It was a mixed week in U.S. stock markets. The Nasdaq ended 0.4% down for the third straight week — thanks in part to an 11% fall in Apple’s (AAPL) share price since it peaked. The S&P 500 and Dow Jones industrial average, however, both snapped two-week losing streaks, rising 0.6% and 1.4%, respectively.
Your Bull Market Alert portfolio continued its strong performance. You booked a quick 57.14% gain in the Digital Realty Trust Inc. (DLR) options I recommended last week in just two days.
Many of your other positions continue to outperform the broader market. Intuitive Surgical, Inc. (ISRG) and Novo Nordisk A/S (NVO) led the way, adding 5.49% and 4.22% each. Your options in NVO are now up 84.36% and are nearing triple-digit gain territory.
As you know, I’ve recommended that you close a number of your Bull Market Alert positions in the past few weeks on expectations of a general pullback in the market. And as Bull Market Alert is a short-term trading service, I wanted to ensure that you lock in some of your big gains in your strongest-performing positions.
At the same time, as you’ve seen, many of your current Bull Market Alert positions have rebounded from the recent sell-off. This tells me that for the first time in a while, investors are not throwing out the baby with the bathwater. Good stock picking matters once again.
So this week, I am recommending that you re-renter a couple of your former Bull Market Alert positions — which I believe have plenty of upside left in them.
1) Buy Alexion Pharmaceuticals (ALXN). Alexion announced strong earnings last week, beating the consensus estimates by $0.07, thanks to strong Soliris sales. The label expansion of Soliris in the United States and European Union for the aHUS indication has also boosted the sales potential of the drug and sales are now expected to exceed $1 billion in 2012. The stock now has a target price of $106 — 15.5% upside from its current level. Place your stop at $85.00. For potentially bigger gains, I recommend the August $95 call options (ALXN120818C00095000).
2) Buy Companhia de Bebidas Das Americas (ABV). This bet on the Brazilian consumer pulled back in early April, but is once again hitting 52-week highs. ABV just took control of the Dominican Republic’s iconic beer brand, Cervecería Nacional Dominicana. With this acquisition, Latin America’s biggest brewer is now not only a great way to play consumer growth in Brazil, but also middle class growth in the Caribbean and all of Latin America. Place your stop at $39.50. If you want to play the options, buy the July $45 calls (ABV120721C00045000).
3) Buy the September $65.00 call options for Monster Beverage Corp. (MNST) (MNST120922C00065000). You already booked double- and triple-digit percentage gains in an earlier set of options in MNST. But with strong momentum behind it, and earnings coming out on May 3, there is plenty of upside left in this stock.
Disclosure: I hold each of these stock positions on behalf of my clients at my firm Global Guru Capital.
If you want to learn how I manage these and other positions in my clients’ portfolios, make sure you sign up for my seminar “How to Manage Your Money Like a Hedge Fund” at the upcoming Money Show in Las Vegas on May 15. This is the first time I am teaching this in over three years. You can register for the seminar by clicking
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Portfolio Update
Bank of Ireland (IRE) came in flat for the week. Your position in IRE shares keeps you in the company with some of the best investors out there. Canada’s answer to Warren Buffett — Prem Watsa of Fairfax Financial Holdings — holds a 9% stake in IRE and is now up 30% so far on his bet on IRE. IRE is a HOLD.
National Bank of Greece SA (NBG) lost 2.07% last week. The first half of the EUR50 billion bailout fund arrived in Greece last Friday. These funds will recapitalize Greek banks over the coming months in a move that is key to a Greek recovery. NBG is a HOLD.
Intuitive Surgical, Inc. (ISRG) jumped 5.49% last week, on 3x normal trading volume, due to a stellar earnings report that handily beat the Street. ISRG reported Q1 profit up 38% on strong revenue and continuing strong demand for robotic surgical products. ISRG also increased its revenue forecast from 18% growth to 26%. Several firms — including Goldman Sachs, Cantor Fitzgerald, Dougherty & Company, and JP Morgan — all raised price targets significantly. ISRG is a strong BUY.
Altisource Portfolio Solutions (ASPS) rose 2.13% over the past five trading days, as U.S. estate-related stocks had a strong week across the board. Expect an increase in volatility and trading volume this week as investors ready for ASPS’ Thursday morning earnings report. ASPS is a HOLD.
Monster Beverage Corp. (MNST) gave back 1.17% last week. MNST will report earnings on May 3 and several analyst firms expect great news. J.P. Morgan predicts sales will be up more than 25%, and raised its price target to $70. That’s a 10.21% upside from current levels. MNST is a BUY.
Dick’s Sporting Goods (DKS) gained 2.06% over the previous week. DKS rose back up to the $50 resistance level and managed to break above it, making a new 52-week high. If DKS can maintain $50, this could be a solid footing for the next leg up. DKS is a BUY.
Novo Nordisk A/S (NVO) added 4.22%. Novo Nordisk’s diabetes drug Victoza has been a blockbuster success since its 2010 Food and Drug Administration (FDA) approval. Sales have increased exponentially since then, reaching $1.1 billion for 2011. NVO will report earnings on April 27 and is a BUY.
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