Markets recovered somewhat this week, after last week’s weak showing.
The tech-heavy Nasdaq led the charge with a gain of 1.58%. The MSCI Emerging Markets Index followed to end the week 1.58% higher. The S&P 500 closed up by 0.60% and the Dow Jones recovered 0.54%.
Your Smart Money Masters’ holdings continued to have little correlation to the overall market. Liberty Broadband (LBRDK) climbed 4.45% and Restaurant Brands International (QSR) jumped 4.36%. Costco Wholesale (COST) rose 3.74%.
Three of your Smart Money Masters’ positions have now gained over 20% since Feb. 10: Paypal Holdings (PYPL) soared 25.20%, Restaurant Brand’s International (QSR) jumped 20.29% and BlackBerry Ltd. (BBRY) is up an even 20%. Five of your other positions are up by single-digit percentages. Two positions are showing a loss.
By way of comparison, the S&P 500 has gained 4.73% since then.
All but one of your positions is back above their 50-day moving averages and are now a BUY.
The continued sell-off in Navigator Holdings (NVGS) is painful. There is no fundamental reason for the sharp sell-off. The sector has been caught up in the falling oil price. So like Wilbur Ross, we are sticking to our guns on this one. Here is a link to an article by analysts and Zacks, which supports the view that NVGS remains a terrific value play.
A big story in U.S. markets has been the death of traditional retail outlets, even as Amazon.com (AMZN) — a holding in my Alpha Algorithm trading service — just passed the $1,000 share price mark.
The one exception to the crisis in retail is Costco Wholesale (COST), which is proving to be the exception to the doom and gloom.
Investment bank Morgan Stanley continues to be bullish on Costco, and published the following comment last week:
In this tough retail backdrop, we advocate sticking with retail playbooks that are working. Costco remains a standout in this regard. Its has a growing membership (+0.1% QoQ to 66.4 million), a high retention rate (90.2% in Q3) and generates steady traffic growth (3%+ and 4%+ in the U.S.). This formula, combined with the lowest product markups in retail, is a recipe to insulate itself from e-commerce competition… The business should be going through a period in which double-digit EPS growth is likely for the next several quarters.
Portfolio Update
Sincerely,
Nicholas A. Vardy
