Categories: Smart Money Masters HotlinesStock Market News

Big Buying Opportunity in Munger’s Favorite Stock

U.S. stock markets traded broadly flat last week, with only the Dow Jones Industrial Average eking out a gain of 0.48%.

Otherwise, the S&P 500 closed down by 0.63% and the tech-heavy Nasdaq fell by 0.71%. The MSCI Emerging Markets Index ended the week 1.46% lower.

Your Smart Money Masters holdings had a mixed week. Restaurant Brands International (QSR) led the week with a 7.44% gain. Baxter International (BAX) jumped 3.46%. Paypal Holdings (PYPL) rose 0.88%.

The big news in your portfolio was in Costco Wholesale (COST), which tumbled 9.76% over the past week on news that Amazon is taking over Whole Foods.

Both Goldman Sachs and Deutsche Bank (DB) downgraded Costco, saying that the competitive advantage from its food business is at risk due to Amazon. DB reduced its price target for the company to $172 from $187.

Not everyone on Wall Street is jumping ship. Cowen reiterated its outperform rating and $190 price target on the belief that Costco will survive Amazon’s onslaught.

I agree with Cowen. Although the dust has yet to settle, I think this is a textbook case of a market overreaction and a buying opportunity.

BlackBerry Limited (BBRY) will release first-quarter fiscal 2018 results on June 23, before the market opens. Last quarter, the company delivered a positive earnings surprise of 75%. In fact, BlackBerry has beaten consensus estimates in each of the last four quarters, with an average beat of 75%. Shares of BlackBerry have rallied 53.21% in the last three months.

Several of your positions fell below their 50-day moving average and are now HOLDs.

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Sincerely,

Nicholas A. Vardy

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.