Market Rally Continuation
The broad market rally that took a respite last week, appears to be ready to rally higher with a broad range of stocks participating. All sectors are in new up cycles, signaling all sectors might see more buying. While the watchlist covers new positions, current positions show an appetite for more gains. We will most likely add to these during the week.
Summary
CAT – Recent Position
Caterpillar management reported earnings of $2.16 per share, vs. analysts expectations and projections of $1.79 EPS. This was an increase of 160% Q/Q and 33% YoY. The machinery manufacturing company reported revenue of $12.9 billion. Caterpillar also topped expectations in its EPS outlook for the year ahead.
Technically speaking the stock is trading higher, after the 11% correction in the broader market. MACD crossed signaling bulls are back and RSI reflecting continued relative strength. Volume shows institutions are actively picking up shares. We will add to our position this week if the current momentum does not dissipate markedly. We anticipate a flag at 166.50 (+/-) VBP.
United Rentals, Inc. (URI) reported revenue of $1.922 billion, in addition to rental revenue of $1.646 billion for the quarter. This was compared with $1.523 billion and $1.298 billion, respectively, for the same period the prior year. This reflects a 25% and 40% increases respectively.
On a GAAP basis, URI report fourth-quarter net income of $897 million, or $10.45 per diluted share, compared with $153 million, or $1.80 per diluted share, for the same period the prior year. The fourth quarter of 2017 includes a net income benefit estimated at $689 million, or $8.03 per diluted share, associated with the enactment of the Tax Cuts and Jobs Act of 2017.
Technically speaking the stock is trading higher, after the 11% correction in the broader market.MACD crossed signaling bulls are back and RSI reflecting continued relative strength. Volume shows institutions are actively picking up shares. We will add to our position this week if the current momentum does not dissipate markedly.
Home Depot recently reported fourth-quarter earnings and sales that topped Wall Street’s expectations as more people shopped at the home improvement stores. HD management also gave an upbeat financial forecast for 2018, in addition to declaring a 15.7% increase in its quarterly dividend, to $1.03 a share.
Technically speaking the stock is trading higher, after the 11% correction in the broader market.MACD is nearing a cross, signaling bulls are back. RSI will most likely rise through the 50 zone if strength persists. We will add to our position this week if the current momentum does not dissipate markedly. Note price is above VBP support.
Watchlist for 02-25-2018 – Market Rally
The broad market rally in stocks will most likely affect all of the stocks in the watchlist for this week.
PetMed Express (PETS) operates through 1-800-PetMeds, an online retailer that sells drugs for pets in its digital pharmacy. In its latest quarterly report, PETS reported earnings of $0.44 per share, crushing analysts estimates of $0.33 per share by more than 30%. The company also reported total revenues of $60 million, surpassing consensus estimates of $58 million and expanding from the $53 million in the prior-year period for an increase of 54% year over year.
PetMed’s earnings estimates have been moving consistently higher in the wake of its report, with our consensus mark for the current fiscal year gaining six cents in just the past week and the upcoming fiscal year’s consensus moving 20 cents higher over that time. PETS is now sporting a Zacks Rank #1 (Strong Buy).
Technically speaking the stock is trading higher, after the 11% correction in the broader market.MACD crossed signaling bulls are back and RSI reflecting continued relative strength. Volume shows institutions are actively picking up shares. We will add to our position this week if the current momentum does not dissipate markedly.
Look for the remaining stocks on the watchlist to perform in a similar fashion as noted in the commentary section.
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Good luck today, CYCLE UP!
Vinny
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