Adding to 3 Portfolio Holdings, Calling Up Another Bullpen Name
A looming power pain point makes this latest initiation an electrifying addition.
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* We are nibbling further on shares of Bank of America, Morgan Stanley and Universal Display.
* We are also calling up Eaton Corp. from the Bullpen, establishing a $350 price target.
| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
BAC | Buy | 200 | 38.25 | 4,200 | 3.8 |
MS | Buy | 130 | 94.50 | 1,705 | 3.8 |
OLED | Buy | 125 | 167.75 | 960 | 3.8 |
ETN | Buy | 190 | 284 | 190 | 1.25 |
After you receive this Alert, we will make the following trades:
-- Buy 200 shares of Bank of America BAC at or near $38.25. Following the trade, BAC shares will account for roughly 3.8% of the portfolio.
-- Buy 130 shares of Morgan Stanley MS at or near $94.50. Following the trade, MS shares will make up about 3.8% of the portfolio.
-- Buy 125 shares of Universal Display OLED at or near $167.75. Following the trade, OLED shares will constitute around 3.8% of the portfolio.
-- Buy 190 shares of Eaton Corp. ETN at or near $284. Following the trade, ETN shares will account for roughly 1.25% of the portfolio.
Yesterday, we rang the register on a very profitable slice of Lockheed Martin LMT shares.
Today, we are redeploying that capital and dipping into our cash position to augment the portfolio’s positions in Bank of America, Morgan Stanley, and Universal Display. Like our moves earlier this week with Amazon AMZN and Microsoft MSFT, both BAC and OLED are oversold with relative strength levels (RSI) below 30. While the RSI for MS shares is higher, near 34, they are down considerably after having touched $108 just a few weeks ago.
We are also calling up Eaton Corp. to the portfolio, establishing a $350 price target.
Universal Display
In our note to you regarding Universal Display’s June-quarter results, we reviewed the company’s prospects as the organic light emitting diode market expands into smartphones and takes off in tablets and PCs. Automotive remains a growth vector as do TVs, and we continue to see the longer-term opportunity in general illumination and other applications.
Our OLED price target remains $250 but with this move, we will reset our panic point to $145. As we have in the past, as the shares recover, we will lift that panic point accordingly.
Bank of America and Morgan Stanley
As it relates to Bank of America and Morgan Stanley, the capital markets businesses at both should benefit from the recent turmoil in the market and we continue to see overall investment banking activity elevated compared to H1 2024 and H2 2023. Ahead of the Fed's moves into a rate-cutting cycle, we have seen mortgage rates move lower with the 30-year fixed hitting as low as 6.09%, according to Bankrate, with the national average at 6.56%. As the Fed moves into its rate-cutting cycle, we should see further improvement and our thinking is that will lead to incremental mortgage activity as well as help improve other lending activity.
Against that backdrop, we reiterate our BAC and MS price targets of $49 and $120, respectively, but we will reset the respective panic points to $32 and $80 given today’s trades.
Eaton Corp.
Back in late April, we added Eaton shares to the Bullpen given the power pain point primarily associated with the expected data center build-out but also other demands, including those tied to EV charging station growth. We’ve kept our eyes on ETN and the slide from $340 in late May to the current share price has put the shares in a far more favorable risk-to-reward position than when we added them to the Bullpen near $325.
As we noted above, our initial price target for ETN is set at $350, which offers just under 24% potential upside. With the market looking to recapture even more of its recent selloff we would see that upside potential shrink quickly, just the way Meta META shares popped after our recent buy.
Because we are disciplined investors, we will start ETN with a Two rating, and look to build up the portfolio’s exposure on weakness or on signs the power pain point is accelerating quicker than priced in by the market. Our initial panic point for ETN shares is set at $240.
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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro portfolio was long BAC, MS, OLED, LMT, AMZN, MSFT and META.
