Weekly Roundup

While it was a relatively slow week on the macroeconomic front, earnings are in full force and have taken up the lion's share of our focus (more below). The Dow broke through the 23,000 level on Tuesday as all major indexes pushed to record highs.

Treasury yields trended higher, in line with the move into stocks that pushed markets higher every day this week. In line with the risk-on attitude taken by investors, gold pushed lower this week. The euro weakened slightly against the dollar as the latter saw strength on Friday resulting from the Senate passage of a budget resolution, bringing us one step closer to tax reform. Lastly, oil moved lower this week but managed to hold above the $51 level.

Earnings

Third-quarter earnings are under way and have so far been largely positive vs. expectations. In the portfolio, we heard from Abbott Labs, Nucor, Danaher, KeyCorp, General Electric and Schlumberger.

Abbott Laboratories (ABT) reported a top- and bottom-line beat for its third-quarter results. Revenue came in at $6.8 billion, topping the consensus of $6.72 billion, and adjusted earnings per share totaled $0.66, edging out the consensus by a penny. Importantly, the company meaningfully increased revenue on a comparable operations basis, rising 5.6%.

It was a very strong quarter for the company thanks to many recent product launches, and upcoming expectations are high due to the powerful number of products that will soon hit the market. International sales of ABT's FreeStyle Libre product were strong during the quarter, and with it recently receiving FDA approval, we anticipate U.S. sales will drive earnings growth. Similarly, the company's Alinity system will launch in the U.S. in 2018, further proving that the company has many exciting products to look forward to. Lastly, although management did not provide guidance for the Alere acquisition, we believe this recently closed transaction has been discounted by the market, and management still expects the deal to be accretive.

Nucor (NUE) reported a solid quarter when it released third-quarter earnings Thursday morning. After factoring in last month's earnings pre-announcement, revenue of $5.17 billion was in line with expectations of $5.16 billion, and earnings per share of $0.83 came in higher than the $0.78 consensus.

The company's operations were limited this quarter due to the impact of Hurricane Harvey, which temporarily shut down facilities in Louisiana, but management said operations are back to normal. Pricing pressures from heavy Chinese steel imports continue to be the largest impact on Nucor's margins, as cheap foreign steel is driving prices down. Still, the company believes it will be able to increase prices for the upcoming quarter, which should help boost the stock. Lastly, management anticipates that an update to the Section 232 trade investigation and an infrastructure spending bill are possibilities for 2018, increasing investor confidence for the long-term outlook of the company.

Danaher (DHR) reported a top- and bottom-line beat Thursday. Third-quarter revenue came in at $4.53 billion (9.5% year-over-year increase), which beat the consensus of $4.47, and adjusted earnings per share of $1 was $0.05 higher than the consensus.

What separated Danaher's excellent quarter from previous prints was the company achieving 3% core sales growth for the quarter. This figure represents the highest level this year and is in line with management target rate. By segment, Life Sciences, Diagnostics and Environment and Applied Solutions were all strong during the quarter, but the key difference this quarter was an improvement to Dental, where core sales increased 1%. This segment in previous quarters saw flat to lower core sales, and we believe the turnaround in this business is what helped unlock value in shares.

On Thursday, KeyCorp (KEY) reported its third-quarter results, which were in line with expectations. Revenue of $1.55 billion fell just short of the consensus of $1.56 billion, and adjusted earnings per share of $0.35 exactly matched estimates heading into the quarter.

Net interest income and net interest margin were $962 million and 3.15%, respectively, during the quarter, marking strong year-over-year increases, but this was largely driven by the First Niagara acquisition. Sequentially, both figures were reported flat to lower, which was a consistent result of other financial institutions. Non-interest income, which features fees collected from the company's underrated investment banking business, came in at $592 million for the quarter. Lastly, average loan balances remained stagnant for the quarter, but net charge-offs have been steadily decreasing, which suggests the credit quality of KeyCorp's balance sheet is improving.

General Electric (GE) reported mixed results on Friday before the bell, with revenue of $33.47 billion exceeding expectations of $32.56 billion and adjusted earnings per share of $0.29, coming up short of expectations of $0.49. Importantly, industrial segment revenue was reported to be up 10% (to $30.1 billion) year over year. However, organic industrial revenue (adjusted for foreign exchange, acquisitions and dispositions) declined 1% (to $26.9 billion).

Annually, by segment, Renewable Energy rose 5% to $2.91 billion, Oil & Gas jumped 81% to $5.37 billion, Aviation increased 8% to $6.82 billion and Health improved 5% to $4.72 billion. However, offsetting these were a 4% decline in Power to $8.68 billion, a 14% drop in Transportation revenue to $1.07 billion and a 16% contraction in Lighting revenue to $483 million. Total orders increased 11% annually to $29.8 billion, driven by a 22% increase in services orders (to $15.9 billion) that was only marginally offset by a 1% decline in equipment orders (to $13.9 billion). On an organic basis, orders were flat year over year, as a 10% increase in services orders was completely offset by a 10% decrease in equipment orders.

Schlumberger (SLB) reported in-line results Friday before the bell, with revenue of $7.9 billion and earnings per share of $0.42 matching expectations. While the numbers are always important, we encourage members to read our take on the quarter here, as management provided key insights into the energy market moving forward.

Breaking down revenues, Schlumberger saw 18% sequential revenue growth in North America (53% annually), as 22% growth in land revenue was partially offset by disruptions from Hurricane Harvey and offshore weakness in the Gulf of Mexico. Sequential revenue growth of 5% was also seen in Europe/CIS/Africa (down 2% annually). However, offsetting these gains was an 8% sequential decline in Latin America (4% annually). The Middle East and Asia were flat sequentially, however, decreasing 1% annually.

Economy

The Federal Reserve announced Tuesday that industrial production rose 0.3% in September, in line with expectations, while capacity utilization increased 0.2%. Estimates for the rates of change for industrial production in July and August were revised from +0.4% to -0.1% and -0.9% to -0.7%, respectively. It is estimated that Hurricanes Harvey and Irma suppressed total production growth in December by roughly 0.25%. For the third quarter, the industrial production index declined 1.5% annualized, although we note that if not for the hurricanes, it is estimated the index would have gained at least 0.5% overall. Total industrial production is up 1.6% from the same time last year.

Although industrial production accounts for a relatively small portion of total GDP, it is considered an important macroeconomic indicator as it measures output from the manufacturing, mining, electric and gas industries and can aid in forecasting structural changes in the economy, business cycle inflection points and inflationary trends. In conjunction with capacity utilization readings, industrial production can be used as a gauge for future inflation because signs of inflation will first begin to show at the industrial level (via increases in the prices of commodities and basic materials), before trickling through the supply chain and ultimately resulting in higher costs for finished goods.

Digging deeper, manufacturing (the largest component of industrial production and roughly 12% of GDP) output inched up 0.1% last month but pulled back 2.2% annualized in the third quarter. Mining output increased 0.4% while utilities (electric and gas) rose 1.5%. On an annual basis, manufacturing and mining output increased 1.0% and 9.8%, respectively, while utilities output declined 4.1%. All in, the report was largely in line and, except for some hurricane-related impact, may indicate that we are on track for a December rate hike.

On Wednesday, the U.S. Census Bureau reported that housing starts declined in September for the third consecutive month, falling a whopping 4.7% month over month to a seasonally adjusted annual rate of 1.127 million, far below expectations of a decline to 1.175 million units. Marginally offsetting September's decline, housing starts in August were revised up from 1.18 million to 1.183 million units. On an annual basis, starts are up 6.1%.

It is worth noting that September's results were affected by both delays as well as material and labor shortages resulting from Harvey and Irma. However, according to Granger MacDonald, chairman of the National Association of Home Builders, "Builder confidence is strong and production should bounce back as the recovery process gets under way."

Digging deeper, monthly, single-family housing starts declined 4.6% while housing starts for complexes with five or more units saw a month-over-month decrease of 6.2%. By region, total housing starts fell in the Northeast, Midwest and South by 9.2%, 20.2% and 9.3%, respectively. In the West, housing starts jumped 15.7%. Single-family homebuilding, which accounts for the largest share of the residential housing market, fell 15.3% in the South but managed to rise in the Northeast, Midwest and West by 5.8%, 10.5% and 8.1%, respectively.

On a yearly basis, total starts are up 4.2% in the Northeast, 2.7% in the Midwest and 24.8% in the West. Total starts are down 2.2% in the South.

Compounding the decline in housing starts, building permits fell 4.5% month over month to a seasonally adjusted annual rate of 1.215 million, missing expectations of 1.25 million. August's reading was revised down from 1.13 million to 1.272 million. Total permits are down 4.3% from September 2016.

Permits for single-unit homes rose 2.4% on a monthly basis while permits for complexes with two to four units were flat and permits for complexes with five or more units plunged 17.4%. By region monthly, total permits issued rose 9.2% in the Northeast and 0.5% in the Midwest; however, this was offset by a 5.6% decline in the South and a 9.2% decrease in the West. Year over year, total permits increased 2.2% in the Midwest but fell in the Northeast, South and West by 16.2%, 5.3% and 0.9%, respectively.

On Thursday, the Department of Labor reported that initial jobless claims for the week ending Oct. 14 were 222,000, a decrease of 22,000 claims from the prior week's revised level (revised up from 243,000 to 244,000) and 18,000 claims below expectations of 240,000 initial claims. This marks the lowest level for initial claims in over 44 years, when the reading matched these levels back on March 31, 1973. However, we note that as has been the case in recent weeks, Hurricanes Irma and Maria affected results in Florida, Puerto Rico and the Virgin Islands; claims for Virginia were estimated. Importantly, the four-week moving average for claims (used as a gauge to offset volatility in the weekly numbers) was 248,250, a decrease of 9,500 from last week's revised level (revised up from 257,500 to 257,750). The low rate of layoffs reflects a strengthening labor market as claims have remained below 300,000 -- the threshold typically used to categorize a healthy jobs market -- for an incredible 134 consecutive weeks, the longest streak since 1970.

Lastly, on Friday, the National Association of Realtors (NAR) reported that existing home sales rose 0.7% in September to a seasonally adjusted annual rate of 5.39 million. The reading exceeded expectations for a 1% decline to an annualized pace of 5.3 million and comes following three consecutive months of declines. Despite the monthly rise, last month's pace is 1.5% below year-ago levels and is the second slowest year to date (August being the slowest sales month of the year).

As has been the case all year, supply continues to be the biggest drag on existing home sales despite strong demand. Results also continued to be affected by Harvey and Irma.

Speaking on the results, NAR chief economist Lawrence Yun said, "Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country," adding that "Realtors this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings -- especially at the lower end of the market -- and fast-rising prices that are straining the budgets of prospective buyers."

On that note, median existing home prices are up 4.2% from September of last year, coming in at $245,100 and marking the 67th consecutive month of year-over-year price gains. It also appears a lack of supply will continue to drive prices as inventory levels at the end of September have declined 6.4% from the same time last year. Inventory levels have decreased year over year for 28 consecutive months and, as of the end of September, represent roughly a 4.2-month supply (at the current pace of sales), down from 4.5 months last year and well below the ideal six-month supply level.

Digging deeper by region on a month-over-month basis, sales were unchanged in the Northeast while rising in the Midwest and West by 1.6% and 3.3%, respectively. Sales fell in the South last month by 0.9%. On a yearly basis, sales are unchanged in the West and are down in all other regions, falling 1.4% in the Northeast, 1.5% in the Midwest and 2.3% in the South.

Oil

On the commodity front, oil got a nice bump to start the week on increased Chinese imports (something we spoke to in last week's roundup) and rising tensions in Iraq resulting from the Kurdish vote for independence, which led to disruptions in the supply chain. Starting with China, West Texas Intermediate (WTI) prices were aided by higher exports to the region because, as we noted in our Weekly Roundup from Oct. 6, "the recent decline in U.S. crude (because of hurricanes impacting U.S. demand at a time of rising production) has made it more attractive on world markets." As for Iraqi Kurdistan, we saw a disruption in the supply chain this week, with shipments via the Iraq-Turkey pipeline falling from a typical 600,000 barrels per day (on par with oil-producing nations such as Qatar and Ecuador) to roughly 190,000 barrels per day. The decline came as result of production declines out of the Bai Hasan and Avana oilfields because of security concerns after Iraqi troops advanced on the city of Kirkuk and seized territory from Kurdish fighters. Recall that as we reported in our Weekly Roundup from Sept. 29, the Kurdish vote for independence from Iraq was met with strong responses from both Turkish President Recep Erdogan, who threatened to block exports from the region, and from the Iraqi government, which called for a boycott on Kurdish crude. This is a key story that we will continue to monitor as Iraq is the second-largest producer in OPEC.

Also driving this week's action, on Tuesday, Reuters reported that refineries in India had increased "test" purchases of U.S. crude. Like China, Indian refineries are seeking to take advantage of the relatively cheap WTI prices resulting from unrelenting U.S. production and is seeking new sources outside of the Middle East. With this, it appears there may be even more worldwide demand to come as several Indian refineries have been granted special privileges to continue importing U.S. crude until March 2018 following President Trump's meeting with Indian Prime Minister Narendra Modi back in June. Until late 2015, the U.S. banned crude exports to India and there have been few since then. We will continue to monitor the situation with hopes that India may be able to become a new market for U.S. producers.

We also learned this week that OPEC has a compliance rate with current production-cut agreements of roughly 86%, according to International Energy Agency (IEA) executive director Fatih Birol. Regarding the situation developing in Iraq (mentioned above), Birol stated, "It is too early to say how these geopolitical developments will continue and how much they will have an impact on oil prices." Finally, while there is nothing definitive yet, Reuters reported that OPEC appears to be leaning in favor of an extension to the current production cuts, a factor Schlumberger management cited in its third-quarter earnings release on Friday as a reason they believe oil prices will push higher into 2018.

Stocks

In the portfolio this week, we bulked up on Allergan (AGN) as we believe the recent selling to be overblown, even if we accounted for a generic version of Restasis hitting shelves as early as next year (something we view as highly unlikely). With much of this overhang now removed from the stock, we believe the focus can turn back to the company's strong migraine and anti-depression drugs, as well as the company's growing aesthetic franchise.

We also trimmed some of our Southwest Airlines (LUV) position to lock in a strong gain and to help rebuild our cash position. While our long-term view of Southwest has not changed, we believe the sale will improve future optionality in our position as well as in our greater portfolio.

Moving on to the broader market, third-quarter earnings have so far been largely positive vs. expectations, with 77% of companies reporting a positive EPS surprise. Total third-quarter earnings growth has increased roughly 6.3% year over year vs. expectations for an overall 3.08% increase throughout the season; of the 54 non-financials that reported, earnings growth is up 7.4%. Revenues are up 6.4% vs. expectations throughout the season for a 4.65% increase; 77% of companies beat EPS expectations, 13.5% missed the mark and 9.5% were in line with consensus. On a year-over-year comparison basis, 78.38% beat the prior year's EPS results, 20.27% came up short and 1.35% were virtually in line. Healthcare and information tech have had the strongest performance vs. estimates, whereas materials, real estate and telecom have posted the worst results in the S&P 500 for the third quarter thus far.

Next week, 175 companies in the S&P 500 will report earnings. In the portfolio, we will hear from Arconic (ARNC) and Illinois Tool Works (ITW) on Monday before the open. On Tuesday, we will get results from Eli Lilly (LLY) before the bell. Next, we'll hear from NXP Semiconductors (NXPI) when it reports on Wednesday after the close. Thursday will be the busiest day as we will hear from Waste Management, (WM) Southwest and Comcast (CMCSA) before the bell and Alphabet GOOGL after the close.

Other key earnings reports for the market include: Halliburton (HAL), Kimberly-Clark (KMB), Philips (PHG), V.F. Corp. (VFC), Hasbro (HAS), Whirlpool (WHR), Owens-Illinois (OI), Crane (CR), Zions Bancorp (ZION), Logitech (LOGI), Infosys (INFY), General Motors (GM), Fiat Chrysler (FCAU), United Tech (UTX), Lockheed Martin (LMT), Novartis (NVS), Caterpillar (CAT), 3M (MMM), McDonald's (MCD), Stanley Black & Decker (SWK), Biogen (BIIB), JetBlue (JBLU), AT&T (T), Express Scripts (ESRX), Capital One (COF), Texas Instruments (TXN), Advanced Micron (AMD), Chipotle (CMG), Edwards Lifesciences (EW), United Micro (UMC), Walgreens (WBA), Boeing (BA), Anthem (ANTM), Coca-Cola (KO), General Dynamics (GD), Northrop Grumman (NOC), International Paper (IP), Visa (V), Wyndham (WYN), Sirius (SIRI), Six Flags (SIX), Grub Hub (GRUB), Trivago (TRVG), Suncor Energy (SU), Amgen (AMGN), AFLAC (AFL), Las Vegas Sands (LVS), O'Reilly Auto (ORLY), Buffalo Wild Wings (BWLD), Netgear (NTGR), Banco Santander Chile (BSAC), McKesson (MCK), Ford (F), Valero (VLO), Marathon Petro (MPC), UPS (UPS), Anheuser-Busch (BUD), Charter (CHTR), ConocoPhillips (COP), Raytheon (RTN), Nokia (NOK), Bristol-Myers (BMY), Amazon (AMZN), Microsoft (MSFT), Intel (INTC), Gilead (GILD), Flex (FLEX), Western Digital (WDC), Baidu (BIDU), Mattel (MAT), Exxon (XOM), Chevron (CVX), Phillips 66 (PSX), Merck (MRK), AbbVie (ABBV), Colgate-Palmolive (CL) and Rockwell Collins (COL).

Economic Data (*all times ET)

U.S.

Monday (10/23)

Chicago Fed Nat Activity Index (830): -0.10 expected

Tuesday (10/24)

Markit US Manufacturing PMI (9:45): 53.3 expected

Markit US Services PMI (9:45): 55.0 expected

Markit US Composite PMI (9:45)

Richmond Fed Manufact. Index (10:00) 16 expected

Wednesday (10/25)

MBA Mortgage Applications (7:00)

Durable Goods Orders (8:30): 1.0% expected

Durables Ex Transportation (8:30): 0.3% expected

Cap Goods Orders Nondef Ex Air (8:30): 0.1% expected

Cap Goods Ship Nondef Ex Air (8:30)

FHFA House Price Index MoM (9:00): 0.4% expected

New Home Sales (10:00): 550k expected

Thursday (10/26)

Wholesale Inventories MoM (8:30)

Initial Jobless Claims (8:30)

Continuing Claims (8:30)

Bloomberg Consumer Comfort (9:45)

Pending Home Sales MoM (10:00): 0.3% expected

Friday (10/27)

GDP Annualized QoQ (8:30): 2.5% expected

Personal Consumption (8:30)

GDP Price Index (8:30): 1.8% expected

Core PCE QoQ (8:30)

Univ. of Mich. Sentiment (10:00): 101.0 expected

International

Monday (10/23)

Eurozone Agg Consumer Confidence (10:00)

Japan Nikkei Japan PMI Mfg (20:30)

Tuesday (10/24)

Germany Markit/BME Germany Manufacturing PMI (3:30)

Germany Markit Germany Services PMI (3:30)

Germany Markit/BME Germany Composite PMI (3:30)

Eurozone Agg Markit Eurozone Manufacturing PMI (4:00)

Eurozone Agg Markit Eurozone Services PMI (4:00)

Eurozone Agg Markit Eurozone Composite PMI (4:00)

Wednesday (10/25)

Germany IFO Business Climate (4:00)

Germany IFO Expectations (4:00)

Germany IFO Current Assessment (4:00)

UK GDP QoQ (4:30): 0.3% expected

UK GDP YoY (4:30): 1.5% expected

Thursday (10/26)

Germany GfK Consumer Confidence (2:00)

Eurozone Agg M3 Money Supply YoY (4:00)

Eurozone Agg ECB Main Refinancing Rate (7:45)

Eurozone Agg ECB Marginal Lending Facility (7:45)

Eurozone Agg ECB Deposit Facility Rate (7:45)

Japan Natl CPI YoY (19:30): 0.7% expected

Japan Natl CPI Ex Fresh Food YoY (19:30): 0.7% expected

Japan Tokyo CPI YoY (19:30): 0.1% expected

Japan Tokyo CPI Ex-Fresh Food YoY (19:30): 0.5% expected

Friday (10/27)

New folks, welcome aboard! You're reading the Weekly Roundup of the charitable trust that Jim talks about regularly on Mad Money and in his new bestseller, Get Rich Carefully. Jim put $3 million of his own money into this charitable trust so that you, the subscriber, can learn how he and the Action Alerts PLUS staff make decisions about a diversified portfolio and make money. You'll see every position in every stock, and we'll send you alerts BEFORE every trade. And best of all, all profits go to charity -- we've donated $1.8 million to date.

To learn more about how we construct and trade the portfolio, click on Getting Started in the dropdown menu of the Help link above.

We also want to be sure you're not confused about the terminology that Jim uses on his Mad Money television show: When you hear Jim refer to the charitable trust, he is talking about the trust that holds the Action Alerts PLUS portfolio. The gains from Action Alerts PLUS go to charity after the close of each trading year.

Here's the quick guide to the rating system, too: Ones are stocks we would buy right now, Twos are stocks that we'd buy on a pullback, Threes are stocks we would sell on strength and Fours are stocks we want to unload as soon as our trading restrictions allow.

ONES

Apple (AAPL) ; $156.25; 700 shares; 3.91%; Sector: Technology -- Shares trended lower this week, bucking the trend of the overall market. Starting off the week, analysts at KeyBanc upgraded shares from Sector Weight (equivalent to Hold) to Overweight (equivalent to Buy), citing a "more aggressive market segmentation strategy." In line with our view, the analysts noted that while concerns around demand for the newest generation of iPhones remains (we will learn more when the company starts taking iPhone X pre-orders on next Friday), downside risks are limited as the company's pricing power and higher average selling price for the new models will likely lead to expanded margins and thus higher gross profits. The analysts also pointed to the company's growing Services business as a means for the company to drive higher profits without significant growth in the install base. Also in line with our view, the note pointed to Services (and the recurring, more transparent revenue that comes with it) as a factor that could justify shares trading at a higher multiple than they do currently. All in, shares have bounced back nicely since their recent selloff and, despite the bounce, we continue to view shares as attractive. Near term, we believe iPhone 8 demand concerns will be addressed with the release of the iPhone X. On that note, DigiTimes reported this week that the supply chain for the new model has begun to stabilize, shipments are expected to "increase substantially" in the months ahead and meet demand for the holiday season, with the first batch already being shipped from Apple supplier Foxconn Electronics. Beyond the new iPhones, a growing install base will continue to aid the Services segment, which we view as being key to longer-term share price appreciation. We reiterate our $165 target.

Abbott Laboratories (ABT) ; $56.32; 500 shares; 1.01%; Sector: Healthcare -- Shares pushed higher this week as the company reported a top- and bottom-line beat when it released quarterly earnings on Wednesday. Abbott's quarterly revenue of $6.8 billion was slightly ahead of the consensus of $6.72 billion, and adjusted earnings per share of $0.66 edged out the consensus by a penny. During the quarter, strong growth in Diagnostics, Established Pharmaceuticals and Medical Devices offset lagging progress in Worldwide Nutrition. Overall, we expect Abbott's momentum to continue due to the upcoming U.S. launches of FreeStyle Libre and the Alinity core laboratory system. Both products have been successful in international sales, and we anticipate similar achievements when launched in the U.S. Further supporting Abbott heading into 2018 is its upcoming integration with the recently acquired Alere. Although management expects more modest accretion compared to when the deal was first announced, given the success that Abbott had with St. Jude Medical, we think management is under-promising here. For more on our analysis of the quarter, please read our Alert here. We reiterate our $61 price target.

Activision (ATVI) ; $62.63; 1,400 shares; 3.13%; Sector: Technology -- Shares pushed higher this week on little news but remain stuck in the low $60s. We continue to like Activision into the end of the year as the company has several positive catalysts in the months ahead. In addition to the upcoming release of Call of Duty: WW2 (which will be out in the first week of November, just in time for the holiday season), we see upside as we approach the launch of the Overwatch League preseason in December, with the inaugural season kicking off the following month. As we've noted, we believe Activision's investment into the league will pay off greatly in coming years as e-sports gains in popularity and slowly makes its way to the mainstream. In addition to a growing e-sports following, we see further upside as the industry shifts to an all-digital distribution model, which will result in higher margins and a reduced secondhand market, forcing buyers to deal directly with Activision rather than buy used games that provide no additional revenues to the company. Given these near-term catalysts (Call of Duty and Overwatch League) and longer-term trends (shift to all digital and a growing e-sports industry), we reiterate our $68 target and believe the lack of movement since the company's last earnings release is providing a solid buying opportunity.

Allergan (AGN) ; $188.28; 675 shares; 4.54% Sector: Healthcare -- Shares of Allergan were in a sharp decline to start the week before finding some stabilization as the week progressed. Driving the decline was Monday's district court ruling that invalidated Allergan's patents for its Restasis drug, opening the window for generics to hit the market earlier than expected. Although this is a big hit for the company, as we detailed in our Alerton Tuesday, we believe the value of the drug does not justify the amount of market cap that has been shaved off. Restasis revenue was expected to be approximately $1.5 billion in 2018, representing less than 10% of the company's total revenues, and we do not believe this justifies the over $10 billion in market cap that has been lost. The stock is being heavily sold as the slew of analyst price target slashes is not allowing the stock to find any traction, causing this once well-loved stock to turn into one of the most hated names in the market. However, if we learned anything from history it is that when names become hated from a heavy overreaction, that is often the time to be a buyer in the name. We are reiterating our stance that the company's other suite of products is worth more than what the market is currently discounting, and in the near future we will be providing a sum-of-the-parts analysis supporting this view. We think the company's medical aesthetics portfolio, migraine and anti-depression drugs, and the six "star" pipeline drugs will help carry shares to a higher multiple compared to the diminutive 11.5x 2018 earnings the stock currently trades at, and once the stock regains favor, which we are confident will occur, we expect it to move higher. We are reiterating our $270 price target for now, but we will likely be revising this number following our sum-of-the-parts analysis.

Broadcom (AVGO) ; $244.24; 250 shares; 2.18%; Sector: Electronics -- Shares fell this week as the stock seems to be stuck in a range-bound holding pattern that is waiting on a few developments to take shape before breaking out. Capping the potential of an upside movement has been the delay in the company's acquisition of Brocade. Despite Brocade divesting assets and businesses to alleviate concerns from the Committee on Foreign Investment in the United States, which has final say on the deal, the transaction was again set back this week after Brocade and Arris International re-filed their voluntary joint notice to the committee. In an Alert on Tuesday, we spoke about how Broadcom's inability to quickly close this deal has handcuffed the company's cash position, limiting its flexibility to pursue other merger and acquisition activity and share buybacks. In our view, we believe the Broadcom-Brocade deal will eventually close, which will then help the stock revert to its value creation trends. Also this week, Intel unveiled its new family of chips focused on artificial intelligence applications, and that is believed to be designed with the help of Broadcom. These customized application-specific integrated circuit chips (ASIC) support Broadcom's overall semiconductor diversity and increase its exposure to the rapidly growing machine/deep-learning industry. For more on this news, please read our Alert here. Lastly, we remind members that our biggest catalyst for Broadcom relates to its chip production in the upcoming iPhone X. Broadcom manufactures eight chips in the smartphone whose demand is yet to be quantified, and with pre-orders set to begin next Friday, we will get a better idea of how supply is meeting demand, and whether there have been any setbacks in the manufacturing process. If demand for the iPhone X is strong and the product is not in short supply, we believe Broadcom's earnings power will receive a strong boost. Until then, we continue to view shares as cheap, as this is a name in which we continually look for ways to add to our portfolio below basis. We reiterate our $290 price target.

Cimarex (XEC) ; $117.34; 900 shares; 3.77%; Sector: Energy -- Cimarex traded somewhat sideways this week, ultimately ending higher. With West Texas Intermediate crude prices hovering above the $50 mark, we continue to like the prospects of Cimarex shares as production will remain much more profitable for the company compared to the summer months. Cimarex's financial discipline in the Permian, where it employed the strategy of drilling where it makes the most sense from a capital return perspective, and simply not to achieve growth targets, is why we believe the company is well positioned to break out within the industry once the macro environment improves. With oil managing to hold at roughly the $50 level and the potential for OPEC to deepen production cuts or extend the current March 2018 deadline to the end of 2018, we continue to believe shares will rise into the end of the year. We reiterate our $150 price target.

Comcast (CMCSA) ; $37.22; 2,000 shares; 2.66%; Sector: Consumer Discretionary -- Shares pushed higher ahead of next week's earnings release. We continue to view CMCSA as undervalued at current levels given the company's significant diversification and strong cash flows. While cord cutting remains a headwind, we have confidence that the company has properly planned for the trend and is effectively positioning itself to compete in a more on-demand/online streaming world. Recall that Comcast is a joint owner of streaming service Hulu and recently partnered with Disney to bring its content to Disney's new digital film service, Movies Anywhere. We also view the X1 platform as best in class and believe it to be more "sticky" than other cable offerings as it combines traditional cable offerings with over-the-top (OTT) services such as Netflix and YouTube. We also note that while streaming services may compete with cable subscriptions, they benefits broadband subscriptions as higher-quality (think 4K) content brings with it the need for faster internet connections. We look forward to learning management's take on the cord-cutting situation and broadband trends as well as how the new Xfinity mobile offering is progressing when the company reports fiscal-third-quarter earnings on Thursday before the bell. On that note, we will be looking for sales of $21.06 billion on the top line with earnings per share of $0.49 on the bottom. We reiterate our $45 target and will re-evaluate following the release.

DXC Technology (DXC) ; $91.89; 1,000 shares; 3.28%; Sector: Tech Services -- Shares trended higher this week, slightly outperforming the overall market. This week, analysts at Evercore ISI initiated coverage on DXC with an Outperform rating (equivalent to Buy), while analysts at Morgan Stanley increased their price target. In line with our view, the analysts cited the potential for margin expansion as well as a positive view of the recently announced spinoff of the U.S. public sector segment. Recall that by spinning out this segment, DXC can create value as it will own the majority share of the new business (86%) and free up the segment to trade a higher multiple, more in line with other similar government service companies, without being tied to DXC's declining legacy business. Despite the recent run, we continue to see upside as management progresses toward achieving synergy targets and works to shift the company's overall revenue to include a higher mix of digital services as means to expand margins and offset declines in the legacy business. We reiterate our $100 target.

iShares MSCI Eurozone ETF (EZU) ; $43.39; 1,000 shares; 1.55%; Sector: Europe -- Shares trended lower this week as the euro declined relative to the dollar. This is the only ETF in the portfolio and is our passively managed way of achieving our dual goal of adding exposure to the European markets and the euro currency. We selected the EZU over other European ETFs such as the Vanguard European Stock Index Fund (VGK) due to its minimal exposure to the U.K., a region of Europe we felt it prudent to avoid given the lingering uncertainty surrounding Brexit. We also decided upon an unhedged ETF (as opposed to the hedged version, the HEZU) as this provides currency exposure, something we opted for based on our belief that the euro still has room to run relative to the dollar. Given that this is an ETF encompassing over 200 companies, we will not have a price target.

Eli Lilly (LLY) ; $87.23; 1,450 shares; 4.52%; Sector: Healthcare -- Shares trended higher but slightly underperformed the overall market. The only key announcement this week came Wednesday morning when the company announced it will be collaborating with CureVac Ag to create up to five potential cancer vaccine products using CureVac's proprietary RNActive technology. Eli Lilly will be paying CureVac an upfront payment of $50 million, and CureVac could be eligible to receive payments totaling $1.7 billion if certain milestones are achieved across all five vaccines. As part of the deal, Lilly will be responsible for target identification, clinical trial development and commercialization into the market. Lastly, we will hear from the company Tuesday when it reports earnings. We will be reviewing closely how successful Lilly's new pharmaceutical products have been in their recent launches, and we are interested in hearing management's commentary about their diabetes franchise. It is important for Jardiance and Trulicity to gain share in the market as competitor launches are looming, and gaining brand loyalty in this market is key to keeping sales high. Also, we will be looking for updates to the company's pipeline as last quarter the stock fell partially due to management announcing a new drug application delay in their rheumatoid arthritis drug. Although management later expedited this process, it is important to keep the pipeline's momentum on the positive side as these new drugs are expected to signal a strong refresh cycle for the company. We reiterate our $93 price target.

Facebook FB ; $174.98; 1,000 shares; 6.25%; Sector: Technology -- Shares pushed higher this week but underperformed the overall market. We continue to like FB as the company is one of two dominant players in the lucrative online ad space (the other being Alphabet) and is constantly investing in new revenue streams. Recall that the company recently doubled down on its virtual reality bet, announcing its new headset, the Oculus Go, last week and has made many investments to increase the amount of video content on its platforms. We also learned this week that the company collaborated with Intel on the latter's new artificial intelligence-focused chip called the Nervana Network Processor, potentially deepening its push into artificial intelligence and deep learning. All in, we continue to see near-term strength because of online ads and the additional space being created for them via new video content (an important factor as this will prevent an overload of ads in one place from damaging the user experience). We believe mid- to- longer-term upside will result from the push into virtual reality and efficiency improvements resulting from the company's ever-increasing advancements in artificial intelligence. We reiterate our $175 target.

First Data Corp. (FDC) ; $19.08; 3,000 shares; 2.05%; Sector: Technology -- Shares traded largely higher this week. Anticipation of a strong quarter and guidance grew this week, as many research analysts are projecting an improved quarter for the company. In an interesting development this week, on Thursday the company accidentally posted a news release on its website announcing that First Data was acquiring BluePay Holdings, a credit card processing company. Although this news release was quickly removed by the company as First Data said no transaction is finalized, we believe this potential acquisition is another example of First Data's transition from being a defensive company to an offensive one. First Data wants its Clover system to be the dominant player in the market, and the current integration of CardConnect, and a potential deal with BluePay, would strengthen Clover's presence in the market. Much like the growing analyst expectations, we have high hopes for First Data's third-quarter results, as well as the future guidance, which is why we will be looking to add shares below basis where we can ahead of the print. We reiterate our $21 price target.

Alphabet GOOGL ; $1,005.07; 150 shares; 5.39%; Sector: Technology -- Shares trended lower on what was a relatively slow news week for the company as we gear up for next week's earnings release. We continue to like Alphabet as the company is a dominant player in the online ad industry and a leader in the in the artificial intelligence (AI)/deep learning space. As we've noted, we believe that while the short term will be driven by the company's ability to monetize online advertisements by driving greater return for customers via highly targeted marketing campaigns (achieved with greater efficiency via AI), longer-term growth will result from the company's efforts to diversify revenues. To this extent, we believe the company has already taken major steps toward this longer-term objective by investing in initiatives such as autonomous driving (Waymo), advancing its hardware offerings (home assistants, smartphones, etc.) and the aforementioned push into artificial intelligence, which will ultimately disrupt a vast number of industries as companies seek to harness AI in order to increase efficiencies and speed up the time to achieving breakthroughs. Turning to earnings, we will be looking for revenues of $21.9 billion to translate into earnings per share of $8.55. We also will be keeping a close eye on traffic acquisition costs as this was a point of concern in the last release because the shift to mobile has increased these costs and cut into margins. However, we note that the reduced net profits (from lower margins) can be offset by the increased volume of mobile users. We reiterate our $1,100 target.

Illinois Tool Works (ITW) ; $155.03; 550 shares; 3.05%; Sector: Industrials -- Shares pushed higher this week, outperforming the overall market. Kicking off the week, analysts at Wells Fargo raised their price target on ITW while reiterating their Outperform rating (equivalent to Buy). We continue to like ITW into next week's earnings as we believe the recent vehicle damage suffered because of Hurricanes Harvey and Irma will aid in reigniting the company's vehicle OEM division (21% of 2016 revenue). Recall that this segment was a key area of weakness in the company's last report and until recently has weighted on the company as a result of the (now broken) peak auto thesis. We look forward to learning more when the company reports fiscal-third-quarter earnings on Monday before the bell. On that note, we will be looking for sales of $3.57 billion with earnings per share of $1.64. We will also be looking for organic sales growth of roughly 1.8% with reaffirmation that organic sales growth for the full year is on track to meet or exceed management's 2%-4% target. We reiterate our $170 target and will re-evaluate following the release.

KeyCorp (KEY) ; $18.49; 2,200 shares; 1.45%; Sector: Financials -- Shares managed to increase this week despite some selling after the company reported earnings on Thursday. KeyCorp's third-quarter results were in line with expectations as revenue of $1.55 billion came in just under the consensus of $1.56 billion, and adjusted earnings per share of $0.35 matched the consensus. Much like the trading patterns of its financial peers last week after reporting earnings, KeyCorp fell victim to similar selling on Thursday that was accelerated by selling across the sector. Net interest income for the quarter did not rise to the same degree that many investors expected under a raising rate environment, and critics of the quarter will point to disappointing average loan balance growth and fourth-quarter expectations as a reason to sell the stock. However, Keycorp's net charge-offs have been steadily decreasing for the company, suggesting that the credit quality of Keycorp's balance sheet is improving. We expect KeyCorp's stock to trade higher as we anticipate profitability to increase if interest rates increase in December, as well as into 2018, and the prospects of fiscal stimulus represent another potential catalyst that would improve economic activity. Read our analysis of the quarter here. We reiterate our $21 price target.

Magellan Midstream Partners (MMP) ; $68.11; 1,500 shares; 3.65%; Sector: Energy -- Despite this week's decline, we continue to find MMP attractive as the company has the only spare storage capacity for oil coming out of the Permian, a key factor as Permian-based E&Ps continue to pump and there are growing concerns that production will soon overtake capacity, making available space increasingly more valuable. We also remind members that MMP has recently partnered with Valero to build out its Pasadena, Texas, marine storage in anticipation of the approaching capacity constraints. Outside of MMP's strong storage position, we are encouraged by the company's commitment to returning cash to shareholders. On that note, this week the company announced its board of directors has increased the quarterly payout to 90.5 cents per share for the third quarter of this year (to be paid out Nov. 2), representing a 2% increase compared to the second quarter and an 8% increase compared to the same time last year. Annualized, this represents a distribution per share of $3.62 or roughly 5.3% at current levels. We reiterate our $89 target and believe current levels to be attractive given the opportunities for growth and strong, cash-backed distribution yield.

Nucor (NUE) ; $60.00; 2,150 shares; 4.61%; Sector: Industrials -- Shares traded higher this week after reporting solid third-quarter results. After a previous earnings pre-announcement that guided down estimates, Nucor matched the consensus of the top line by reporting $5.17 billion in revenue, and beat on the bottom line by reporting earnings per share of $0.83. Although there were some sequential declines to top- and bottom-line growth due to Hurricane Harvey limiting operations at Nucor's Louisiana facility, during the call management noted that capacity at the plants had neared 100%. Also, management noted that they are expecting prices to increase heading into the end of the year and into the fourth quarter, supporting improvements to the health business, but we believe the two biggest events that would boost the company are an update to the Section 232 trade investigation into Chinese steel and heavy infrastructure legislation. During the call, management stressed the importance of what limiting Chinese steel imports would do for the industry, going as far as calling the imports illegal, and they expressed optimism that the U.S. government will eventually conclude that they must impose tariffs. Also, after commenting on how Hurricane Harvey damaged much of the company, management noted that an increase in infrastructure spending to proactively fix many of the country's in-house problems would be a boost to Nucor's bottom line. While we have yet to receive either of these potential catalyst events so far in 2017, we remain hopeful that either an update or a new spending bill will be passed in 2018 that will help lift the stock. That being said, given our large position in the company, we may become inclined to trim the stock a few points to protect against future pre-announcements. To read our analysis of the quarter, please see here. We reiterate our $75 price target.

Nvidia (NVDA) ; $196.90; 200 shares; 1.41%; Sector: Technology -- Shares pushed higher, outperforming the overall market. On Monday, analysts at Mizuho raised their price target on shares. In line with our view, the analysts cited robust trends in gaming and crypto-currencies as factors driving increased demand for the company's GPU chips as well as the recent wins in Chinese data centers. Recall that China's cloud and technology juggernauts -- Alibaba, Baidu and Tencent -- have all selected to upgrade their massive data centers with Nvidia's new Tesla V100 GPU accelerators. We continue to view Nvidia as best in class and one of the purest ways to play the rapidly growing artificial intelligence (AI) and machine learning (ML) trends as their GPU chips are an absolute necessity for any organization looking to improve its ability to filter through massive amounts of data (i.e., any company with user data looking to benefit from data analytics). Bottom line, with so many avenues of growth, including video games, autonomous driving, cloud/datacenters, AI/ML and crypto-currency mining, we continue to like Nvidia in both the near and long terms. We reiterate our $200 target as we believe shares will likely need some time to consolidate at current levels before taking the next leg higher.

Schlumberger (SLB) ; $63.15; 1,400 shares; 3.16%; Sector: Energy -- Shares moved lower this week despite the company reporting in-line earnings on Friday before the bell. Despite the poor performance this week, as we noted in our earnings Alert (read here), we believe shares have put in a floor at current levels and would be buyers on any move below $60. Backing our optimism moving forward, management, known for their "tell it like it is" style, expressed their view that the macro environment is finally showing clear signs of a balanced oil market and noted that, should current trends continue, we will likely see further upside to oil prices and, as a result, increased investments in global E&Ps. This would lead to increased demand for SLB services as upstream producers look to get the most out of their oilfields. For these reasons, we reiterate our One rating and our $93 price target.

Southwest Airlines (LUV) ; $59.37; 700 shares; 1.48%; Sector: Transportation -- Despite Southwest underperforming the overall market this week, we continue to see opportunity in this premier U.S. airline for its industry leadership in domestic travel. Last week, the company made two announcements that we believe will be incrementally positive for Southwest. First, the company said it will raise its fares by a few dollars, and this move should support top-line growth. Southwest already has some of the lowest fares in the business, and their consumer loyalty will not be affected by the price hike. Second, the company announced it will extend routes into Hawaii, a highly lucrative market. This was a positive announcement for Southwest because few airlines fly to the distant U.S. state, allowing Southwest to quickly gain share in this long-haul route. However, due to concerns over pricing wars raised when United Continental Holdings reported on Thursday, we decided to trim shares in a very strong gain to reduce our exposure from a potential downward industry trend. Read our trade Alert here. We will learn more if this trend is affecting Southwest when we hear from the company on Thursday. We expect earnings to follow close to what management pre-announced in late September (read our analysis here), but as mentioned with United, guidance will be key. Also on the print, we will be looking to see if headwinds from the implementation of the new reservation system have shifted to tailwinds, and if improvements were made to the company's poor fuel hedge, which inflated costs. We reiterate our $70 price target.

Starbucks (SBUX) ; $54.57; 1,800 shares; 3.51%; Sector: Consumer Discretionary -- Shares declined this week on limited news. Dating back to when the company last reported earnings in late July, the stock has been undecided on which direction it wants to move, vacillating in a range of $52 to $56. Expectations are high that management will reset earnings when they report on Nov. 2, and although this event is likely baked into current shares, the overhang of the unknown has capped the upside potential of the stock. The initial reset may cause the stock to drop a few points, but we are of the camp that once management sets more realistic targets, the company will deliver on its goals and the stock will reverse from its previous downward trend. Abundant growth opportunities are out there for Starbucks as investment in its China business and mobile pay systems will help drive revenue and same-store sales propel forward. With the company's popular pumpkin spice latte season under way, improvement to its channels and store logistics are critical for an efficient quarter. The company knows the playbook it needs to follow, and with a reset likely upcoming, it is just a matter of hitting on those results. We reiterate our $62 price target.

T.J. Maxx (TJX) ; $72.09; 2,000 shares; 5.15%; Sector: Consumer Discretionary -- Shares were flat to higher this week on little news. While we maintain that TJX is one of the few investable retailers in a world where Amazon is looking to entrench itself in everything from food to clothing (this week reports surfaced that the e-commerce giant may be looking into its own sportswear line) and maybe even pharmaceuticals, we have been taking a harder look at what's holding shares back and what will be required for them to break out. First, we reiterate our view that because of its off-price model, TJX can fend off price competition from Amazon while the treasure-hunt experience keeps buyers coming back to physical locations. Backing this view, analysts at Morgan Stanley noted this week that in the firm's third annual AlphaWise apparel survey, TJ Maxx and Marshall's took two of the top 10 spots for net purchase intentions over the next year. Second, we believe that despite positive analyst commentary in recent weeks surrounding both the off-price retail sector and TJX specifically, we believe the lack of upward movement can be attributed to TJX's presence in retail ETFs such as S&P Retail (XRT) , VanEck Vectors Retail (RTH) and the Consumer Discretionary Select Sector Fund (XLY) . These two viewpoints brought us to our next question: What will it take to break out if TJX is to continue to be tied to these ETFs? Looking to another retail example, Walmart, we saw last week that shares finally broke out on the back of robust growth and a significant buyback. Looking at TJX, we believe the company's new HomeSense concept could prove to be the new growth the company needs as it focuses on larger-ticket items and can capitalize on consumers' love for the rapidly growing HomeGoods brand. As for buybacks, while the timing is difficult to predict, we are confident another one is on the way as the company has already planned to repurchase $1.3 billion to $1.8 billion worth of shares this year and since 1997 has bought back over $18 billion worth of stock. For these reasons, we continue to view TJX as attractive despite the ETF-ization of the market holding them back. We reiterate our $85 target.

Waste Management (WM) ; $77.73; 950 shares; 2.64%; Sector: Industrials -- Shares pushed higher this week, marginally outperforming the overall market. Next week, Waste Management will release fiscal-third-quarter results. While we realize WM may see some margin pressure resulting from upfront expenses due to Hurricanes Harvey and Irma, we maintain these events will ultimately be accretive into the end of the year as the cleanup effort is expected to take months and WM is the largest player in the ongoing effort. As a result, we would not be surprised if WM raised guidance into the end of the year as increased revenues play into the fourth quarter. Further out, we see upside beyond the cleanup effort resulting from management's ongoing effort to increase adoption of technology such as e-commerce, artificial intelligence and autonomous driving capabilities (starting with landfills before eventually progressing to collection routes). As for next week's earnings release, we are looking for sales of $3.7 billion to translate into EPS of $0.88. We also will be listening for any updates on the current CTO search. We reiterate our $85 target and will look to re-examine following the release.

TWOS

Apache (APA) ; $41.53; 2,250 shares; 3.34%; Sector: Energy -- Shares increased this week alongside the rise in WTI crude prices. The stock has slowly reversed some of the losses incurred when management last week reported its 2017 guidance update, 2018 spending plan and their detailed update to the Alpine High play, which we initially viewed as a long-term overreaction. Although we do have some apprehensions related to the company's 2018 budgeting plan and concerns over the lack of infrastructure in place to get the vast amount of oil and gas out of the Alpine High and into the market, we ultimately believe the value of this asset is still being discounted in Apache's share price. The 2018 ramp-up in production in the Alpine High is already expected to offset the loss of production from key assets (the Canadian business) that were divested earlier this year, and if oil can continue to trend above $50 per share with relief toward $55 by the end of the year, we believe that positive momentum will carry Apache into the new year. Since we believe the Alpine High is still not being properly reflected into Apache's shares, we have not altered our view that shares are cheap, but to reiterate, the 2018 production potential means this story is extended out into the New Year. We reiterate our $60 price target.

Arconic (ARNC) ; $27.17; 2,200 shares; 2.14%; Sector: Industrials -- It was a muted week for the company as Arconic is in a quiet period before earnings. As we have been telling members over the last few months, we believe there is a possibility that Arconic has the potential to be a takeover target due to the lack of developments in its permanent CEO search, as well as the consolidation in the aerospace industry. Further supporting the potential of an acquisition bid, Arconic boasts an excellent balance sheet with a decreasing amount of debt. Takeover bid or not, this balance sheet and improving industry trends in aerospace make shares attractive to own, and there is the potential for near-term upside should the company announce a permanent CEO. Lastly, we will hear from the company when it reports earnings Monday. We will be looking to see if the company was able to continue expanding margins through cost reduction, and how it is faring during the large engine ramp up. We reiterate our $31 price target.

Citigroup (C) ; $73.53; 1,150 shares; 3.02%; Sector: Financials -- We continue to view Citigroup as the most attractive of the major banks following last week's earnings release, when the company reported a top- and bottom-line beat. While the stock sold off following the release, the move was in line with the broader financial index and we believe it to be a result of profit taking (and not a change in sentiment) as support quickly came in at roughly the $71 level. Furthermore, with current tangible book value at roughly $68 a share, we see downside as limited and believe shares will push higher as the Fed continues to unwind its balance sheet and as management progresses toward its 2020 goals of 11% return on tangible common equity and earnings per share of $9. We also believe management's capital allocation policy of returning over $20 billion to shareholders in each of the next two years will continue to support shares. Lastly, we note that with the Senate passing its budget proposal this week, we are one step closer to tax reform, another potential tailwind for the financial sector. We reiterate our $80 target.

Danaher (DHR) ; $90.79; 1,000 shares; 3.24%; Sector: Life Sciences -- Shares climbed this week after a strong third-quarter earnings report. Revenue for the quarter was $4.53 billion, topping the consensus of $4.47 billion, and non-GAAP adjusted earnings per share of $1 beat the consensus by $0.05. Importantly, sales growth for the quarter came in at 3%, marking the first time this year the company reached management's target. Driving the strong growth in the quarter was continued success in Life Sciences, Diagnostics and Environment Applied Solutions; however, the big kicker was improvements to the company's dental segment. In previous quarters, flat to declining growth in this division suppressed the company's overall totals, but the lagging business initiated a small turnaround during the last quarter as core sales growth increased by 1%. We have told members that the slightest improvement to dental would be the key for the stock to break out, which is why it was of little surprise that the stock gained nearly 5% after earnings. Looking forward, if the company can continue to find success and reach core sales growth figures near the company's historic range of 3%-4%, we think the company's valuation will return to its previously higher levels. For more of our analysis from the quarter, please read our Alert here. We reiterate our $94 price target.

DowDuPont (DWDP) ; $71.18; 1,375 shares; 3.50%; Sector: Chemicals -- Shares declined this week despite limited news. With the integration process between legacy companies Dow Chemical and DuPont under way, we believe it is best to sit back and let CEO Ed Breen and executive chairman Andrew Liveris do their thing and align the two businesses and improve the $130-billion-market-cap company. Looking ahead, the integration of the two legacy companies is expected to create $3 billion in run-rate cost synergies, as well as $1 billion in growth synergies. After these synergies are achieved, the company will next begin splitting up its divisions (agriculture, materials and specialty products) in a move that will unlock additional value to shareholders. As we said during our members-only call on Wednesday, we believe this value creation is still not fully reflected in DWDP's stock price, and we believe each of the three new companies would be worth owning. Since we are still early in the timeline of the company's upcoming capital changes, we believe the stock still has plenty of room to run, and we reiterate our $85 price target.

General Electric (GE) ; $23.83; 2,450; 2.09%; Sector: Industrials -- Shares pushed higher this week, despite reporting a significant bottom-line miss when the company released third-quarter results on Friday before the bell. Perhaps most surprising, while the stock was initially down as much as 8% on Friday in pre-market trading, shares reversed course and ultimately finished up over 1% as investors reset expectations and bought into new CEO John Flannery's plan to turn things around. We also believe the incredible midday reversal can be attributed to Flannery's candor while speaking on CNBC after the conference call and his willingness to hear out and take into account analysts' views, noting that the ultimate task of the company is to return value to shareholders and not let emotion get in the way of this mandate. As we noted in our earnings Alert, although we were disappointed by the results, we were not surprised as the company's issues are well known at this point. With expectations reset and Flannery in charge, we are optimistic that we will finally begin to see the changes we have been waiting so long for. Lastly, as we noted in our follow-up Alert, while we believe the stock will be higher in 18 months, largely predicated on our belief in Flannery and his track record turning around GE Healthcare, we still believe the dividend to be at risk and advise any members who are in the name for the income and cannot weather a potential dividend cut to consider taking action before the company's Nov. 13 Investor Update event, where Flannery will reveal details on GE's capital allocation plans. That said, we are buyers under $20 and reiterate our longer-term $31 target.

NXP Semiconductors (NXPI) ; $115.88; 550 shares; 2.28%; Sector: Technology -- With shares trading at a material premium to Qualcomm's current $110-a-share tender offer, we continue to advise that members not tender their shares and reiterate that it makes more sense financially to simply sell in the open market. As we've noted, we believe the current offer undervalues shares (a view shared with a number of activist investors, including Elliott Management) and Qualcomm must raise its offer to roughly $118 a share. We are holding on to our position as we believe Qualcomm will ultimately raise its offer rather than walk away from potential synergies (which are still realizable at a $118-a-share offer) and because of NXPI's auto industry exposure, a key market as cars become more advanced and are equipped with more semiconductors at an accelerating pace. That said, while we believe shares to be worth at least $118, we must reiterate our $110 target until we receive more concrete news from either QCOM or NXPI.

PepsiCo (PEP) ; $111.61; 500 shares; 1.99%; Sector: Consumer Staples -- Despite recent weakness in shares, we continue to view PepsiCo as an important holding that provides both diversity and stability to the overall portfolio. Despite some weakness in organic revenue growth in the most recent quarter, we believe the issues to have been temporary as management acknowledged their mistakes (allocating too much shelf space to smaller brands at the cost of sales drivers such as Mountain Dew and Pepsi) and has already made efforts to correct them. With weakness being seen in the beverage sector, we believe PepsiCo's efforts to introduce more snack offerings, via the Frito-Lay division, to be as crucial as ever. Lastly, we would note that although we recently saw lawmakers in Cook County, Ill., decide to repeal the recently enacted soda tax, this remains a headwind and we are pleased by the ongoing efforts to include healthier beverage options. That said, despite support being seen at levels slightly below where the stock currently trades, we are reiterating our Two rating to reflect our concerns surrounding the beverage industry and until we see that management is back on track to achieve full-year organic growth targets of greater that 2%. We reiterate our $120 target and will continue to monitor for reports on the domestic and international beverage markets to key us into any changes in the current trend.

Join Jim Cramer, CNBC's Jon Najarian and Other Experts Oct. 28 in New York

Jim Cramer will host CNBC's Jon Najarian, TD Ameritrade's JJ Kinahan, famed analytics expert Marc Chaikin and other market mavens on Oct. 28 in New York City to share successful strategies for active investors.

You can join them as they discuss how smart investors can make the most of options trading, futures contracts, fundamental and quantitative analysis and great ETFs to buy right now. Participants will also get a chance to meet Jim and other panelists and take photos.

When: Saturday, Oct. 28, 8 a.m.-3 p.m. ET

Where: The Harvard Club of New York, 35 W. 44th St., New York, N.Y.

Cost: $250 per person.

Click here for the full conference agenda or to reserve your seat now. 

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long ABT, ATVI, AAPL, AGN, APA, AVGO, XEC, CMCSA, DHR, DXC, FB, FDC, GE, GOOGL, LUV, KEY, MMP, NUE, NVDA, ARNC, C, DWDP, PEP, NXPI, SLB, SBUX, TJX, EZU, ITW, LLY and WM.