Weekly Roundup

Stocks were on fire in November, and I suspect nobody really wanted the month to end. But here we are, in the countdown to 2024.

The statistics for December, however, are actually pretty bullish; it is the second-strongest month for the stock market, and of course, we have the the potential for the famed Santa Claus rally period, where everyone seems to get bulled up. But we need to remember stocks have come a long way since the end of October, up more than 10% on the S&P 500 -- that is quite a steep move. But nobody rings a bell at the top, so we have to pay attention to the indicators and when the boat gets loaded up, we have to make some moves to lighten the load.

Fed speakers were all over this week, with Fed Chair Jerome Powell alone speaking twice on Friday, signaling the Fed remains vigilant in its fight against inflation. As expected, the Fed Chair warned that expecting rate cuts in 2024 was far too premature. The committee won't tip its hand until the very last minute, which means more positive data on the inflation front is needed.

Falling energy prices have been a tailwind easing inflation pressures. The scope of such policy adjustments could be an inflationary headwind. OPEC+ agreed to a bigger production cut, but prices fell back following that, which indicates supply may be an issue or traders were simply front-running the decision.

Economic data has been positive with the Chicago PMI surprisingly strong, construction spending up, ISM manufacturing ramping, prices coming down and the S&P global PMI nearly showing consistent growth (above 50) after months of contraction. China's economy is showing some cracks, though, with their PMI numbers still below 50. New orders were down, but the non-manufacturing component was higher for the 11th straight month of expansion, though new orders, foreign sales and employment declined.

Interest rates have fallen sharply from recent peaks, another sign that inflation is receding. While the economy may be slowing down, there is no hiding that the third quarter was one of the best quarters in quite some time, and driven by strong productivity, labor and demand, rather than higher prices, which had some effect. If there is a slowdown in growth (which is being forecast by a few Fed "nowcasters" in Atlanta, New York and St. Louis) there may not be a full-blown recession, just a minor blip. Lower rates will help the economy recover from a drop such as this and earnings will again become a focal point (increases).

Catching Up on the AAP Portfolio This Week

November saw the S&P 500 climb 8.9%, its ninth best monthly gain since 1990, and the Nasdaq Composite add 10.7%. As impressive as that is, a dozen our portfolio positions cleared that almost 9% hurdle set by the S&P 500 with Coty shares taking the top spot followed by Qualcomm and Marvell. Of course, the robust gains for those two market barometers meant our inverse ETFs were a drag on the portfolio, but as we noted on Thursday, there are reasons to think the market's rally could run out of gas. We did no buying for the portfolio this week, but we did add the shares of Lab Corp. to the Bullpen, and we took another look at Morgan Stanley shares. A pullback in the market and some digestion of November's gains could give us an opening to put some capital to work in either of those two positions or a few others in the Bullpen.

While we have no positions above the 4% level for the portfolio's assets, we have a few that are encroaching that level, including Coty, United Rentals, and Axon. We're inclined to let these winners run, but should they move past that 4% level the prudent move would be take some of those gains off the table.

This Week's AAP Videos and Podcasts

We cover a lot of ground during the week in our Daily Rundowns and the AAP Podcast. If you happened to miss one or more of them, here are some helpful links:

Monday, November 27:Why Early Holiday Shopping Numbers Line Up Well for the Portfolio

Tuesday, November 28: What to Expect from the Fed with Critical Inflation Data on the Way

Wednesday, November 29:ChargePoint, the Fed and More: Your Top Questions Answered

Wednesday, November 29:Podcast: Jay Woods Trades his Thoughts on the Textbook Rally

Thursday, November 30: Not Too Hot, Not Too Cold, the Data is 'Just Right'

Friday, December 1: Helene Meisler Explains How the Market Will "Shake Out" From Here

Key Global Economic Readings

(Note: T is the most recent period, T-1 is the prior period's reading and T-2 is two periods back, the intent being to illustrate any trends)

Chart of the Week:  Defense and Aerospace Chart is Out of this World

A pretty strong move the past two months for the SPDR S&P Aerospace & Defense exchange-traded fund XAR. This ETF includes AAP name Lockheed Martin, which is one of our steadier names. The chart of XAR shows a very bullish trend with higher highs and higher lows. This sector is an important one as it is a huge beneficiary of government spending.

The indicators are flashing buy signals. MACD, which shows a change in trajectory in the moving averages remains on a buy, while money flow is positive. In the top pane, the candles all month have either been blue or green. The blue candles in the GoNoGo system reflect a strong bullish sentiment. The parabolic SAR, which shows a change in price trajectory before it actually occurs remains bullish. The recent gap above the downtrend line, successful test was the launch point. A pullback here might be a great opportunity to get on board the XAR.

For a closer look at the chart, click here.

Other charts we shared with you this week were:

Monday, November 27: Here is How Marvell is Setting Up in Front of Earnings

Monday, November 27: Charting the S&P 500: Inching Closer to a Key Level

Tuesday, November 28: Lab Corp's Textbook Bullish Uptrend

Wednesday, November 29: For Walmart, Money Does not Grow on Dollar Trees

Thursday, November 30: Time to Hit Save and Update Microsoft

Poll of The Week

Earlier this week, we asked AAP members if they have or would be inclined to use buy-now-pay-later services this holiday shopping season. As you can see, the response was clear:

We'll be back to tap into the collective smarts of the AAP membership with another poll next week.

The Coming Week

As we move into December and past the bulk of retailer earnings, we will see a noticeable drop in the volume of earnings reports next week. That's the good news. The not so good news is that earnings slowdown will be offset by a deluge of economic data that will reveal the speed and inflation pressure in the services economy as well as overall job creation and wage pressure. Exiting this week, the Atlanta Fed's GDP Now Model pointed to 1.2% for the current quarter compared to the New York Fed Staff Nowcast model at 2.17%, the St Louis Fed at 2.04% against the 5.2% second print for GDP in the third quarter of 2023. The pieces we receive this week will lead to further revisions in those current quarter figures and the same for the upcoming November prints for the consumer as well as producer price indexes. Currently the Cleveland Fed Nowcast estimate for November inflation is for a very small drop of .01% month/month.

Here's a closer look at the economic data coming at us next week:

U.S.

Monday, December 4

• Factory Orders - October (10:00 AM ET)

Tuesday, December 5

• S&P Global Final Services PMI - November (9:45 AM ET)
• ISM Non-Manufacturing PMI - November (10:00 AM ET)
• JOLTs Job Openings Report - October (10:00 AM ET)

Wednesday, December 6

• Weekly MBA Mortgage Applications (7:00 AM ET)

• ADP Employment Change Report - November (8:15 AM ET)
• Productivity - 3Q 2023 (8:30 AM ET)
• Weekly EIA Crude Oil Inventories (10:30 AM ET)

Thursday, December 7

• Challenger Job Cuts Report - November (7:30 AM ET)

• Weekly Initial & Continuing Jobless Claims (8:30 AM ET)
• Wholesale Inventories - October (10:00 AM ET)
• Weekly EIA Natural Gas Inventories (10:30 AM ET)
• Consumer Credit - October (3PM ET)

Friday, December 8

• Employment Report - November (8:30 AM ET)
• The University of Michigan Consumer Sentiment Index (Preliminary) - December (10:00 AM ET)
• Used Car Prices - November

International

Monday, December 4

• Germany: Imports/Exports - October

Tuesday, December 5

• Japan: Jibun Bank Services PMI (Final) - November
• China: Caixin Services PMI - November
• Eurozone: HCOB Services PMI (Final) - November

• UK: S&P Global/CIPS Services PMI (Final) - November
• Eurozone: Producer Price Index - October

Wednesday, December 6

• Germany: Factory Orders - October
• Eurozone: Retail Sales - October

Thursday, December 7

• China: Imports/Exports - November
• Japan: Leading Economic Index (Preliminary) - October
• Germany: Industrial Production - October
• Eurozone: 3Q 2023 GDP (3rd Estimate)

Friday, December 8

• Japan: GDP (Final) - 3Q 2023
• Germany: Inflation Rate (Final) - November

A light week of earnings but we should also know that earnings season never ends, it just slows down. Important data points from FDX, AVGO, ACN, LULU, NKE and some others will give us more clues this month as to how the economy shapes up for 2024. This week it is Broadcom, a direct competitor for AAP name Marvell (MRVL), while some retail names like AZO, SIG, GME, OLLI and DG will trickle in along with LULU. We'll see if shoppers continue to spend as the holiday season continues.

Here's a closer look at the earnings reports coming at us next week:

Monday, December 4

• Open: Science Applications (SAIC)

Tuesday, December 5

• Open: Autozone (AZO), Signet Jewelers (SIG)
• Close: Box (BOX), Dave & Busters (PLAY), Sentinel One (S), Toll Brothers (TOL)

Wednesday, December 6

• Open: Brown-Forman (BF.B), Campbell Soup (CPG), Ollie's Bargain Outlet (OLLI), United Natural Foods (UNFI)
• Close: GameStop (GME)

Thursday, December 7

• Open: Ciena (CIEN), Dollar General (DG)
• Close: Broadcom (AVGO), Cooper (COO), lululemon (LULU), Vail Resorts (MTN)

ONEs

Alphabet GOOGL; $131.86; 850 shares; 3%; Sector: Communication Services

WEEKLY UPDATE: Alphabet had a rough week after some heavy selling hit the stock and a few other mega-cap names this week. Shareholders were simply giving back some recent profits, the stock having risen more than 10% from the end of October. But falling through the 20-day moving average Thursday is a short-term negative, but the 100-day moving average is holding firm. Ideally, we would like to see this $130 area hold firm for Alphabet, build a base and take a run at the next leg higher. An article in Barron's suggested names like Alphabet are "under-owned" by the hedge fund crowd. Also, Youtube Premium gained new gaming feature amid recent price hikes. Google said they would start enforcing updated personalized ads policy in February 2024.

1-Wk. Price Change: -3.53%; Yield: 0.00%

INVESTMENT THESIS: We believe that while search and digital ad dominance are what will carry shares in the near- to mid-term, longer-term it is the company's artificial intelligence "moat" that will provide for new avenues of growth. AI is what has made the company's search, video, and targeted ad capabilities best-in-class and is the driving force behind the company's success in voice (Google Home) and autonomous driving (Waymo). Furthermore, we believe it is this AI expertise that will also make the company more prevalent in other industries, including healthcare via its subsidiary Verily, as AI and machine learning continue to disrupt operations across industries. Lastly, compounding our positive view of the company's future opportunities, we believe that Alphabet's free cash flow generation and solid balance sheet set it apart and are what will allow the company to continue taking chances on far-out ground-breaking and potentially world-changing projects.

Target Price: Reiterate $155; Rating: One

Panic Point: $115

RISKS: Regulatory risk (data privacy), competition, and macroeconomic slowdown impacting consumers and therefore ad buyer activity.

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/27/21), Why GOOGL Has Shrugged Off Antitrust Headlines in Early Trading Tuesday (10/20/20)

Applied Materials Inc. (AMAT) ; $151.59; 275 shares; 1.12%; Sector: Semiconductor Manufacturing

WEEKLY UPDATE: The chart of Applied Materials is clearly in a consolidation phase. After a few volatile sessions post earnings in November the stock made a move to the 20-day moving average, often a spot of good support. That happened on Tuesday and Applied made a sharp rebound. We would like to see the stock settle down as lower volatility sets in, establish a base and then start making a run higher. We see this potentially happening in a month or so, we'll be patient. The recent news about an investigation into their potentially illegal sales to China (violating export restrictions) is going to be a drag on the stock, but hopefully over time this will be proven to be a non-event.

1-Wk. Price Change: 0.83% Yield: 0.84%

INVESTMENT THESIS: Applied provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. With its diverse technology capabilities, Applied delivers products and services that improve device performance, power, yield, and cost. Applied's customers include manufacturers of semiconductor chips, liquid crystal, and organic light-emitting diode displays, and other electronic devices. Applied operates in three reportable segments: Semiconductor Systems (73% of 2022 revenue, 78% of 2022 operating income), Applied Global Services (22%, 19%), and Display and Adjacent Markets (5%, 2%). Key customers include Samsung (12% of 2022 sales), Taiwan Semiconductor (20%), and Intel (10%). The company has a rising dividend bias with the current annualized dividend reaching $1.28 per share vs. the 2017 dividend of $0.43 per share and 2018's $0.64 per share.

Target Price: Reiterate $165; Rating: One

Panic Point: $120

RISKS: Manufacturing and Supply Chain, Competitive Factors, Government Regulation, Technology Change.

ACTIONS, ANALYSIS & MORE: We're Pulling This Name Up From the Bullpen, Investor Relations.

Amazon (AMZN) ; $147.03; 835 shares; 3.29%; Sector: Consumer Discretionary

WEEKLY UPDATE: After a pretty strong November, Amazon is trying to carve out a base at a higher level. But the worry here is if the stock starts to roll over, there is plenty of downside room to go and gaps to fill, way down toward $120, where the 200-day moving average lives. But for now, we are in a seasonally strong period and waiting of course for the holidays to commence. After a tight consolidation we should see Amazon break free of the $150 area soon enough, and that would launch the stock into a new bullish uptrend. In news for the week, Accenture announced they would be using AWS to integrate into their AI services. Amgen also announced they would be using the AWS artificial intelligence to increase manufacturing throughput to deliver medicines faster for patients worldwide. Amazon and NVIDIA are expanding their AI partnership. ServiceNow and Amazon signed a 5-year collaboration agreement. Truist Securities reiterated a buy on Amazon with a $176 price target.

1-Wk. Price Change: 0.20%; Yield: 0.0%

INVESTMENT THESIS: We believe upside will result from Amazon's continued eCommerce dominance, AWS' continued leadership in the public cloud space, and ongoing growth of the company's advertising revenue stream, which feeds off Amazon's eCommerce business. Additionally, we believe profitability will continue to improve as AWS and advertising account for a larger portion of total sales as both these segments sport higher margins than the eCommerce operation. And while we believe the increasing share of revenue from these higher margin businesses will be key to driving profitability longer-term, we believe margins on eCommerce stand to improve as the company's infrastructure is further built out and economies of scale further kick in. The embedded call option is that management is always looking to enter a new space and generate new revenue streams.

Target Price: Reiterate $170; Rating: One

Panic Point: $108

RISKS: High valuation exposes the stock to volatile swings, eCommerce has exposure to slower consumer spending and competition, management is not afraid to invest heavily, potential headwinds resulting from new eCommerce regulation in India, and management is not scared to invest aggressively for growth, which can at times cause volatile reactions as near-term concerns arise relating to the impact on margins.

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/29/21), 2020 Letter to Shareholders (4/15/21), Initiation (2/2/18), Investor Relations

Axon Enterprise Inc. (AXON) ; $231.51; 620 shares; 3.84%; Sector: Aerospace & Defense

WEEKLY UPDATE: We didn't have much to drive the stock this week, but we continue to like the tight base being built at the higher end of the recent range. The $230 level has been proven difficult to exceed this time around, but as the moving averages catch up to the price (the 20-day moving average is now just underneath the current price) then we could see a new leg up get started. The company and Verizon recently demonstrated the ability to sustain performance levels for mission critical functions while passing video data over a network slice in 5G environment. Axon also published a piece called "Force for Good," celebrating its 30th anniversary.

1-Wk. Price Change: 1.35% Yield: 0.00%

INVESTMENT THESIS: Axon Enterprise Inc develops, manufactures, and sells conducted energy devices and cloud-based digital evidence management software designed for use by law enforcement, corrections, military forces, private security personnel, and private individuals for personal defense. The company operates in two segments: Taser and Software & Sensors. Taser develops and sells CEDs used for protecting users and virtual reality training. Software & Sensors manufactures fully integrated hardware and cloud-based software solutions such as body cameras, automated license plate reading, and digital evidence management systems. Axon delivers its products worldwide and gets most of its revenue from the United States. President Biden's fiscal year 2023 budget requests a fully paid-for new investment of approximately $35 billion to support law enforcement and crime prevention -- in addition to the President's $2 billion discretionary request for these same programs. According to Mordor Intelligence, the wearable, and body-worn cameras market on its own was valued at $1.62 billion in 2020 and is expected to reach $424.63 billion by 2026.

Target Price: Reiterate $260; Rating: One

Panic Point: $195

RISKS: Manufacturing and supply chain, competitive factors, government regulation, technology change.

ACTIONS, ANALYSIS & MORE: Strong Demand Bodes Well for This Conducted Energy Devices Firm, Initiating a New Position in a Public Safety Technology Name, Investor Relations.

Bank of America Corp. (BAC) ; $30.96 ; 3,615 shares; 3%; Sector: Financial Services

WEEKLY UPDATE: Bond yields have started to decline and that is good news for financials such as Bank of America. The stock had a decent week of trading, moving above $30 at one point, it's highest levels in nearly four months. Lower interest rates are positive for the banks as they can re-start their lending business and perhap some improvements in housing (mortgage lending). In news, BAC was fined 12 million dollars by CFPB over mortgage data reporting. In Barron's this week, an analyst suggested BAC is a value stock that "can trounce growth for awhile." Indeed! RBC's banking analyst named BAC one of his two top picks in banking.

1-Wk. Price Change: 4.14% Yield: 3.10%

INVESTMENT THESIS: Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with approximately 56 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking, and trading across a broad range of asset classes, serving corporations, governments, institutions, and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories, and approximately 35 countries. From a reporting basis, the company's business breaks down as follows: Net Interest Income breakdown: Consumer Banking 57%, Global Banking 23%, Global Wealth & Investment Management 14%, and Global Markets 6%; Income Before Tax breakdown: Consumer Banking 42%, Global Banking 27%, Global Wealth & Investment Management 16%, and Global Markets 15%. Bank of America pays a quarterly dividend of $0.22 per share.

Target Price: $35; Rating: One

Panic Point: $23.50

RISKS: Financial markets, fiscal, monetary, and regulatory policies, economic conditions, and credit ratings.

ACTIONS, ANALYSIS & MORE: We're Upgrading and Building Upon a Position, We're Initiating a Bank Position, Investor Relations

Coty Inc. (COTY) ; $11.58; 12,850 shares; 3.98%; Sector: Consumer Discretionary

WEEKLY UPDATE: Coty continues its recovery from lows in late October. So, far this past month the stock has rallied sharply, a nice 20% gain over that period on pretty strong turnover. That tells us some big money is starting to buy Coty shares. Currently the stock is fighting a battle at the 200-day moving average, which is where the stock may stall out and consolidate as the shorter term moving averages catch up. Recent highs at the $13 area become the next target for Coty if the stock can break above $11.50 confirmed. On the company front, Coty announced a commitment to setting emissions reduction target in line with science-based net-zero. A positive for the environment.

1-Wk. Price Change: 1.94%; Yield: 0%

INVESTMENT THESIS: Founded in Paris in 1904, Coty is one of the world's largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Coty serves consumers around the world, selling luxury and mass-market products in more than 130 countries and territories. The company derives almost 45% of its revenue from the Americas, 44% from Europe, the Middle East and Africa, and the balance from Asia Pacific. By revenue category, Prestige drives 62% of Coty's revenue but more than 80% of its operating income with the balance derived from its Consumer Beauty segment. Management intends to further grow the Prestige business, expanding its prestige fragrance brands, through the ongoing expansion into prestige cosmetics, and the building of a comprehensive skincare portfolio leveraging existing brands. Management is also targeting margin improvement at its Consumer Beauty brands as well as expanding its presence in China across both of its reporting segments. China's beauty and personal care market is expected to grow at a quicker pace of 5.4% per annum through 2027, putting it at $70 billion-$75 billion by 2027.

Target Price: $15; Rating: One

Panic Point: $9.00

RISKS: Industry competition and consolidation, product efficacy and safety, currency, and brand licensing.

ACTIONS, ANALYSIS & MORE: We're Making Our Portfolio a Little More Beautiful Today, We're Adding a Name to the Bullpen, Investor Relations.

Deere & Co. (DE) ; $368.81; 357 shares; 3.52%; Sector: Farm Machinery & Equipment

WEEKLY UPDATE: Following disappointing results from Deere last week, the stock is trying to recover some lost ground. It is still trading below the highest level from the day after earnings, so a bear flag is being represented on the chart. That's not positive, but if we can see the stock make a strong base above the $350 level for a month or so then we might see the stock start an uptrend, but first things first. A couple of firms cut their price target on Deere this week, which included Canaccord who lowered its price objective to $375.

1-Wk. Price Change: -0.37% Yield: 1.46%

INVESTMENT THESIS: The global agriculture equipment market size is expected to reach $166.5 billion in 2027, growing at a 6% CAGR over the 2020-2027 period. The favorable outlook for equipment purchases in the coming quarters reflects rising farmer income that historically drives new equipment purchases. At the same time, Deere continues to lean into the sustainability movement with its precision ag offering. That technology is helping farmers drive crop yields higher while also realizing cost savings, which makes the new technology a productivity upgrade compared to older equipment. In February, Deere announced a 4.2% in its quarterly dividend per share to $1.25 from $1.20.

Price Target: Reiterate $450; Rating: One.

Panic Point: Increase to $315 from $300

RISKS: Geopolitical uncertainty, economic conditions, raw material, and other input prices, prices for key agricultural commodities.

ACTIONS, ANALYSIS & MORE: Initiation (10/25/21), Investor Relations

Elevance Health Inc. (ELV) ; $483.12; 275 shares; 3.56%; Sector: Health Care

WEEKLY UPDATE: It's been a down week for Elevance, but the drop on Wednesday clearly was not their fault. A story out of the Wall Street Journal that Cigna and Humana may merge rocked the entire HMO group on that day. Frankly, it doesn't hurt Elevance as much as it does these two also-rans. United Health remains the leader with ELV right behind, so combining forces creates chaos and difficult synergies, all likely to benefit ELV in the long run if this merger takes place. With the stock still above the 200-day moving average and with other short-term moving averages coming up quickly, we like Elevance to make a run soon at the April highs near $500.

1-Wk. Price Change: 0.92%; Yield: 1.23%

INVESTMENT THESIS: Elevance, formerly Anthem/Blue Cross Health, is a premier healthcare brand that appears to be in the sweet spot for HMO companies. Mostly domestic, this company has a wide reach and coverage across the U.S., serving more than 118 million people via medical, pharmacy, clinical, and care solutions. Founded in 1944, Elevance offers a terrific business model that works in boom or bust economic times. The opportunity to find a company with reliable and dependable revenue and cash flows is right here with Elevance. Revenue growth for this company has surged in recent years, with better than double-digit growth since 2018 as the company thrived during the pandemic.

Target Price: Reiterate $550; Rating: One

Panic Point: $410

RISKS: With any insurance business the risk is high for changes in regulation and government programs. Since the onset of Obamacare more than 10 years ago, companies like Elevance have changed their model to be more in line with a better cost/benefit analysis, reducing waste and squeezing out excesses (as was outlined and suggested in Obamacare). Separately, as the population increases and ages, there is more opportunity for Elevance to grow, but with those changes, there is a risk. Lastly, competition is brisk with some very strong opponents who keep their costs low (Humana, Cigna, UNH, CVS/Healthnet).

ACTIONS, ANALYSIS & MORE: We're Trimming One Stock to Add to Another,2021 Annual Report, 2Q 2022 Earnings Report, Investor Relations.

PepsiCo Inc. (PEP) ; $168.69; 730 shares; 3.3%; Sector: Consumer Defensive

WEEKLY UPDATE: Not much news this week for Pepsi but we continue to see good support on the chart at the 20-day moving average ($167). The recent drop in October and subsequent rally back to the 50-day moving average is currently being digested. A nice base is being built at this level, call it $165-$170 for now. Indicators show Pepsi's stock is neutral to slightly bearish, but the price action will tell the story. A move above $170 would be very bullish and set up a move towards the 200-day moving average at $177.

1-Wk. Price Change: -0.40%; Yield: 3%

INVESTMENT THESIS: PepsiCo is one of the largest food-and-beverage companies globally. It makes, markets, and sells a slew of brands across the beverage and snack categories, including Pepsi, Mountain Dew, Gatorade, Doritos, Lays, and Ruffles. The firm uses a largely integrated go-to-market model, though it does leverage third-party bottlers, contract manufacturers, and distributors in certain markets. In addition to company-owned trademarks, Pepsi manufactures and distributes other brands through partnerships and joint ventures with companies such as Starbucks. The combination of the consumable nature of those products along with PepsiCo's ability to realize price increases has led to consistent revenue, EPS, and dividend growth during both the Great Recession and the Covid pandemic.

Target Price: Reiterate $210; Rating: One

Panic Point: $140

RISKS: Economic conditions, supply chain constraints, raw material costs.

ACTIONS, ANALYSIS & MORE: Adding to 2 Positions on Market Weakness, We're Initiating 1 Name While Adding to Another, This Stock Should Have 'Pep,' Even in a Recession, Investor Relations

Vulcan Materials Company (VMC) ; $215.63; 613 shares; 3.54%; Sector: Building Materials

WEEKLY UPDATE: Vulcan has created a nice, bullish "W" pattern on the chart. This is where a bottom may be established and if tested successfully the chart has the appearance of the letter W. This is a key bullish pattern of a test, re-test and follow-through to the upside. That is the condition here for Vulcan's chart, but it appears the stock is stalling out. Volume trends are flat and the indicators we follow are simply going sideways. Not much news here but earnings/guidance out this week from ROAD signal that maybe spending in this infrastructure area might increase in 2024.

1-Wk. Price Change: 1.87% Yield: 0.8%

INVESTMENT THESIS: Vulcan Materials operates primarily in the U.S. and is the nation's largest supplier of construction aggregates (primarily crushed stone, sand, and gravel), a major producer of asphalt mix and ready-mixed concrete, and a supplier of construction paving services. Its products are the indispensable materials used in building homes, offices, places of worship, schools, hospitals, and factories, as well as vital infrastructure including highways, bridges, roads, ports and harbors, water systems, campuses, dams, airports, and rail networks. Ramping spending associated with the Biden Infrastructure Law should drive demand for Vulcan's products over the coming years. Vulcan has historically complemented its organic growth prospects by acquiring businesses to expand its geographic reach and product scope. Since 2014, the company has acquired more than two dozen companies, including the 2021 acquisition of U.S. Concrete. That combination has allowed the company to deliver steady top and bottom-line growth over the last decade, with only a modest decline when the pandemic hit in 2020.

Target Price: Reiterate $245; Rating: One

Panic Point: $175

RISKS: General economic and business conditions; dependence on the construction industry; timing of federal, state, and local funding for infrastructure; changes in the level of spending for private residential and private nonresidential construction.

ACTIONS, ANALYSIS & MORE: Initiation Post, Investor Relations

TWOs

Apple (AAPL) ; $191.24; 700 shares; 3.58%; Sector: Technology

WEEKLY UPDATE: It was a good week to consolidate recent gains, and that is exactly what Apple did. The stock had a great run in November with the rest of the market and reached an overbought condition last week. There is nothing wrong with a little sideways movement as the overbought condition is burned off. Indicators are still reflecting bullish sentiment, the stock is less than 2% away from all-time highs. In news this week, Apple suggested ending its relationship with Goldman Sachs on the Apple credit card. Also, the court of appeals ruling on antitrust in the U.K. may be revived. A rumor was out that Apple's low-cost vision pro variant was to slash production costs by half. Lastly, an article in Barron's stated Apple's risk from Huawei phones looks 'overstated', which is good news.

1-Wk. Price Change: 0.67% Yield: 0.5%

INVESTMENT THESIS: While we acknowledge that near-to-midterm performance remains heavily influenced by iPhone sales, the dynamic is shifting as investors finally place greater emphasis on Services growth. We are bullish on the 5G upgrade cycle and believe longer-term upside will continue to come as Services revenue grows its share of overall sales. Services provide for a recurring revenue stream at higher margins, a factor that serves to reduce earnings volatility while allowing for a higher percentage of sales to fall to the bottom line; as a result, we believe that Services growth and the installed base, are much more important than how many devices the company can sell in each 90-day period. In addition to improved profitability, we also believe the transparent nature of this revenue stream will demand an expanded price-to-earnings multiple as segment sales grow. Furthermore, we believe that Apple's desire to push deeper into the healthcare arena will help make its devices invaluable as more life-changing features are added and the company works to democratize health records. Lastly, also see upside resulting from increased adoption of wearables (think the Apple Watch) and potential new product announcements such as an AR/VR headset or an update on Project Titan, the company's secretive autonomous driving program.

Target Price: Reiterate $195; Rating: Two

Panic Point: Reiterate $160

RISKS: Slowdown in consumer spending, competition, lack of new product innovation, elongated replacement cycles, failure to execute on Services growth initiative.

ACTIONS, ANALYSIS & MORE:FY3Q21 Earnings Analysis (7/27/21), Apple Product Launch Event Takeaways (4/20/21), Takeaways from WWDC (6/22/20), Initiation (1/4/10), Investor Relations

Chipotle Mexican Grill (CMG) ; $2,233.83; 34 shares; 2.03%; Sector: Restaurants

WEEKLY UPDATE: We recently downgraded and took some chips off the table on Chipotle following a move to all-time high price levels. The stock has been so impressive with this move higher over the past month. What's lovely about the chart is the stock moved over a period of time rather than just a one-shot gap higher and then down. A series of higher highs, higher lows signal an uptrend is in place. Chipotle this week got into the holiday spirit by offering mystery tees and car napkin holders inspired by Chipotle fans. Also this week it was announced a 'buy now, pay later' for Chipotle food for those who cannot afford to pay at once. It's a curious concept here but apparently the company believes it will drive more sales.

1-Wk. Price Change: 0.64% Yield: 0.00%

INVESTMENT THESIS: Our investment thesis on the shares centers on the company offering consumers better-for-you fare while also expanding its geographic density, embracing digital ordering, and bringing to market limited-time menu offerings that should spur traffic and boost average revenue per ticket. With the upside to our price target shrinking, we are once again reviewing the incremental upside and revisiting protein input costs.

Target Price: Reiterate $2,200; Rating: Two

Panic Point: Increase to $1,850 from $1,800

RISKS: Input costs, particularly for the protein complex, labor costs, consumer spending, food safety, industry dynamics, and competition.

ACTIONS, ANALYSIS & MORE: Initiating a New Position in Chipotle, We're Adding Chipotle to the (Bullpen) Menu

Costco Wholesale (COST) ; $596.25; 240 shares; 3.83%; Sector: Consumer Staples

WEEKLY UPDATE: Some pretty strong monthly sales numbers released this week from Costco as the holiday shopping season gets underway. Comparable sales were up 3.5% for November. Several analysts raised their price target on Costco including Telsey Advisory with a target of $625 while Goldman Sachs upped their target to $641 due to strong traffic at their stores. Stifel also maintained a buy and raised their price target as well. Costco's numbers in November seem to point toward a robust holiday shopping period is coming.

1-Wk. Price Change: 0.83% Yield: 0.68%

INVESTMENT THESIS: We like Costco's long-term prospects, driven by a club-based operating model that focuses on volumes, not margins, and therefore offers its customers a value proposition of everyday low prices. The strength of this model has created an incredibly loyal customer base with low churn and continued share gains in both bricks-and-mortar and e-commerce. And this is a global concept, evidenced by the strength of sales both in the U.S. and abroad, which includes an emerging China opportunity. We see the company's membership model as a key differentiator vs. other retailers and its plans to open additional warehouse locations in the coming quarters should drive retail volumes and the higher-margin membership fee income as well. We also appreciate management's approach to capital returns and their willingness to return cash when it is in excess on the balance sheet.

Target Price: Reiterate $625. Rating: Two

Panic Point: $525

RISKS: Inability to pass through higher costs, fuel prices, weaker consumer, and membership churn.

ACTIONS, ANALYSIS & MORE: FY4Q21 Earnings Analysis (9/23/21), FY2Q21 Earnings Analysis (3/4/21), Upgrading Costco to a One (2/25/21), $10 Per Share Special Dividend (11/16/20), Recent Buy Alert (2/28/20), Initiation (1/27/20), Investor Relations

First Trust Nasdaq Cybersecurity ETF (CIBR) ; $50.32; 2,900 shares; 3.91%; Sector: Cybersecurity

WEEKLY UPDATE: A huge week for cybersecurity stocks vaulted the CIBR above more resistance. The month of November has truly been outstanding for this ETF, gaining more than 10% since the start of the month and about 12.5% since the CIBR tagged the bottom in late October. Earnings this week from Crowdstrike and Zscaler were enough to push this group higher, but more worrisome talk of cyber-attacks across the globe showed how countries, governments and businesses remain vulnerable to cyber criminals. According to some of the recent conversations post earnings, CEO's and management teams from CIBR-related businesses see more attacks happening and more spending by firms to help get ahead of the "bad guys." CIBR remains a solid ETF as long as world conditions are volatile.

1-Wk. Price Change: 3.07% Yield: 0%

INVESTMENT THESIS: The First Trust Nasdaq Cybersecurity ETF seeks investment results that correspond generally to the price and yield (before the fund's fees and expenses) of an equity index called the Nasdaq CTA Cybersecurity Index. The Nasdaq CTA Cybersecurity Index is designed to track the performance of companies engaged in the cybersecurity segment of the technology and industrial sectors. It includes companies primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices to protect the integrity of data and network operations. To be included in the index, a security must be listed on an index-eligible global stock exchange and classified as a cybersecurity company as determined by the Consumer Technology Association. Each security must have a worldwide market capitalization of $250 million, have a minimum three-month average daily dollar trading volume of $1 million, and have a minimum free float of 20%.

Target Price: Reiterate $62; Rating: Two

Panic Point: $38.50

RISKS: Cybersecurity spending, technology, and product development, the timing of product sales cycle, new products, and services in response to rapid technological changes and market developments as well as evolving security threats.

ACTIONS, ANALYSIS & MORE: We're Swapping One Cybersecurity Stock for Another, ETF Product Summary

Lockheed Martin Corp. (LMT) ; $449.41; 295 shares; 3.55%; Sector: Aerospace & Defense

WEEKLY UPDATE: Lockheed Martin stock continues to consolidate and flirt with a breakout above the 200-day moving average. We should note volume trends are rising but we are not seeing evidence of a break higher, which could be a problem. In fact, there is a series of lower highs in the chart but LMT has plenty of support below with shorter term moving averages pointing higher. The company announced another big win with the US Army this week for Launch Rocket System Services.

1-Wk. Price Change: -0.58% Yield: 2.8%

INVESTMENT THESIS: Lockheed Martin is the largest defense contractor globally and has dominated the Western market for high-end fighter aircraft since the F-35 program was awarded in 2001. Lockheed's largest segment is aeronautics, which is dominated by the massive F-35 program. Lockheed's remaining segments are rotary and mission systems, which is mainly the Sikorsky helicopter business; missiles and fire control, which creates missiles and missile defense systems; and space systems, which produces satellites and receives equity income from the United Launch Alliance joint venture. Historically, the stability of defense spending has been a haven during periods of economic uncertainty, and we see that repeating once again even as geopolitical conflicts are likely to lead to incremental demand for Lockheed's products. The company has increased its dividend consistently over the last 19 years and is widely expected to boost it again in the coming days. In October 2022, Lockheed announced its board authorized the purchase of up to an additional $14.0 billion of LMT stock under its share-repurchase program.

Target Price: $520; Rating: Two

Panic Point: $360

RISKS: Contracts and budget risk with the U.S. government and the Department of Defense, F-35 program funding and renewal, competition, and subcontractor issues.

Mastercard (MA) ; $414.36; 275 shares; 3.05%; Sector: Info. Tech

WEEKLY UPDATE: It's been a wild couple of months for Mastercard shares, reaching the $400 level for the first time in months then suffering a sharp correction, and now we find the price is back above the magic $400 area again. Moving averages are starting to catch up to the price, the MACD is on a strong buy signal and money flows are bullish. Several retailers have signed on with Mastercard including J. Crew and BJ's. An article from Barron's talked about a shift to a cashless society, which would be good news for Mastercard. The holiday shopping season got underway last week and so far, it's been pretty robust, a 7.5% gain in online sales on Black Friday weekend, Cyber Monday also brought more buying as well -- it's setting up to be a strong holiday shopping season.

1-Wk. Price Change: 0.45% Yield: 0.55%

INVESTMENT THESIS: Mastercard is a card network company that benefits from the secular shift away from cash transactions and toward card-based and electronic payments. On Covid-19 dynamics, we view MA as a "reopening" play and an economic recovery play within technology because its cross-border volumes fell sharply during the pandemic but will rebound as mobility increases and travel restrictions ease. Mastercard has more international exposure relative to Visa, making its growth outlook more susceptible to new travel restrictions. However, we view MA as the better long-term play as we are betting on that inevitable recovery.

Target Price: Reiterate $425 Rating: Two

Panic Point: $350

RISKS: The recovery in cross-border transactions, regulation in the payments market, competition from other fintechs, pricing pressures.

Microsoft Corp. (MSFT) ; $374.51; 325 shares; 3.26%; Sector: Technology

WEEKLY UPDATE: The drama with OpenAI continues to play out, but this week we learned the CEO, who was booted and went to MSFT for a 'cup of coffee' was back at OpenAI as their leader. In the end, MSFT is probably going to be a winner as they have a huge investment stake in the promising young company co-founded by Elon Musk. Salesforce released earnings this week and they were stellar, bolstering the idea of strength in cloud (AZURE) and AI that is going to be the future driver of earnings for MSFT. The stock hit all-time highs but backed off a bit and may now be starting a corrective move, which could have the stock land down at the 50-day moving average near $346. If that happens over the next six weeks, we suspect this will be an excellent spot to add shares.

1-Wk. Price Change: -0.77% Yield: 0.8%

INVESTMENT THESIS: We believe the cloud to be a secular growth trend and that upside to shares will result from Microsoft's hybrid cloud leadership as the company grabs market share in this expanding industry. While companies may look to build out multi-cloud environments, Microsoft's Azure offering will be a prime choice thanks to the company's decision to provide the same "stack" used in the public cloud, to companies for their on-premises data centers. Additionally, we would note that hybrid environments are currently the preference for most companies because they allow them to maintain critical data in-house while taking advantage of the agility and scalability provided by public clouds. Outside of the cloud opportunity, we maintain a positive view on the company's growing gaming business, which we believe is becoming an increasingly prominent factor in the Microsoft growth story as gaming becomes more mainstream, management works to convert its gaming revenue from one-time license purchase to a recurring subscription model and as technologies like augmented/virtual reality evolve. Finally, as it relates to LinkedIn and other subscription-based services such as O365 and various Dynamics products, we continue to value them highly for their recurring revenue streams, which we remind members, to provide for greater transparency of future earnings.

Target Price: $390; Rating: Two

Panic Point: Reiterate $300

RISKS: Slowdown in IT spending, competition, cannibalization of on-premises business by the cloud.

ACTIONS, ANALYSIS & MORE: FY4Q21 Earnings Analysis (7/27/21), Ignite 2021, Microsoft Acquires ZeniMax (9/22/20), CEO Satya Nadella on CNBC (3/25/20), CEO Satya Nadella speaks at the World Economic Forum (1/23/20)

McDonald's Corp. (MCD) ; $285.96; 410 shares; 3.14%

WEEKLY UPDATE: McDonalds had been on a monster run from mid-October until last week. This week though the stock has taken a much-needed breather. MCD had reached an overbought reading for several days, and with the recent cross above the 200-day moving average the company is not working on carving out a base. We could see that tight consolidation last a month or so. There is resistance ahead at the September highs (call it $287) where more sellers may come out. Deutsche Bank maintained a buy rating but upped their price target to $313 from $295.

1-Wk. Price Change: 1.21%; Yield: 2.34%

INVESTMENT THESIS: The company franchises and operates McDonald's restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 40,275 McDonald's restaurants at year-end 2022, approximately 95% were franchised. The US market accounts for ~40% of total revenue, International 50%, and International Developmental Licenses Markets & Corporate ~10%. With consumers facing continued inflation pressures, we see McDonald's winning consumer wallet share as it benefits from pricing action put in place in recent quarters and improving input costs.

Target Price: $325; Rating Two

Panic Point: Increase to $240 from $235

RISKS: Consumer spending, competition, supply chain interruption, franchise business model, employment challenges.

ACTIONS, ANALYSIS & MORE: We're Moving This Bullpen Name Up to the Portfolio, Here's Why We're Adding This Name to the Bullpen, McDonald's Investor Relations.

Marvell Technology Inc. (MRVL) ; $52.80; 2,000 shares; 2.83%; Sector: Technology

WEEKLY UPDATE: The company reported earnings Thursday night that were mixed. They beat on earnings by a penny over estimates as revenue was slightly better on the quarter. Guidance however was softer than expected as the company sees softer demand down the road. Perhaps Marvell is just being conservative as their main competitor Broadcom (AVGO) showed the same conservatism in their September report (they will report again in a couple weeks). A couple of analysts kept buy ratings on the stock, meaning a drop would be a buying opportunity. We should note however Marvell has run strong into this earnings print, up nearly 23% in a month's time. So, a modest pullback to support around $50-52 should not be a surprise and would be a nice buying opportunity.

1-Wk. Price Change: -5.76%; Yield: 0.45%

INVESTMENT THESIS: Marvell is a fabless supplier of high-performance standard and semi-custom infrastructure semiconductor solutions. These solutions power the data economy, enabling the data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial end markets. With roughly 75%-80% of Marvell's revenue stream tied to digital infrastructure, we see it continuing to benefit from rising content consumption and creation. Pointing to that rising demand that necessitates network densification and the build of digital infrastructure, Ericsson sees global monthly average usage per smartphone reach 46 gigabytes (GB) by the end of 2028 vs. 19 GB in 2023 and 15 GB in 2022.

Target Price: Reiterate $62; Rating: Two

Panic Point: $45

RISKS: Technology risk, customer risk, competition risk, reliance on manufacturing partners, and supply chain constraints.

ACTIONS, ANALYSIS & MORE: We're Watching These Three Names Set to Report Thursday, Why We Added This Chip Stock to the Bullpen, Investor Relations.

ProShares Short QQQ ETF (PSQ) ; $10.11; 4,070 shares; 1.1%

WEEKLY UPDATE: As the Nasdaq continues to move ahead this quarter we are reminded of the inherent risk of market corrections that can happen at any time. It is nearly impossible to time such events, but suffice to say having protection in place affords us the luxury of waiting for a down period without having to chase down protection. Down moves can be sharp, quick and vicious. With the small protection we have in place it works to dampen the volatility of the portfolio.

1-Wk. Price Change: 0%; Yield: 0.0%

INVESTMENT THESIS: ProShares Short QQQ seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Nasdaq 100 Index. The Nasdaq 100 Index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization.

Target Price: N/A; Rating Two

RISKS: Because PSQ shares track the inverse of the Nasdaq 100 Index, PSQ shares will move lower when the Nasdaq 100 Index moves higher.

ACTIONS, ANALYSIS & MORE: Selling Shares in 1 Position, Closing Another, Adding to 1, and Initiating 1

ProShares Short S&P 500 ETF (SH) ; $13.66; 3,310 shares; 1.21%

WEEKLY UPDATE: Stocks were modestly higher this week, we are satisfied with the protection being offered by the SH ETF. This is a great tool to not only provide good short-term protection but it serves to dampen volatility of our portfolio. While it certainly does not feel good to be against the grain in a market running higher, the cost of playing defense is cheap and serves a purpose.

1-Wk. Price Change: -0.58%; Yield: 0.0%

INVESTMENT THESIS: The Pro Shares Short S&P 500 ETF seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the S&P 500. We are using SH shares to blunt market volatility and hedge the portfolio's performance against its benchmark, the S&P 500. Given the tactical nature of this position, we do not expect to hold SH shares for the same length of time as we do the portfolio's long positions.

Target Price: N/A; Rating Two

RISKS: Because SH shares track the inverse of the S&P 500, SH shares will move lower when the S&P 500 moves higher.

ACTIONS, ANALYSIS & MORE: Selling Shares in 1 Position, Closing Another, Adding to 1, and Initiating 1.

Qualcomm Inc. (QCOM) ; $129.67; 1,005 shares; 3.49%

WEEKLY UPDATE: The week started slow for Qualcomm but the stock made some noise Wednesday with a strong showing on pretty good turnover. The stock remains below the late summer highs but has made some nice attempts to rise above. We should note the stock is pretty-well overbought here and could rest a bit, in fact a nice sideways consolidation as it carves out a base would be ideal. The company announced Tuesday they would be promoting ARM chips for PC's. OnePlus 12 teased out their newest smartphone which will contain the QCOM chipset, Snapdragon 8 Gen 3.

1-Wk. Price Change: 1.50%; Yield: 2.47%

INVESTMENT THESIS: Qualcomm focuses on foundational technologies for the wireless industry, including 3G (third generation), 4G (fourth generation), and 5G (fifth generation) wireless technologies and processor technologies including high-performance, low-power computing, and on-device artificial intelligence technologies. As a connected processor company, its technology roadmap aims to enable the connected intelligent edge (the next generation of smart devices) across industries and applications beyond handsets, including automotive and the Internet of Things (IoT). Qualcomm has three reportable segments: QCT (Qualcomm CDMA Technologies) semiconductor business, which develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in mobile devices; automotive systems for connectivity, digital cockpit, and ADAS/AD; and IoT including consumer electronic devices; industrial devices; and edge networking products. QCT accounts for 80%-85% of revenue. QTL (Qualcomm Technology Licensing) licensing business grants licenses or otherwise provides rights to use portions of the company's intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. QTL accounts for ~15% of Qualcomm's revenue but contributes a greater portion of the company's operating income. The company has been paying a quarterly dividend since 2003, and its next quarterly dividend of $0.80 per share will be paid on September 21 to shareholders of record on August 31.

Target Price: $150; Rating Two

Panic Point: $108

RISKS: Customer risk, technology advancement, competition risk, third-party supplier and manufacturing partner risk.

ACTIONS, ANALYSIS & MORE: We're Making Another Call to the Portfolio's Bullpen, Here's When We'd Consider Taking a Position in Qualcomm, Qualcomm Investor Relations

SPDR Gold Shares ETF (GLD) ; $192.01; 312 shares; 1.6%; Sector: Commodities

WEEKLY UPDATE: Gold has been on fire of late, gold futures are now within 1% of its all-time high near 2,088 per ounce. One might wonder why gold continues to rise if inflation is coming down or the perception of it is real. It's a good question to ask, but in reality gold performs well during inflationary booms and disinflationary spirals. We saw this happen during 2011-2016 when gold took off as deflation drove through the economy. There is still plenty of turmoil around the world, a weaker currency and inflation - which pretty much sums up the many reasons to hold the yellow metal. Sporting a 15% gain for our portfolio, it's been a great holding since the beginning.

1-Wk. Price Change: 3.5% Yield: 0.0%

INVESTMENT THESIS: The GLD ETF is a proxy for gold. This "trust" buys and sells gold futures each day to mimic the daily moves in the underlying asset, in this case, gold. We see gold as an ideal hedge against a weaker dollar, strong inflation (which tends to weaken the dollar) alternative, and in uncertain times (worry over war and battles). For the past 15 years, gold has been a strong asset class held by fund managers, countries, and banks. The metal is not correlated with markets and will move based on the demand/supply dynamic in the marketplace. Other precious metals such as silver and platinum are good proxies for the criteria stated earlier, however, gold is far more liquid and offers better upside opportunities.

Target Price: Reiterate $200; Rating: Two

Panic Point: $165

RISKS: Weak inflation data, interest rate risk, dollar strength relative to other currencies, geographic risk.

Trinity Capital Inc. (TRIN) ; $14.79; 4,610 shares; 1.82%

WEEKLY UPDATE: Trinity pulled back this week from an overbought condition. The stock remains in a nice uptrend with higher highs and higher lows. Recently a touch back on the 20- day moving average came on lower turnover, that's what you want to see on a pullback. Better support if the stock continues to correct is at the 100-day moving average at $14. With lower yields in the marketplace Trinity's business is in a good spot.

1-Wk. Price Change: -1.33%; Yield: 14.6%

INVESTMENT THESIS: Trinity Capital is a Business Development Company that provides debt, including loans and equipment financing to growth-stage companies, including venture-backed companies and companies with institutional equity investors. Trinity aims to generate current income and, to a lesser extent, capital appreciation through its investments. It does this by making investments consisting primarily of term loans and equipment financings and, to a lesser extent, working capital loans, equity, and equity-related investments. Because Trinity is a BDC, it must pay out at least 90% of its net income to shareholders in the form of dividends. Trinity is positioned to fill the gap left by recent bank failures and shareholders should benefit as that lifts the company's investment portfolio and income stream, and its dividend payout to shareholders.

Target Price: $16; Rating Two

Panic Point: $12

RISKS: Global economic, political, and market conditions; regulations governing our operations as a BDC; credit facility provisions

ACTIONS, ANALYSIS & MORE: Let's Dig Into the Thesis Behind Our Newest Position, As Banks Start Tightening Up on Loans, Let's Check This Bullpen Stock, Listen as We Make a Bullpen Pick -- and Talk Business Development Cos.; Investor Relations.

United Rentals (URI) ; $501.83; 300 shares; 4.03%; Sector: Industrials

WEEKLY UPDATE: A pretty good week for United Rentals, rising up sharply on Wednesday with some pretty good volume. It was an accumulation day too, with higher prices and volume than the prior session. The stock is flirting with recent highs from late summer into the Fall, call it a stubborn level of $492. Eventually that is going to break and URI will push through $500, but for now we wait. Optimistically, the stock is not overbought here and could continue to move forward with a push by the bulls. URI is above all the relevant moving averages here and remains bullish on all time frames.

1-Wk. Price Change: 7.39% Yield: 1.18%

INVESTMENT THESIS: United Rentals, the largest equipment rental company in the world, operates throughout the United States and Canada, and has a limited presence in Europe, Australia, and New Zealand. It serves industrial and other non-construction; commercial (or private non-residential) construction; and residential construction. Industrial and other non-construction rentals represented approximately 50% of rental revenue, primarily reflecting rentals to manufacturers, energy companies, chemical companies, paper mills, railroads, shipbuilders, utilities, retailers, and infrastructure entities; commercial construction rentals represented approximately 46% of rental revenue, primarily reflecting rentals related to the construction and remodeling of facilities for office space, lodging, healthcare, entertainment, and other commercial purposes; and residential rentals around 4% of revenue. We see the company benefiting on three fronts -- the seasonal uptick in construction spending; the release of funds and projects associated with the five-year Biden Infrastructure Bill; and the company's nip-and-tuck acquisition strategy that should further enhance its geographic footprint. In January, the company announced a fresh $1 billion buyback authorization following the completion of $4 billion in share repurchases over the 2012-2021 period.

Target Price: Reiterate $470; Rating: Two

Panic Point: $410

RISKS: Industry and economic risk, competition and competitive pressures, and acquisition risk.

ACTIONS, ANALYSIS & MORE: Initiating a Position in This Equipment Rental Company, We're Adding This Equipment Rental Company to the Bullpen, Investor Relations

THREEs

Energy Select Sector SPDR Fund (XLE) ; $84.99; 865 shares; 1.97%; Sector: Energy

WEEKLY UPDATE: Oil stocks were on the move this week as crude oil continued it's run higher. The commodity has risen nearly 5% to the 200-day moving average on hope/word that OPEC+ would cut more production. On Thursday they agreed to cut 1 million barrels a day more and that has buoyed oil prices. The XLE however did not get the benefit as gas prices (natural) continue to plunge. All told, energy stocks are still on the rise and it won't be long before the XLE ETF reflects the strength in the commodity. The chart shows the XLE at good support on the 200-day moving average. The ETF has been flirting with that level for about three weeks, above $87 would be bullish.

1-Wk. Price Change: 0.07%; Yield: 3.91%

INVESTMENT THESIS: The Energy Select Sector SPDR Fund is an exchange-traded fund that tracks the performance of the Energy Select Sector Index. The ETF holds large-cap U.S. energy stocks. It invests in companies that develop & produce crude oil & natural gas and provide drilling and other energy-related services. The holdings are weighted by market capitalization.

Target Price: Reiterate $98; Rating: Two

Panic Point: $82.50

RISKS: Interest rates, weakness in the broad economy, energy prices.

ACTIONS, ANALYSIS & MORE: Adding to 2 Positions on Market Weakness, We're Initiating a Position in the Energy Sector, State Street Global Advisors SPDR Fact Sheet for XLE.

* The AAP Ratings System

1 - Buy Now (BN): Stocks that look compelling to buy right now.

2 - Stockpile (SP): Positions we would add to on pullbacks or a successful test of technical support levels.

3 - Holding Pattern (HP): Stocks we are holding as we wait for a fresh catalyst to make our next move.

4 - Sell (S): Positions we intend to exit.

Action Alerts PLUS is long BAC, AXON, COTY, LMT, ELV, GLD, SH, PSQ, XLE, PEP, MA, CIBR, AMZN, AMAT, URI, MSFT, MRVL, GOOGL, DE, COST, CMG, AAPL, VMC, TRIN, MCD, QCOM.