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Hotline Sample Report

This report is a sample for information purposes only. These recommendations are closed.
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6/27/2022 10:01:46 AM Eastern Time

AND THE LAST SHALL BE FIRST (SOMETIMES)
By Charles Payne, CEO & Principal Analyst

 Click here to download PDF version

What a wonderful session last week, as it capped off the first up week (in five weeks) that investors’ fear of the Fed ‘going too far’ abated, and buyers were eager to pounce to make their move. This time, a few other fence-sitters joined along. For the week, however, market breadth was horrible and the down channels were still firmly in place.

Market Breadth

NYSE

NASDAQ

Advancers

2,668

3,072

Decliners

564

1,472

New Highs

10

33

New Lows

68

147

Up Volume

6.81 billion

5.84 billion

Down Volume

1.41 billion

3.57 billion

Mega-cap names soared on Friday.

Reopening Trade Takes Off

But folks looking to make a quick buck moved swiftly into reopening trades. The thing is they have been so beaten down that you might still be in a paper loss unless you bought midweek.

There was also a smattering of oversold disappointments that were higher as well, including Wells Fargo (WFC) and Salesforce (CRM). But, of course, several perennial favorites are bound to work sooner or later, right?

Today

Watch those names that are supposed to join the Russell 1000:

  • META (FB)
  • Netflix (NFLX)
  • PayPal (PYPL)
  • Zoom Video Communications (ZM)
  • Pinterest (PINS)

I think this is a brilliant move. However, it says a lot about how some of the mighty have fallen and how some of the contenders have fallen short.

For more information on these and key sectors, ask for a copy of Payne’s Perspective – contact your rep or research@wstreet.com.

Take that to the Bank

And look for a bunch of buybacks and dividend hike announcements from banks. The S&P Financial (XLF) sector has been an unmitigated disaster. 

Everyone on Wall Street loved the trade on January 1st, just like they seem to love it every January 1st of any year.

There is a lot of work to do to reverse out of its down channel. But there might be some trades and even a couple of names that will sustain moves – but there is no urgency to make that determination.

XLF

Portfolio Approach

We are adding a new position in Consumer Discretionary in our Hotline Model Portfolio.

Today’s Session

Durable goods for May came in above consensus and that “good” news took a little starch out of premarket trading.

I’m not sure it should matter that much, and I’m glad to see businesses are investing, despite abysmal sentiment readings.

The news sent bond yields slightly higher, keeping the trend of higher lows intact and holding above that now magical 3.00% support point.

 

Long Idea: Chipotle Mexican Grill, Inc. (CMG) @ $1,349.15
Industry: Consumer Discretionary; Restaurants
Click here to view the trading alerts that followed this recommendation

Trading Parameters
Status Closed
Entry Price$1,349.15
Entry Limitsee comments
Stop LossN/A
Target$1,603.00

BACKGROUND: Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. As of February 15, 2022, it owned and operated approximately 3,000 restaurants in the United States, Canada, the United Kingdom, France, Germany, and rest of Europe. The company was founded in 1993 and is headquartered in Newport Beach, California.

SKINNY: CMG recent pullback represents an opportunity. In the past five years, CMG has delivered impressive growth in revenue and profits, supplemented with improvement in operating and gross margins. The company has ambitious plans to more than double its restaurants counts from 3,000 to 7,000. Overall, CMG as outperformed its peers and the S&P 500 in the last five years. Our target $1,603.


Key Fundamentals
PEG  1.26
Book Value  76.26
Institutional Holdings  94.87
Price/Sales  4.92
Average Daily Volume  252.63K
Shares Outstanding  27.96M
Market Value  37.10B
Insider Activity  22 Buys 6 Sales
52-week High  1958.55
52-week Low  1196.28
Annual Earnings Estimate  42.48

Analyst Coverage
 BofA Securities Resumed  BUY
 Jefferies Reiterated  HOLD
 Barclays Reiterated  EQUAL WEIGHT



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