In a week filled with major events such as Nvidia’s quarterly results and Federal Reserve Chairman Jerome Powell’s Jackson Hole address, our portfolio underwent a series of adjustments. These changes were driven by careful analysis and strategic decision-making. Let’s take a closer look at our trades and price-target adjustments for each day.
Monday set the tone for the rest of the week as we made purchases of GE Healthcare (GEHC) and Stanley Black & Decker (SWK). The S&P Short Range Oscillator indicated an oversold market, prompting us to put our large cash position to work. GE Healthcare and Stanley Black & Decker stood out as attractive investment opportunities, leading us to buy 100 shares and 150 shares respectively. We believed that GEHC’s stock price had experienced an unwarranted decline, while SWK presented an opportunity due to its post-earnings decline. Additionally, we took advantage of Microsoft’s post-earnings weakness and bought 30 more shares, despite violating our low cost-basis in the stock. Our confidence in Microsoft’s leadership in the artificial intelligence race outweighed the temporary slide in the stock price. Furthermore, we increased our price target on Palo Alto Networks (PANW) in response to the company’s impressive fiscal 2023 fourth-quarter results and investor day. Our new price target of $280 per share represents more than 20% upside potential.
Tuesday saw us maintaining discipline and looking for opportunities to deploy cash as stocks entered oversold territory. We decided to buy 25 more shares of Danaher (DHR), a life sciences company that had been facing challenges in its bioprocessing business. However, signs of a bottom forming in its second-quarter earnings report and the upcoming divestiture of its environmental and applied solutions division made it an attractive investment. We also revisited Stanley Black & Decker, purchasing an additional 100 shares due to encouraging commentary from Lowe’s about the pro-construction market, a key customer for SWK’s tool business.
On Wednesday, we turned our attention to Amazon (AMZN) and Starbucks (SBUX) as we continued to take advantage of oversold market conditions. Our belief in Amazon’s potential for growth, particularly in its cloud-computing division, led us to buy 50 more shares. Similarly, we saw an opportunity in Starbucks, with its long-term prospects still looking bright despite short-term challenges. We added to our position, exceeding our cost basis to expand exposure. Unfortunately, Foot Locker’s disappointing quarterly report and dividend suspension forced us to move to the sidelines with a 4 rating and remove our price target on the stock. The future for the sneaker retailer appears more challenging than initially anticipated.
Thursday was focused on the tech industry, with the addition of Broadcom (AVGO) to our portfolio and our intention to exit Advanced Micro Devices (AMD) when trading restrictions are lifted. Broadcom’s networking chip, Jericho3-AI, caught our attention for its ability to meet the demands of complex AI workloads. We downgraded AMD to a 3 rating and plan to exit our position. In contrast, Nvidia’s impressive earnings report and market dominance prompted us to raise our price target to $600 per share, reflecting approximately 27% upside potential. The increased earnings estimates from Wall Street made Nvidia shares more attractive on a valuation basis.
Throughout the week, our portfolio adjustments were guided by careful analysis, strategic decision-making, and an understanding of market conditions. We believe these decisions will position us for success in the future.
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