Exiting 6 EPS Diplomats Positions Plus a Beaten-Up Software Play

Stock Trade

Symbol	Transaction Type	# Shares Traded	Recent Price $
CVNA	Sell	33	307.25
EQX	Sell	978	14.25
IAG	Sell	832	18.60
KGC	Sell	485	30.25
PAAS	Sell	265	54.25
SITM	Sell	39	345.75
NOW	Sell	1,435	104.80

After you receive this Alert, the Pro Portfolio will make the following trades as the first part of our quarterly reconstitution of the EPS Diplomats model:

-- Sell 33 shares of Carvana (CVNA) at or near $307.25. This will close out the Portfolio’s CVNA position as part of the EPS Diplomats strategy with a loss of more than 25%.

-- Sell 978 shares of Equinox Gold (EQX) at or near $14.25. This will close out the Portfolio’s EQX position as part of the EPS Diplomats strategy with a loss of less than 1%.

-- Sell 832 shares of IAMGOLD (IAG) at or near $18.60. This will close out the Portfolio’s IAG position as part of the EPS Diplomats strategy with a gain of ~12%.

-- Sell 485 shares of Kinross Gold (KGC) at or near $30.25. This will close out the Portfolio’s KGC position as part of the EPS Diplomats strategy with a gain of more than 7%.

-- Sell 265 shares of Pan American Silver (PAAS) at or near $54.25. This will close out the Portfolio’s PAAS position as part of the EPS Diplomats strategy with a modest gain of more than 2%.

-- Sell 39 shares of SiTime Corp. (SITM) at or near $345.75. This will close out the Portfolio’s CVNA position as part of the EPS Diplomats strategy with a modest loss of just under 4%.

-- Sell 1,435 shares of ServiceNow (NOW) at or near $104.80. This will close out the Portfolio’s NOW position for a loss near 39%.

As we close out the quarter, we are initiating the next quarterly reconstitution for the basket of stocks that comprise our EPS Diplomats strategy. For Q1 2026, the basket returned 4.6% compared to a loss of 5.6% for the S&P 500. You’ll notice that two of the holdings for the Q1 2026 basket, Credo Technology (CRDO) and Lumentum (LITE) , are being carried over into the Q2 2026 basket.

Based on the decision to expand the Portfolio’s starting exposure to the EPS Diplomats strategy, we will be adding additional CRDO and LITE shares before Wednesday’s open as well as the other six new positions to round out the model. Each individual position will start Q2 2026 at 0.5% of the Portfolio’s assets, tallying a net exposure of 4.0%.

We will be sharing that buy trade with you well before Wednesday’s market open, revealing those six new positions as we do so.

To help fund this additional use of capital, after much debate, we are opting to do so with capital returned to the Portfolio by closing out our ServiceNow position. We expect this will cause not only some angst among members, but also some questions, with “why now?” likely to be the most common one.

So, let’s tackle that decision front and center.

First, if you read Bob’s analysis of NOW’s chart yesterday, the following probably stood out to you like it did to us:

… as we see in the top chart, that rally from about $100 to $120 never turned the candles into bullish on the GoNoGo composite of indicators; they remained pink/purple, which is bearish. The indicators supporting the price chart are bearish still, MACD is on a new sell signal while money flow just went negative again.

Second, the last two times NOW shares rebounded to the 50-day moving average in December and early March, the move was rejected.

Third, when Salesforce (CRM) reported its quarterly results on February 25, which included a nice step up in its remaining performance obligations (RPOs), the shares rallied before petering out again, but at no point did they approach the 50-day moving average.

This tells us investor sentiment remains very bearish on software stocks. Even Tuesday, when the market is rebounding with the S&P 500 up more than 2% and the Nasdaq Composite more than 3%, NOW shares are little changed. This tells us that it will be a long journey if and when we would be back to breakeven with NOW. That’s potentially a lot of waiting when we could be putting that capital to work in more productive places, like the EPS Diplomats.

Could we see NOW shares trade higher if the market rebounds? Possibly, but as we mentioned we’re not seeing that Tuesday. Moreover, the shares rejected their last rebound attempt near $124 and the 50-day moving average has since moved lower to $112.40. The question is what is a likely catalyst that could lift NOW shares past that resistance point on a sustained basis? Unlike Palantir’s (PLTR) string of announced program wins, ServiceNow has been far more quiet about new customer acquisitions or even expanded relationships.

Meanwhile, with the uncertainty tied to the U.S.-Iran conflict and its fallout, there is the risk that companies extend deal cycles like we’ve seen in the past during periods of great uncertainty. That has the potential to weigh on ServiceNow’s RPO performance in Q1 2026 and an underwhelming print would likely reignite concerns over AI related disruption.

Why ServiceNow instead of Microsoft (MSFT) ? When we discussed MSFT shares with you recently, we discussed the company’s prime business is AI and cloud infrastructure, and demand for that is rising as AI adoption and usage expand. To that we can add, the announcement we covered in Monday’s Portfolio video about Microsoft’s Critique imitative, one that will allow enterprise customers to utilize multiple AI models together to generate optimal results.

And while we like ServiceNow CEO Bill McDermott, and find him to be a bit promotional, we’ve seen mistakes made by others by falling in love with CEOs, and not making tough decisions when need be.

(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)

At the time of publication, the Pro Portfolio was long CVNA, EQX, IAG, SITM, KGC, PAAS, NOW, CRDO, LITE, MSFT and PLTR.