Updates on 17 Holdings as We Revisit Our Cybersecurity Play
Apple has reached a notable condition, but here's why we're holding off on a change.
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As we move a step deeper into the December quarter earnings season, we’re sharing an updated table of consensus EPS expectations, relative strength levels and related metrics for our holdings. We’re also upgrading shares of the First Trust Nasdaq Cybersecurity ETF (CIBR) to a One rating as we adjust some panic and pick up points.
Let’s get to it
One Rating Change, But Not Apple
We are upgrading shares of the First Trust Nasdaq Cybersecurity ETF to a One rating from Two. This reflects the revised net upside to our $85 target and new panic point of $68, as well as the numerous confirmation points for increasing cyberattacks.
Even though we have more than 19% upside as of Friday’s close for our Apple (AAPL) price target, and the share‘s relative strength index level (see below) points to an oversold condition, we are maintaining our Two rating for now. The reason for that stems from growing headlines for memory prices and constrained capacity that could limit smartphone, PC and tablet shipments in the coming quarters.
The catalyst we are waiting for that could re-ignite the iPhone replacement cycle is the pending refresh of Apple’s AI-enabled Siri. That refresh, which leverages Google’s (GOOGL) Gemini, is expected to be unveiled this spring.
We are also keeping our Two rating on Bank of America (BAC) shares in place until we have more clarity on the potential for 10% credit card interest rate caps.
We are also reviewing our current Two rating on Microsoft (MSFT) and Dutch Bros (BROS) shares.
Adjusting Some Panic Points
Alphabet to $263 from $250
Axon Enterprise (AXON) to 520 from $500
Broadcom (AVGO) to $290 from $275
Dutch Bros to $52 from $50
First Trust Nasdaq Cybersecurity ETF to $68 from $63
Morgan Stanley (MS) to $165 from $160
Welltower (WELL) to $165 from 155
Adjusting Some Pick-Up Points
Axon Enterprise goes to $575 from $500
Arista Networks (ANET) to $120 from $117
Morgan Stanley to $175 from $160
Notable Relative Strength Index Levels (RSI)
Costco (COST) : 74.59, overbought condition
Apple: 25.18, oversold condition
ServiceNow (NOW) : 19.28, deeply oversold condition
We recently picked up additional shares of ServiceNow for the Portfolio, and we discussed AAPL shares above.
Should we see COST shares continue to push deeper into an overbought condition, we may opt to do some prudent trimming, especially if the position size expands dramatically from 4.1% as of Friday’s market close.
Notable Beta Levels and What That Means
Let’s remember that the S&P 500’s beta is 1.00, and the greater a company’s beta is above that, the more volatile the shares can be, and vice versa. We should interpret that to mean that higher beta stocks can have greater swings day to day in their stock price, hence our wider panic points for those holdings.
Dutch Bros: 2.56
Marvell (MRVL) : 1.95
Nvidia (NVDA) : 2.31
United Rentals (URI) : 1.69
First Trust Nasdaq Cybersecurity ETF: 0.78
TJX Companies (TJX) : 0.75
Welltower: 0.86
Waste Management (WM) : 0.59
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At the time of publication, TheStreet Pro Portfolio was long CIBR, AAPL, GOOGL, BAC, MSFT, BROS, AXON, AVGO, MS, WELL, ANET, COST, MRVL, NVDA, URI, TJX and WM.
