We're Locking in Big Gains on 5 Portfolio 'Champs'
As we make these moves we're rebuilding of our cash position post-January inflation data and ahead of Trump's reciprocal tariffs.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
COST | Sell | 23 | 1,066 | 187 | 3.9 |
BROS | Sell | 960 | 82.50 | 1,890 | 3.0 |
CIBR | Sell | 342 | 70.25 | 2,188 | 3.0 |
META | Sell | 28 | 725 | 212 | 3.0 |
WM | Sell | 115 | 227.25 | 720 | 3.2 |
After you receive this Alert, we will make the following trades:
-- Sell 23 shares of Costco Wholesale COST at or near $1,066. Following the trade, the portfolio will own 187 COST shares, roughly 3.9% of the portfolio.
-- Sell 960 shares of Dutch Bros BROS at or near $82.50. Following the trade, the portfolio will own 1,890 BROS shares, roughly 3.0% of the portfolio.
-- Sell 342 shares of the First Trust Nasdaq Cybersecurity ETF CIBR at or near $70.25. Following the trade, the portfolio will own 2,188 CIBR shares, roughly 3.0% of the portfolio.
-- Sell 28 shares of Meta Platforms META at or near $725. Following the trade, the portfolio will own 212 META shares, roughly 3.0% of the portfolio.
-- Sell 115 shares of Waste Management WM at or near $227.25. Following the trade, the portfolio will own 720 WM shares, roughly 3.2% of the portfolio.
We are making these profitable trimming trades to not only lock in a slice of some of the recent gains in each of these positions but to also build up our cash position as President Trump is set to announce reciprocal tariffs later today. This telegraphed move has already resulted in other countries saying they would respond in kind, re-kindling trade war and inflation concerns. This morning’s hot January Producer Price Index is also a contributing factor even though we think the inflation-related comments coming in next week’s Flash February PMI report will be far more insightful.
Costco
Costco shares have been a champ for the TheStreet Pro Portfolio year to date, but when we look at the buys we made in 2022 between $435-$505, the gains are far more extreme. Those extended gains, the relative strength index (RSI) level above 78, and the shares being the largest position in the portfolio lead us to do some prudent register ringing.
Yes, we continue to see Costco capturing consumer wallet share as inflation remains persistent. However, depending on U.S.-China tariffs to come, we could see the shares face some pressure.
Dutch Bros
Following last night’s earnings report, we are seeing BROS shares pop considerably this morning. Adding this latest move to the substantial gains put in following the company’s September-quarter earnings report, means BROS shares have more than doubled in the last three and a half months.
We are seeing price targets move higher, and we are boosting ours as well, to $85 from $65, to reflect better-than-expected same-store sale growth and margins, with prospects for more of the same as the company’s expansion plan continues. We’ll have more comments on the quarter later this morning.
Meta
Shares of Meta have been on a tear so far this year, rising more than 23% as of last night’s close, but given our staged buying in the last months of 2024 the portfolio’s position is up far more than that. That year-to-date surge has led META shares deep into overbought territory with a relative strength index (RSI) reading near 82.
While we see META positioned to benefit from external and internal adoption of AI and the accelerating shift to digital advertising, being prudent investors we are going to lock in some gains but keep some META chips on the table.
Waste Management
While the RSI level is not as extreme with Waste Management shares, it too has crossed into overbought territory following the double-digit year-to-date move. We’ll harvest those gains, and in keeping with our Two rating look for opportunities to rebuild the position at lower prices.
First Trust Nasdaq Cybersecurity ETF
Even though the RSI reading for CIBR shares is just shy of being overbought, tracing the chart back we’ve tended to see the ETF pullback in situations like this. Having held the CIBR position for a considerable time, which has been very good for the portfolio, we’d rather lock in some gains and rebuild the position back at lower prices.
The Net Effect
The combined effects of these trades will lift the portfolio’s position by two percentage points to roughly 7.8% of its assets. Paired with the ~3% position in the ProShares Short S&P500 SH and ProShares Short QQQ PSQ ETFs, that equates to a position of more than 10%.
Our view is that should help tamp down volatility on the portfolio in the near term while giving us a nice war chest to pick up stocks at better prices once the market has come to grips with the reciprocal and re-reciprocal tariffs and their ripple effects.
Two positions on our radar are ServiceNow NOW and American Express AXP, but we’ll continue to keep our options open.
Coming up, we’ll have some comments on The Trade Desk TTD shares following last night’s quarterly results. We also have our Quarterly Call coming your way later today.
(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, TheStreet Pro Portfolio was long COST, BROS, META, WM, CIBR, NOW, AXP, TTD, SH and PSQ.
