Category: Investment Strategy Today

Market expectations were continually increasing to the point of overvaluation across all market capitalizations, but especially in MidCap and SmallCap classes. The market in total was well in cautionary position. While no one ever knows the exact time, it seemed reasonable the market would need to return to fair value. This generally occurs when investors realize their expectations exceed the ability of stocks to return value through revenues, earnings and dividends. That time appears to be occurring as the market is nicely returning to fair value territory.

S&P makes changes to new Communication Services sector (old Telecommunication Services), 23 stocks move, changes sector from value to growth, dividend yield from 1.1% to 6%, Comm sector becomes 5th largest, Abercrombie & Fitch, Chesapeake Energy, Cloud Peak and Lam Research earn Buy consideration while Cable One, FutureFuel, UnitedContinental and Viad become Sell considerations. Micron Tech drops in fair value but remains a Sell consideration.

Exports with U.K. increase 18.3% while imports increase 10.2% annualized thru July. Western Digital and Skyworks earn Buy considerations, CH Robinson, Nordstrom, Knight Swift Transport, Landstar and Sprouts Farmers Market earn Sell considerations.

Canada/USA surplus grows in the first quarter on an annualized basis. Seacoast Banking and Tetra Tech earn higher fair values while Viad Corporation drops. Cree, INc. and Webster Financial move back to Hold. Wageworked and Viad Corp move to Watch list.