This report is a sample for information purposes only. These recommendations are closed.
Contact our research department for access to current reports. research@wstreet.com

7/29/2024 10:13:08 AM Eastern Time

Looking for Equilibrium
By Charles Payne, CEO & Principal Analyst

 Click here to download PDF version

On Friday, we got a great template of what a non-growth rally would be like.  Industrials (XLI) are blistering the way, led by capital goods and followed by Materials (XLB), Real Estate (XLRE), and Financials (XLF).

Of course, on Friday, growth sectors were also higher, and market breadth was decidedly bullish.

Nice Finish to a Rough Week

An oversold rally saw relief on Friday when there were just specs of red on the heat map.  There continues to be pressure in the oil-related names, as WTI continues to fail to hold above $80.00.

But the big names were crushed during the week.

Biggest Earnings Week

The biggest names are among the 34% of S&P 500 names posting second-quarter financial results this week.

Still About Mag Seven

Even though the rotation trade is supposed to reflect earnings momentum shifting away from Mag Seven stocks, they are still expected to outgrow the rest of this year. This week, we hear from four Mag Seven names: Microsoft - MSFT (Tuesday), Meta - META (Wednesday), Amazon - AMZN, and Apple - AAPL (Thursday).

Interesting Earnings Reactions

This morning, On Semiconductor (ON) posted results that beat the street, and management hiked guidance.

• Revenue $1.74 billion consensus $1.73 billion
• EPS $0.96 consensus $0.92
• 3Q Guidance (sales) $1.7 to $1.8 billion consensus $1.73 billion
• 3Q guidance (eps) $0.91 to $1.03 consensus $0.92

I do not like margins coming down month to month and from a year ago.

McDonald’s (MCD) posted a disappointing number, missing on the top and bottom lines, as comp store sales collapsed, but the stock is indicating to open higher.

Earnings misses have triggered investors to sell, but stocks are higher five days after posting results.

Portfolio Approach

Friday afternoon, we added a new position to Healthcare (UHS) and this morning we are adding a Healthcare position (OSCR) in the Hotline model portfolio.

Long Idea: Oscar Health, Inc. (OSCR) @ $16.00
Industry: Health Care; Health Care Plans
Click here to view the trading alerts that followed this recommendation

BACKGROUND: Oscar Health, Inc. operates as a health insurance in the United States. The company offers health plans in individual and small group markets, as well as +Oscar, a technology driven platform that help providers and payors directly enable their shift to value-based care. It also provides reinsurance products. The company was formerly known as Mulberry Health Inc. and changed its name to Oscar Health, Inc. in January 2021. Oscar Health, Inc. was incorporated in 2012 and is headquartered in New York, New York.

SKINNY: According to the marketplace, enrollment reached a record high in 2024, helping OSCR surpass its own guidance. The health insurance is well-positioned and continues to deliver sustainable long-term growth. Earnings estimates are increasing as the ratio of earnings beats to consensus increases. Note: The company is expected to report earnings next week.