June 29th, 2022 Watch List

Stocks sold off on Tuesday, with the S&P losing 2%. It was an ugly session with indexes closing at lows and nary a bid to be found. Asia stocks closed lower overnight while Europe markets are in the red this morning. U.S. futures are pointing to a slightly lower open as I write this, Yields are lower while Oil, Gold, and the Dollar are higher.

And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-51/

Stocks repeated Monday's action yesterday by opening in the green and reversing into the red. The difference between yesterday and Monday was there were no buyers and stocks melted like an ice cube in the hot summer sun to close at lows by the end of the day. Just like many of the last few weeks of market swings, there was no true catalyst to rationalize the move. This morning we got the PCE data which came in a tad above expectations, futures pared gains after the report. That $380 area on the SPY is back in play and would want to see that hold or fear sellers take us back to $360 on the SPY.

BHC rallied to multi-week highs yesterday before losing gains and closing under $9. Still like this name for a move over $10 in the next few weeks:

That bull-flag on BPT is playing out, and think a test and break of 52 week highs is coming in short order. Will look to close my $25 calls soon and may add some August strikes on a break over $25 today:

IBM neared that $145 handle before reversing course and closing in the red. Still hopeful here but will need to find some strength soon and break those highs:

It was a tough day for TRIP, NTR, and TZOO with those names trading solidly higher in the morning only to give it all back and then some. Still love these names and will hold my calls.

SAGE fell nearly 6% yesterday and think the move provides an opportunity to add some speculative calls, may look at some at the open:

If there market finds weakness and breaks $380 on the SPY will be looking at TZA calls as a hedge.

Here are the analyst changes of note for today:

FedEx long-term guidance well ahead of expectations, says BMO Capital
BMO Capital analyst Fadi Chamoun keeps his Market Perform rating and $270 price target on FedEx after the company announced its long-term FY25 guidance this morning ahead of its planned investors conference. The targeted EPS of roughly $32.60 by FY25 at the middle of the guidance range is well ahead of consensus $28.77), with 200bps ROIC improvement and lower capital intensity also supporting higher cash flow, the analyst tells investors in a research note. Improving revenue quality and technology to drive service and network efficiency appears to be the key theme, and the update will likely be well-received by investors, Chamoun adds
Zoetis should have greater resiliency than widely thought, says Stifel
Stifel analyst Jonathan Block believes the conventional thought among investors is that Zoetis' 2023 operational revenue growth rate likely decelerates as competitors enter atopic dermatitis and triple combo parasiticides, which are two of Zoetis' key markets. However, his work suggests upside in 2023 may be driven by greater-than-expected resiliency from the company's current core Key Derm and Trio franchises, said Block, who currently estimates 2023 operational revenue growth of 9.4%. The analyst, who would use the recent relative multiple compression as a buying opportunity, keeps a Buy rating and $225 price target on Zoetis, which he identifies as his top pick in animal health
Dollar Tree management changes 'important step' to improved results, says Truist
Truist analyst Scot Ciccarelli keeps his Buy rating and $178 price target on Dollar Tree after the company disclosed a large number of C-level management changes. Given Dollar Tree and Family Dollar's underperformance over the years, these "significant management changes" are an important early step to improving performance and a key reason to remain bullish on the stock despite its significant year-to-date outperformance, Ciccarelli tells investors in a research note

O'Reilly Automotive upgraded to Buy from Neutral at DA Davidson
DA Davidson analyst Michael Baker upgraded O'Reilly Automotive (ORLY) to Buy from Neutral with a price target of $740, up from $700. The analyst increased estimates saying auto parts are navigating consumer headwinds better than other areas and that O'Reilly is a "long term share gainer." Vehicle aging is a long term positive and price pass through mitigates some of the margin pressures, Baker tells investors in a research note. He sees a favorable entry point into O'Reilly Automotive with the shares down 16% from the 52-week high. O'Reilly is his preferred way to play "favorable" auto parts trends relative to AutoZone (AZO) and Advance Auto Parts (AAP)

GoDaddy's acquisition of Dan.com to boost its domain aftermarket, says Truist
Truist analyst Naved Khan keeps his Buy rating and $114 price target on GoDaddy after the company announced the acquisition of Dan.com yesterday. The deal would bolster GoDaddy's aftermarket business, which has been experiencing outsized growth, the analyst tells investors in a research note. Khan adds that the move would not only eliminate one of GoDaddy's top competitors in the aftermarket space, it would also allow the company to benefit from innovation at Dan.com
B. Riley starts 'mispriced' Digital Turbine with Buy, $29 price target
B. Riley analyst Daniel Day last night initiated coverage of Digital Turbine with a Buy rating and $29 price target. Digital Turbine is a leading mobile app growth and monetization platform offering a suite of products to assist app publishers and developers in user acquisition and monetization, Day tells investors in a research note. The analyst says that with the shares down 80% from the 2021 highs, investors have "unfairly bucketed APPS into a group of high-growth story stocks lacking near-term free cash flow generation." He models 27% annual revenue growth over the next five years, with EBITDA and free cash flow projected to grow even faster due to operating leverage. Digital Turbine is an "ideal name for investors looking for high-quality, mispriced stocks that have been unfairly punished amidst the fog of the recent tech drawdown," writes Day

And here is what I am watching today: BPT, APPS, ROKU, U, TZA, SAGE, EXPE, NTR, BIIB, IWM and ZYME.

Let's have a great day!


JimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

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