Analysis: CSCO DIS HD PINS ZM

Shortly after the opening bell, we will be selling 100 shares of Cisco Systems (CSCO) at a bid/ask of $56.08/$56.30. In addition, we will be selling 100 shares of Disney (DIS) at a bid/ask of $132.00/$132.29. Lastly, we will be selling 25 shares of Home Depot (HD) at a bid/ask of $204.81/$205.50. Following the trades, CSCO (1400 shares), DIS (875 shares), and HD (275 shares) will represent 2.92%, 4.29%, and 2.09% of the portfolio, respectively.

In our Alert last Thursday that you can read here, we guided that we would have trimmed three positions (Cisco, Home Depot, and Disney) had we not been restricted from trading them. That was us telling you what we would do had we been unrestricted from doing it. We didn't love the market's trading action last Thursday, when signs of frothiness and over exuberance kicked in with the Pinterest (PINS) and Zoom (ZM) IPOs, and we wanted to protect some of the large gains that had accrued in the portfolio. With our restrictions cleared this morning, we are following up on our guidance and locking in double-digit gains through three trims.

Cisco Systems was a stock we heavily targeted and bulked up on during the "fourth quarter bear market" of 2018, adding to our position several times in the last few trading days of December in our Alerts here, here, and here. This conviction has paid off handsomely, as CSCO has been one of the best performing stocks in the Dow Jones Industrial Average year-to-date, gaining about 30% so far. While we still believe there is room for additional upside here (even as the price has eclipsed our current price target) and CEO Chuck Robbins has done a terrific job repurposing focus into software and security...bulls make money, bears make money, and pigs get slaughtered. The company will report its fiscal third quarter earnings on May 15th, and we will update our price target after the quarter. We will realize a gain of about 23% with this sale.

Disney has been on a tear as of late, gaining nearly $25 from the time of our March trade Alert here to the company's April Investor Day Event  which re-rated the stock higher. We have wanted to trim DIS stock for several days now to lock in the resulting upside, as Jim first indicated on our April 16th Daily Rundown video that we have become more of a "scale seller" than a buyer after this great move. Simply put, it would be greedy to not take something off the table at this level, especially in a position as large as ours, and we will realize a gain of roughly 17% with this sale.

Lastly, we will trim our Home Depot position. The stock has stormed back from its post-earnings selloff, during which we initiated our position in the low-$180s, and is now roughly $10 removed from the all-time highs made in the fall of 2018 . Although we continue to see room for additional upside, brought on by improved weather during the crucial spring selling season (the company's "holiday season"), this is another name that has made a quick, impressive run in a short amount of time that we want to cash in some shares on. We would gladly buy back what we have sold should market-related weakness cause a pullback. We will realize a gain of 11% with this sale.