Over the last few weeks, we've seen significant outperformance in several Action Alerts PLUS portfolio holdings. As you know, we like to take advantage of these pronounced moves either locking in some profits for the portfolio or taking a slice of those gains, putting them to work in other holdings.
Two of the stronger names of late have been Chipotle (CMG) shares, which are up more than 50% so far in 2023, and Alphabet (GOOGL) , which have soared more than 40% since the start of the year. And, the shares of both are overbought from a technical perspective, which is also a factor in our thinking.
In the last two weeks, the shares of both Axon Enterprise (AXON) and Deere (DE) traded off post earnings despite both delivering solid quarterly results. In the case of Axon, the company offered somewhat conservative guidance, but we continue to like the shifting mix toward the higher margin Axon cloud business. That shift is being fueled by product sales that include Tasers and body cameras.
With Deere, as we discussed on today's Daily Rundown and on Friday, the company lifted its annual guidance across the board. What weighed on the shares was the return to more normalized seasonality in the business, especially for its ag equipment that tends to have stronger spring and fall selling seasons. As supply chains have eased, this isn't that much of a surprise. The fact that 90+% of its channel inventory is sold to customers is far more revealing.
In our view, the pullbacks in these two positions relative to their business opportunities warrants adding to them at current levels. As we move through the week, we'll be looking at similar opportunities with Bank of America (BAC) , Trinity Capital (TRIN) , and a few others in the portfolio.
After you receive this Alert, we will make the following trades:
-- Sell 6 shares of CMG at or near $2,125. Following the trade, CMG shares will account for roughly 2.75% of the portfolio.
-- Sell 150 shares of GOOGL at or near $125. Following the trade, the portfolio, GOOGL shares will make up around 3.0% of the portfolio.
-- Buy 20 shares of AXON at or near $201. Following the trade, AXON shares will account for roughly 3.6% of the portfolio.
-- Buy 30 shares of DE at or near $357. Following the trade, DE shares will represent about 3.6% of the portfolio.
(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.)