SARA SILVERSTEIN: Chris, you've been expecting S&P earnings estimates to continue to come down as we head further into the year. Is this contraction playing out as you expected?

CHRIS VERSACE: Yeah, Sara. We identified this concern about S&P 500 earnings for 2023 far back in as early as September of last year. And at the time, the consensus forecast was for 8% earnings growth. Again, year over year 2023 versus 2022.

And when we looked at what was going on in the economy, we looked at the pace of monetary policy, the dollar, and a number of other factors, we were very concerned about that. And we've seen that number, again, that 2023 EPS growth for the S&P 500 just continue to come down. And as of last Friday, it was pretty much on par with that for 2022, saying no earnings growth.

And I think what we're seeing is the market start to wrap its head around that prospect. And I think when we see that, it tells us that we want to continue to focus on companies that are growing their earnings faster than the overall market, someplace we always want to be with the portfolio, but it also tells us that the market multiple might be kind of extended here leading to capping upside, if you will, in the market. And I think that jives around that 41, 4,200 level that Helene has been talking about as well.

SARA SILVERSTEIN: And what does that mean for how you're viewing the portfolio?

CHRIS VERSACE: So take what I said a moment ago, right? We want to look for companies that are poised to outperform the market. So we first have to start by identifying companies that have strong tailwinds behind them. And I think we've done a great job with that, really zeroing in on the stimulus spending out of Washington, whether it's the Biden Infrastructure Law or some of the other spending initiatives that are out there, public policy and public safety being another one.

What we're looking for, though, is companies that will grow their revenue, grow their earnings faster than the market. And when we tend to see that, faster earnings growth tends to give way to multiple expansion, that-- when you put those two together, they tend to drive higher stock prices. So that's the rationale behind our thinking.

SARA SILVERSTEIN: And before we get to the stock by stock analysis of the portfolio, I want to start with your favorite and some of your most concerning stocks. If we were to look at all of the stocks rated as a one or a buy now, which name stands out to you the most or would be your first pick to buy if you were doing some buying today?

CHRIS VERSACE: So if it was today, specifically today, I would say Vulcan Materials, VMC. And the reason for that is they're going to report their quarter in the next 24 hours, and it should be a very, very positive one. We've heard nothing but great things about non-residential construction data and spending over the last several weeks.

Everything from President Biden touting it during the State of the Union, we heard Fed Chair Powell talk about it during the Fed's last monetary policy meeting, but we also have had great, great confirming data points out of Caterpillar, Jacobs Engineering, and even our own United Rentals as well. So that really sets the stage for Vulcan's report.

And we have to remember too that they've had great pricing power that they put in place in the back half of the year. And then the final point of confirmation, I tend to track this almost every week, is the weekly rail car loadings, and they've been very favorable on a year over year basis for aggregates even into 2023. So I think the guidance will be very robust as well.

SARA SILVERSTEIN: And of the stocks rated three, which is your least favorite or most likely to end up on the chopping block or to fall out of favor?

CHRIS VERSACE: Sure. So it's an interesting question to ask today. If we were having this conversation yesterday, I probably would have said McCormick & Company, which we've been clearly telegraphing to members that we're waiting for that to rise closer to $80, $78, $79, something like that. And then we would look to downgrade it to a four rating, meaning that we would start working our way out of the position. Potentially using the cash to put into other positions or just keeping cash on the sidelines for the time being.

But, again, that would have been yesterday. Last night, Ford came out and said that they're halting production of their F-150 due to some potential battery issues. This coupled with some of the other missteps that we've seen of late, this is causing us to take a kind of a hard fresh look at Ford.

I think we're going to give it another a couple of months to see what happens. See how long this shutdown in production lasts, also see if they are seeing a pickup in their EV business. If we see that, I think we won't be as concerned. But if we don't see that, then we're going to have to really rethink the position in the portfolio.

SARA SILVERSTEIN: OK, let's bring in our very special guest Helene Meisler for our stock by stock review of the portfolio. Helene was the first ever market technician at Goldman Sachs. She is famous for updating over 100 stock charts by hand every day. I can see one pinned behind her right there.

She has looked at every-- Oh, my God! It's beautiful. She has looked at every holding in our portfolio and chosen a few that stand out from a technical perspective to put together in a report which we will share with you and discuss with you today. Hi, Helene. Can you tell us a little bit about your style and what your approach was when looking at the portfolio?

HELENE MEISLER: Good morning. Thanks for having me. My style is I'm a base picker. I like stocks when they're down and out. I preferably like them when they're hated. Like in the portfolio, I would look at Google is quite hated right now. And I generally will not chase the stock once it's up.

So I see Chris likes Vulcan. But Vulcan is up a lot today. To me, that would be like, Oh, we're having a heart attack trying to buy it up there. So that's just a difference in style, I guess.

SARA SILVERSTEIN: Great. Well, let's start with ChargePoint. This is one of the stocks we get the most questions about from members. Helene, what do you think about the chart of ChargePoint?

HELENE MEISLER: So I look at ChargePoint and I see a stock that is trying to bottom. But I also look at it and I see so much resistance as that stock gets up over 14. I would love personally to-- let me just give you a little something here. Is that, generally, if you've seen six or eight months of a stock trading, in this particular case, over 14, you would expect at least four to six months of work on the downside to overcome that because there's that old expression, for every buyer, there's a seller.

But so in this case, let's just say that you've got approximately three or four months where ChargePoint traded over 14. And now we have about three or four months where it's traded under it. So now what I would like to see is I would like to see the chart trade between that nine and $14 area and sort of get up to $14, pull back, get up to $14 a little bit more, pull back, because that would tell me that it's slowly eating into the resistance. So for now, I think the stock is in a trading range.

In a couple of months time, if you just kind of try and imagine, that big high all the way up over 20 on the left-hand side, in a couple of months, that's going to fall off the chart and make the chart look a lot smoother on the bottom. So time should heal it.

SARA SILVERSTEIN: Great. Chris, you've held firm in your fundamental thesis here. What would cause you to change your mind?

CHRIS VERSACE: Well, we got some very bullish news this morning, Sara, with the White House really spelling out some things regarding the EV charging network and the funding. So it's hard for me to say that I'm going to get negative in the near term.

Probably the biggest overhang was the concern that the Department of Transportation was talking about having 25% of components sourced in the US by the middle of the year. That's now been pushed out. It's 55% by the middle of 2024, and on a cost basis, which also makes another difference.

So as I kind of sit back and I think about the EV tax credit and we look at other companies bringing product to market, driving down the cost of EVs, I don't see a lot of macro headwinds for ChargePoint. It would have to come down to an execution issue, something company-specific. But we haven't seen that yet.

SARA SILVERSTEIN: And does any of that impact, what do you think will be the quality of the ChargePoint charging stations? Because we've had a few members ask us about what you think about the quality there. Will any of this and what you're talking about affect that?

CHRIS VERSACE: So that's actually a great question because, as part of the White House's mandate, there's a 97% uptime requirement. So I think any issues in the past that we've read about, and candidly, it's not just ChargePoint. They're for Volta as well, EVgo. I think we're going to see that get addressed in order for them to continue to qualify for federal dollars as part of this buildout of roughly half a million EV charging stations.

SARA SILVERSTEIN: Right. Helene, you like stocks out of favor. Let's talk about Alphabet. What do you see in the Google chart?

HELENE MEISLER: OK. Well, I did this a couple of days ago, and it has subsequently come down to that downtrend line. It traded just below 90 yesterday or right around there. And what it did was it filled a little gap that was down there around 92, which you can't really see on this chart because I've drawn the line so thick.

But what I like is the stock is now quite out of favor. Nobody really likes it. Used to be, people would say, Oh, Apple, Microsoft, Google, Amazon. And they never mentioned Alphabet anymore. I like that it's down to support. I like that it filled a little gap. And so I think in terms of the price being right to buy it, the timing may require a little bit of patience because, generally speaking, when tech stocks that have been hot fall out of favor, it takes a while for people to want to rotate back into them.

SARA SILVERSTEIN: And Chris, one of our members is asking about the recent move in Google and Microsoft and whether ChatGPT is more than a short term hype for Microsoft. What do you think about the recent move and what happened with Google, and the impact on Microsoft?

CHRIS VERSACE: Yeah. So if we look at the longer term picture, there's obviously been a concern about overall advertising spend that is the bread and butter for Google's business. And it speaks to the very thing about Microsoft and their move with ChatGPT because Microsoft-- sorry, Google has something like 92%, 93% market share in the search engine business. Microsoft's Bing has something like 2%, 3%, 4%.

So the concern here is that, with ChatGPT, Microsoft can reinvigorate Bing and perhaps start eating away at Google's search market share, eating into their advertising dollars. But I think what we've seen over the last few days after all the flurry of activity is that this is not a one-and-done type of move.

We do know that Google is going to incorporate its own AI technology. They did have a little flub last week. But then again, this was more of a beta product that they were kind of showcasing. I would not rule Google out. My longer term concern about all of this, as we have other folks like, Alibaba, and others incorporate AI and ChatGPT-like functionality into what they do, is that it's-- does it level the playing field so that market shares start to stabilize, right?

There might be a point or two, a few points of shift in the short term, but to us, it's the longer term trend that's going to matter on this. So we're going to have to watch and see how this all develops. But I do like what Helene is saying here about Google, and I do think it's potentially washed out. That's interesting to me.

SARA SILVERSTEIN: And what would it take for Microsoft to move out of a three rating for you to a two or a one?

CHRIS VERSACE: Yeah. So two things. One, seeing progress in that market share front on a sustained basis against Google. That would be very positive. But we have to remember too that the other areas of Microsoft, particularly on the hardware side, the outlook for the first half of the year is for continued weakness.

And that was just confirmed yesterday from GlobalFoundries, and we shared our thoughts in a note to members about that. That's going to keep us on the sidelines. It's also going to keep us on the sidelines regarding some other of the chip stocks as we continue to look for something more in the data center, data infrastructure side.

SARA SILVERSTEIN: And, Chris, you've been increasingly bullish on the cybersecurity ETF. And we've had strong earnings results for some of these companies. And now, with some of the news out of China, where does this put this position in your eyes?

CHRIS VERSACE: Well, I mean, look, there's a lot of bad actors out there. It isn't just China. There are other countries and other, again, just bad actors in general that are trying to use ransomware and other attacks to hijack companies in the case of ransomware, which continued to be a barn burner of an attack format last year. They're trying to compromise company information and monetize that.

I don't think there's going to be any slowdown in that. If anything, the number of attack vectors are going to continue to widen out, whether that's IoT or otherwise. Healthcare in particular is another hot, hot bed of activity on the cybersecurity front as well because of all the personal information that healthcare providers have. So I just continue to see this as a long-term pain point. And, again, pain points, cry out for solutions, and that's obviously going to be the cybersecurity companies.

SARA SILVERSTEIN: And, Helene, when you look at the chart for this ETF, what do you see?

HELENE MEISLER: I think it's trying to base. One of my problems with loving it is that I don't know that it ever got as washed out as some of the other technology stocks. I know it looks like it has, but, to me, I look at like Palo Alto Networks, and I think, OK, that stock broke 160 and it came down to 140. But if it were truly washed out like all those other tech stocks like Meta, like Amazon, it probably should have come down to 120.

Maybe I'm being a little picky and choosy, but I'll just look at the chart on its own merits. And if I do that, what it would take for me to feel like the stock-- like the chart is not going to fail is it would have to pan out and trade akin to the way I've drawn in here in blue. So it has a rally to resistance, it has another shakeout back to support, it has a rally, it eats through, it gets to its next resistance, comes back, and then it would look like it could go and do more than just chop.

SARA SILVERSTEIN: And just help me understand the way that you think about these things. This line that's pretty much across here at 45, what does that represent?

HELENE MEISLER: That's resistance. To me, that's a resistance line. If you take a look, it was the March low last year. You take a look at May, when it cracked that level, it really spiraled down, and then it got up there in August. And yeah, it ate through it a little bit, but then came down again. So to me, that tells you that a lot of people own that stock in that area, and, come on, human nature never changes. And we all have this feeling, just get me back to even and I'll never trade the stock again.

SARA SILVERSTEIN: Perfect. Helene, what about Costco? You've talked about it being rangebound. What breakout levels should members be looking for? So I like Costco a lot as a trading vehicle. Just so you know, in my newsletter, I recommended it in October for that rally, and then I recommended it again in January.

So I like when that chart comes down to the bottom of the range. And generally, I'm taking profits up at the top. I still right now just feel like Costco can rally back up into that 520, 540 area and then come down again. It just doesn't feel like an imminent breakout chart to me just yet.

What would change my view? I guess if it rallied over 540 and was able to hold on to it, then I would have to say, Oh, OK, it's not coming back down into the range. But right now, it's got two lower highs dating back to August.

SARA SILVERSTEIN: Great. And, Chris, how does the Costco January report compare to retail sales at large in January?

CHRIS VERSACE: So when Costco released its January comp sales a few weeks ago, when you clean out gasoline and foreign exchange, the US sales were up about 6.9%. And when we dug into the January retail sales report that was out earlier this morning, and we looked at a number of the analogous categories that comprise Costco's various businesses, head and shoulders, Costco came out once again, winning consumer wallet share.

So we continue to like that. We continue to think cash-strapped consumers are going to lean into Costco, stretching those disposable dollars that they do have. But we have to remember too that Costco is not like most other retailers. It has this warehouse membership model. And as they continue to grow that footprint, it will continue to drive the high margin membership fee revenue stream. And we really like that about this company in particular.

SARA SILVERSTEIN: And let's go to McCormick. I think we have a lot of feelings about McCormick right now. You downgraded it, Chris, to a three after disappointing earnings in January. What are you looking for there?

CHRIS VERSACE: Well, we would love to see it turn around. I think the company is having some more internal issues, particularly on sourcing and input cost inflation, and it's taking time dealing with that. They are going through some restructuring. But the whole reason why we downgraded the position to a three is we were sitting back and asking ourselves, OK, so we're underwater in this. Do we think that we can see the stock rallying back to the cost basis? The answer is no.

This is why we shared with members, when we downgraded to a three, we're going to look for it to kind of recover a little bit, downgrade it to a four, again, on an approach to around the $80 levels. And we said, near $80, that could be $78, $79, something like that. And then we're going to downgrade it to a four and start to work our way out of it.

We think that we're likely to see more fruitful or more plentiful waters elsewhere in some other names, and we'd rather use that than hang around and use the word that I often chastise others for, hoping that perhaps one day McCormick shares will rally back to the cost basis.

SARA SILVERSTEIN: And from a technical analysis, Helene, you like his chart. Tell us what you're seeing.

HELENE MEISLER: I like it because it's down and out. But it's not just that it's down and out. I look at the chart, and I see that resistance overhead. That's your red and your green lines. I like that little support line, that's the black line that I drew in.

I'm a little quirky like this. I would love to break that black line because I think all the chart readers out there would just, Oh, hate McCormick if it broke it. But my guess is it would break it and it would be your last gasp on the downside. The chart just has that feel to me. I can't explain any more than that. But anyway somewhere down in the low 70s, I would tend to be a buyer for a move up into that red and green area.

SARA SILVERSTEIN: Right. And let's look at the Lockheed Martin chart, Helene. What do you think about this one?

HELENE MEISLER: OK. I like it. Overall, I like it. What I don't like is it's just had one hell of a run from 440 up to 490. And so it's run smack into resistance. What I'd love to see it do now is have a pullback into that 460, 470 area, and then I would be a buyer again because I ultimately have a target in the mid-500s

SARA SILVERSTEIN: And I see the resistance line there. Can you explain to me what the green line here means to you?

HELENE MEISLER: OK. So on the green line, all right, this is maybe a little technical here. It's a downtrend line. Which basically means the stock was in a downtrend until it crossed over that downtrend in November. And so what it did in January was it came back and tested the downtrend line. That's that move down there at 440.

So to me, that's a support area. And like I said, if you come down now, that black resistance area-- if I come down and I pull back, that black resistance area on the next time we get a rally should break out.

SARA SILVERSTEIN: Great. And, Chris, you initiated this position at 418. You added some shares for the portfolio around 442. What are you thinking about now? Are you looking for more movement to the upside or are you considering trimming?

CHRIS VERSACE: No, we're certainly not considering trimming the position. If anything, we would like to pick up more shares because it fits, again, with the overall thesis that I laid out earlier. Kind of leaning into areas where we know we have defined spending growth. Defense spending is one of those areas. And if it came down, pretty much in thinking with what Helene said, that 460-ish area, we would look to buy more.

SARA SILVERSTEIN: Awesome. Chris, you bought more shares of Deere in earlier this month. Can you explain why that stock is a two instead of a one?

CHRIS VERSACE: Yeah. Look, I like the prospects for Deere quite a bit. Farmer income continues to be rather flush. The upgrade path for ag equipment is there. Their construction business will benefit from the Biden Infrastructure Law, even though that's a smaller piece of the business compared to some others out there.

So if you were to say-- well, you just did say, right? Why isn't this a one? And the simple answer is we just don't have enough upside to our 470 price target to warrant it. If the share is pulled back to around the $400 level, then we would go chips in on Deere and upgrade it to a one without question.

SARA SILVERSTEIN: And AMN Healthcare is a stock that some of our members are asking about. Any outlook ahead of earnings tomorrow? What are you looking for?

CHRIS VERSACE: So we're looking for them to print a good quarter. We're looking for the guidance to be good as well. Pretty much all the data that we've been looking at, everything, including the December JOLTS report, really supports that because it all shows that there are four more-- excuse me, far more healthcare, and in particular nursing job openings than are being filled. That's exactly the pain point that AMN targets.

So the guidance is going to be really what we want to hear. And so far, from other companies in and around the healthcare space, they continue to say that, yes, the nursing shortage continues, pretty much reaffirming all the headlines that we continue to see in the press about that. So the guidance should be good as well. So all in all, looking for a good quarter. Perhaps we get some short covering, we could see the stock pop.

SARA SILVERSTEIN: And let's move on to one of the newest positions in the portfolio, Chris. Tell us about Coty. What do you like about this name?

CHRIS VERSACE: Oh, Coty is simply a wonderful, wonderful business. They got a new management team about two to three years ago that are really turning the business around. For those not familiar with Coty, it's a beauty and personal care products company.

And what I like about it is the cost reduction efforts that the management team has not only put in place but they continue to put in place, wringing out cost from the business, driving margins higher and higher. So that's the first part. Second, if we were concerned about the economy, we know that these are consumable products. They tend to be more recession resistant. I won't say recession proof, but more recession resistant.

Two-- sorry, three, Coty is actually leaning into Asia, particularly China. That's a great growth area in general for this category of products given rising disposable income in China. And they are, again, looking to tap into China's reopening. So a lot of positives there.

One other thing though too is, unlike some other companies in the personal care products, Coty management in particular has experience in the clean beauty sector. That's one of the fastest growing categories. And here, we're talking about not using harmful ingredients, whether it's to ourselves or to the environment. So those are four particular reasons why I think Coty is going to be a great name over the coming quarters.

SARA SILVERSTEIN: And, Chris, one of our members is asking about the volatility you expect around Coty, and if we could expect it to be volatile like ChargePoint.

CHRIS VERSACE: No. I don't think that's going to be the case. When we were going in, I think we knew that ChargePoint was going to be volatile. It's a higher beta stock. We don't tend to see that with Coty. So I would be surprised if that happens.

But on the other hand, volatility is not a bad thing. We used it a number of different times with various positions in the portfolio to scoop up the shares when they come down really on the downside of that volatile nature, if you will. So to us, that's opportunity. But do I think it will be? No.

SARA SILVERSTEIN: And, Helene, you took a look at CBOE for us. [INAUDIBLE] chart. Tell [AUDIO OUT]

HELENE MEISLER: I'm sorry? I missed that.

SARA SILVERSTEIN: Oh, sorry. In the portfolio, you took a look at CBOE. What did you see in that chart?

HELENE MEISLER: Oh, yeah. That's a chart that has gone sideways what seems like forever. So I like it. Just to throw a little fundamental in there, with the explosion in options trading, it just seems like it's on the right track.

And again, you'll see-- I think that was earnings when it had that plunge down to 116 and reversed, which I like because it came down to support, which shows me that the buyers were still down there at 116 where they'd been basically since last summer, and now we just need some impetus to get it over 130 to show us that the buyers are interested in owning it over 130.

And I would just add-- I was just going to say I would add that-- I looked at some of the other exchange charts. And I noticed that ICE is also a base. It's a different kind of base, but that's also an options exchange. And it just seemed a little thematic to me that Chris is on the right track in terms of owning the Options Exchange.

SARA SILVERSTEIN: Great. And, Chris, tell me what you think about CBOE's business versus someone like ICE or other competitors?

CHRIS VERSACE: So there are a bunch of, quote, "folks that are in the options trading business." We like CBOE because it's the purest play on that. And CBOE also reports monthly metrics, as do the other exchanges. And what we've noticed is that CBOE continues to take share from some of the others, including NASDAQ. So that tells us that we're on the right track with the company that continues to roll out new functionality, new services, leaning into the continued growth in options trading.

SARA SILVERSTEIN: Great. And, Helene, if you don't mind, I'd love to use this one as an example. I love how you do technical analysis without using all of the abbreviations that we often get when we talk about technical analysis. It feels like it's a more fundamentally understandable, the way that you look and feel it. Can you talk us through these lines on the CBOE chart and what they represent for you?

HELENE MEISLER: Well, so like down there at 116, If we take a look at how many times it came down to 116 and held, what we do is we assume that that means buyers stepped up to the plate at that level over and over and over again. And then just recently, they tried to take it down, and the buyer stepped in. So to me, it represents support. It's where people come in and support the stock.

Right now, that 130 level is pretty important because for the last four months, that's where people have decided to sell it. So at some point, we hope, hope we up, Chris, hoping 'em. We hope that it'll get up over 130. And if it does, what that tells us is that people-- the sellers that were there at 130 have decided to step away or had their fill or whatever, and that's why then we'd call that a breakout.

SARA SILVERSTEIN: Great. Thank you. Let's move on to clear Secure. Chris, you moved that to a two from a one recently waiting on news and earnings. What are you thinking about that right now?

CHRIS VERSACE: So we downgraded the stock when it just about approached-- sat on, if you will, our price target around $34. And we said, look, we love the name, they continue to add more airport partners, they're continuing to expand their non-travel services, but the stock had a great run. I believe we also trimmed the position back ever so slightly at that point.

But we would look to buy more on a pullback. And we're-- I believe, we're in print staying around 28. It's gotten close to that level a couple of times over the last week or so. Not close enough for us to pull the trigger, but that's the level that we would want to be buying more. Or, or if there was something else that allowed us to get even more bullish on the name, some type of announcement, that would allow us to increase our price target from the $34 level.

SARA SILVERSTEIN: And, Helene, if Chris is looking to buy more on a pullback, where is the pullback that you would recommend buying on based on your charts?

HELENE MEISLER: Well, I'm looking at the chart, and it has bounced off that line every single time since July. So that would be the area which I'm calling 26, 27, maybe it's only 28. But one thing I would point out in terms of a pattern, if you look at July, and you see how there was a W made there before it made the run, it came down in late June, early July, had a rally, came right back down and tested it then it had a run.

Then it came down in September. And it spent three months just testing those lows. And then it had a run, it came down again in December. And it didn't just turn around on a dime, it spent quite some time feeling around for the bottom. And so the way I view this stock, it doesn't tend to trade like when it comes down and it just bounces. It tends to come down and give itself a feel down in that area.

So it's currently rallying a bit today. I would say if it comes down in the next few weeks, that would probably-- and it gets down to the 27, 28, 26 area, I would say that that's probably a buying opportunity.

SARA SILVERSTEIN: And when you look at these support lines, just looking through all of your charts, what does it take for it to disappear? On the downside and then also on the resistance side on the upside. What changes that?

HELENE MEISLER: Well, let's take you for example, or Clear Secure. The stock has been in an uptrend. And to explain an uptrend line and a downtrend line, just think of it in fundamental terms. Earnings are growing, right?

Forget the stock chart for a minute. If earnings are growing at a certain rate on a fundamental basis, let's say 30%, and all of a sudden, they start to grow at 20%, 20% not bad, but it's not 30%. OK? Right? We're all in agreement on that?

So the stock, in terms of the uptrend line, has been growing at a certain rate since July. That's our uptrend. If I break that uptrend line, the stock may be OK to buy, but it tells me something has changed in the uptrend that has taken place since July.

So when I talk about liking the stock down to the 26 or 28 or in that area near that line, I think that's because the risk-reward is good there. Because if I don't get that bounce, I know I'm wrong. So whereas if I buy it up here at 28 or 29, I still have risk for the stock to come all the way back down and test the line. So I'd rather take a look at the stock down at the line because then if I break the line pretty quickly, I'm probably wrong.

SARA SILVERSTEIN: Great. Chris, talk to me about Axon. You recently picked up shares on Friday. Why are you bullish on this stock?

CHRIS VERSACE: Well, again, it's one of those areas we see pronounced public spending on, in this instance, on public safety. We had confirmation of that from Motorola Solutions, a competitor to some of Axon's business. Not the taser side, but more the body camera and related software solutions.

And what we were looking for after sitting on the sidelines for more than several weeks with Axon was a positive catalyst. So to set the stage, when we first bought the Axon shares, they reported simply wonderful numbers. The stock catapulted up to the 185 level. And it's traded 175, 185, and a little bit of higher, but what we needed is something to confirm that the spending was going to happen as was expected-- excuse me, as it was expected.

And the confirmation point, again, was that from Motorola Solutions. And it was key. And I say that because, given the concern about the debt ceiling in federal spending, what we heard from Motorola Solutions was that 3/4 of its backlog growth, which was substantial, was due to state and local authorities spending.

That confirmed why-- or excuse me, confirmed our bullish stance on Axon. That's what we needed to not only raise our price target from 185 to 220, but it was the opportunity then to wade into the shares, and we luckily had enough upside that we could upgrade the stock to a one rating. So it was kind of a trifecta event for us with the shares.

SARA SILVERSTEIN: And I want to talk about Elevance a little bit. I know that this is in your report, Helene. I'm not sure that we have the chart cued up. So I'll definitely get in trouble for this. But what do you think about where Elevance is trading right now?

HELENE MEISLER: It's been in a trading range for the most part-- for almost a year. I'm not sure I see that it's dying to break out. So right now, I would just trade the range, and I'll call that range 450 to 540. I mean, it's a very wide range, but generally speaking, the chart looks just literally sideways to me. It doesn't look like it's dying to go anywhere special on the upside or the downside except within that kind of 100-point range.

SARA SILVERSTEIN: And, Chris, where do you fall with Elevance right now? What are your thoughts?

CHRIS VERSACE: Yeah. So when we first added it to the portfolio, we were concerned about the speed of the economy, particularly in the first half of the year. We wanted a little more defensive posturing. Healthcare and the continued growth in Medicaid was a great way to do that. But we haven't exactly chased the stock either. Our thinking has been more in line with Helene. That somewhere between 454 to 75, that's where we want to scoop up the shares. That's what we've done, and we probably will continue to do that.

SARA SILVERSTEIN: Great. I'd love to look at some of the bullpen names. Helene, you picked one to chart out, Marvell. Tell us what you're seeing in this chart. I love when there's more than one color.

HELENE MEISLER: Yeah. I do that so as not to confuse everyone. And yet, I probably do. All right, the green line, again, is a downtrend line. The stock has been in a downtrend for almost a year. And it crossed over that in early February. And then it ran smack into resistance up there at the black line. That's where resistance, where buyers come in.

It's pulled back, it's testing the green line. This is a stock that has what I would call layers of resistance all the way down. It's just layers and layers and layers. There's no clear breakout. Even if it went over 50, big deal. You still have all that resistance from August in that 50 to 55 area. So I wouldn't even call that a breakout.

What I am looking at that I did not draw on the chart that'll really confuse everyone is that low in October around 35, it broke just a little bit in January, but it pretty much held. In other words, remember we talked about the CBOE chart where everybody-- the buyers kept stepping in at 116.

In this particular case, I see the buyers have stepped in now twice in the mid-30 area. If Marvell managed to come down, back down there, I would take another look at it. could it rally from here or just keep going? Yes, because of the green line. But my preference is really to have it come back down to that 35 area just because it's got all that resistance overhead. So I think sellers are just going to kind of keep coming in every time you rally unless you have another good clean out.

SARA SILVERSTEIN: And one of the things you mentioned in the report which I think is really interesting is how you drew this green line, how you draw the downtrend line, and why it didn't start up at that earlier-- that it goes to that March high and not that higher high in April. Can you explain to us how you look at that?

HELENE MEISLER: Yeah. OK. If we'll all remember back to basic geometry, two points make a line, the third confirms it. The more points on the line, the better the line. In this particular case, I think there may be five or six touches to the line, which makes it a very good line.

The other thing is that a steep line tends to get broken and not have a lot of meaning to me. That's uptrends and downtrend lines. So if I started at that April high, I'm going to only have a steep downtrend line because that high was so high. And so I picked a line that had more touches and was flatter because, to me, a flatter line has more meaning because it's just not as steep.

SARA SILVERSTEIN: Yeah. No, that makes perfect sense. We just all want to learn to think a little bit more like you. So I just wanted to understand that better. Chris, as we look at the other bullpen names, what are you seeing? Is there anywhere in there where you're seeing opportunities to upgrade into the portfolio?

CHRIS VERSACE: There is one, and I shared thoughts on, it's Kellogg's. And I shared some thoughts with members earlier this week on that. And it's actually a very different reason. The company is actually splitting itself into three public companies by the end of this year. And we've had some experience with this back when we ran the trifecta portfolio with what we saw with United Technologies.

And typically, when you see this spin-out, it allows the new companies to be evaluated on a standalone basis, not part of some of the parts valuation that more often than not gets a little kludgy. So better defined valuations, better defined stories for each of the individual companies as well.

And, again, Kellogg's Is going to do this later in the year through a special dividend process. So if we own shares of Kellogg's, at some point, we will get shares in all three of the companies. So that's one of the ones that we're looking at. We're also looking at Applied Materials as well, given the Chips Act and another aspect of that spending out of Washington that we are continuing to lean into as part of our 2023 process.

SARA SILVERSTEIN: And can you talk to me about semiconductors? You've been watching them closely. We just talked about Marvell. What are you looking for in the semiconductor industry from a fundamental standpoint? And what are you looking for from a name like Marvell?

CHRIS VERSACE: So Marvell is kind of a different animal, right? We tend to talk about some of the big high profile chip names, whether it's Intel, Qualcomm, Nvidia. And invariably, most of them have some exposure to the consumer end markets. PC, smartphones, gaming, something along those lines.

And the end market composition at Marvell is rather different. It's really more of an infrastructure company. And I like that, given what we're seeing with network buildouts, 5G, gigabit fiber. They also have exposure to the automotive market which is just continuing not only to recover, but if you look at the road map for automotive semiconductors, the amount that will continue to go into the average car just continues to rise.

So for Marvell, we've been in print with members. We are watching it very, very closely. We're not inclined to chase it, in part because we continue to hear about end market weakness in data center, which is a decent-sized end market for Marvell. We'd much rather come in when the risk-reward is not even balanced, but when it really tips to more opportunity ahead. And our fundamental work kind of speaks to what Helene has been saying. Not quite the $35 level, but really the very low 40s is where we would look to start a position.

And if Helene-- if it turned out to hit that $35 level where Helene is, we might get a little more aggressive in buying the name. But again, we're not in a rush, we're not going to chase it. The company is going to report its earnings in a couple of weeks. And what we heard last night from a company that's simply getting demolished today, Credo Technologies, ticker symbol CRGO, they cut their outlook on the data infrastructure end market. So we think we have some time to be patient and pick up the shares at a better price.

SARA SILVERSTEIN: Great. Well, before we wrap up, I want to thank the members for joining us and also for sending in your feedback and your questions. And I hope you continue to do that. Send it to But also, I want to make an announcement that the forum is re-open. So you can also post questions there that Chris will answer directly.

And let's see. Oh, that is a question in the forum. What does it mean when you are putting a stock in the bullpen? Perfect. So please use that. And then I just want to thank Helene for joining us. And thank you, Chris, too. You don't really have a choice. And thanks for all the members who joined us, and I can't wait to see you next month.