J.D. DURKIN: Good morning, subscribers, one and all. Chris Versace and I are now back with some answers to your biggest questions of the week. Chris, good morning. Thank you for taking the time on this busy though very fun shortened holiday trading week. Let's kick things off with a little housekeeping. Chris, for members still getting a handle overall on panic points, remind us of what panic points actually are and the best place to find them listed.

CHRIS VERSACE: Sure. So panic points are levels in each individual position at which we would become overly concerned. Now it's not like a stop loss. It's not a hard set rule at which we're going to exit a position. But it's more of a warning area that says, wow, OK, stock's been under pressure. Let's take a moment. Let's recheck the fundamentals. Let's recheck the technicals and plot our next course. So it's kind of a little bit of a wake-up call for us to revisit a particular stock. In terms of where members can find them, really, two or three places. First and foremost in most Friday roundups, when we have the full company positions, we include each position's panic point there.

But we also tend to publish a cohesive chart of the panic points at least once a week, typically on Mondays, sometimes Tuesdays. And then the third place members can find them is in a particular company's alert when we discuss a company, whether it's just updating our thoughts on it, if we're changing the rating, changing a price target, or talking about what a competitor might have to say, typically, we like to remind members of what our panic points are there as well as well as our ratings and our price targets.

J.D. DURKIN: So, Chris, let's drill down on one such panic point. We have a member who's wondering if the exit of Universal Display after it breached its panic point of 140 was premature. What do you think there?

CHRIS VERSACE: Well, I can certainly understand that question. I mean, look, the stock has run up to about 160, 165, depending on the day. And we exited around the 140 level. So it's an understandable question. But two things. One what really led us to trade out of Universal Display shares were comments first from Samsung and then from Sony about the weak TV market for the holiday shopping season and into 2024. And as we discussed at the time, while a lot of folks tend to focus on the smartphone market or organic light emitting diode displays, the TV market is a much, much bigger end market for that display technology.

So we haven't seen anything that says Oh the TV market looks like it's going to turn around. If anything, guidance from Best Buy with negative comps for the holiday season seems to underscore the notion that the TV market is poised to be very weak this holiday season, and again, into 2024. But the second point is, look, the stock market has made an incredible run since October 27. You know, we've talked about it. It's pretty widely well known. There was some heavy short interest in the shares of Universal Display. And as we said when we exited the position, that short interest if the market continued to move higher could leave the shares to climb and rebound further. So I guess, I would say this, J.D. , we recognize what's happened. The fundamental outlook really hasn't changed at all.

But we always want to keep our eyes on companies that are in the bullpen. And that's exactly where the shares of Universal Display are. When we see signs that the TV market might be bottoming out or we see signs that the smartphone market is seeing even wider adoption of that display technology, we may opt to call OLED shares back up to the portfolio.

J.D. DURKIN: All right, fair enough. Chris, let's get your latest thoughts on COTY. Now that Wall Street has had a bit of time to digest its earnings earlier this month. What do you think on that name?

CHRIS VERSACE: Well, that's a great question and super timely, J.D. , because we actually shared the most recent data point for COTY shares and an alert to members this morning. We watch a wide variety of companies in the luxury space, whether it's looking for insights on skincare, on fragrance, which, of course, are the sweet spot for COTY.

And as we talked about over the last few weeks, when we look at luxury company earnings, they've been a little disappointing mostly due to luxury apparel, watches, and other forms of jewelry being softer than expected, while fragrance businesses have remained strong. And we heard that again last night from Interparfums, which focuses on the fragrance industry. Not only did they reiterate their outlook for 2023.

But they gave an upbeat outlook for 2024 with hefty revenue growth and EPS growth, all citing the strength in their core business, again, fragrances, which is the core prestige business, the high margin business at COTY. So just very, very positive in terms of underscoring our bullish stance on COTY shares. But also too, J.D. , we are seeing continued declines in oil and gas prices, gas at the pump that could put a little extra cash in consumer wallets this holiday shopping season, another positive for COTY.

J.D. DURKIN: Yes. A bit of good news there that lots of people hitting the road would certainly like to hear for the busy days ahead. Chris, last week we had a member looking at Chipotle wondering why you rose the price target instead of trimming the position for Chipotle. This morning's trim may be the answer. But break down your approach to Chipotle for us. What has been your thinking?

CHRIS VERSACE: So we have been thinking. And the data has really proved this out that cash strapped consumers or increasingly folks that are stretching their dollars have been trading down from casual dining where you kind of sit down, wait service, that sort of thing to more fast casual or quick service dining like Chipotle, like McDonald's. And when we got the October retail sales report, overall, restaurant spending continued to be strong, one of the strongest categories in the month. That led us to revise our price target for Chipotle higher. But since then, they have continued to run, going from around 2,100 to 2,200 past that this morning based on the last quote that I saw.

And look, we sat back and said, wow, significant move in the shares, over 22% since October 27. And our own position was up more than 38%. The prudent move, just like we did last week with the shares of United Rentals, Qualcomm, and Costco following substantial outperformance is to ring the register and trim some of those big gains back, put them back into the portfolio. That said, we still have exposure for Chipotle around a 2% position. We want to continue to capture further upside in the shares.

J.D. DURKIN: Chris, we have another member who has a large position in Vulcan Materials. That persons wondering, should they do a little bit of trimming? What do you think?

CHRIS VERSACE: Well, it's a good question. I mean, if you take a look at the portfolio, we're up almost 20% in Vulcan shares. And year to date, they're up high double digits as well. So totally, totally understand the question. I guess, what's a little hard to say is what is a big position, right? That could mean different things for different people. Our rule of thumb is that if a position size gets over 4%, we would start to trim it back. We do want to let our winners run a little bit. Sometimes we'll let it go a little bit more than 4%, 4.1%, 4.2%, 4.3%. And again, prudent, be prudent with the portfolio, with your position, recognizing that no harm in taking some profits off the table.

In fact, AAP contributor Bob Lang has often said, no one went broke taking a profit. And that's certainly the case. I would say, though trim the position, don't sell out of the position. Remember, we're continuing to see a ramp in infrastructure and nonresidential spending. And to the extent that the Fed begins a rate cutting cycle, we're going to see some more lift in those shares and probably an acceleration in those infrastructure projects.

J.D. DURKIN: Chris, unfortunately, I have to leave it there. This is the last time I get to see you before the Thanksgiving break. So my very best wishes to you and your family. I hope it's great. And thanks for taking the time as always, my man.

CHRIS VERSACE: Happy to, J.D. . Looking forward to capturing our time together next Monday, talking about all our sides and potential as I like to call it, carve-aside for the Thanksgiving holiday.

J.D. DURKIN: Absolutely. Looking forward to that. And it'll be a busy week, too, Chris. Thanks as always. We will be back with your next Daily Rundown, folks, on Monday, as Chris just indicated, just in time to take a look at what we expect from Cyber Monday. Until then, keep an eye on your Alerts for Chris's latest analysis and commentary. Have a fantastic Thanksgiving. Enjoy all the food and football. We will see you again soon.