As we head into a new quarter, now is the perfect time to look back and reflect on our successes but also look ahead to what we can expect for the market in the coming months.
We have a lot of things to celebrate when we look back to first quarter of 2024. Our Quantum Edge Pro portfolio was up an average of 15%, outperforming the S&P 500, which was up around 10%.
We also took a lot of profits when we sold partial shares of some top-performing stocks: Super Micro Computer (SMCI), Cadence Design Systems (CDNS), Photronics (PLAB), and Copart (CPRT). And we're set for more profits on the remaining shares.
I expect a strong second quarter, which tends to be seasonally very good for stocks. We do tend to see some pockets of volatility before earnings reports start coming out in about two weeks. That's exactly where we are right now.
In this video issue, I'll pull up the Quantum Score tool and show you exactly why I like this stock. The fundamentals look great, and its historically strong – ELF is up 33% year to date and 1,680% in the past five years.
As you may have seen, ELF is getting dinged today after Ulta Beauty's CEO David Kimbell said the company saw slower demand than expected in the first quarter. ELF is down in sympathy, as are other related companies, and because it has had such a strong run. This is the typical "sell first, think later" mistake that so many investors make.
I'm disappointed in Ulta's news, but I found it interesting that management affirmed previous forecasts for 4% to 5% comparable store sales growth for the full year.
Nobody likes to start a trade in the hole, but ELF still has the fundamentals, technicals, and history of Big Money support to drive prices higher over time.
My system may pick up a red Big Money sell signal tonight when it crunches the day's data, but as we talk about in the video, those sell signals on high-quality stocks are usually buying opportunities – and that's what I see here.
I'll also dig into our Quantum Edge Pro portfolio, which is doing really well. I'm comfortable with the stocks we are holding based on their incredible fundamentals. And I expect more buys and profit-taking opportunities in this new quarter.
Enjoy the video issue, and keep those comments and questions coming. I'd love to hear about your big wins and market success stories, or anything else that's on your mind. Just email jasonqe@tradesmith.com.
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