Weekly Portfolio Summary

I'm getting a little behind on last week, but it was fairly uneventful on the portfolio.  It sure didn't feel that way, though.  There was a lot of movement for a week that ended flat to slightly down.  Housing numbers weren't great, but Home Depot also got a significant upgrade.  Next week I have earnings reports from Broadwind Energy (Wednesday) and On Semiconductor (Thursday).  Both are rather speculative plays.  During the ebbs and flows of the markets lately, Broadwind has a hard time going down, meanwhile, On got hit pretty hard this week - especially when one of its customers, Avnet, reported lower than expected numbers.  My feel is that if the markets pull Broadwind down early in the week, you would want to buy into some of the position ahead of the quarter.  If they give good numbers, I have a feeling the stock will soar.  On I see more of a sell on the quarter regardless of news.  Sell as soon as you can if they miss, and sell within a few days if they beat, but don't raise.  The only reason to maybe consider holding is if they beat and raise guidance.  These are very broad guidelines.  You have to be careful of this market.  It's had a serious habit of popping early after a beat only to give it all up later.  This market is tough and doesn't seem to make a lot of sense yet.  As we enter May, you might see additional selling pressure, so be careful, be nimble, and have conviction of what you own.  If you don't have the conviction, you should sell it now.  This summer may be as exhilarating as the nearby roller coaster and when it comes to stocks, exhilarating isn't always a good thing.

Notes:

Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

Ones:

Home Depot (HD, 79.38) - This company still has long term prospects.  It's earnings have been accelerating and the economy continues to show signs of strength. It has pulled back to 16 times it's guided 2014 earnings (I'm actually expecting them to earn $4.50 instead of the 4.32 they've guided).  Great management team that knows how to take the competition on.. This stock has pulled back recently near the price it was at when it announced the quarter.  At the same time, interest rates have been falling. Target price is $86.  HD is 10.7% of my portfolio.

Citigroup (C, 47.75) - First quarter earnings were a huge surprise to just about everyone.  In the end, it's looking like Citigroup will post one of the best quarters out of all of the banks.  That will help put a floor into the stock at the $47 range, however, it doesn't have a lot of growth potential in the near-term either.  The fact that the company isn't going to return more cash to shareholders this year will keep a lot of buyers at bay, I think.  It will also keep the stock at a premium price compare to it's book value.  Management now has a very serious job to show they can fix the problems that exist and turn this into a positive story.  The company has oodles of cash, but it won't be until the processes are fixed that we'll really see this thing start to move.  I'm thinking this is a better story towards the end of the year.  Interest rates will have to start rising to give earnings a boost as well.  Under current circumstances, I give C a $51 target.  Citi is 9.7% of my portfolio.

Twos:

Broadwind Energy (BWEN, 12.05) -  I have decided to upgrade this stock and take a chance on it if it pulls back from $11.50.  With international turmoil continuing to be a theme, a pure American play will be helpful with an economy that's strengthening.  Considering I wasn't entirely impressed with the last conference call, the stock has performed well in a distinctively weak tape, pulling back just a little before charging ahead again.  Watching this stock will be interesting.  It could get hit hard if sector indexes are beaten down or it can hold it's own as a pure American play.  Either way the international economic and political events won't drive this company's stock price, but I believe the extension of government subsidies that is due for discussion in the last part of the year will be key.  I'm setting a $13 target price on it right now.  BWEN is 2.6% of my portfolio

Deere & Company (DE, 93.14) - Deere beat on earnings and revenues last quarter.  Recently, the stock has been on the rise.  Commodity prices are trending upwards - particularly corn - and that is helping give reason to the stock's rise.  Monsanto also reported strong results for the Ag sector appear to provide more fuel to the bull case.  There is still more upside potential, with my price target of  $100 or more if priced fairly with industry/peers, however, history states you have to watch it closely as it approaches $95 as that seems to be a relative ceiling it's struggled to break through.  This appears to be a stock that is an industrial value play - benefiting from rotation from high priced growth stocks to high value industrials.  DE is 12.6% of my portfolio.

Encana Corporation (ECA, 22.63) - Encana reported a beat on earnings and revenues for the fourth quarter.  Additionally a combination of both weather and the Crimean events have lifted both natural gas prices as well as natural gas stocks.  These prices approached $5 over the quarter and have spent much of its time in the mid-$4 range.  This has provided an opportunity for the company to hedge much of 2014's supplies at levels unseen in the last few years and it is appearing that the prices are likely to stay above $4 with the tighter supplies in the market (compared to the $3.75 prices they guided at).  I feel I've seen the needed sustainability in gas prices and am waiting to see the same results from management to maintain my conviction.  They continue to focus on the Nat Gas liquids, which provide good returns while Nat gas prices work to increase and the glut is decreased.  Encana should be having a strong quarter, given the higher than expected prices and this should translate into a stronger year, providing they locked much of the year's production prices in.  If so, it's reasonable to believe that they can post earnings of $1.25 this year. That would be a 13% increase in earnings from 2013.  The company is trading around 18 times those forward earnings estimates.  With a PEG ratio of 1.3 and potential that these earnings increases are accelerating right now, I think things are reasonably priced..  The earnings release in May is likely going to be important for this stock.  Analyst average is currently at $.41 earnings for the first quarter.  That's a 29% year over year increase and may be tough to beat, but the company could still be on pace for $1.25 earnings if it doesn't reach the expectations.  Price target is set at $25.  ECA is 12.6% of my portfolio.

Honeywell (HON, 92.65) - Another solid quarter posted by this Industrial conglomerate.  Margins continue to improve, they've raised the lower end of their guidance and almost every division appears to be properly aligned to the current economic state of the world.  The analyst community could be starting to get ahead of the company, though, as their fiscal year earnings estimates are right at the top of the guidance range.  If anything goes wrong, this stock could get hit pretty hard and that would be your best buying opportunity.  The stock trades near 17 times earnings which P/E is at about 17 times earnings which is below its peers while its growth rate appears to be ahead of their peers.  This, too, should provide a little protection..  My target is $100.  HON is 18.8% of my portfolio.

Pepsico (PEP, 85.25) -  Pepsi has provided an earning announcement that might be enough to at least subdue the activist pressure on the company.  The company beat on both top and bottom line numbers and showed signs that they have started to get some control in the weakening beverages section.  I consider this stock to be something worth buying if it pulls back 5-10%.  It has growth prospects, is returning a lot of cash to shareholders, and the yield on the treasury will make a stock like this a nice dividend alternative for a little while yet.  P/E ratios are a little rich, but in line with the industry despite what appears to be improving growth  PEP is 8.7% of my portfolio and my price target is raised to $90.

Threes:

On Semiconductor (ONNN, 9.45) - On Semi has been performing well since it last reported and those numbers were strong too.  The company expects decent growth, but we're also entering a slow time of year for this cyclical company.  On also recently announced an acquisition which it expects to close during this second quarter.  Earnings should be accretive immediately.  I am estimating it will add about 10 cents on top of the analyst-anticipated 62 cents earnings for 2014.  The stock has now popped up to $10, but was pulled on the bad market tape. I missed the sell at my price point and with earnings a few weeks away, I'm thinking it might be worth waiting until earnings before making a sale.  My price target is 11.50 after their acquisition, though the stock seems more likely to pull back for awhile before it ever gets there.  On Semiconductor is 6.4% of my portfolio.

Unranked:

NPS Pharmaceuticals (NPSP, 24.29) - I've gotten this stock completely wrong since I started doing these summaries.  The stock was yet again obliterated this week.  I haven't bought on this constant pullback, but I haven't sold either (shame on me for being greedy).  This stock is clearly a part of the big growth winners being sold to rotate into something else.  The question now is how much more will they sell off and what happens after they're done selling?  The stock broke below my $25 range - what I expected to be the absolute bottom for this stock.  It jumped to $24 six months ago after a good earnings report on how sales of Gattex have grown faster than anticipated and have been received well by patients.  At this point, anything is possible so I don't want to call another bad bottom.  Buy/Sell at your own risk.  I need to understand more before I take any actions on this.  NPSP is 11.5% of my portfolio.