Weekly Portfolio Summary

Another wild week is behind us.  Earnings from NPS Pharma took the stock down to lows not seen in almost a year only to watch it all bounce back on Friday.  Encana announces the purchase of some valuable land for what appears to be a sweet price and jumps over 5% and then loses it all and maybe a little more in the 2 days after.  Home Depot is suffering from varying home reports and the institutional banks can't get out of their own way.  In the end, the portfolio and the S&P 500 appear to be trading sideways the last couple months, but the day to day action makes this market a day trader's dream.  It's simply not a time I'm going to make a lot of money and all I can do is try to make sure I'm properly positioned for when the market steps out of this funk.  For the week ahead, my portfolio has 2 earnings reports.  Encana announces it's first quarter on Tuesday.  The stock hasn't been able to push through the $24 mark.  What we hear on this call could dictate whether we break through or not.  On Wednesday, Deere announces it's second quarter results.  I actually expect another great quarter for the company, but the history here is that Deere announces, the management speaks overly conservatively, and the stock pulls back for a little while.  Had I a larger position, I might sell some into the announcement and buy it back later.  Instead, it may be a buying opportunity if it pulls back a bit on the earnings conference call.  There are areas in North America struggling to get the crop in this year and this could hurt yields.  I expect grain prices to rise some over the summer and this will only help the stock price.  The other area to watch will be what happens in the forestry and construction space.  

Please note that there may not be an update, next week, due to lack of available time.

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:

Citigroup (C, 46.99) - 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.  Additionally, people have been flooding to the treasuries - driving interest rates down - recently, which is both counter intuitive to growth of the economy and negative to future growth potential.  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 9.4% of my portfolio.

Home Depot (HD, 77.71) - 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 10.4% of my portfolio.

On Semiconductor (ONNN, 8.70) - ONNN beat on Q1 earnings, but missed on revenues.  Forward looking guidance seemed positive and the second quarter revenue estimates are near the lower end of guidance right now.  The stock got crushed, and I believe, unjustly so.  I think this stock is currently providing room for a 10-15% pop while downside is likely in the 5% range.  Biggest risk right now is the semiconductor sector falling out of favor, or the whole market suffering due to political or other unknown "catastrophes.".  So far it's been fairly stable, as indicated by the SOX semiconductor index.  My price target remains at 11.50, though the stock seems more likely to pull back for awhile before it ever gets there.  On Semiconductor is 5.8% of my portfolio.

Twos:

Broadwind Energy (BWEN, 13.11) - Though I missed my $11.50 target, I did buy a very small position going into the earnings report.  With international turmoil continuing to be a theme, a pure American play will be helpful with an economy that's strengthening.  The company shows signs of accelerated growth in earnings, revenue, and profit margins right now, but has risks residing in its gearing segment's turn-around abilities as well as the pending PTC legislation that is expected to be voted on after November elections.  This stock should be good as long as the turn-around and growth stories stay intact.  I'm a $15 target price on it right now.  BWEN is 5% of my portfolio

Deere & Company (DE, 94.34) - Deere beat on earnings and revenues last quarter.  The stock was on the rise, but has taken pause as of late - struggling to reach and break through the $95 ceiling I've identified in the past.  Commodity prices - particularly corn - have been taking a hit and that is likely affecting the stock's price.  There is still more upside potential, with my price target of  $100 or more if priced fairly with industry/peers, however, history states now is the time to watch it closely as it fights the aforementioned historical ceiling.  This is an low value industrial stock - which should fare well in a growing economy.  DE is 12.6% of my portfolio.

Encana Corporation (ECA, 22.44) - 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 12.3% of my portfolio.

Honeywell (HON, 92.80) - 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 18.6% of my portfolio.

NPS Pharmaceuticals (NPSP, 27.52) - NPS Pharma reported numbers that missed the street's expectations whil also lowering guidance.  In the end, it's not as bad as it sounds, but there are chinks in the armor.  With the conservative goals set in place, the company is still expecting a 200% increase in the sales of Gattex for this year and continue to work towards FDA approval for Natpara in October.  The stock was clearly ahead of itself when it was nearly at 40, but the selloff after earnings may have taken this stock lower than it should've.  The need to increase the sales team and that they don't fully understand the SBS market is somewhat worrisome, however, they're also the only player in the market and should be able to figure this out quickly.  The company will make profits late this year or sometime next year, but it's all about the growth of the earnings.  It will continue to be a wild ride, but I think we're fairly priced now.  Keep an eye on the 40 and 20-week simple moving averages.  If the 20 crosses over the 40, it's time to take your gains and run.  NPSP is 12.9% of my portfolio.

Pepsico (PEP, 87.17) -  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.