I'm not sure if there's a hotter group right now than delivery services ($DJUSAF). Both United Parcel Service (UPS) and FedEx Corp (FDX) blew earnings right out of the park. They crushed both revenue and EPS estimates and the market has responded with institutions seemingly accumulating millions and millions of shares of each. Check out the DJUSAF and the relative strength of UPS and FDX vs. the benchmark S&P 500:
UPS has outperformed FDX over the past several years, so I'd give that one the nod among the large caps. But what about small caps? From this next chart, you can see that the IWM:SPY ratio has been trending higher since the bottom in March:
Based on this rotation, could there be a small cap stock that's got even more upside potential? Well maybe.....
AAWW reported results earlier this month and its EPS came in at $4.71, which crushed consensus estimates of $2.07. And check out the AD line (accumulation/distribution). It broke out to a new 2020 high in March. Clearly, there were plenty of investors willing to snap up shares that sellers were panicking out of. And for good reason.
I'm in the process of updating our Strong Earnings ChartList (SECL) at EarningsBeats.com and AAWW will definitely be on our latest ChartList. A bigger question will be - is it going to make one of our portfolios when they're announced this Wednesday, August 19th? Perhaps the Aggressive portfolio, which is now +43.59% (vs. the S&P 500's +17.52% over the same period) since its inception 15 months ago on May 19, 2019?
Time will tell. The portfolio "draft" will be held on Wednesday and is available to all EarningsBeats.com members, including no-cost trial members. For more information on this event, CLICK HERE.
If you want to check out our service, I'm hosting a special webinar today, "The Research Engine at EarningsBeats.com" (and it's FREE to everyone!) and we'd love to welcome you into our EB.com community. I'll be explaining our 4 portfolios, 7 key ChartLists, predefined scanning strategies, etc. There's no commitment whatsoever, other than being added to our free EB Digest newsletter (no credit card required and can unsubscribe at any time). I'd love to see you there! The webinar room should open around 1:30pm ET and I'll get started promptly at 2:00pm ET. Here's the room link:
https://us02web.zoom.us/j/86177894040
Happy trading!
Tom
