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Quick-Hit Earnings Trade #7


Dear Friend,

I want to share a successful trading philosophy that I have faithfully followed: Always sell into strength.

Take Marvel (MVL) for example. We sold right after earnings when the stock was on the rise. Everyone was singing Marvel’s praises after it reported a 75% increase in revenue. We used that strength to lock in our double-digit gain and move on to our next trade.

That’s exactly what we’re going to do time and time again during our Quick-Hit Earnings Trades profit series. When we identify pockets of strength in our picks, we won’t hesitate to lock up short-term gains.

Marvel was our first closed up trade, so let’s review our open positions thus far. I want to give you an update on each position and where potential strength may be lurking:

Illumina (ILMN) was our first Quick-Hit trade for a reason: This is a company on the brink of big success, and on the leading edge of modern medicine. As I told you recently, the stock reported strong earnings but consolidated because of its guidance. Illumina has since bounced back strongly and is now trading at a profit. This is why I did not instruct you to sell this stock—because we didn’t give into emotion and sell in a panic, we’re now sitting on a small gain instead of locking in a loss. I want you to continue riding this stock up, and I will let you know as soon as it’s time to sell this stock into strength.

Myriad Genetics (MYGN), I must admit, has been the biggest disappointment of all the Quick-Hit trades. The stock sold off after its earnings because revenue fell short of Wall Street expectations. Here’s what burns me up though: The company has reported year-over-year sales growth of 50% for the past five quarters. This time around, Myriad posted 47% growth—and was slammed for it. Wall Street’s has grossly overreacted to these numbers, and I would not be surprised to see investors come flooding back into this stock. MYGN has a history of jumping 10% in a day, and the last time the stock was in the low $30s, it made a beeline for $40 in a few weeks. Hold your position in MYGN and be prepared for what should be a profitable ride.

Panera (PNRA) recently posted strong earnings numbers but couldn’t translate that into the kind of Quick-Hit gains that we’re looking for. However, this is no plain-Jane sandwich shop. This company is as innovative and savvy as any tech company. With constant product testing and cost-cutting measures, this one can quickly grab market share and move sky-high. This is why I do not want you to sell PNRA yet.

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