CNXC, FSV, FOXF and FOUR Move to SELL. SPT, BILL and UPST Move to HOLD
We’ve been enjoying a crazy-strong market in many growth stocks lately, which has padded our paper gains in many of those positions. Today we’re going to step off the gas a little, book a few modest profits and step aside from some positions that haven’t done a lot lately.
Fox Factory Holdings (FOXF) has been with us since mid-May but is still trading around our entry point. I love the company and the products but not the performance. SELL
FirstService (FSV) is a steady little company with an interesting story and a nice long-term chart. There’s absolutely nothing wrong with the stock, which is trading above its 50-day line and is up a modest 3% since we bought in about a month and a half ago. Still, as we look to tighten up our portfolio and focus on the “faster horses,” FSV’s slow and steady pace just doesn’t justify holding now. SELL
Shift4Payments (FOUR) is another stock I like and one we’ve done OK on – we’re up almost 30% after roughly nine months. The recent quarterly earnings call was good, and the business is doing well, but the stock has been a little soft as rising cases of the Delta variant have cast a bit of a pall over companies with a lot of exposure to travel and dining, which Shift4 has. I don’t think FOUR is broken at all, but at the same time I’m not convinced the stock can bust higher in the near term given what’s going on out there. I’m willing to forgo some upside if I’m wrong, take a step back from the stock, and revisit it when I have just a little more confidence in the near-term trajectory. SELL
Concentrix Corporation (CNXC) has gone on a nice little run since we added it on July 21. Recall the customer experience solution specialist was spun out of SYNNEX (SNX) at the beginning of the year. It’s done well since, up more than 70%. It’s not the fastest grower out there, and in fact after this year’s expected 17% revenue growth rate, sales might decelerate to 7% in 2022 (acquisitions could easily change that though). This is one of those stocks that fits nicely into the “swing trade” bucket I spoke about a couple of weeks ago. With a modest 7% gain in seven weeks, we’ve done well enough to lock in a gain now, especially since we have some customer experience exposure through our Telus (TIXT) position (a faster grower). CNXC will go back on the watch list for potential future purchase. SELL
Stocks Moving to Hold: SPT, UPST, BILL
A number of software stocks have gone bonkers lately, so we’re stepping off the gas. Sprout Social (SPT), Upstart (UPST) and Bill.com (BILL) all move to HOLD today.