We are enjoying the continued move higher in the shares of Action Alerts PLUS Global Markets (CBOE) , roughly 10% since they bottomed out on March 10, and the positive impact that is having on the larger AAP portfolio.
While we see the recent market environment, one colored by the string of bank failures and subsequent stock market choppiness, driving favorable March options volumes for Cboe, the upward move in the shares has closed the potential upside to our $140 price target. As we write this alert, there is roughly 7% upside to that price level, which is leading us to downgrade the shares to a Two rating from One.
As we make that change, shares of Deere & Co (DE) remain below the $400 level and that is leading us to upgrade them to a One from Two rating. While wheat prices are continuing to trade off following the renewal of an agreement that allows for the safe Black Sea export, as we pointed out in last week’s Roundup, corn, soybean and even wheat prices remain above 2020 levels.
We continue to see that as a positive for farmer income and the current ag equipment replacement cycle. Moreover, the combination of pricing action in Deere’s backlog along with the continued improvement in supply chains bode well for additional margin improvement. And as 2023 progress, its construction business should see some lift from all the non-residential construction stimulus coming out of Washington.
And we will cap off this alert by doing some modest position buying. Ahead of Micron Technology’s (MU) earnings report after Tuesday’s market close, we will scoop up some additional shares of Marvell Technology (MRVL) . Back in December, Micron warned about the PC and smartphone markets but also shared some inventory build in the data center market at its customers.
With MRVL shares still well below those December share price levels, we want to take advantage of that should Micron point to a quicker than expected rebound in that market. If Micron doesn’t offer that outlook, we will have ample room to pick up additional MRVL shares at lower levels.
We also want to add to our position in Clear Secure (YOU) as well, given the continued positive comments on travel from a variety of companies, but also daily TSA travel data that shows airport congestion is still with us. Anecdotally, when he flew to New York over the weekend, Chris Versace saw a sea of people in not only regular TSA lines but also in TSA Pre-Check ones, but the Clear Secure lines were moving at a brisk pace.
After you receive this Alert, we will make the following trades:
— Buy 245 shares of Marvell at or near $41.25. Following the trade, the portfolio will own 1,045 MRLV shares, roughly 1.25% of the portfolio.
— Buy 375 shares of Clear Secure at or near $24.25. Following the trade, the portfolio will own 4,260 YOU shares, roughly 3.0% of the portfolio.