Markman Capital Insight

Its Time To Update Our Digital Transformation Portfolio

After today’s rally, the S&P 500 is now down 17.5% for the year, the Nasdaq 100 is down 24.8%, the Dow is down 11.7% and the small-cap Russell 2000 is down 19.3%

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-- After today’s rally, the S&P 500 is now down 17.5% for the year, the Nasdaq 100 is down 24.8%, the Dow is down 11.7% and the small-cap Russell 2000 is down 19.3%. (All including dividends.)

-- The Dow has been the best due to its value orientation and higher dividends.

-- The best performing stock in the S&P 500 so far this year is Occidental Petroleum (OXY), up 117%, including a big 4.6%. Still looks good now. … Other top performers this year are refiner Valero (VLO), +45%; ExxonMobil (XOM), +44.7%; Hess (HES), +40.6%.

-- Weird but true: Only five tech stocks in the S&P 500 are up this year, led by solar energy focused Enphase Energy (ENPH), +16.6%; and banking software maker Jack Henry (JKHY 117%), +16.4%. Jack Henry still looks good as bulls will aim at the April high of $205.

-- Worst tech stocks in the benchmark index this year are EPAM Systems (EPAM), down 51.6%; Zebra Tech (ZBRA), -47%; Nvidia (NVDA), -42%; F5 (FFIV), -38%; and Applied Materials (AMAT), -37%; and Intuit (INTU), -37.2%).

-- All the worst performing techs are up the most in the current rally, which is typical. Rallies off bottoms are all about the concept of “the last shall be first.” … Shares of the worst cohort are back over the middle of their Keltner channel, a great first step, but now we want to see if they can get back to the top of the Keltner channel and ride the updraft as bears stand aside and lick their wounds.



-- Netflix crossed over its mid-channel a few days ago and is now pressing up against its upper channel. A jailbreak from recent lows will stun the bears as bulls take aim at closing the gap at $325, a move of 62% that would still leave the streaming media giant down 54% from its November high! Netflix can be a leader due to its superior management, relentless innovation, and important and much-loved product. Even including its recent collapse, Netflix is still up 4,622% since 2009.


Action: Netflix deserves to be back in our active Digital Transformation portfolio. It’s time to see DT stocks reassert their important place in the growth and innovation universe. Set a 10% trailing stop in case the story collapses.