Plenty of Ways Into This Market

 | Oct 31, 2013 | 3:28 PM EDT
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Don't you ever say this market doesn't give you chances to get in at terrific prices, ones that you don't deserve. Take Yelp (YELP). Last week I told you to be ready for the company to report a terrific number and then announce a secondary offering of stock meant to fund its worldwide expansion. That's exactly what this online yellow pages did, and the firm sold a ton of stock Thursday. That knocked shares down a couple of points -- to a level where, if you snared some, it could be considered a steal when we look back.

Or take Wednesday, when I revealed the pattern of this market. For days the indices rallied into the Federal Reserve meeting. That's because market players were confident the central bank would leave its easy-money policy unchanged since the economy is soft, courtesy the brainlessness of our politicians. Then the Fed announces it must leave monetary policy easy because, lo and behold, the economy's soft. Then sellers come in and sell all of the big cyclical companies that might be threatened by the softness in the U.S. economy, even as a huge number of these companies are international.

But then cooler heads prevail, and the same exact stocks get bought with a vengeance. That's how you get a huge rally in high-quality stocks that had gotten knocked down on Fedspeak -- stocks like 3M (MMM), United Tech (UTX) and Boeing (BA).

Or if you want to take a longer-term view, consider the action in two very high-quality companies whose shares rallied gigantically today: Expedia (EXPE) and Perrigo (PRGO). When we last heard from both companies, they reported quarters that were widely perceived as being disappointing.

Expedia, the online travel company, told you not to worry -- that it would solve its problems, and that it would come roaring back with a vengeance. I had to believe them, because I co-own the Debary Inn in Summit, N.J., and I know Expedia has become the de facto travel department for many corporations, which just tell their employees to save costs and book through Expedia. Sure enough, the company's admonition to stay the course panned out. When it reported today, Expedia revealed that it had done everything it said it would do on the last call. You've now caught an almost-20% move on a very big-capitalization stock.

When Perrigo reported last, I though the quarter was a good one, and I said so after I listened to management explain the earnings report on "Mad Money." It was very clear that the company, which makes store-labeled healthcare drugs, was going to have a strong rest-of-year because of all the drugs coming off patent that the company could knock off immediately. That's just what happened, and the stock has advanced $9.

Now, because this show isn't just about reporting what has happened, let me tell you about a new discount that just surfaced that you should take advantage of: Visa (V). After listening to today's conference call, a lot of people decided that Visa has peaked. They were upset by comments that consumer spending in the U.S. had suffered a downturn because of the government shutdown and the debt ceiling, even as the company made it clear that spending is already coming right back. The sellers didn't care.

I say that, first, Visa is an international story about a fabulous secular trend from paper to plastic. Second, the company is one of the most pro-shareholder concerns in the world. Finally, Visa's had periodic swoons based on its own candor, only to see those swoons erased in the next quarter. I think it will be no different this time. I think you have, at long last, been given another terrific chance to buy at what I think will prove to be a nifty discount to where the stock will be trading just a few short weeks from now.

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volatility is quite low here, and we could see some downsides here in the short term. ...



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