Down days are like when the tide goes out. You can really see who is swimming naked vs. who's got the latest Speedos, or whatever they are wearing these days. That's what's happening now and it's worth noting.
What do I mean by who is naked? That's any stock that's able to be knocked down by the endless selling in the S&P futures, based once again, I believe, on a confluence of who is being hurt by China's bear market -- which, by the way, has morphed back into a bull market if you check the averages -- and who would be hurt by higher interest rates and the super-freakin' strong dollar. There are way too many stocks and sectors to enumerate them here.
But the others, the swimmers who are looking pretty smart in this S&P riptide? They stand out while everyone else is naked and drowning.
The tide couldn't be going out at a more important time: We are now through a big chunk of earnings. We can make judgments and spot trends and themes that have emerged.
So let me tick them down.
The first theme that's withstood the S&P current? One that had been looking a mite unclothed of late: cybersecurity. The group, according to some in the analyst community, had gotten overheated. In fact, one of our most loved in the group, Fortinet (FTNT), had been downgraded to a sell earlier this month by Cowen, a good research firm. That sent the whole group in a tizzy and caused Fortinet to tumble down to $39. It had been at $43 a few days before the sell call. You would only make that call, we figured, if the analyst knew there could be a shortfall.
Turns out the analyst knew nothing. Or at least nothing that could make you money because Fortinet reported a picture-perfect upside surprise with amazing billings and an acceleration of spending in the category. So up go the usual suspects that we like so much: CyberArk (CYBR), FireEye (FEYE) and, of course, Palo Alto Networks (PANW). The latter remains totally go-to even as it is now up 62% and Mark McLaughlin, the savvy CEO, keeps delivering.
Second strong theme? How about apparel and fitness. When I think of these, I think of three companies: VF Corp. (VFC), Nike (NKE) and Under Armour (UA). These stocks have become so go-to, so strong that they are just rolling over all of the shorts. We recently got a research note that VF Corp., of North Face fame, is doing fabulously and that's completely fitting with the bankable Eric Wiseman, the CEO of this amazing company. (Under Armour and Fortinet are part of TheStreet's Growth Seeker portfolio.)
Nike? What can I say about the stock of this company, the best senior growth performer in the land. Mark Parker, the CEO, doesn't get his due, so I will give it to him. When Europe slipped back into recession, his numbers went up there. When China's market crashed, his sales roared. He even is doing OK in Brazil, where everyone else is just drowning in whatever they are selling, even as he singled it out as an issue. This man and his team and, of course, the great outgoing Chairman Phil Knight, just amaze and I am hearing about some technology shoes in the works that could allow you to have a shoe that fits your foot personally. That's dynamite, as I have to buy two pairs of sneakers as one foot's a 9½ and the other is a 10½.
Fitbit (FIT) fits into the theme. What could be more of a perfect accessory for sports than one of the many models of this gem of a company? My family likes the Surge, although the little device fits well on undergarments that fortunately, at least yet, I don't need. But if I had to wear a "manzier," you know what I would attach it to.
But today's Under Armour's day, and the numbers from CEO Kevin Plank are nothing short of extraordinary. UA announced top-line growth of 29% --how many companies are delivering that kind of growth -- and has just struck gold backing Stephen Curry and Jordan Spieth, recognizing these athletes before they became MVPs of basketball and golf. I want to know who this guy is endorsing for president.
I already labeled Under Armour one of my favorite stealth technology stocks in Get Rich Carefully, but I didn't count on him developing a network of 140 million registered users to his Connected Fitness community. Right under Nike's very nose, Plank has put together the world's leading digital health and fitness community with tremendous consumer engagement. Get this: Connected Fitness is adding 100,000 new athletes a day. This weekend I wore Under Armour boots, pants and a shirt to garden after working out in Under Armour pants, shirt and sneakers. The breadth of product here is extraordinary. Oh, and he's just scratching the surface of China, so he can't be hurt by it yet.
Next theme? Cameras and drones. Here we go with GoPro (GPRO), which has the red-hot camera devices that I featured on last night's Mad Money, and Ambarella (AMBA), the drone chip, which is used for so much more than just GoPro. On a nasty day like today, it's amazing that Ambarella can just power right ahead, taking out even the level where the nasty short report came out. Go listen to that conference call, where you can hear how many different Internet of Things devices this chip can fit into and then see if you can go short it.
Next up? The home. Today Fortune Brands Home & Security (FBHS) joined the parade of companies that reported stellar numbers that sell into the home. Kitchen cabinets, faucets, Master Locks, they are all part of the family of Fortune Brands that delivered a beautiful quarter last night.
They weren't alone. Whirlpool (WHR) may have issues overseas in China, Europe and most definitely Brazil, but what sent that stock soaring yesterday was the amazingly strong business it is doing in the United States.
That was echoed by insulation company Owens Corning (OC), which had a giant upside surprise because of demand for insulation. Just as Home Depot (HD) said when it reported, now that home values are going up, homeowners are investing in their homes, and that's the key to incrementally strong orders. As long as people thought their homes could lose value, no one wanted to spend much money on them. But a house that goes up in value? Now that's worth renovating.
Final theme? Rearmament. There is an amazing thing going on right now in this world. Our sworn enemy, the old Death to America crowd in Iran, is about to get the peace treaty it has always dreamed of to be able to do whatever the heck it wants including export terror, which is something it can do almost as well as the oil it is about to export, which is about to crush the market and has already impacted our shale plays, which are once again being obliterated.
No matter, the president tends to win these battles, which means that every country that fears Iran's primary export until oil's allowed to flow, is rearming and rearming in a hurry.
If giving Iran the upper hand isn't enough, Russia's been cornered and has ambitions like we haven't seen since the Cold War. Does anyone think it isn't eyeing one of the Baltic states, given its willingness to test the West in Ukraine? Remember, Estonia, Latvia and Lithuania are all NATO members, and if you attack one you attack them all. Time to rearm big. And how about China with its military push? The paper tiger's got to become more of a real one and it's looking to put people to work. Have 'em build carriers. So the rest of Asia feels threatened and it isn't like we seem gung-ho to play the world's policeman anymore in any of these countries.
Of course, then there is ISIS or ISIL, the strange entity that seems to win a lot more than it loses in a lot of places around the globe as it builds its caliphate. Can it be stopped? Not with words and three cups of tea, that's for certain.
It's not being lost on our companies. Raytheon (RTN), which makes hardware that can shoot down missiles, just reported a fantastic quarter and boosted its forecast. I expect Northrop Grumman (NOC) to report a similarly robust quarter next week, and did you see the numbers that came out of Lockheed Martin (LMT), my favorite in the group? Lockheed Martin just shrewdly doubled down on defense with the purchase, or should I say the steal, of Sikorsky Helicopter from an ailing and flailing United Technologies (UTX). What a terrific time to be in the military helicopter business. Lockheed Martin CEO Marillyn Hewson must be laughing all the way to the arms race. Oh, and drones, of course, play a role here, too; excellent for Ambarella. (Lockheed Martin is part of TheStreet's Dividend Stock Advisor portfolio. United Technologies is part of the Trifecta Stocks portfolio.)
Yep, the tide's going out and who's got the Speedos on? The stocks of companies in cybersecurity, athletic apparel, housing, drones and defense. Everyone else? They're just hoping to stay afloat.