This update is short and sweet as I am up to my knees looking for new stocks for the portfolio. Although the averages are creeping lower, market breadth is plummeting. Volatile times like these, where even good earnings reports are met with selling, can provide excellent entry points for stocks.

Keep your eyes peeled for new stock alerts.

Around the Portfolio:

Ambarella (NSDQ: AMBA) customer GoPro (GPRO) is being upgraded to neutral from sell at Goldman Sachs, which also increased its price target to $10 per share from $6.75. Goldman points to the upcoming launch of the new HERO 6 camera. Although Ambarella is becoming increasingly less dependent on GoPro for sales growth, any good news for GoPro should flow into its numbers.

Gap (NYSE: GPS) reported an impressive quarter last week. Comp-store sales, the measure of store sales excluding newly opened stores, grew for the third consecutive quarter. While the 1% gain reported is not huge, the trend is in the right direction and is confirmation that Gap is making the right product adjustments to entice customers.

Profit margins on products continue to improve, partly due to improved product mix and partly due to leverage on rent expense when comp sales are positive. Earnings beat by $.06 and the company raised estimates for the year by $.04.

After jumping 10% after-hours to $25 the stock reversed course and is now down slightly from pre-earnings levels. I attribute the weakness to the fact that management raised estimates for the year by $.02 less than the $.06 quarterly beat, implying a slight lowering of second half estimates. I don’t agree with this assessment. Management is conservative and carefully treading into the back to school and holiday season.

It is incredibly frustrating to be correct on the fundamentals of a stock but wrong on the price action. Luckily 25 years selling stocks short for a hedge fund trained me to look through the price noise and laser in on the numbers. Gap’s numbers look strong to me.

The stock is trading at 10x this year’s estimate. Analysts look for little earnings growth, an assumption I think is incorrect. As earnings growth becomes more consistent the stock should trade higher. In the meantime, investors can enjoy the 4% dividend yield the stock provides.

Jazz Pharmaceuticals (NSDQ: JAZZ) issued $500 million of convertible debt last week. The debt pays 1.5% interest and is convertible to stock at levels above $219. The funds will be used to pay off higher interest debt the company currently holds.

PRA Health (NSDQ: PRAH) stock was initiated with an Outperform and an $89 price target at Raymond James.  The analyst believes it is one of the fastest-growing contract research organizations and has gained significant traction among large pharma client segment. Further, he expects two recent strategic partnerships, strong bookings growth, and peers tied up in large-scale M&A should translate to higher 2018 revenue and EPS than consensus expects.

VF Corp (NYSE: VFC) where we hold a put position, made a major acquisition last week in an effort to buy its way out of a sales decline.

It spent $820 million to buy Williamson-Dickie, owner of Dickies and Workrite clothing. Although this business is profitable and will add $.02 to earnings this year (the deal is all cash so no interest payments or incremental shares need to be issued which would cut into earnings), its growth rate and profitability are below VFC’s current rate.

I don’t expect the deal to change VFC’s growth prospects materially with the exception that it eats up the bulk of VFC’s available cash that could be used for other acquisitions.