After the best January since 1987, I think it’s time to start cleaning house. Many of our names have bounced nicely off their late December lows. Those that I believe may be at risk for future disappointment will be cleared from the portfolio.

You likely saw my recommendation this morning to sell our stocks with retail exposure. I am concerned that retail demand post the holidays may be weak. The government shutdown, historical low temperatures that quite literally froze wide patches of the country and general consumer malaise after a frothy holiday may dampen first-quarter sales.

Seeing how poorly these stocks behaved after reporting strong December numbers, it is clear they are in “show-me” mode to the stock market. In this situation, it’s best to exit the positions and wait until the trend is clear. I think it may be a few months before the market regains confidence that decent growth in retail sales is sustainable.

I may be doing more paring of the portfolio as I review all of our positions and re-evaluate price targets and performance.

Around the Portfolio:

Imperial Capital increased its price target on Air Transport Services (NSDQ: ATSG) to $31 from $27 ahead of the company’s Q4 results. They kept an outperform rating on the name. The analyst believes that Amazon (NSDQ: AMZN) is still in the early innings of developing its air freight business, with Air Transport Service and Atlas Air (NSDQ: AAWW) likely to be critical partners.

Telsey Advisory downgraded Steven Madden (NSDQ: SHOO)  to Market Perform and lowered their price target to $37 from $40. The analyst noted that while there is much to like about the Steven Madden story, worries over tariffs and a pullback in the wholesale channel has them worried. My fears are not exactly the same as theirs but my thinking is the same; retail stocks may not fare well if sales are below expectations.

My opinion of the PayPal (NSDQ: PYPL) quarter doesn’t square with the weakness in the stock. I think it was quite strong and demonstrates the power of its customer base. Venmo, the peer to peer payment system, which is the basis for my bullish recommendation, is hitting on all cylinders. Venmo payments grew 80%, accounting for $19 billion of transaction volume in the quarter and $62 billion in the year.

The company generated over $1 billion in cash flow on revenue of $4.2 billion. This cash flow number is astounding. Some fretted that PayPal’s revenue was a tad soft but that appears to be from the divestiture of its credit card receivables to Synchrony Financial (NYSE: SYF) and currency weakness.

Baird analyst Colin Sebastian kept his Outperform rating and $99 price target on PayPal after its Q4 results, saying that while revenues came in “a touch soft”, the slight miss was in line with his checks. The analyst notes that the soft top-line result was driven by ” e-commerce slowdown, eBay weakness, and International/x-border challenges”, but sees the company’s positive long-term fundamentals as intact. Sebastian points to the growth in PayPal’s transactions and an increase in user engagement.

Craig-Hallum analyst Bradley Berning raised his price target for PayPal to $110 from $100 following the results and Stephens analyst Brett Huff recommends “aggressive buying” of the shares on the pullback. The stock also had its price target raised to $100 by Oppenheimer.

DZ Bank, whose report I don’t have access to, downgraded it to hold from buy.

Synchrony (NYSE: SYF) was upgraded to buy from neutral at BofA/Merrill with analyst Kenneth Bruce saying the company’s renewal of the Sam’s Club partnership, the sale of the Walmart portfolio to Capital One and Walmart’s dismissal of the lawsuit against Synchrony “substantially remove many of the key risks” that had been facing the company.

OTR Global issued a change in opinion on the North American frac sand market, where it raised its industry outlook from bearish to mixed. Obviously, this is not an outrageously bullish statement but a move in the right direction. Frac sand stocks, Smart Sand (NSDQ: SND) included have been demolished as investors fear lower oil prices are drying up demand for this sand. The analyst said that checks indicate demand and spot prices are slowly stabilizing in January following a drop in Q4.