Long weekends like we just went through always seems to get me to look deeper into the portfolio, says Steve Reitmeister, editor of Reitmeister Total Return.

Meaning the extra peace and quiet that comes from the extra day off does wonders for looking at the portfolio through a fresh lens. This is leading me to get rid of two of our positions that have underwhelmed and replacing them with two picks that have wonderful upsides that also adds welcome diversity to our portfolio.

  • Sell all shares of Brunswick (BC)
  • Sell all shares of Sleep Number (SNBR)
  • Buy 7.5% allocation in APA Corporation (APA)
  • Buy 7.5% allocation in Western Digital (WDC)

Why Sell BC? Been in the portfolio since April and still struggling to make waves. So, time is up and want to jump overboard into a new pick that is hopefully a more timely selection.

Why Sell SNBR? This mattress firm has not provided a good night's sleep since we picked up shares. Just like BC I can point to 10 different reasons that shares are still attractive. But at a certain point, if the rest of the market is not joining in the chorus, then best to sell and cast your lot elsewhere.

Why Buy APA? We have no energy exposure and that seems like a mistake as the world economy continues to improve, which generally leads to higher energy usage. And as I look at the best options for energy APA rises to the top for the following reasons...

POWR Ratings are strong across the board with B overall, Growth and Value. Yet A for Momentum and the most important category, Quality.

Only one earnings miss in four years, which is very tough in the energy industry. But a clear statement of how well run the company is (which also shows up in the Quality score of A).

The most recent earnings report was a stunning 38% beat, which got estimates flying higher for this year and next. This got followed up with AMPLE analyst praise with an average target price of $27.55, which is nicely higher the current price under $20.

Speaking of the current price, note that the entire energy space has seen a pretty stiff correction since early June. In the case of APA the price made it to $24.30 before a massive haircut got heading under $20. Gladly this downfall is showing signs of being over allowing us both a good entry price and a touch of momentum that should carry shares higher.

Why Buy WDC? We are a bit light on tech, which had me scouring that space looking for stocks that were also decent value propositions. But that's like trying to find a skinny person at Old Country Buffet ;-)

Gladly, one did emerge in Western Digital, which is crazy given how they are so dominate in storage space. As you probably know storage/memory is a tremendous growth market given how the world is getting every more connected...the more memory we need. The most recent 50% earnings beat only proves that point that this is a hot technology space...and WDC is perfectly situated.

And yet, just like we were saying for APA, it has been on the downswing since making a new high of $78.19 back in June. This is what creates a tremendous value proposition as the average target stands at $95 (55% above the current price). But in the past week you have two top analysts thinking that is still not high enough including a $115 target from the analyst at Stifel.

That's a wrap for this trade alert.

Learn more about Steve Reitmeister at StockNews.com.