On Friday morning, we sold four stocks: AAR Corporation (NYSE: AIR), ChannelAdvisor (NYSE: ECOM), AngioDynamics (NASDAQ: ANGO) and Sotheby’s (NYSE: BID). All four stocks have exceeded our suggested buy-up-to price. Amidst the higher market volatility, we decided to take the gains.

AAR Corp. has been a consistent performer for us since joining the portfolio in February 2017. The total return in a little over a year is about 35%. It’s a solid company in an industry with good growth prospects.

The stock had a tough Monday after the TV program 60 Minutes reported that the FAA says the company failed to perform proper maintenance procedures for Allegiant Air, a budget airline, and endangered passengers. However, the main target of the FAA’s report seems to be Allegiant. AIR bounced back and set a new all-time high yesterday.

ChannelAdvisor jumped 19% yesterday after announcing preliminary first-quarter results above its guidance. The company expects first-quarter revenue to be about $31.2 million, beating the high end of its own guidance by $1.4 million. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is expected to be $0.8 million; its guidance called for a loss of $0.7 million to $0.3 million. In other words, its adjusted EBITDA beat the high end of its guidance by $1.1 million.

The quarter was a breath of fresh air for the company, which in recent prior quarters had delivered underwhelming results. CEO David Spitzer had previously promised that the company would make progress, and this time it finally surprised on the upside.

We’ve discussed both AngioDynamics and Sotheby’s in recent weeks. Both stocks had exceeded our recommended buy-up-to price and we decided to take the gain at this time.

Stock Update

Synchrony Financial (NYSE: SYF) reported first-quarter results on Friday. Revenues of $3.2 billion and adjusted earnings per share of $0.83 both beat expectations. However, beyond the headline numbers there was a little bit of a mixed bag.

As we’ve mentioned before, Synchrony implemented tighter loan criteria in 2016. This has stabilized bad loans, but loan growth is decelerating as a result. Credit card spending from subprime customers decreased 15%. However, spending from customers with FICO scores of at least 660 grew 8%.

The fall in spending from the subprime group matters because these customers are more likely to carry balances on their statements that result in interest payment (revenues) for Synchrony.

Offsetting this somewhat is that Synchrony is slowing the increase of its loan-loss-reserves more than it expected. Since these reserves count as an expense, slower growth is, all things equal, a positive for earnings.

The stock fell $0.15 on Friday, but given the down market, the performance was not bad.

The stock has struggled this year so far. Higher interest rates likely renewed investor concerns of loan quality since higher interest rates increase the cost of credit card debt. However, Synchrony still has above-peer loan growth, even if the loan growth has slowed, and comparatively low expense ratio.

We’ve lowered the suggested buy-up-to price to $38 for the time being. The company still has solid growth potential, but it is going through a bit of a rough patch right now, and we will continue to monitor the company closely to see how it navigates the next few months.