Virtus Investment Partners' Joe Terranova is shaking up his portfolio on Wednesday.
What Happened: Terranova trimmed his AbbVie Inc ABBV position and bought Chipotle Mexican Grill Inc CMG and Palo Alto Networks Inc PANW shares.
"I don't think we are in the initial stages of a bear market, so I'm looking for opportunities," Terranova said Wednesday on CNBC's "Fast Money Halftime Report."
He decided to trim AbbVie to free up some capital after seeing bearish momentum in the name, he said. For three consecutive days, AbbVie experienced range expansion, where the daily trading range was much wider than average, he explained.
"That was quickly negated. It was completely eliminated by three negative range expansion days, so I had to take half that position off," Terranova said.
In a search for growth at a reasonable value, he came across Chipotle, he said.
"Chipotle is actually able to endure this inflationary environment. Fast-casual seems to have some resiliency, there's some brand recognition and there's the efficiency of the way management is navigating this inflationary process," Terranova said.
He told CNBC that he took the funds from the AbbVie sale and "very happily" put them into Chipotle stock, which increased his growth exposure.
Terranova also found opportunity in Palo Alto stock.
"Cybersecurity is such a dominant theme in 2022. Palo Alto is a way to add to that cybersecurity exposure," he said.
He noted that CrowdStrike Holdings Inc CRWD is a better option for investors looking for faster revenue growth and higher beta exposure.
"If the market is going to appreciate significantly from here, CrowdStrike is the better trade, but I kind of wanted to trade down a little in the beta exposure. I wanted to get growth at more of a reasonable price. That's what Palo Alto will deliver for you," Terranova said.
He told CNBC that he expects the stock to "break out significantly beyond" $700 per share.
ABBV, CMG, PANW Price Action: According to data from Benzinga Pro, AbbVie was down 5.52% at $158.08, Chipotle was up 3.05% at $1,579.43 and Palo Alto was up 3.2% at $631.50 at press time.
Photo: Forextime.com from Flickr.
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