Hi all, I hope everyone has a great Thanksgiving.
As I also mention, I will be taking a sabbatical from blogging. There are two reasons for this: One, the markets stink and most likely will continue to stink until Europe gets resolved one way or another. This includes sovereign bankruptcies like Greece and a subsequent rash of banking failures, etc. I do think that US corporations are in excellent shape as they are lean and profitable, but until those loose questions get resolved regarding Debt, Europe, and a slew of other issues I think there are going to be few opportunities until that happens.
The second reason is that I've run out of gas regarding blogging. I find I am an excellent project-manager type of person and that I am not good at constant updating and posting. Instead, I tend to lose interest in things unless they really grab me which is another reason why regular weekly posting doesn't work for me. I tend to post when I am excited about things and since August there has been absolutely nothing to get excited about in the market.
I will continue to post in the future though I can't say when, but most likely it will be when a new set of opportunities comes up that I am excited about. When the markets get better and turn up meaningfully is when that will probably happen, so until then I think I'd rather be on a beach somewhere watching and waiting. In the future please be safe, be cautious, and be prudent with your money.
November 22, 2011
November 6, 2011
Super Stock Screener results, November 6th
This weeks results from my Super Stock Screener. Screening is an excellent starting point for finding winning stocks.
My thoughts:
Change. This is the word that comes to my mind as I compare the Super Stock Screener results from November 6th with the last screen I ran two weeks ago on October 23rd. I am amazed at all the adds and drops from the screener lists, including names that are new to me as well as those that appear strong on their stock charts and yet are too weak to appear in the lists below. i don't know what this means but it sure makes things confusing as I try to keep up.
I am still very bullish but again the question is "what" to buy. The easy answer is to buy stocks with strong fundamentals that also have strong charts and show solid up-volume. If only things were as easy as this. The perfect example of this is Under Armour stock (NYSE: UA). Under Armour is a leading maker of athletic gear that wants to become the next Nike, and their recent earnings provoked a strong upward move in the stock on high-volume. However, UA's financial results showed a low percentage increase in earnings per share at 29% which is too low for my requirements. In fact, this low level of growth is not really consistent with the historical growth profile of strong growth stocks, so I reluctantly found myself passing on buying their stock. If UA goes on to be a huge winner then of course I'll keep myself but at the moment I have my doubts. If anything I would classify Under Armour as a "20% and out" type of trade for those that do have a profit in the stock at this time.
There are other stocks like this as well so be sure to checkout the stocks that have fallen off the list with those new ones that have shown up below. There are very interesting divergences occurring and I expect them to even out over the next several weeks.
Apart from that the main difference which confirms that the market is getting more bullish is the sheer number of stocks that make the screen. Two weeks ago there were only 22 stocks that made the screen and now there are 31 stocks. This is a healthy increase of about 50% and another indication that things may be getting better as time goes by. Greece and Europe are still the wild cards but no one knows how they will play out. Until then we'll see what happens.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
Stocks that fell off the Super Stock Screener results from October 23rd are below:
My thoughts:
Change. This is the word that comes to my mind as I compare the Super Stock Screener results from November 6th with the last screen I ran two weeks ago on October 23rd. I am amazed at all the adds and drops from the screener lists, including names that are new to me as well as those that appear strong on their stock charts and yet are too weak to appear in the lists below. i don't know what this means but it sure makes things confusing as I try to keep up.
I am still very bullish but again the question is "what" to buy. The easy answer is to buy stocks with strong fundamentals that also have strong charts and show solid up-volume. If only things were as easy as this. The perfect example of this is Under Armour stock (NYSE: UA). Under Armour is a leading maker of athletic gear that wants to become the next Nike, and their recent earnings provoked a strong upward move in the stock on high-volume. However, UA's financial results showed a low percentage increase in earnings per share at 29% which is too low for my requirements. In fact, this low level of growth is not really consistent with the historical growth profile of strong growth stocks, so I reluctantly found myself passing on buying their stock. If UA goes on to be a huge winner then of course I'll keep myself but at the moment I have my doubts. If anything I would classify Under Armour as a "20% and out" type of trade for those that do have a profit in the stock at this time.
There are other stocks like this as well so be sure to checkout the stocks that have fallen off the list with those new ones that have shown up below. There are very interesting divergences occurring and I expect them to even out over the next several weeks.
Apart from that the main difference which confirms that the market is getting more bullish is the sheer number of stocks that make the screen. Two weeks ago there were only 22 stocks that made the screen and now there are 31 stocks. This is a healthy increase of about 50% and another indication that things may be getting better as time goes by. Greece and Europe are still the wild cards but no one knows how they will play out. Until then we'll see what happens.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
| Symbol | Name | EPS % Chg Last Qtr | Sales % Chg Lst Qtr | ROE |
| AAPL | Apple Inc | 52 | 39 | 41.7 |
| ALXN | Alexion Pharmaceuticals | 48 | 44 | 21.6 |
| CF | C F Industries Holdings * | 369 | 53 | 19.5 |
| CFX | Colfax Corp * | 68 | 29 | 18.6 |
| CPA | Copa Holdings Sa | 52 | 41 | 24.8 |
| CRR | Carbo Ceramics Inc * | 83 | 41 | 16.1 |
| DECK | Deckers Outdoor Corp * | 49 | 49 | 27.7 |
| FTNT | Fortinet Inc * | 44 | 37 | 23.8 |
| GWR | Genesee & Wyoming Inc * | 58 | 39 | 10.7 |
| HLF | Herbalife Ltd * | 45 | 30 | 71 |
| IRBT | Irobot Corp * | 111 | 28 | 15.1 |
| ISRG | Intuitive Surgical Inc | 43 | 30 | 21.4 |
| KEX | Kirby Corp | 65 | 100 | 10.8 |
| LULU | Lululemon Athletica * | 73 | 39 | 36.2 |
| MA | Mastercard Inc Cl A * | 43 | 27 | 42.4 |
| MLNX | Mellanox Technologies * | 41 | 80 | 14 |
| ODFL | Old Dominion Fght Lines * | 52 | 25 | 12 |
| PEGA | Pegasystems Inc * | 60 | 26 | 11.2 |
| QCOR | Questcor Pharmaceutical | 95 | 91 | 39.1 |
| QLIK | Qlik Technologies Inc * | 400 | 50 | 23.2 |
| RAX | Rackspace Hosting Inc | 63 | 32 | 11.8 |
| RBN | Robbins & Myers Inc * | 72 | 85 | 12.3 |
| RGR | Sturm Ruger & Co Inc * | 81 | 38 | 26.9 |
| RHT | Red Hat Inc * | 47 | 28 | 13.6 |
| RL | Ralph Lauren Corp Cl A | 57 | 32 | 17.7 |
| SCSS | Select Comfort Corp | 63 | 25 | 78.5 |
| SPRD | Spreadtrum Comm Inc Ads | 91 | 124 | 52.4 |
| SWI | Solarwinds Inc * | 48 | 31 | 42.9 |
| TIF | Tiffany & Co | 56 | 30 | 18.5 |
| TPX | Tempur Pedic Intl Inc | 45 | 30 | 105.3 |
| VRA | Vera Bradley Inc | 48 | 30 | 60.1 |
Stocks that fell off the Super Stock Screener results from October 23rd are below:
| Symbol | Name |
| BKI | Buckeye Technologies Inc |
| CDNS | Cadence Design Systems * |
| CVLT | Commvault Systems Inc |
| MTZ | Mastec Inc |
| OXM | Oxford Industries Inc |
| RNOW | Rightnow Technologies |
| STMP | Stamps.com Inc |
| TGI | Triumph Group Inc * |
| UA | Under Armour Inc Cl A |
October 24, 2011
Charts, October 24th
Like I mentioned, about a couple of weeks ago I became incredibly bullish but couldn't pinpoint "what" to buy. Now I am seeing some promising stocks taking shape so I've annotated some charts so you can quickly see some examples of what I am seeing.
Indexes:
Right now the indexes still have some work to do before they start looking really good, though at the moment the S&P 500 looks like the better index when compared to the Nasdaq Composite. I think things will firm up as more earnings reports come in.
Stocks to avoid:
There are a few stocks that I feel need to be avoided. The first is an obvious one, Green Mountain Coffee Roasters (NASDAQ: GMCR). That chart is just plain ugly.
Another stock is Athena Health (NASDAQ: ATHN). The reason I think Athena Health should be avoided now is that it reported earnings the other day and, instead of rising to new highs, the stock sold off on big down-volume. This tells me that institutions are unlikely to support the stock and push it to new highs, so if they don't want it then why should you?
The last stock that I think should be avoided is Apple Computer (NASDAQ: AAPL). I know that people love the company and love it's products, but just because they make great stuff does not mean it is a great stock. I think the law of large numbers is catching up to them. After all, how much more can a huge company like AAPL grow? The chart shows a lot more selling than buying which is why I think Apple stock is likely to not go anywhere for a while.
Promising stocks:
Luckily there are more promising stocks in my opinion than ones to avoid. First is Alexion Pharmaceuticals (NASDAQ: ALXN) which just reported earnings and looks pretty good at this point. I actually owned some ALXN and sold it the day after it's earnings, and looking at it now I'm scratching my head to figure out exactly why I sold. The stock still has work to do but so far it looks ok after reporting it's latest results.
A new one that reported earnings and launched to new highs is Integrated Surgical (NASDAQ: ISRG). This stock has a unique medical device product plus great sales and earnings numbers, but the only thing that concerns me about ISRG is whether the lack of a proper base will hurt it going forward. We'll see but so far it looks ok.
Questcor Pharmaceuticals (NASDAQ: QCOR) is one I have tracked for a while and looks great except that I wish it had more volume. We'll see what happens with it.
A promising new leader is Select Comfort (NASDAQ: SCSS). Select Comfort reported it's earnings and the stock launched on huge earnings, all stuff that I want to see. They make specialized mattresses and so far their business looks like it is doing great.
The last stock is a sister stock to SCSS, and that is Tempur-pedic Corp (NYSE: TPX). Tempur-pedic also makes specialty mattresses and based on their sales and earnings is a bigger company than SCSS. I just love how TWO mattress companies both have rising share prices on big up-volume, so clearly something good is happening in the mattress industry. If you're looking to replace your own mattress than I'd suggest one of these companies...who knows, maybe owning the stock will end up paying for your purchase?
That is it for now, just keep your eyes peeled for those new stocks making big moves. Have a good week.
Indexes:
Right now the indexes still have some work to do before they start looking really good, though at the moment the S&P 500 looks like the better index when compared to the Nasdaq Composite. I think things will firm up as more earnings reports come in.
Stocks to avoid:
There are a few stocks that I feel need to be avoided. The first is an obvious one, Green Mountain Coffee Roasters (NASDAQ: GMCR). That chart is just plain ugly.
Another stock is Athena Health (NASDAQ: ATHN). The reason I think Athena Health should be avoided now is that it reported earnings the other day and, instead of rising to new highs, the stock sold off on big down-volume. This tells me that institutions are unlikely to support the stock and push it to new highs, so if they don't want it then why should you?
Promising stocks:
Luckily there are more promising stocks in my opinion than ones to avoid. First is Alexion Pharmaceuticals (NASDAQ: ALXN) which just reported earnings and looks pretty good at this point. I actually owned some ALXN and sold it the day after it's earnings, and looking at it now I'm scratching my head to figure out exactly why I sold. The stock still has work to do but so far it looks ok after reporting it's latest results.
A new one that reported earnings and launched to new highs is Integrated Surgical (NASDAQ: ISRG). This stock has a unique medical device product plus great sales and earnings numbers, but the only thing that concerns me about ISRG is whether the lack of a proper base will hurt it going forward. We'll see but so far it looks ok.
Questcor Pharmaceuticals (NASDAQ: QCOR) is one I have tracked for a while and looks great except that I wish it had more volume. We'll see what happens with it.
A promising new leader is Select Comfort (NASDAQ: SCSS). Select Comfort reported it's earnings and the stock launched on huge earnings, all stuff that I want to see. They make specialized mattresses and so far their business looks like it is doing great.
The last stock is a sister stock to SCSS, and that is Tempur-pedic Corp (NYSE: TPX). Tempur-pedic also makes specialty mattresses and based on their sales and earnings is a bigger company than SCSS. I just love how TWO mattress companies both have rising share prices on big up-volume, so clearly something good is happening in the mattress industry. If you're looking to replace your own mattress than I'd suggest one of these companies...who knows, maybe owning the stock will end up paying for your purchase?
October 23, 2011
Super Stock Screener results, October 23rd
This weeks results from my Super Stock Screener. Screening is an excellent starting point for finding winning stocks.
My thoughts:
There was no update to the Super Stock Screener last week as I was away on personal business, but I am glad to see what appears to be an improving market.
A couple of weeks ago I mentioned how I was becoming incredibly bullish but that I couldn't really explain why, and nor could I pick out which particular stocks would be good if that came true. Things do appear more bullish and stocks have logged some gains, and I feel that this will continue as earnings reports come in and demonstrate that corporate america is quite healthy. In fact I think that corporate america is a lot healthier than the news headlines suggest.
The trouble is still in picking out which stocks will be the next cycles winners and which will not. I continue to think that this round of earnings reports will separate the have's from the have not's, and so far this seems to be playing out. The latest example of this was Athena Health (NASDAQ: ATHN) whioch was a leading stock and just reported it's earnings a couple of days ago. I didn't think their numbers were all that good and neither did the market as the stock sold-off on heavy volume. Another promising stock that no longer makes the list.
Another example of winning stocks that have failed is Green Mountain Coffee Roasters (NASDAQ: GMCR). Two weeks ago I flagged it as a stock to avoid and at the time it was trading around $93 or so. On Friday it closed at $67.85, ouch! What this proves is that the stocks we have been accustomed to the last six months to a year are no longer at the forefront, so it is time to look for the new winners.
The way to spot these new winners is the way all winners are found: with high rates of growth, compelling products or stories, and positive price and volume action on their charts. The latest screen results show some interesting names and I think some of the new winners are already being shown.
I still am very bullish and feel that if we do get a rally then stocks will do very well, so this is a week that investors should watch very closely in order to grab on to new winning stocks as they begin their runs. I am highly optimistic we will see some very soon if not already. Remember, if the big investors want it then I (we) should want it. If they don't want it then we shouldn't want it either.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
Stocks that fell off the Super Stock Screener results from October 10th are below:
My thoughts:
There was no update to the Super Stock Screener last week as I was away on personal business, but I am glad to see what appears to be an improving market.
A couple of weeks ago I mentioned how I was becoming incredibly bullish but that I couldn't really explain why, and nor could I pick out which particular stocks would be good if that came true. Things do appear more bullish and stocks have logged some gains, and I feel that this will continue as earnings reports come in and demonstrate that corporate america is quite healthy. In fact I think that corporate america is a lot healthier than the news headlines suggest.
The trouble is still in picking out which stocks will be the next cycles winners and which will not. I continue to think that this round of earnings reports will separate the have's from the have not's, and so far this seems to be playing out. The latest example of this was Athena Health (NASDAQ: ATHN) whioch was a leading stock and just reported it's earnings a couple of days ago. I didn't think their numbers were all that good and neither did the market as the stock sold-off on heavy volume. Another promising stock that no longer makes the list.
Another example of winning stocks that have failed is Green Mountain Coffee Roasters (NASDAQ: GMCR). Two weeks ago I flagged it as a stock to avoid and at the time it was trading around $93 or so. On Friday it closed at $67.85, ouch! What this proves is that the stocks we have been accustomed to the last six months to a year are no longer at the forefront, so it is time to look for the new winners.
The way to spot these new winners is the way all winners are found: with high rates of growth, compelling products or stories, and positive price and volume action on their charts. The latest screen results show some interesting names and I think some of the new winners are already being shown.
I still am very bullish and feel that if we do get a rally then stocks will do very well, so this is a week that investors should watch very closely in order to grab on to new winning stocks as they begin their runs. I am highly optimistic we will see some very soon if not already. Remember, if the big investors want it then I (we) should want it. If they don't want it then we shouldn't want it either.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
| Symbol | Name | EPS % Chg Last Qtr | Sales % Chg Lst Qtr | ROE |
| AAPL | Apple Inc | 52 | 39 | 35.3 |
| ALXN | Alexion Pharmaceuticals | 48 | 44 | 21.6 |
| BKI | Buckeye Technologies Inc | 162 | 25 | 17.9 |
| CDNS | Cadence Design Systems * | 71 | 25 | 27.4 |
| CPA | Copa Holdings Sa * | 52 | 41 | 24.8 |
| CVLT | Commvault Systems Inc | 91 | 38 | 20.4 |
| ISRG | Intuitive Surgical Inc * | 43 | 30 | 21.4 |
| KEX | Kirby Corp | 56 | 60 | 10.8 |
| MTZ | Mastec Inc | 72 | 52 | 15.3 |
| OXM | Oxford Industries Inc | 78 | 26 | 14.6 |
| QCOR | Questcor Pharmaceutical | 53 | 62 | 37.7 |
| RAX | Rackspace Hosting Inc * | 63 | 32 | 11.8 |
| RL | Ralph Lauren Corp Cl A | 57 | 32 | 17.7 |
| RNOW | Rightnow Technologies | 67 | 26 | 27.6 |
| SCSS | Select Comfort Corp * | 63 | 25 | 78.5 |
| SPRD | Spreadtrum Comm Inc Ads * | 91 | 124 | 52.4 |
| STMP | Stamps.com Inc | 125 | 26 | 22.8 |
| TGI | Triumph Group Inc * | 52 | 108 | 13.5 |
| TIF | Tiffany & Co * | 56 | 30 | 18.5 |
| TPX | Tempur Pedic Intl Inc * | 45 | 30 | 105.3 |
| UA | Under Armour Inc Cl A | 71 | 42 | 15.3 |
| VRA | Vera Bradley Inc * | 48 | 30 | 60.1 |
Stocks that fell off the Super Stock Screener results from October 10th are below:
| Symbol | Name |
| KLAC | K L A Tencor Corp * |
| PII | Polaris Industries Inc |
October 10, 2011
Super Stock Screener results, October 10th
This weeks results from my Super Stock Screener. Screening is an excellent starting point for finding winning stocks.
My thoughts:
Another short post as this time I have been busy all week and weekend, plus I am a huge San Francisco 49ers fan and have been celebrating their destruction of the Tampa Bay Buccaneers this weekend, 48-3. That has been a long time coming for me.
So now to stocks. First thing I want to say is that I am bullish. I can't explain why or articulate all the reasons for it, so instead all I'll say is that I think things are probably going to change over the next few weeks for the positive. If I'm wrong then I'll take my lumps; and please remember that even when I leap I still do so with a safety net in place with stop-loss triggers set and buys made only from the candidates in the screening list below. The quantities will also be small enough where if I am wrong it won't hurt too much either. Hopefully I'm right.
For the Super Stock Screener I'm seeing some positive developments as well. Last week there were 13 stocks on the list, and this week there are 14 stocks that make the screen. What is interesting to me is that one of the stocks that fell off the screen is one that has been around for a long time and was a huge winner from the past bull market, Green Mountain Coffee Roasters (NASDAQ: GMCR).
I view the deletion of GMCR as a net positive in that it tells me that the market is finally clearing out the old winners and is now making room for the new ones that are sure to appear in the future. You can't live in the past and clearly GMCR was a stock rooted in the past 2009-2011 bull market. I feel that the majority of it's gains have already occurred, so I'll speculate that GMCR is no longer a stock that one should hold anymore. That the stock is no longer is on my screen after all these weeks vindicates this change to me and helps add to my bullish feeling.
Because new stocks are the lifeblood of a new bull market I was also heartened to see the addition of 5 (yes, five) stocks coming onto the list. A few were names that have been here before but one, KLA-Tencor (NASDAQ: KLAC) is one I never expected to see. If 30% of my screen this past week consisted of new names, than perhaps more undiscovered stocks will be showing themselves shortly? Let us hope so.
The Greek and the European situations are all ugly and the headlines are very scary, but again I do feel that better days will be coming. The US economy feels strong to me, corporations are profitable, and perhaps this will bolster stock prices in the days to come. I can't wait to find out.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
Stocks that fell off the Super Stock Screener results from October 1st are below:
My thoughts:
Another short post as this time I have been busy all week and weekend, plus I am a huge San Francisco 49ers fan and have been celebrating their destruction of the Tampa Bay Buccaneers this weekend, 48-3. That has been a long time coming for me.
So now to stocks. First thing I want to say is that I am bullish. I can't explain why or articulate all the reasons for it, so instead all I'll say is that I think things are probably going to change over the next few weeks for the positive. If I'm wrong then I'll take my lumps; and please remember that even when I leap I still do so with a safety net in place with stop-loss triggers set and buys made only from the candidates in the screening list below. The quantities will also be small enough where if I am wrong it won't hurt too much either. Hopefully I'm right.
For the Super Stock Screener I'm seeing some positive developments as well. Last week there were 13 stocks on the list, and this week there are 14 stocks that make the screen. What is interesting to me is that one of the stocks that fell off the screen is one that has been around for a long time and was a huge winner from the past bull market, Green Mountain Coffee Roasters (NASDAQ: GMCR).
I view the deletion of GMCR as a net positive in that it tells me that the market is finally clearing out the old winners and is now making room for the new ones that are sure to appear in the future. You can't live in the past and clearly GMCR was a stock rooted in the past 2009-2011 bull market. I feel that the majority of it's gains have already occurred, so I'll speculate that GMCR is no longer a stock that one should hold anymore. That the stock is no longer is on my screen after all these weeks vindicates this change to me and helps add to my bullish feeling.
Because new stocks are the lifeblood of a new bull market I was also heartened to see the addition of 5 (yes, five) stocks coming onto the list. A few were names that have been here before but one, KLA-Tencor (NASDAQ: KLAC) is one I never expected to see. If 30% of my screen this past week consisted of new names, than perhaps more undiscovered stocks will be showing themselves shortly? Let us hope so.
The Greek and the European situations are all ugly and the headlines are very scary, but again I do feel that better days will be coming. The US economy feels strong to me, corporations are profitable, and perhaps this will bolster stock prices in the days to come. I can't wait to find out.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
| Symbol | Name | EPS % Chg Last Qtr | Sales % Chg Lst Qtr | ROE |
| AAPL | Apple Inc | 122 | 82 | 35.3 |
| ALXN | Alexion Pharmaceuticals | 45 | 48 | 21.6 |
| BKI | Buckeye Technologies Inc | 162 | 25 | 17.9 |
| CVLT | Commvault Systems Inc * | 91 | 38 | 20.4 |
| KEX | Kirby Corp * | 56 | 60 | 10.8 |
| KLAC | K L A Tencor Corp * | 114 | 60 | 32.8 |
| MTZ | Mastec Inc * | 72 | 52 | 15.3 |
| OXM | Oxford Industries Inc | 78 | 26 | 14.6 |
| PII | Polaris Industries Inc | 82 | 41 | 51.1 |
| QCOR | Questcor Pharmaceutical | 53 | 62 | 37.7 |
| RL | Ralph Lauren Corp Cl A | 57 | 32 | 17.7 |
| RNOW | Rightnow Technologies | 67 | 26 | 27.6 |
| STMP | Stamps.com Inc | 125 | 26 | 22.8 |
| UA | Under Armour Inc Cl A * | 71 | 42 | 15.3 |
Stocks that fell off the Super Stock Screener results from October 1st are below:
| Symbol | Name |
| ATHN | Athenahealth Inc |
| DMND | Diamond Foods Inc |
| GMCR | Green Mtn Coffee Roasters |
| TGI | Triumph Group Inc |
October 2, 2011
Super Stock Screener results, October 1st
This weeks results from my Super Stock Screener. Screening is an excellent starting point for finding winning stocks.
My thoughts:
A short post as I was quite busy this weekend. In summary, I am very bearish and very fearful for the market. Stocks are not showing much life at all and the market has a very ominous tone. The rout in commodities like copper, corn, silver, etc. will, in the long run, help consumers and result in generally lower prices for goods and food. However, the negatives of this happening is that earnings for commodity-related companies are sure to drop, and this means that their customers will buy fewer tractors, fertilizer, mining equipment, drilling machinery, etc., and it also means lower stock prices as well. The S&P 500 is well-represented by these types of companies (for example, Energy accounts for 14% of the Index's earnings) so that means that Index earnings will also shrink and thus have less profit holding it up in the future, which means that the S&P 500 and other indexes also have further to fall as well.
Thus it appears that everything is shrinking at the same time. Customers, Sales, Earnings, Stocks, you name it...and it doesn't help that the Greeks and Europeans are on the verge of more crisis as too.
The Super Stock Screener also reflects this environment when you look at all the names that dropped off this week. 11 stocks fell off and only one new one showed up which was Questcor Pharmaceuticals (NASDAQ: QCOR). Questcor makes sense in that pharmaceutical companies are relatively protected as patients have to take their meds regardless of the economy, but I can't advise buying anything at this point. Instead I think there is more pain to come so the best things I can recommend are Cash and Caution.
Better days will come but probably not this week. Be careful, it's ugly out there.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
Stock that fell off the Super Stock Screener results from September 24th are below:
My thoughts:
A short post as I was quite busy this weekend. In summary, I am very bearish and very fearful for the market. Stocks are not showing much life at all and the market has a very ominous tone. The rout in commodities like copper, corn, silver, etc. will, in the long run, help consumers and result in generally lower prices for goods and food. However, the negatives of this happening is that earnings for commodity-related companies are sure to drop, and this means that their customers will buy fewer tractors, fertilizer, mining equipment, drilling machinery, etc., and it also means lower stock prices as well. The S&P 500 is well-represented by these types of companies (for example, Energy accounts for 14% of the Index's earnings) so that means that Index earnings will also shrink and thus have less profit holding it up in the future, which means that the S&P 500 and other indexes also have further to fall as well.
Thus it appears that everything is shrinking at the same time. Customers, Sales, Earnings, Stocks, you name it...and it doesn't help that the Greeks and Europeans are on the verge of more crisis as too.
The Super Stock Screener also reflects this environment when you look at all the names that dropped off this week. 11 stocks fell off and only one new one showed up which was Questcor Pharmaceuticals (NASDAQ: QCOR). Questcor makes sense in that pharmaceutical companies are relatively protected as patients have to take their meds regardless of the economy, but I can't advise buying anything at this point. Instead I think there is more pain to come so the best things I can recommend are Cash and Caution.
Better days will come but probably not this week. Be careful, it's ugly out there.
As always this is not a buy list but rather a starting point for doing more research. Stocks that are new are underlined and have an Asterisk (*) next to their company name.
| Symbol | Name | EPS % Chg Last Qtr | Sales % Chg Lst Qtr | ROE |
| ALXN | Alexion Pharmaceuticals | 45 | 48 | 21.6 |
| AAPL | Apple Inc | 122 | 82 | 35.3 |
| ATHN | Athenahealth Inc | 83 | 33 | 15.2 |
| BKI | Buckeye Technologies Inc | 162 | 25 | 17.9 |
| DMND | Diamond Foods Inc | 53 | 32 | 14.1 |
| GMCR | Green Mtn Coffee Roastrs | 133 | 127 | 15.9 |
| OXM | Oxford Industries Inc | 78 | 26 | 14.6 |
| PII | Polaris Industries Inc | 82 | 41 | 51.1 |
| QCOR | Questcor Pharmaceutical * | 53 | 62 | 37.7 |
| RL | Ralph Lauren Corp Cl A | 57 | 32 | 17.7 |
| RNOW | Rightnow Technologies | 67 | 26 | 27.6 |
| STMP | Stamps.com Inc | 125 | 26 | 22.8 |
| TGI | Triumph Group Inc | 52 | 108 | 13.5 |
Stock that fell off the Super Stock Screener results from September 24th are below:
| ACTG | Acacia Rsrch Acacia Tech |
| CPA | Copa Holdings Sa |
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September 25, 2011
Twisted
Another week, another crash. Raise your hand if you're tired of this...I am too. This week the Fed announced 'Operation Twist' which from the name I am inferring that they want to twist 'something' and I'm not sure its limited only to bond rates. At any rate the reaction has been brutally negative and I have spent the last couple of days wondering why.
I searched the internet and was unable to find anyone who explained the impact in plain english except saying "it won't work", so below I will attempt to describe what I think will happen and has already begun. I am not a Fed Analyst so if I am wrong please forgive me.
The impact of Operation Twist as far as I can tell is:
1. Banks will no longer be able to make easy money from the yield curve. The way they did this was they would make long-term loans at higher interest rates while funding the loans with short-term borrowings at lower rates. Thus they would keep the difference between the two as profit, and now the Fed is going to make this a lot harder. As if banks needed more trouble.
2. Mortgage rates should become cheaper. While this may be true, I don't know if that will incentivize anyone to buy a house that doesn't already own one. Houses appear to be plentiful (and become more plentiful from a flood of foreclosures hitting the market) as well as getting cheaper too, so why should buyers do anything at the moment unless they really want to? It will probably take many years before housing gets back to normal and this is probably what Ben Bernanke is afraid of.
3. I think financial institutions will speculate less and have lower returns and profits than forecast. This is big because it affects insurance companies and pension funds. Underfunded pensions will probably be hardest hit because they're already in the hole. and one has to wonder how they can possibly earn enough to pay pension benefits? Retirees beware. Insurance companies will probably tighten their business because they can't make as much from investing premiums to cover losses and claims, so add these to the list of Twist-losers.
4. Lastly, short-term I think Operation Twist will force institutions that speculate in the markets like brokerages and big banks to de-leverage and reduce their market commitments and exposure. The reason is because their investment positions are financed using short-term rates and if it becomes more costly to maintain positions in commodities and futures then they all will have to speculate less. I believe we are already seeing this happen as the stock market was hit right after the Fed announcement, and Commodity markets were also down HUGE on Thursday and Friday as well. I've included their charts below so take a look and you'll see that it appears that 'everyone' was stampeding out at the exact same time and it wasn't you and me. Instead it looks more like a herd of panicked financial elephants crushing everything in their path. This may create a better financial environment in the long-term, but this process in the short-term will be ugly, yuck. Hopefully the stampede ends soon.
So this is my take on what the impact of 'Operation Twist' will be as the Fed moves money around the yield curve by selling short-term bonds to raise those rates, and buying long-term bonds to lower those rates. I know that the markets and the Congress all wanted the Fed to 'do something', but I'm not sure that this effort will really accomplish much beyond doing a lot of unintentional damage. If the first rule of doctors is to "do no harm" then it appears that the Federal Reserve either did not ask if they were doing harm, or perhaps they didn't care even if they did know. "It won't work" seems to be a pretty accurate assessment after all.
For this upcoming week I strongly advise all to be on the lookout for herds of rampaging elephants as I don't want to see anyone get trampled underfoot. Remain cautious and if you must invest then do so with appropriate levels of risk-management (or carry an elephant gun). The chart of Silver below should be enough warning for that.
Charts:
Gold ETF (NYSE: GLD)
Silver ETF (NYSE: SLV)
Copper
Lastly, the obligatory S&P 500 chart. Stocks were hit too and the big "If " is whether these levels hold or if it keeps going down. We'll learn this soon.
I searched the internet and was unable to find anyone who explained the impact in plain english except saying "it won't work", so below I will attempt to describe what I think will happen and has already begun. I am not a Fed Analyst so if I am wrong please forgive me.
The impact of Operation Twist as far as I can tell is:
1. Banks will no longer be able to make easy money from the yield curve. The way they did this was they would make long-term loans at higher interest rates while funding the loans with short-term borrowings at lower rates. Thus they would keep the difference between the two as profit, and now the Fed is going to make this a lot harder. As if banks needed more trouble.
2. Mortgage rates should become cheaper. While this may be true, I don't know if that will incentivize anyone to buy a house that doesn't already own one. Houses appear to be plentiful (and become more plentiful from a flood of foreclosures hitting the market) as well as getting cheaper too, so why should buyers do anything at the moment unless they really want to? It will probably take many years before housing gets back to normal and this is probably what Ben Bernanke is afraid of.
3. I think financial institutions will speculate less and have lower returns and profits than forecast. This is big because it affects insurance companies and pension funds. Underfunded pensions will probably be hardest hit because they're already in the hole. and one has to wonder how they can possibly earn enough to pay pension benefits? Retirees beware. Insurance companies will probably tighten their business because they can't make as much from investing premiums to cover losses and claims, so add these to the list of Twist-losers.
4. Lastly, short-term I think Operation Twist will force institutions that speculate in the markets like brokerages and big banks to de-leverage and reduce their market commitments and exposure. The reason is because their investment positions are financed using short-term rates and if it becomes more costly to maintain positions in commodities and futures then they all will have to speculate less. I believe we are already seeing this happen as the stock market was hit right after the Fed announcement, and Commodity markets were also down HUGE on Thursday and Friday as well. I've included their charts below so take a look and you'll see that it appears that 'everyone' was stampeding out at the exact same time and it wasn't you and me. Instead it looks more like a herd of panicked financial elephants crushing everything in their path. This may create a better financial environment in the long-term, but this process in the short-term will be ugly, yuck. Hopefully the stampede ends soon.
So this is my take on what the impact of 'Operation Twist' will be as the Fed moves money around the yield curve by selling short-term bonds to raise those rates, and buying long-term bonds to lower those rates. I know that the markets and the Congress all wanted the Fed to 'do something', but I'm not sure that this effort will really accomplish much beyond doing a lot of unintentional damage. If the first rule of doctors is to "do no harm" then it appears that the Federal Reserve either did not ask if they were doing harm, or perhaps they didn't care even if they did know. "It won't work" seems to be a pretty accurate assessment after all.
For this upcoming week I strongly advise all to be on the lookout for herds of rampaging elephants as I don't want to see anyone get trampled underfoot. Remain cautious and if you must invest then do so with appropriate levels of risk-management (or carry an elephant gun). The chart of Silver below should be enough warning for that.
Charts:
Gold ETF (NYSE: GLD)
Silver ETF (NYSE: SLV)
Copper
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