Intelligent Investments

Sorry for the Delay in Posts...

2007-07-16T13:55:00.000-07:00

I am now a research analyst for a smallish asset adviser. I look forward to continuing my work journalling my investment performance and theories.

Ouch...

2007-02-28T06:46:00.000-08:00

The week started off just fine with a unchanged Monday in the portfolio while the major indexes were slightly down. Then came Tuesday and the markets plunged along with my portfolio. For the day, it finished down 3.15% vs. 3.84% for the S&P. That wiped away half my gains for the year in a mere few hours. Painful to see.

However, there may be a silver lining. The cause of this market drop was mostly due to a slowdown in China and a forecasted slowdown here in the U.S. This may cause the fed to lower interest rates by late spring or summer which would be a boon for the market. I'm still very bullish on the markets as valuations are not far from there mean.

Weekly Summary: Good!

2007-02-23T14:41:00.001-08:00

The portfolio creamed the S&P 500 holding to my theory that I tend to outperform only on volatile weeks for the indices. My portfolio gained 0.88% ($2,232.15) for the week while the S&P 500 lost 4.5 points (0.30%) resulting in 118 basis points of outperformance. The portfolio also thrashed the Russell 1000 but not the Russell 2000 which gained 1.04% for the week.

My best gainers were MHJ and GYI which both reported stellar earnings which boosted their stocks. The portfolio was dragged down by RAND which lost most of the gains I unrealized over the past 3 months. Most other holdings were slightly up or slightly down. The funds did well, especially the Fidelity Leveraged Company Growth which has done remarkably well over the past 3 years.

A new holding to report: Key Tronic. I came across this stock off another blog and did some digging of my own. It has everything I normally look for in a micro cap stock. Low Price to Book and Price to Sales. Enterprise value greater than market cap. Strong ROE and low institutional ownership. Current Ratio over 2. The company makes computer peripherals and other electromagnetic manufacturing services.

SANG!!

2007-02-22T17:08:00.000-08:00

Man Sang reported stellar earnings and the stock responded jumping nearly 15%. It is now my largest percentage gain, since inception. Too bad I don't own more. Overall, the portfolio was damaged by Genentech which suffered from an overall pharma decline, and TAIT on a low volume sell off.

The portfolio finished up 0.09% (just over $230) as it swung wildly through the day. At one point, the portfolio was up nearly 1% and down nearly 1%.

Another Good Day

2007-02-21T14:48:00.000-08:00

The portfolio finished the day up 0.19% even though the S&P was down 0.14%, a nice 33 basis point out performance. The Russell 2000 did finish up .15%.

Its hard to decide which benchmark is most appropriate for my portfolio. I do own many micro cap stocks which would suggest I should use the Russell 2000. However, the mutual funds I own are most representable to the Russell 1000 Growth or maybe even the Russell Mid Cap Growth Index. Of course, I own a few larger cap stocks that are most represented by the S&P 500. When I have time, I'll have to develop a blended index that is highly correlated to my portfolio. To be continued on that....

Getty Images jumped another 7.21% and Man Sang Holdings jumped again today over 9%. TAIT again dragged down the portfolio.

S&P Decimated!

2007-02-20T14:17:00.000-08:00

My stock portfolio decimated the S&P 500 by almost 100 basis points today. It was a good start to the week as EMVL has a last minute jump right before the close. It had been up .06 all day and within minutes of the close, it skyrockets up .31 (23.6%). Other strong players were MHJ (up 8.3%), ARTX (up 4.77%), SUNN (Up 4.57%) and PFSW (Up 6.47%).

The portfolio finished up $1,657.97 on the day, up 0.66%. The portfolio was weighed down by my fund holdings Wasatch Core (up 0.23%) and Fidelity International Discovery (-0.08%) and Fidelity Leveraged Co. and Low Priced (0.55 and 0.52%, respectively).

Also notable is the potential merger between Sirius and XM satellite radio. When satellite radio was first born, the government issued just two licenses for satellite waves. Both of these companies were formed within a year of each other but both have remained unprofitable. Capital intensive and marketing initiatives have cost both companies. Sirius gave Howard Stern $100 million a year for the next 5 years.

I bought Sirius with some spare cash back in 2003 for $1.60 a share. The stock then went up to $9, a 465% increase in the course of a year and a half. It then slid down to $4 a share over the next 18 months where it has been ever since.

This merger will not help profitability much in my mind. In the end, it is going to take several years for the benefits of this merger to be realized on the bottom line.

Weekly Summary

2007-02-16T18:59:00.000-08:00

This the week the portfolio finished up 0.90% but underperformed the benchmark by 30 basis points for the first time since the beginning of January. The reason for this underperformance lies squarely on my stock selections. EMVL, BRNC, ATRM, and RAND were the big culprits.

I finally sold off my energy fund as it recovered nicely from the December lows when oil was down near $50 a barrell. I hope to find some nice micro caps this weekend to roll this capital into.

ATRM Rebound

2007-02-15T16:28:00.000-08:00

The portfolio of stocks did very well all day, at one point eclipsing the 1% mark while the major indexes were down but as the day wore on, the indexes and portfolio converged. The portfolio finished up 0.35% dragged down by the funds mostly. The stocks finished up .62%.

ATRM jumped 10% today after rising 7% yesterday. It has recovered most of its losses of the past week. Otherwise it was a broad portfolio increase.

DOW Sets a New High

2007-02-14T14:47:00.000-08:00

Soothing words from Ben Bernanke at the Federal Reserve about inflation sent the major indexes skyward as the DOW set a new high at 12,741.86. The portfolio finished the day up 0.72% basically in line with the major indexes (S&P: +0.76%, R2000: 0.18%, R1000: 0.77%).

ATRM recovered from its sell off the last two days gaining nearly 4%. EMVL continued it downward slide on me losing another 6.5% and is now down in the low 1.30's. COH finished up another 2.25% is near the $50 mark. My price target is somewhere in the low 60's for Coach. It is my flagship holding. PTG made a nice move up rising over 3% after a week and change of new movement.

Lets hope the portfolio finishes out the week strong.

Beaten Down by RAND and ATRM

2007-02-13T16:52:00.000-08:00

The portfolio finished up 0.30% today even though RAND was down more than 12% and ATRM was down over 8% on no news. Does someone know something I don't? I wonder. EMVL and TAIT also dragged down the portfolio.

COH performed well again up over 2%. Also, all mutual funds helped pull the weight of the portfolio north of zero.

I plan on some re balancing and elimination of some stocks as well as taking some profits on others. But where to put them? I think I would rather hold cash than an investment that I believe has reached its ceiling.

Viva Las Vegas- Weekly Summary

2007-02-13T09:16:00.000-08:00

Sorry about the lack of a weekly summary as I was on a little R&R this past weekend in Las Vegas. Not much to report portfolio wise, as it was flat for the week, losing less than $20. With all the major indices down for the week, the portfolio achieved significant out performance.

ATRM suffered a large loss on no news on Friday so hopefully that will rebound today (Monday). Otherwise, there hasnt been much action on my micro caps. GYI has moved up nicely into the low 50's and may be a possible sell candidate at this point.

Quick Update

2007-02-09T13:18:00.000-08:00

The portfolio finished Thursday down slightly 0.07% better than all the major indexes. Tomorrow will be a release from the Fed so I'm expecting some serious movement in the markets depending on the news.

Stock Day!

2007-02-06T18:18:00.000-08:00

The portfolio gained 0.46% today fueled mostly by big gains in some of my stocks with most issues heading higher. MRVC, PFSW, RAND, and TOA all had multi percentage gains. ARTX has continued to sink and has now given up most of its 15% of gains.

Energy was slightly lower today which mostly results for the lackluster mutual fund performance. In the coming days, I'll be selling more assets from the funds to have cash on hand to plow into existing stocks at buying opportunities or new issues that come to my attention.

TAIT Drop

2007-02-05T14:59:00.000-08:00

The portfolio finished the day down 0.09% ($215), mostly because of TAIT and ARTX. There was no news on either stock so i would expect to see them back up tomorrow. It looks like someone entered a sizable market sell order for TAIT which dropped the price down. I don't understand the logic in entering market orders in low liquidity stocks. People just want to lose money I guess.

Weekly Summary

2007-02-03T07:10:00.000-08:00

The portfolio had its best week ever, gaining 2.4% ($5,826.89). For the month of January, it was up 3.6%. Strong showings from GYI, COH, JOB, and RAND helped propel the portfolio. The mutual funds also posted nice gains.

Crappy PXPL

2007-02-01T16:07:00.000-08:00

PXPL was down another 8.54% today on no news. Obviously there is news on the stock but only privy people know it. Anyways, it was a good day overall as the portfolio crossed the $250k mark again ( I reached it last spring before a down payment for a house). Up 0.68 ($1699.09). Today was the first day in awhile where the funds pulled me up. Still, the S&P has been on a tear lately and was up 0.54%.

Decent Day

2007-01-31T14:57:00.000-08:00

The portfolio finished the day up 0.48 but my stocks outperformed my funds yet again. The portfolio was up .70% at midday before the Fed announcement. The S&P at the time was barely at break even but after the announcement it shot up almost one percent while my portfolio barely budged. The indexes bested my performance by 15-20 basis points, mostly because of my funds.

Top JOB Performance

2007-01-30T18:06:00.000-08:00

JOB posted stellar quarterly numbers yesterday and the stock boosted 16%, at one point today it was up over 30%. Overall, the portfolio finished the day up 0.47%, slightly better than all major averages. My stock holdings handily outperformed my mutual funds, even with oil rising over a buck today.

Getty Images was up another 9% today. This stock has reached my sell zone and i plan to unload it on its next strong day. PXPL continues to vex me as it was down almost 8% for no reason. It has been extremely volatile lately.

Big Hole to Start the Week

2007-01-29T17:15:00.000-08:00

The week started out poorly as TAIT, PXPL and RAND pulled me lower. TAIT was a large portion of my drop today as the portfolio finished down 0.09% while the Russell 2000 finished up 0.63%. I did do better than the S&P by two basis points and only slightly worse than the 1000.

Getty Images posted a solid quarter and beat estimates. It rose over 5% today and is up another 4% after hours. COH, MRVC and ARTX also helped out the portfolio.

Weekly Summary

2007-01-29T17:08:00.000-08:00

For the week ending Jan. 26th, the portfolio finished up just 0.27%. It was a disappointing week given the advances most of my stocks had early in the week. I did however, manage to outperform the S&P by 86 basis points and the Russell 1000 by 77. I underperformed the 2000 by a few basis points. As of Friday, I know have just over $75,000 in individual stocks and $175,000 in mutual funds. I'm on schedule to have a 50/50 distribution by the end of the first quarter.

PXPL?

2007-01-25T19:06:00.000-08:00

PXPL has been extremely volatile the last couple of weeks and today was not different. The stock was down most of the day until a few minutes before market close when the it jumped more the 17% on no news. For the day, we were down 0.70%

SUNN-y Days

2007-01-24T20:00:00.000-08:00

I started a position in SUNN today. Its a great net net play selling at80% of NCAV. Also, i had a limit for 1500 shares of PFSW at 1.10 which hit. My lower buy limits weren't reached. I got into a large position of TAIT. I think I'm a little late to this game but i think the stock has at least another dollar upside.

Overall, the portfolio finished up 0.70% which was not as good as the major averages but any up day is a good day i say!

OIL Finally Rebounds

2007-01-23T14:58:00.000-08:00

The portfolio finished up 0.52% today thanks in large part to my energy fund and Fidelity Leveraged Company which has a 28% sector weighting in oil. My individual stocks did not far as well. ARTX continued to move and I added to BRNC with another 150 shares at $15.85 bringing my total to 450 shares, one of my largest holdings. EGR was also added to doubling my share total to 2000 at a cost basis of 1.44.

TOA finished down 6% today after announcing they were updating a joint venture in which they basically created an SPE with Deutche Bank. EMVL, formally EWEB, dropped 6% also on no news.

Coach announced earnings today that beat estimates and it also raised its forecast. However, the street didnt like the small decrease in its margins due to the fact that factory store sales outpaced regular store sales for the first time. Seems to me that Wall St. always focuses on the worst news of any earnings report. The stocks was down almost 3% at one point before rebounding to finish up slightly.

Bad Start to the Week

2007-01-22T15:11:00.000-08:00

The portfolio was hit by the broad decline and fell 0.47% however that was slightly better than the S&P 500 and Russell 1000 and over 50 basis points better than the Russell 2000. I sold small stakes in three mutual funds today, which would make me more happy if they had finished in positive territory, and have placed a few limit orders to pick up some potential bargains. More to come on those buys...

Weekly Summary

2007-01-20T17:28:00.000-08:00

For the week, the portfolio finished up 0.66% besting all major indexes soundly, especially the NASDAQ and Russell 2000 which finished down 1.15%. I'm still looking for more value microcap plays to invest in. I'm happy to see oil recover slightly as some winter like weather finally moved in across the Northeast. Ill continue to search for some more investment opportunities or buy some current holdings on weakness. But until then, I'll continue to keep the mutual funds.

Not As Bad As I Thought

2007-01-18T14:54:00.000-08:00

With oil dropping again and trading below $50 for a time today, I thought my portfolio would have been down a lot more than it was. The portfolio finished down 0.59% on the day with really no consistency between the funds and stocks. RAND and PXPL were both down over 6%. ARTX was again up as it has gained over 25% in the last week and change. Again, i can't stress enough that I wish I got more than 400 shares of my limit order. ATRM, JOB, and NWS were all up over 1% to help stave off disaster.

For the Second Day in a Row..

2007-01-17T15:15:00.000-08:00

My stocks picks have destroyed my fund holdings. I think the market is trying to tell me something... the portfolio finished the day up 0.13% besting all major averages which were all negative. I'm still trying to pick up more ARTX but the stock jumped .27 (7%) today so I obviously wasn't able to grab anymore shares. Energy made a nice bounce today so I hope tomorrow will be more of the same so I can dump my energy fund. We'll see.

Stocks to the Rescue

2007-01-16T16:08:00.000-08:00

WIth oil down again, my funds performed poorly. However, my stock holdings which represent 26% of my portfolio, increased 1.78% today alowing me to beat the major indexes quite easily. Right now, I'm looking for a boost in oil given the forecast for the first major outbreak of cold weather in the northeast as an opportunity to sell my energy fund and decrease my mutual fund holdings.

While I'm always on the lookout for new stocks to buy, right now I'm focusing my attention on increasing the size of some of my individual stocks to increase their weight in the portfolio. Im currently buying ARTX, PXPL, ATRM, and RAND on any weakness they show.

Weekly Summary

2007-01-16T16:06:00.000-08:00

The portfolio finished the week up 1.90% besting all major averages except the Russell 2000. It was a broad rally with all holdings up except PXPL.

NCAV Stocks

2007-01-12T12:55:00.000-08:00

I have been tracking NCAV stocks which are stocks that are trading below there net current asset value. Basically, you subtract total liabilities from current assets and then divide that by the float and if the stock is trading below that figure, it considered a deep value stock. This philosophy was tauted by Benjamin Graham, the father of value investing, in his landmark book, The Intelligent Investor- the basis for the name of this blog.

A great resource to find these types of stocks is grahaminvestor.com/screens. This site is updated daily with the 20 most undervalued stocks based on their float. Now, I would caution about flat out investing in such securities without serious investigation beforehand. Many times, there is a legitimate reason why they are trading at such discounts.

UP 1% today. Oil finally rebounded and boosted my energy fund 2.86% along with a new position that I hope I caught on its low, Bronco Drilling. BRNC has a high correlation to oil, almost .94 according to Bloomberg. I am probably one of the few hoping for $80 oil again.

Too Much Red

2007-01-10T15:17:00.000-08:00

Down 0.2 today. Couldnt pick up any more ARTX as the stock jumped again today, up over $.29 (7%). Thats a two day profit of 18%. I could complain that i didnt get my full alotment of shares but i guess i should be thankful i had anything in it. 400 shares is better than nothing.

New Position- ARTX

2007-01-09T13:40:00.000-08:00

Well, I have a new position to report- ARTX- Arotech Inc. I have been watching this stock for some time and should have pulled the trigger back in November when the stock was trading at $1.65, but i procrastinated and at $3.50, think its still has significant upside. The stock trades at 74% of book value and has seen significant institutional buying over the past quarter. I put in an order for 1000 shares at 3.58 this morning when i went to work. I was away from my desk most of the day and when i returned, found that 400 shares had been filled and the stock was no trading in the $3.85 range. Thats a nice 8.4% return in a few hours. I just wish I got all my shares.

Seesaw

2007-01-08T15:14:00.000-08:00

The market was all over the place today with the portfolio finally ending the day in positive territory 0.22% (+$543.88). Funds boosted my overall performance with the price of oil and natural gas recovering a bit with talk about a new OPEC meeting on production cuts. I'm hesitant to sell at this point with oil mostly lower due to the unusually warm winter in the Northeast. I may hold it one more week as the forecast calls for a general cooling trend this week and a cold snap next week. I hope this will boost oil prices so that i can garner a few more percentage points on my energy fund.

Kent Brockman, "If 60 degree days is the "price" we have to pay for global warming, then pardon me if I don't get rid of my old pontiac."

Weekly Summary

2007-01-08T15:08:00.000-08:00

For the week, the portfolio started the year down 0.99% with a significant portion of that under performance coming from the energy sector plummeting this week. I have precleared many new microcaps and hope to sell my energy fund and some assets within other mutual funds to provide capital for new securities within the portfolio.

I have been receiving these spam emails at work with weird from addresses that state a certain pink sheet stock will jump by 10-50% over the next few days. I have been watching them and they do indeed jump shortly after receiving the email but then the following week, they plummet, usually to a level below what it originated at. I guess these people know they are going to acquire a block of the stock so they are spamming to try and gain a floor for when other investors initiate selling after the pop. Unethical to say the least.

Bad Day for the Funds, Good Day for Stocks

2007-01-04T16:15:00.000-08:00

The portfolio finished the day up 0.13% ($320.12) pulled up by my microcap holdings. The price of oil plummeted today so obviously the energy fund dropped (2.11%) in addition to many of my other funds which have a high correlation to oil.

MRVC led my stock holdings higher posting a 7.32% along with JOB 4.73% and COH up 2.69%. Tomorrow i will run some of my screens to see if any opportunities have presented themselves over the past few weeks. I hope to devote more capital towards microcaps to benefit from the January effect.

Weekly Summary- Bounce Back

2007-01-02T09:31:00.000-08:00

For the week ending December 29th, the portfolio finished up 0.95% besting the major averages. I was on vacation all last week visiting the folks so I couldn't update the blog. Starting in a few weeks, I'm going to start to increase my equity holding from 21.5% of my portfolio towards 40%. My goal of 50% equity holdings, 50% mutual funds should be attained by the end of the first quarter. I hope to not invest solely in microcap stocks but it will be the bulk of my investing.

Weekly Summary: Not Good

2006-12-22T15:14:00.000-08:00

The portfolio for the week lost 1.66% (4,115.36). This was worse than most major indexes. Hopefully, the new year will reverse this trend. This is two weeks in a row of under performance. My new position of PXPL led the downward trend and is now down 10% from where I purchased it two weeks ago. There are a few bright spots like RAND, COH, and BUD which all bucked the trend and finished in positive territory for the week. Next week ill be away for Christmas vacation back east. Merry Christmas all!

Increased Volatility

2006-12-20T19:03:00.000-08:00

Over the past couple of weeks, the volatility of the micro-cap world has increased substantially. Normally, this would be a good thing because I could capitalize on news less jumps in my positions and repurchase them when they come back down but my job prevents me from this sort of opportunistic trading unfortunately.

The portfolio finished up 0.05% with my stocks pulling some the weight of my funds, mostly the energy fund (down 1.45%) and Fidelity Leveraged (down 0.58%) which is highly correlated to the price of oil. Coach was a big gainer today, at one point over 3.5% before settling around 2.48%.

Beat Down

2006-12-18T15:56:00.000-08:00

Over the past several trading sessions, small cap stocks have fared poorly while large caps have performed at least partially well. This may just be cyclical or could be a new trend downward for small caps- we'll have to wait and see.

January is typically a very good month for small caps and micro caps in general. Whats known as the January Effect usually sees stellar returns in the smallest of market caps.

The portfolio pared back 0.90% ($2,244.06) on the day. Only the Russell 2000 did worse- by 45 basis points.

Started my journey to pass the second level of the CFA exam today. Im going to stick to the same routine I did last year for the first level since that seemed to do well for me.

Mutual Fund Save

2006-12-14T19:49:00.000-08:00

Without my mutual fund holdings, my portfolio would not have finished the day in positive territory. After yesterdays near breakeven, today I finished with a 0.38% gain ($939.30) even though the major indexes were up around .85%. A new position in PixelPlus was started today buying 1500 shares near the low for the day ($1.95). I missed my limits on PFSW and BCGI which have all spiked in recent days. I need a good day tomorrow to keep up my streak of beating the averages.

Broad Selloff

2006-12-12T20:17:00.000-08:00

Despite big pops from ATRM and RAND, the portfolio had a broad sell off today shedding 0.38% ($951.65). The indexes were only slightly lower. The portfolio has some ground to makeup if it wants to continue the 4 week winning streak.

Slight Gain

2006-12-11T15:56:00.000-08:00

The portfolio finished the day up 0.16% ($397.94). EGR, RAND, BUD and TOA were all up over 1%. EWEB was the biggest detractor losing 1.72% along with News Corp (-1.11%) which gave back some of its profits from Friday.

Weekly Summary

2006-12-09T08:11:00.000-08:00

For the week, the portfolio made another strong showing gaining 1.40% (+3,439.66) outperforming all indexes except the Russell 2000 which gained 1.46%. Strong showings from EWEB, STH, and FLVCX boosted the portfolio. However, most positions either gained a percentage or meandered around their value from last week. No real detractors in the portfolio to speak of which accounted for the strong showing for the week. Lets hope the portfolio does the same next week.

So Close...

2006-12-07T16:55:00.000-08:00

I was $10 from extending my win streak to 8. The portfolio finished flat (-$10) on the day. New position to report. I bought 500 shares of RAND at near the low on the day, $3.14. The stock fluctuated a lot at one point dropping 10% in a few minutes on no news, hence my reasoning for jumping into the stock. It then proceeding up and closed near3.40.

Seven Day Win Streak

2006-12-06T16:25:00.000-08:00

The portfolio gained for the seventh day in a row, up 0.14% (+347.87) whereas all major indexes were down on the day. There wasn't much news on the day as investors wait for the key jobs report that will be released Friday. However, the ADP Macroeconomic Advisors employment report predicts employment rolls will have increased by 158,000, ahead of the 110,000 predicted by economists.

New holding to report. Today, I bought 500 shares of Paragon Technologies, PTG at 5.80. I have two other limit orders outstanding but they didn't reach my price.

Inflation worriers subsiding

2006-12-05T14:09:00.000-08:00

The markets and government have been strongly worried about inflation, to the point where growth is currently being stifled in order to stop it. Numbers released today expose the fact that inflation fears are overblown and for the most part, we are done with Fed rate hikes. The Commerce Dept released wage and benefits figures showing a 2.3% increase, much slower than the 3.8% estimated figure. Productivity was also revised upwards for the 3rd quarter proving that the economy did better than most contend.

The portfolio gained 0.6% (+1,441.06) on the day extending my win streak and breaking the quarter-million mark. New holdings are ATRM [750 shares @3.23] and EGR [1000 shares at $1.65].

Broad Rally

2006-12-04T15:00:00.000-08:00

Today the markets moved decidedly higher with 74% of all NYSE issues increasing and 65% of all NASDAQ's doing the same. This occurred mainly because of the BONY buyout of Mellon Financial Corp and a drop in oil prices.

The portfolio performed well but dragged a little due to the drop in the price of a barrel of oil. The portfolio is correlated to the price with the Fidelity Energy Fund and the Fidelity Leveraged Company mutual funds both highly correlated to oils moves. It finished the day up 0.77% (+1,877.31). vs. .89 and .91% for the S&P500 and Russell 1000 indexes, respectively.

A new position was started today in Aetrium Inc. which manufactures and designs electromagnetically equipment worldwide. The company is profitable and small at a market cap of $32.56M and an EPS of $0.30, giving it a trailing P/E of 10. It warned not long ago of a slowdown in chip orders from its two largest customers but after shares plunged 34%, I believe there is a larger slowdown already built in- thus the potential for an upside surprise.

Weekly Summary

2006-12-02T09:43:00.000-08:00

The portfolio finished the week up 0.26% with a distribution waiting on the Fidelity Intl fund, which will likely push the return up to 0.40%. Strong showings again from MHJ as well as TOA and DNA helped the portfolio minimize losses in a down day. The portfolio gained (at mimimum) $628.61 to finish at $244,595.06.

Currently, I am researching microcap stocks. I use the MSN deluxe screener and the yahoo screener the most. MSN I think is the best one- rare for me to say a microsoft product is the best. I also use the fidelity screener to confirm results.

What I look for:
Book value/shr vs. price
Low price/sales
Low price/book
Current ratio greater than 2.5
Growing revenue
Insider or Institutional buying
Low Float

Missed the grand RAND

2006-11-30T16:30:00.000-08:00

I usually don't like to pine about stocks that I have been watching but haven't invested in "jumping" but this one stings. I had planned on buying RAND Capital (RAND) this coming Monday when today it jumps 27%. The problem is I am an access person at the firm I work at and cannot purchase any security which hasn't been precleared before hand. They only preclear on Mondays so I have to wait until Monday before I could purchase RAND.

Overall, the portfolio had an excellent day handily outperforming the indexes. The portfolio gained 0.64% (+1,498.74) beating the S&P500 (0.08%) and Russell 2000 (0.25%). Strong showings from TOA, MRVC, and BUD boosted the portfolio. EWEB and GYI were the detractors.

Movin up...

2006-11-29T14:52:00.000-08:00

The portfolio moved up nearly a percentage point (0.98% +2,367.71) today outperforming all major indexes except the Russell 2000 which was up 1.21%. The only detractors were EWEB which continued its migration downward after yesterdays spike and Anheuser-Busch which dropped 0.58%.

My individual securities performed better than my mutual funds. Genentech moved nicely higher after trailing down over the past week. Coach performed well again gaining another 2.56%. I sold another $10,000 out of Wasatch Core growth to prepare for some more micro cap purchases either tomorrow or next week.

EWEB and MHJ Boost

2006-11-28T17:00:00.000-08:00

Just hours after I purchased 950 shares of EWEB at 2.08, the stock jumped more than 11% on no news. It looks as if a large market order was entered this morning that punched through several layers of limit sell orders up to $2.76 at one point. Then some profit taking took place and the stock slowly retreated down to $2.31.

This morning around 9am, I entered a limit order for Man Sang Holdings (MHJ) for 400 shares at $4.51. I checked around lunchtime and found that my order had been filled and that also the stock was up almost 12% before settling near 4.94. Still a nice 10% gain in only a few hours.

Overall the portfolio performed well gaining 0.37% ($920.14) outperforming the S&P500 and the Russell 1000.

Wal-Mart Dissapoints

2006-11-27T14:11:00.000-08:00

Wal-Mart same store sales dropped a meager 0.1% this past quarter. However, that was the first time in 10 years that this occurred and is signalling to Wall St that the retail season is off to a slow start. That news sent stocks reeling with its worst one day drop in four months. The Dow fell 158 points, S&P was down 19 (1.36%). The Russell 2000 index was down a whopping 2.55%. Decliners led Advancers by a hefty 4-1 margin.

The dollar also continues to get punished and is now down to 20-month lows against the Euro at 1.3133 showing signs that foreign investors are sensing a slowdown in the US market and have started searching for opportunities abroad.

Retailers felt the most pain today based on Wal-Marts numbers. J Crew fell over 7% based on an analyst downgrade. However, that downgrade was based on the recent runnup and not on slow sales.

I wonder if the market has overblown the numbers released by Wal-Mart. Many retailers are reporting heavy traffic into their stores this past weekend. Now I realize that foot traffic does not always mean more sales, but there is a correlation. I expect that sales will be in line with forecasts and that the markets will recover from today's sell-off.

Two new positions to report. The first is MRV Communications- (MRVC). They design, manufacture and sell communication equipment and services. They have two division, networking (basically a small CISCO) and an optical components group. The company is just becoming profitable and is trading at a forward P/E of 33. The stock has jumped 85% in the past year which would normally knock this stock off my radar but with the prospects and fundamentals still ripe, I think its got some more upside movement to go.

It is trading at 2 times book value and has enough cash to cover debt three times over. Institutional buying has pushed Inst. ownership over 40% and I believe it will continue to rise pushing up the stock price.

The other position is EuroWeb International (EWEB). This is basically a liquidation, buyout and net-net play. It is trading around $2 a share, about have liquidation value. The CEO recently resigned and the company is basically switching its business model completely. We'll see how this new management team works out. In the meantime, they have been buying back stock and with 78% owned by insiders, is an excellant "going private" play. There are risks that the management team will simply soak up the cash but those are relatively low.

Recently they have gotten into Real Estate with 5 projects on the books. A couple of the projects are in Nevada- one such project is developing 296 condos in the Las Vegas area. This worries me since real estate in Las Vegas has been plummeting- one of the hardest hit markets in the country. Others are smaller projects such as a single family residence as well as 2 multi-family residences in the LA area. Ill keep you posted on what they get into next.

The portfolio was down 1.41% ($3,456.80), one of my worst days ever. Only the Dow Jones and S&P500 fared better, but only slightly.

Weekly Summary

2006-11-24T17:22:00.000-08:00

For the week, the portfolio gained a respectable 0.59% ($1,423.14) outperforming the S&P 500 and Russell 1000 indexes. My stock picks did not perform as well as my mutual funds which were helped by rising energy prices- Fidelity Energy and Fidelity Leveraged Company each returned over 1.2% for the week. These portfolio's weathered the oil price drop fairly well.

Coach continues to climb with every news release toting luxury goods during the holiday season. Bud and Genentech are trading sideways. Bud isn't going to spike anytime soon but I feel as they expand their offering of products outside of alcoholic beverages, more institutional buying will take place pushing the stock up to possibly $60. Genentech is a great cancer drug play. I feel this stock will increase by 20% a year for the next 3 years.

I plan on making several micro cap purchases next week. Ill disclose those upon purchasing them. Overall, I'm happy with the performance of the portfolio and it beat my goal of .50% gain per week.

The Lack of Value Stocks

2006-11-21T09:51:00.000-08:00

Today I had time to run some of my favorite stock screens. I have noticed a steep decline in the number of opportunities currently in the market. The same crap comes up time after time. Looking back, I wish we were back in early '03. Oh well, guess I'll have to make do with the market we got.

In the meantime, there are a couple of stocks that I have been watching approaching levels where I would consider putting in some seed money. One stock I am looking at is trading at 5.12 trailing earnings, P/B of 0.93, a price of $6.10 but a book per share of $6.80, ROE of 22%, and 0.6 P/S. The drawback is the high debt, with over $300 million in debt and just $85m in cash, the stock is a little risky. I'm going to do more analysis this holiday break and let you know.

Coach was up another 1% today on strong volume. I'm wondering if its going to be another Amazon where you see this pop from Thanksgiving to New Years for the holidays and then struggle in January. I dont think it will and I believe I'll hold it.

Getty Images is up .77% today. This position has been moving slowly but steadily upward since Sept. as it got pounded this past summer on slowing growth prospects.

Overall, the portfolio did decently gaining 0.35% ($839.85) versus 0.20% for the Russell 1000 and 0.16% for the S&P 500.

Blah day..

2006-11-20T15:40:00.000-08:00

GYI is up nicely since i bought it a few weeks ago. Overall though, the portfolio didnt fair very well, down 0.17% (down $422.15). The Russell 1000 growth lost 0.3%, thus i underperformed. I am still in the process of transforming my portfolio. My goal is to have several large cap companies that I can accurately predict future cash flows and believe are undervalued. Small caps is where I will focus the bulk of my attention hoping to isolate and identify securities that are mispriced.

Disclaimer

2006-11-20T14:56:00.000-08:00

Important Disclaimer - Don't buy any of the stocks I buy, without doing your own due diligence and satisfying yourself that these are investments you want to own, without any reliance on any information contained in this blog.
Here's why:
This blog is for my own purpose, not to disseminate stock picks. Please do not mimick my decisions unless you conduct you own research first.

I don't do overly extensive due diligence on the stocks that I own. I don't have the time nor the energy to vigorously research each company. Typically, I look at a company's financial statements, key statistics and some news items about the company that I can find.

I am not responsible for misrepresented posts, any information I post incorrectly, or any typos that cause errors on my part or yours.

I use this blog as a personal journal where I can keep track of my investments and hopefully, teach people something along the way. However, more likely than not, it is you who will teach my something.

I won't tell you when I am about to buy or sell a stock. If I did, the extra competition for my order would reduce my profits. I don't want that.

Some stocks I own are especially volatile. Some of my investments are in microcap stocks with little or no analyst following. These stock are prone to wild swings in prices and often have huge ask/bid spreads. Without even considering other valuation issues, selling or buying on the wrong side of the bid/ask at the wrong time, can result in large losses, sometimes doing serious damage to your portfolio.

Just because I own a stock does not mean I would buy it now. Some of the stocks that I may own may have significantly increased in price since I bought them. Hence, their potential for further returns may be limited. Alternatively, the good situation I thought I saw when buying may have deteriorated, or I may have mis-analyzed the situation, and I might just be trying to ride it out.

I may still talk positively about companies whose stock I'm in the process of selling. I try not to confuse the company with the value of its stock. Great companies (that includes great microcap companies too), can become too overpriced but that doesn't mean I don't still think they're great companies (even if over-priced). Alternatively, they may have reached a quantity in my portfolio that I'm no longer comfortable with, and am in the process of re-balancing.

Even doing exactly as I do (assuming you knew exactly what I was doing and when), your portfolio may still suffer large and serious losses.

Finally, you don't know me, or my motives. That should be reason enough.

Special thanks to StockCoach (Shadowtrader) and Small, Smaller, Smallest for the bulk of this disclaimer.

Decent Week

2006-11-19T15:34:00.000-08:00

Friday was a slightly down day (.14%) but for the week I was up 1.2% beating the S&P 500 (1.1%). I begin the week with $242,543.31 with just 2% in cash. I hope to reduce my mutual fund holdings after the new year (to avoid the tax liability) and hold more positions, especially smallcap and microcap stocks.

Claymore Sabrient Stealth ETF

2006-11-16T08:21:00.000-08:00

About 2 weeks ago I purchased the Claymore Sabrient Stealth Portfolio ETF. Profile is above. This ETF seeks to replicate the index- The Sabrient Stealth Index- with a correlation of 95% or better over time. The index is comprised of 150 stocks that have little or no analyst coverage by Wall St.

The ETF is based on a philosophy that under covered stocks represent a huge risk-return possibility. Basically, they look to profit from the next Wal-Mart or Microsoft that no analyst is covering, is receiving little press by the media, or is too small to be bought by most mutual funds.

The index is constructed from a universe of all U.S. equities and ADRs that have 2 or less analysts covering them. 150 of the highest ranking stocks are then chosen using a quantitative based approach that ranks the securities based on growth-oriented, multi-factor filters. The stocks are then given a modified equal weighting and the portfolio is then rebalanced once per quarter.

The returns are below.

The index is benchmarked to the Russell 2000 index, a broad, small cap index. Over 80% of the index has a market cap below $1 billion with 60% falling into micro-cap territory. This makes sense since most unercovered securities are small business with little or no earnings are very little revenue.

Conclusion: I bought the index in October at $26.25 a share. I think this is an excellant way to play the micro cap space if you dont have the time to investigate individual stocks. The average market cap is $768 million but the average P/E is 18.95, less than the S&P500. I think the ETF has excellant long-term potential.

Disclaimer: I am long shares of the Claymore Sabrient Stealth ETF

Case for Coach

2006-11-15T07:40:00.000-08:00

Company: Coach Inc.
Ticker: COH
Market Cap: $15.4B
Shares Out: 367M
F P/E Ratio: 20.95
EPS: 1.37
Price: $38.61

Coach continues to drive ahead up over 3% today after a report released from Reuters last night and again this morning predicted very strong christmas sales this year. I wanted to purchase the stock in the mid 30's but it took too long to get 'approval' for it from my company. It can take upwards of a week to get approval from the investment staff. So, by the time I got approval, the earnings had been released and i could only get in at 38.41. With the stock up to 41.80, I have made a nice 8.8% in just a few weeks.

My analysis is based on the valuation model below. I forecast a slightly conservative 14% average revenue growth rate from 2008-2011, decreasing to 8% thereafter and a terminal growth of 3.5% Also, EBITA is conservative as well with the margin decreasing over 300 basis points over the course of 4 years.

I think this is extremely conservative givin the expansion opportunities and new products that will be coming out over the next few years. Operating profits have been growing at over 50% annually for the last 5 years- a streak unlikely to continue. However, I believe most analysts are underestimating their top line growth. Conceivably, I would imagine top line growth to average between 17-19% over the next 5 years.

Coach has had tremendous US growth over the past 5 years or so. However, the new growth driver will be Asia where they are broadening their presence in Japan and expanding into China. They plan on adding another 35 stores in the U.S. and between 15-20 in Japan, where they completed the purchase of Coach Japan last year. 20% of sales are being converted into free cash flow.

The firm does have its risks in that the high end retail market is extremely fickle and with new products coming onto the market each season, the chance that Coach will be out of style would have disastrous effects on the top line estimates.

My model gives the firm a $20B+ market cap giving an implied share price of $55.34; a 30.9% upside potential off the $42.30 quote as of 3:40pm today.

Below is a simple check model that i do after completing the more complex to make sure I'm not way off the mark. I use Thomson Baseline or First Call to find the estimated 5 year EPS growth rate average and enter it into the model along with the current years EPS. I then estimate the P/E 5 years from now either using the drivers above or historical industry P/Es. This give me an estimated stock price.

Disclaimer: I am currently long shares of Coach (Coh).

What to do?

2006-11-14T08:11:00.000-08:00

Yesterday I sold my Fidelity Select Health Care fund and I'm unsure of what to do with the proceeds. With $5502 in cash, my overall position in cash is only 2.3%. At this point, it may be better to leave the proceeds as cash than to look for investment opportunities that might not be qualified for the money. With the market at all time highs, the capital may be of better use held in reserve to wait for more attractive buying opportunities.

Health Care Glut

2006-11-13T09:44:00.000-08:00

Today I am selling out of one of the sector funds I currently own. The Fidelity Select Health Care has returned just 10% over the last 18 months and with the Democratic sweep of congress, I think HealthCare will only tread water at best.

Pharmas are going to be the main whipping post for the democrate in congress but with just a slim majority and President Bush still in the White House with his veto power, little action will be taken. Right now, Pharmas have experienced a downturn since last Tuesday. Wall St. is basically pricing in a slim chance of some pricing controls being passed. For now, the sectors outlook looks as bright as ever.

My position in Genentech will not be altered. At $81 a share, it is trading at 30x forward earnings; not cheap by any means but way off hisotorical P/e's. This might present a possible buying opportunity for additional shares for a company growing at a 20% rate.

Current Portfolio

2006-11-12T15:47:00.000-08:00

For my first post, I'll simply display my portfolio and some of my reasoning behind my holdings. Currently, I own 5 Fidelity Funds, 2 Wasatch Funds, a micro-cap fund, one exchange traded fund, and 5 stocks. I am slowly moving my money over to stocks, trying to avoid to big a tax hit.

My mutual funds are:
Fidelity Select Energy Fund Current Value: $6,359.68 Cost: $5,000
Fidelity Select Health Care Current Value: $5,482.49 Cost: $5,000
Fidelity Low Priced Stock Fund Current Value: $39,612.18 Cost: $24,782
Fidelity Leveraged Company Fund Current Value: $60,250.56 Cost: $48,968.03
Fidelity International Discovery Fund Current Value: $14,283.44 Cost: $10,000
Wasatch Small Cap Growth Fund Current Value: $22,145.90 Cost: $13,675.33
Wasatch Core Growth Current Value: $49,465.91 Cost $25,235.98
Perrit Emerging Opportunities Current Value: $11,148.77 Cost: $10,0000

All stocks and the ETF bought within the last two weeks from redemptions from fund above.

ETF- Claymore-Sabrient Stealth Portfolio (STH) Bought 250 shares @26.65
Coach (COH) Bought 100 shares @38.41
News Corp (NWS) Bought 100 shares @21.70
Anheiser Busch (BUD) Bought 100 shares @47.60
Genentech (DNA) Bought 100 shares @83.76
Getty Images (GYI) Bought 80 shares @43.47

Cash: 381.69

My new blog for portfolio analysis

2006-11-11T08:11:00.000-08:00

This is my new blog to track my investments and post research that i find and hopefully learn a lot from people out there like myself.