Friday, August 2, 2013

Indices closed UP .16% to .38%.....NICE !!!!

Indices fought back negativity from less than expected jobs growth of 162K. Strength of this TAPE was obvious as S&P 500 closed @ absolute high of the day.

S&P 500 @ 1709.67

RSI @ 70.10

CMF @ 0.276

Internals were :

UP volume led by 1.05 to 1 in NYSE & 1.47 to 1 in Nasdaq

Advancing stocks led by 1.04 to 1 in NYSE & .90 to 1 in Nasdaq

Net new 52 wk highs were leading by 139 in NYSE & 210 in Nasdaq

VIX Down 7.42% @ 11.98, 52 wk low is 11.05 on March 14, 2013

Oil @ $106.94

Gold @ $1310.50

Canadian $ Down 44 tick @ 96.18

Stocks which were UP 1% or more included CLF F
MKTG YELP FB CLDX LEN LNKD TSLA
AAPL HMC DNKN LULU EXPE BBRY
BIDU V CIEN FNSR QCOM SBUX
SINA Z WYNN.....

Portfolio weighting :

CLF   29.19%

AUY  28.26%

MU   23.94%

F      18.61%

Exposure 121%

Next post by 2 PM on Sunday.

BLOG does NOT give buy or sell.

Saleem

6 comments:

charlie Fallon said...

saleem, any thoughts of buying more AUY if it drops from current levels? thanks charlie

Stocks100 said...

Hi Charlie,

AUY is among the few gold miners who is expected to continue dividend & will earn 54 cents in 2013.....

Current Q is 10 cents earnings then 12 cents...

It remains my 2nd biggest position even after this drop......

Stay diversified & have overweight in AUY.....

Saleem

stocktrader_1996 said...

Hey Saleem,

The portfolio performed nicely this week with a 3.47% gain versus the S&P's +1.07%.

Biggest Winners: TRLA (+19.2%), TXTR (+12.9%), YELP (+7.2% from purchase), OMED (+6.3%), CMI (+6.2%), KORS (+6.1%), WLK/CLF/RDN (+4-5%)

Biggest Losers: X (-7.9%), WLH (-4.3%), TCK (-2.5%)

Here's the current portfolio composition:

~150% normal weighting:
TXTR - construction industry cloud software
KORS - specialty retailer

~100% normal weighting:
TCK - diversified Canadian miner, copper/met coal/zinc
CMI - truck engines
KOG - oil driller in Bakken
M - department store
RDN - mortgage insurer
WLK - commodity chemicals
SODA - home beverage carbonation systems
FCX - copper/gold miner, oil+gas driller
TRLA - housing internet site
X - steel maker
CLF - iron ore and met coal miner
MODN - revenue management cloud software
YELP - online local review site
YHOO - diverse internet site

~67% normal weighting:
WLH - homebuilder
OMED - biotech

Cash: ~4%

Although I made out/in and in/out moves with some portfolio holdings this week, the only net change by week's end was trimming MODN and adding YELP.

The multitude of earnings this week went fairly well with CMI, WLK, SODA, TRLA, and KOG all rising after earnings. Only X fell back, although I think it is misunderstood stock as it is and has been free cash flow positive for many quarters consecutively and "earnings" don't reflect the whole picture.

This week sees my two overweights report with KORS (TUE AM) and TXTR (WED PM). I'll also get earnings from WLH (THU AM) and MODN (THU PM). From the two overweights I expect great quarters and guidance and price action--anything less would disappoint me really. From WLH, I am interested to hear its first public quarterly report and wonder how the street will react to this homebuilder. As for MODN, I'd like to hear more about traction in their new growth areas like semiconductor companies and also further penetration into biotech. I don't have specific expectations for WLH and MODN, but like WLH for undervaluation compared to peers and great geographic presence, and like MODN for their innovative and automated approach to revenue management that can help many companies improve in that area. Other watched companies reporting this week include CSOD (TUE PM), Z (TUE PM), CF (TUE PM--CC WED AM), CSTE (WED AM), PRU (WED PM--CC THU AM), SWC (THU AM), and MCP (THU PM).

The general market appears to have resumed the uptrend after a sluggish start to the week ahead of the Fed meeting. The data from Thursday and Friday paints a picture of slow, steady growth which means treasury yields shouldn't spike and scare the investors away. This week will probably be quite slow, but higher, as the bulk of the major earnings are behind us and without much concern. This leaves portfolio managers and investors to chase the quality stocks into an improving economy without the fears of a rate spike shock.

I find myself in the position of somewhat underweight financials and technology given their usual strong performance at this point in the recovery. Financials I felt had run too far and yet they keep slowly rising. I hope I find a good chance to add one at some point, and look for further clues in PRU's earnings this week as to how insurers might perform in this environment.

As for technology, I have been nervous about margin compression in what seems like an increasingly competitive environment, even in the hot growth area of cloud computing. In thinking more over the past few days, I think I may be underestimating the huge shift in spending towards cloud and other new tech. We have seen many reports in recent weeks where "new tech" companies have done quite well after earnings. Although I am still somewhat nervous, I think higher allocation to this sector is warranted in my portfolio and I will look for future opportunities.

(continued on next post)

stocktrader_1996 said...

Overall, I think we are back to the slow, steady grind higher in the markets. I still like materials to push higher off their bottoms as economic growth around the world slowly improves and portfolio allocations are heavily underweight this sector. Already better performing growth-oriented sectors like financials, industrials, technology, and consumer discretionary should all continue to do well. We should also expect additional money flow into companies that reported well this season. So far I have been mostly right with my stocks and earnings and hope I can keep that streak intact.

Good luck to everyone! :)

Stocktrader

stocktrader_1996 said...
This comment has been removed by the author.
Stocks100 said...

Hi Stocktrader,

Your analysis on majority of your picks have been dead-on......your outperformance is the result of "superb due diligence"

I am sure that BLOG readers have benefitted immensley from your picks.

Saleem