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Sabrient Risers – 3/12/2011
by Sabrient - March 12th, 2011 12:00 am
Top 5 Risers |
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| Stock | Rating | Analysis | ||
| VLO | STRONGBUY | An increasingly positive growth rate of past earnings, along with improving expectations for long term growth, make Valero a good prospect for high returns. | ||
| KRO | STRONGBUY | Kronos Worldwide has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation. | ||
| SFI | BUY | iStar is one of the top candidates projected to achieve both higher than previously projected earnings in the short run and a higher earnings growth rate in the long run. | ||
| AMAT | STRONGBUY | Applied Materials has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation. | ||
| TRW | STRONGBUY | TRW has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation. | ||
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Sabrient Divers – 03/11/2011
by Sabrient - March 11th, 2011 12:00 am
Top 5 Divers |
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| Stock | Rating | Analysis | ||
| CPB | SELL | Expectations for Campbell Soup are decreasing along with projected valuation. | ||
| AEE | SELL | Recent earnings changes for Ameren are troublesome, as is a sinking projected valuation. | ||
| ATPG | SELL | With projected value going down even more quickly than their recent historical earnings, ATP Oil and Gas is not looking good. | ||
| CVG | SELL | With projected value going down even more quickly than their recent historical earnings, Convergys is not looking good. | ||
| AFAM | STRONGSELL | Expectations for Almost Family are decreasing along with projected valuation. | ||
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Sector Detector: Bulls Pause to Celebrate 2-year Anniversary
by Sabrient - March 10th, 2011 2:13 am
Courtesy of Scott Martindale, Senior Managing Director
Today marks the two-year anniversary of the V-bottom that launched an impressive bull market. Since then, the SPY large cap is up about 95%, while MDY mid cap and IWM small cap are up about 135%. Leading sectors include Basic Materials, Industrials, and Financials, which are each up at least 150%. Pretty impressive.
Much of the fuel for the persistent rally has come from QE2, in which the Fed prints money and employs its Permanent Open Market Operations (POMO) to buy Treasuries from the primary dealers in order to keep rates down, and that cash generally goes into equities and commodities. However, QE2 is supposed to end in June, and the promise of a QE3 is dependent upon things like oil prices, which could undo all that the Fed has accomplished in stimulating the economy if they continue to climb much higher. Oil is hanging around the $104 level.
China has already slowed its purchasing of U.S. Treasuries. So, the two main purchasers of Treasuries, China and the Fed, may both be sitting on the sidelines, which makes me wonder where the cash will come from to further the rally. With the market tending towards falling on heavier volume and rising on lighter volume lately, you have to wonder how much more it can run.
The SPY chart pattern since mid-February continues to develop very much like it did from early to late November, when price fell from the upper Bollinger Band, down through the 20-day moving average to the 50-day, and then tried to recover before making another test of support at the 50-day and lower Bollinger Band. Like it did in November, RSI is bouncing along the neutral line, and MACD had a bearish crossover and is now seeking support.
Right now, the pattern is consolidating in a pennant shape, which should soon lead to a breakout or breakdown. My guess is that even if it initially breaks down through the bottom of the pennant, it will soon find buyers again.
Fear as measured by the market volatility index (VIX) closed today at 20.22, after reaching above 23 recently. It was as low as 14.86 on February 8. The TED spread (i.e., indicator of credit risk in the general economy, measuring the difference between the 3-month T-bill and 3-month LIBOR interest rates) is down from last week, coming in at…
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Sabrient Divers – 03/10/2011
by Sabrient - March 10th, 2011 12:00 am
Top 5 Divers |
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| Stock | Rating | Analysis | ||
| CPB | SELL | A consensus is building that Campbell Soup is showing weakening near term and long term prospects. | ||
| AEE | SELL | Recent earnings changes for Ameren are troublesome, as is a sinking projected valuation. | ||
| ATPG | SELL | With projected value going down even more quickly than their recent historical earnings, ATP Oil and Gas is not looking good. | ||
| AMT | STRONGSELL | A consensus is building that American Tower is showing weakening near term and long term prospects. | ||
| AFAM | STRONGSELL | Expectations for Almost Family are decreasing along with projected valuation. | ||
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Sabrient Risers – 3/10/2011
by Sabrient - March 10th, 2011 12:00 am
Top 5 Risers |
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| Stock | Rating | Analysis | ||
| KRO | STRONGBUY | Kronos Worldwide has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation. | ||
| SFI | BUY | Many analysts are expecting higher than previously expected long term growth from iStar, and its near-term earnings outlook is also improving. | ||
| WNR | BUY | The projected value for Western Refining is still rising quickly even though past earnings have already improved significantly. | ||
| AMAT | STRONGBUY | Applied Materials has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation. | ||
| CTCM | BUY | The long term projected growth rate for CTC Media is rising, and this is happenening at a time when historical earnings have already increased significantly. | ||
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Dark Horse Hedge is Rocking On
by Sabrient - March 9th, 2011 2:42 pm
By Scott at Sabrient and Ilene
For those about to rock, we salute you – AC/DC
Dark Horse Hedge is Rocking On
With February and the most of earnings season passing, we decided to "stand up and be counted" with a summary article on the VIRTUAL Dark Horse Traders’ Hedge (DHH) portfolio.
Our mission has been to generate absolute returns through the use of a tilted Long/Short strategy that remains market neutral, but with a partial bias towards momentum (as defined by measuring the S&P 500 relative to its 50 and 200 day Moving Averages). We have been tilted to the long side since October 2010.
Over the long term, reasons for using such a strategy include being positioned to take advantage of both bull and bear runs. As evidenced by the near zero returns of the market over the last 10 years, buy-and-hold strategies are majorly flawed. The market also teaches hard lessons to those who attempt to predict direction, and has forced many retail investors to reconsider their strategies after being pounded in 2001 and 2008.
Alpha is a measure of a return over and above a benchmark index’s return, and Beta is a measure of the portfolio’s performance as it is correlated to movements of the market. With DHH, we strive to optimize Alpha while minimizing Beta to protect our portfolio in up and down markets. Beta is reduced by holding both Long and Short positions and using a rules-based approach to determine which stocks have the best chacteristics to benefit when the market is rising, and conversely to determine which stocks are most apt to perform poorly when the market is falling. In other words, we want to be long stocks of the best companies and short stocks of the worst companies – we want to identify the "tails" of a market, index, sector or basket of stocks.
Once a portfolio of Long and Short stocks is established, then it is a matter of gaining the desired exposure using the available tools, such as …
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Sabrient Divers – 03/09/2011
by Sabrient - March 9th, 2011 12:00 am
Top 5 Divers |
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| Stock | Rating | Analysis | ||
| ATPG | SELL | Recent earnings changes for ATP Oil and Gas are troublesome, as is a sinking projected valuation. | ||
| AEE | SELL | Recent earnings changes for Ameren are troublesome, as is a sinking projected valuation. | ||
| CPB | SELL | A consensus is building that Campbell Soup is showing weakening near term and long term prospects. | ||
| AFAM | STRONGSELL | We project an unfortunate decrease in value for Almost Family, and we’re not alone in this opinion as other analysts are also reducing expectations. | ||
| CVG | SELL | With projected value going down even more quickly than their recent historical earnings, Convergys is not looking good. | ||
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What the Market Wants: Crazy is as Crazy Does
by Sabrient - March 8th, 2011 11:28 pm
Reminder: Sabrient is available to chat with Members, comments are found below each post.
By David Brown, Sabrient Systems
What a week! The market was at its craziest this past week, with flat days, booming days, and a couple of truly nasty days. The crazy part was that you couldn’t predict which way the market might go, based on normal market information. On Thursday the market rallied on an excellent initial jobless claims report and then Friday, when that number was confirmed by the lowest unemployment number in many months (8.9%) and accompanied by a host of other good economic data, the market plunged, giving back more than half the previous day’s gain. Just to make sure we knew it was serious, it gave back the rest of the gain yesterday.
Today (Tuesday, March 8), the market did an about-face, staging a rally for reasons that aren’t completely clear. The S&P 500 gained +0.9%, while the Dow gained a full percent.
Fear = Volatility. Much of the market’s volatility is caused, of course, by the continued turmoil in Libya and the resulting sharp rise in oil prices. (Oil reached $108 a barrel at one point late last week.) For example, the market plunged on Friday after hearing analysts’ forecasts that rapidly rising oil prices would stifle our economic recovery, especially in technology. Today, after OPEC announced it would try to make up for the oil shortage from Libya, oil prices pulled back and the market rallied with gusto.
Who knows what will happen this week to move the market one way or the other, but clearly, it is fearful and its behavior borders on schizophrenia.
The market’s fear was reflected in the VIX index. For several months, the VIX has hovered at a subdued level of about 15, but twice in the past few days new-found fears have pushed it over 20. At today’s close, the VIX sat right at 20. By historical standards, this is not exceptionally high, but it is high when you focus on just the past several years.
The VXX — a longer-term version of the VIX — has been rising steadily over the past 30 days and it rose again today, settling in at 31.
But, when you think about it, why wouldn’t fear indexes rise in an environment like today’s? Indeed, the VIX and the VXX actually seem muted, considering the global turmoil.…
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Sabrient Risers – 3/8/2011
by Sabrient - March 8th, 2011 12:00 am
Top 5 Risers |
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| Stock | Rating | Analysis | ||
| MIC | STRONGBUY | An increasingly attractive expected long term growth rate and a significantly higher projected valuation from just a few weeks ago make MIC a company to watch. | ||
| ETFC | STRONGBUY | The long term projected growth rate for E*TRADE is rising, and this is happenening at a time when historical earnings have already increased significantly. | ||
| JCP | STRONGBUY | J.C. Penney has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation. | ||
| CHK | STRONGBUY | The long term projected growth rate for Chesapeake Energy is rising, and this is happenening at a time when historical earnings have already increased significantly. | ||
| IPGP | STRONGBUY | Many analysts are expecting higher than previously expected long term growth from IPG Photonics Corp, and its near-term earnings outlook is also improving. | ||
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ETF Periscope: Rude Crude and the Fear Index
by Sabrient - March 7th, 2011 1:19 pm
By Daniel Sckolnik of ETF Periscope
“If you want to conquer fear, don’t sit home and think about it. Go out and get busy.” ~ Dale Carnegie
In the world of finance and investing, oil currently dominates the conversation like the loudest drunk at the bar. And, like that drunk, there is a certain degree of menace that seems to be lurking not too far from the surface.
The Dow Jones Industrial Average (DJIA) had the best day of the year to date last Thursday, yet it was barely enough to enable it to edge into the black for the week. The Dow ended at 12,170, up 0.3% for the week. The S&P 500 Index (SPX) ended Friday at 1,321 for a miniscule 0.1% gain. The Nasdaq Composite Index (COMP) also ended up 0.1%, at 2,785.
Not quite how you would want to end the week after Thursday’s impressive pop. Not, at least, if you were rooting for the Bullish trend that has been in affect over the last six months to continue.
The case may be made that a paradigm shift, from Bullish to Bearish, has recently occurred in the markets, following an extended period of the up-trending variety. And that shift has been thrown into gear courtesy of the turmoil in the Middle East and Northern Africa.
The markets’ most compelling storyline lies with the fact that crude oil closed on Friday at $104.42, the highest level since late in 2008. This hot little number is mainly reflective of the high level of concern over oil supply that has now entered the markets, due to the fact that Egypt and Tunisia have just tossed out their long-entrenched leaders, and that Yemen, Libya, and even Saudi Arabia are currently exhibiting potent levels of systemic eco-political unrest.
So what the markets are now experiencing to a large degree is the manifestation of uncertainty. If the streets of Tripoli go bloody and the Saudi sheiks get shaken up, the ripples in the world economy are likely to get pretty strong and pervasive. It may not happen beyond the current level, but as both the scale and speed of change is happening so quickly, betting on a serene transition of power in the region may be wishful thinking of the more delusional sort.
So where does that leave the small investor? That depends. The best opportunities frequently abound in uncertain markets. However, obviously,…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(