What's Up?
Seriously, what types of stocks are working lately? The market has been in turmoil since Strategy Lab Open ended and it's not clear whether oil and commodities are going to resume leadership, something else will take off, or nearly everything will tank.
My SLO portfolio is fairly well diversified, but very little has shown much strength lately. The portfolio did pop back over $10 NAV; that can be explained in three letters - WFC.
Graham Corp. (GHM) had a spurt recently that looked like momentum investors piling in; then took a $15 dive over the middle of last week.
Transocean (RIG) and Chevron (CVX) were holding up reasonably well; but oil's recent drop took a toll there. FWIW, I think anyone who sold them over the last couple days will regret that decision when earnings are reported over the next couple of weeks.
AT&T (T) jumped on in line earnings, then gave it all back. Lincoln Electric (LECO) jumped on a good earnings report and held on to most of the gains over Thursday's awful market.
Unilever (UL), Sysco (SYY), GE, NNBR, National Grid (NGG) and RPM International haven't done much of anything.
My best performer recently has been Novartis (NVS). It's the only stock in the portfolio that was up on Thursday. I've got Johnson and Johnson (JNJ) on a watchlist and it's also been doing well.
If the recent market action isn't just a rumble before continuing the old trends, it may be time to overweight traditional defensive plays like healthcare and consumer staples. If lower oil and commodity prices hold, the raw material inflation pressures on those companies will ease while the engine driving oil, drillers, miners and commodity stocks cools.
I don't think there's enough information to start making portfolio shifts yet, but the trend is worth watching. One signal flag would be if ExxonMobil and Chevron give strong reports and forecasts next week with no reaction in the stock price.
What are you seeing in your portfolios? Anything besides healthcare that's been consistently strong over the past couple of weeks?
On a fun note - I got my first Marketocracy green star by doing better than 82.1% of the funds over the past six months. Since over 70 players finished ahead of me in SLO; we must have collected a fair amount of M* bling. Feel free to share any new star status.
Comments: View Comments | Saturday July 26, 2008
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Archive Comments (3)
Russ,
I have had some gains lately on Electronic Manufacturing Services, JBL and CTS.
I don't like the sector that much but JBL was dirt cheap on a P/S basis. The outlook on their last conference call was very enthusiastic.
CTS in addition to Electronic Mfg Svc does approximately half their business in automotive sensors, etc. They have some patents and they are pushing diesel sensors which help deisel run clean in Asia, that means China. Earnings are due Tuesday and it has been running up ahead of the report.
Reasons not to like the sector is mostly thin margins, but if you can increase net margin from 1% to 2% you doubled earnings. For what its worth, my brokerage (Schwab) recommends it. For CTS my interest is the diesel/China/Asia on the automotive sensors.
Congratulations on a solid performance in SLO/Marketocracy.
Posted by Thomas Armistead July 26, 2008 9:34 PM
I should add I have been taking up starter postions in P&C insurance, the dip in financials Thursday and Friday seemed like a good time to get started.
Tom
Posted by Thomas Armistead July 26, 2008 9:36 PM
Hi RD --
You asked what's working right now and for me it's Akorn, Inc (AKRX), a medical stock. A friend of mine who's an M.D. follows this stock very closely and advised me to check it out, explaining that despite a lack of recent news coverage, Akorn has terrific prospects in its pipeline. On July 7, the stock was at its lowpoint for the year (3.14); Now, a little more than three weeks later, it's at 5.10. It keeps going up, no matter what the market does on any given day, always a good sign. Once this company gets more attention, it should do even better.
Best of luck and thanks for the time and effort you put into the information you provide
Sandy
Posted by SMSchmdt July 31, 2008 8:08 AM