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Peyton Place

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This entry is dedicated to gossip. I read stock message boards mainly for fun, not for serious investing information. However, when a stock price is moving up or down in defiance of all financial data, the gossip can give a clue as to public perception. Perception may or may not have any basis in logic but it certainly influences the stock price. Plus, occasionally somebody in the industry chimes in with an illuminating viewpoint. Blogs are a little more useful than message board postings but I still take them with a grain of salt.

So, following are the Yahoo boards' gossip for some of my StratLab contest companies. (I'll take the blame for my own typos and incorrect spellings. Those in quotes are not my fault.):

HUGH - Hughes Communications, Inc. It is actually UP 26.98% since I started this contest. Why? Why? Sure, it has decent fundamentals. That's why I chose it. But so do all my sinking stocks. -- Well, darn! No Yahoo message board at all. No current comments at Marketocracy (since the spin-off), that I can find. No blog entry (via the Yahoo Finance blog links).

HEI - HEICO Corp. It is up 11.68%. Again, I think the company deserves it but that doesn't make it rise. One Yahoo message board poster says, "Not alot of analyst on the stock for the past two years. I think this is changing right now and that is why the stock has shot up recently in a TIGHT market." No blog entry via Yahoo.

CHL - China Mobile Limited. Up 10.07% Lots of positive message board entries. More meaningfully, three positive blog entries (via Yahoo), two of them at Seeking Alpha, which has some credibility.

PTR - PetroChina Co. Ltd. Up 2.48%. Three blog mentions, one a buy recommendation, which is always nice. There are a number of board postings but mainly gossip:
"Chairman of PTR has been arrested."
"It's not the Chairman of PTR, but the chairman of sinopec. "
"That is right, he was the chairman of sinopec, not ptr."
Another poster asks, "Is Petrochina the next Exxon?" (Of course I think it is but that doesn't explain why the stock is up.)

ROP - Roper Industries Inc. No blogs. This company has the usual type of messages. By "usual" I mean that people say things like:
"This is a great stock." "No it isn't." "Is so." "Is not." "So." "Not."
Who is letting all the 3-year olds post on message boards?

The above are my only picks which are UP at present. All the others are down; so I looked at messages for the 5 lowest companies.

VSEC - VSE Corp. This stock is at the bottom with -19.39% as of today. Yet, not long ago it was at the top of my list, one of the few companies which was up. There are 2 positive blog features at Seeking Alpha. On the message boards one poster says, "If you can't stand the risk, buy with a trailing stop. I got out last time when it went down 10% (after rising 20+%)and bought back in after it was down nearly 40%." Some message board people believe it goes down when peace is in danger of breaking out. Others believe it will inevitably go up, overall. Sadly, that's what I think, too.

MLAB - Mesa Laboratories Inc. -16.77% as of today. This is the company I took only a small position in because it looked (and still looks) promising but is so darned small! Unsurprisingly, there are no blogs. Surprisingly, messages are civilized and intelligent:
" Earnings were good...did not deserve a 10% drop. This market is irrational."
" You're absolutely correct, but the 10% drop shouldn't be a surprise with a low float stock...."
" Look at the big picture. A micro-cap like this needs big % earnings and revenue increases to survive. This latest earnings state displayed a trend from the previous that was not that exciting. A stock that does less than 20 million in revenue better have the potential to do 50 or 75 million a few years down the road or they are eventually headed for single digits. Clarrification. When I said survive I ment survive being a growth stock. Obviously this is a very nice little company with good management and products."

MAD - Madeco S.A. -12.39%. No blogs. On the message board, a warning post said, " MAD PROFIT FELL 53%..... Sell short." Was this a slight exaggeration? The news at Reuters said: "...Chile's Madeco first-half net profit falls 36.5 pct". The company Website said, "En el segundo trimestre del año la Compañía alcanzó una utilidad neta de Ch$6.301 millones, implicando una disminución del 54,0% comparado con los Ch$13.708 millones alcanzados igual período de 2006." So it sounds like the message poster was reading Madeco's own announcement. Of course, part of the reason costs are up right now (and profits down) is the fact that the price of copper has risen. I hoped some poster or blogger might point toward an online article, in any language, analyzing the bigger picture, but no such luck. I'll probably sell but would like to get more information, first. This is a good example of how international investing increases your homework tenfold!.

ESV - Ensco International Inc. -12.05%. How on earth can this decent offshore contract drilling company be down? Message board posters wonder the same thing. One poster says, "ESV isn't down due to GOM fears, its down because management has allowed the street to become comfortable with a 7 forward multiple. ESV management could pop the stock 20% tomorrow by simply putting out a press release stating they are done with their newbuild program, and will be returning all excess future capital to shareholders in the from of buybacks and dividends." Is he right or is this hot air? By the way, the stock also has three nice blog mentions.

GTLS - Chart Industries Inc. -11.11% No blogs. No message board at Yahoo. Hey, that isn't fair. It's big enough, trades enough, and has been around long enough to deserve a board, A Google search even suggests that Cramer mentioned it once.

AXE - Anixter International Inc. -11.06% Some postings but no informational messages. Not even entertaining, off-the-wall rants. There is one blog mention and one, really great, blog plug. Alan Brochstein, CFA, says, "I have always been impressed with the industry (specialty and coaxial cable and wire distribution) as well as how well run the company has been."

It is always gratifying to see people agree with me and, of course, I can always dismiss the others as idiots.