Van Meerten's picks

Hot air from Washington causes marekt collapse

2010-02-07T19:10:54Z

I just returned from a week in Orlando at the Money Show. The speakers were terrific and I came back with a lot of good ideas that I'll share in the coming weeks. I'm not sure what happened to your portfolio but I came back to a lot of triggered stop losses. My Wall Street Survivor portfolio is down 1.97% for the month which puts me back in 6th place behind this months winner so far, Tobin Smith who has a 1.56% gain.

Most speakers at the Money Show had different opinions on the market, how to play it and what's in store for the next 6 months but one thing they all agreed on was that earnings, the economy and job numbers are not being properly factored into this market. Things are improving but every time someone in Washington opens their mouth the hot air deflates the market. Is the hot air deflating your portfolio?

Let's take a step back and see how the market did. As usual I'll use Barchart for my data.

Value Line Index -- I use this index because it contains 1700 stocks making it broader than the narrower Dow 30 or the S&P 500 -- this week down by .95%

1 - Barchart's technical indicators signal a 40% sell signal -- 3 buys, 2 holds and 8 sells
2 - The index closed Friday below its 20, 50 & 100 day moving averages for the first time in many months

Barchart's market momentum indicator -- approximately 6000 stock are used -- the percentage of stocks closing above their daily moving averages for various time frames -- above 50% good but below 50% bad -- this week all 3 looked bad

1 - 20 DMA -- only 20.08% closed above
2 - 50 DMA -- only 35.45% closed above
3 - 100 DMA -- only 45.78 closed above

Ratio of stocks hitting new highs to stocks hitting new lows for various time periods -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- this week all 3 time frames were very bearish

1 - 20 day ratio of new highs to new lows -- 278/3660 = .08
2 - 50 day ration of new highs to new lows -- 152/1733 = .09
3 - 100 day ratio of new highs to new lows -- 74/962 = .08

Summary -- The market is reacting very negatively to the hot air spewing out of Washington. The improving economy, job numbers and earnings are being overshadowed by the threats coming out of the White House. Isn't it ironic that Obama took all the campaign handouts from Wall Street, the banks and hedge fund managers and now spends his time demonizing them and telling the common folk how he will punish them. This week I'll trim non-performing stocks from my portfolios but I'll hold up replacing them till I see a little bit of support in the market numbers.

Alternative strategy -- At the Money Show I ran into 2 of my all time Wall Street heroes -- Robert Stovall and Paul Kangas. Both these guys are going strong and still giving us all some productive and sane advice. Since it's Super Bowl Sunday it might be time to give a return visit to Mister Stovall's Super Bowl indicator. He's observed that the winner of the Super Bowl predicts the performance of the market for the rest of the year. If the NFL wins he can look forward to an up market, if the AFL wins the market will perform poorly. Don't laugh; the indicator has been correct for 34 of the last 43 Super Bowls. Before you go to bed tonight the Bowl game winner will be determined and you'll know how to play the market. I'm not taking sides, I just want to know whether to go long or short.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: I have no positions in the stock in my Wall Street Survivor portfolio

Who is in charge - Wall Street or Washington?

2010-01-30T17:26:02Z

I like to analyze the market by using a combination of fundamental and technical analysis. Normally using that combination keeps me on the right side of the market. Lately the market seems to act irrationally every time a President or other politician opens their mouths. Somewhere back in a high school civics class I thought I remembered a teacher saying the purpose of government was to make and enforce laws and provide the common services that public and private companies couldn't provide.

These days the main purpose of the government seems to be to control the capital and equity markets, lower your taxes by limiting your bonuses, spend money they don't have on stimulus packages that don't create new jobs ( which increases the deficit) and scare the heck out of the stock market whenever it seems things are going great.

So far the scoreboard for the middle class is you are either unemployed or taking home less money because you've lost your bonus, the balance on your 401K or IRA is half of what it was 2 years ago, your house is underwater because the value is down but the mortgage balance isn't and if you need a loan to tide your small business over till the recession ends no bank will loan you money.

Yes Obama has made good on his promise to lower the tax bill of the middle class but he forgot to tell us he would do it by lowering the numbers on your W-2.

Well it's the weekend again and time to take a look on what the market did. As usual I go to Barchart for my data and I look at the Value Line Index because it is contains 1700 stocks and is broader than the narrower S&P 500 or Dow 30.

Value Line Index -- 1700 stocks -- down 2.3 % for the week. That makes us down 3 weeks in a row and down for the month by 2.89%. Remember we were up in November by 3.74% and December up by 7.01%. Is that a correction or change of direction?

1 - The Index closed below it's 20 & 50 day moving average but still managed to trade above its 100 DMA
2 - Barchart's technical indicators gives the Index a 24% sell signal with 4 buys, 2 holds and 7 sells

Barchart market momentum -- approximately 6000 stocks -- the percentage of stocks trading above their daily moving averages for various time periods --short term reversal but still up for the long term

1 - 20 DMA -- only 23.87% above
2 - 50DMA -- only 43.56% above
3 - 100 DMA -- 51.43% above

Ratio of stocks hitting new highs to stocks hitting new lows for various time frames -- 1.0+ bullish, 1.0 neutral, under .99 bearish -- looks bad for all 3 time frames

1 - 20 day new high/new low ratio -- 382/2092 = .18
2 - 65 day new high/new low ratio -- 211/516 = .41
3 - 100 day new high/new low ratio -- 148/374 = .48

Strategy for the next week -- The economy according to the Conference Board's Leading Economic Indicators seems to be mending, fundamentals of the companies that made it through the recession seem to be improving but the market is showing signs of nervousness from the political instability that Washington is creating. I'm going to sit on the side lines and trim a few non-performing stocks this week but not replace them till I see more support in the market.

I'm taking the week off and going down to the Money Show in Orlando to hear what the big boys are saying. The list of speakers is impressive: Steve Forbes, Howard Gold, Jim Jubak and two of my all time favorites Paul Kangas and Robert Stovall. There will be educational seminars by Jamie Dlugosch, Kelly Wright, Tobin Smith and Louis Navellier I'm really looking forward to talking to Jim Rohrback, Ken Kam, Michael Shulman, Nicholas Vardy and the always entertaining Jon Markman. If this sounds like a commercial, it's totally unsolicited. I've attended and spoke at 3 of these and really enjoyed each time. See you there.

Well, I've put off the bad news till last. My Wall Street Survivor portfolio is in the toilet. The S&P 500 was down 3.72% for the month but I'm down 7.09% mainly because I'm margined out. Hats off to Anthony Mirhaydari for calling the market sentiment properly and being up 3.72% while I came in 8th place out of 8.

See you at the Money Show.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Dump the Depot

2010-01-28T20:10:45Z

Office Depot (ODP) is being cut for my Marketocracy S&P 500 portfolio. I've got some rules that I follow religiously and ODP violates them all. Very simply put my investments must meet some basic criteria:

1 - They must have current price appreciation in recent trading sessions
2 - Barchart's technical indicators must show a positive buy consensus
3 - The stock must be trading above it's 20, 50 and 100 day moving average
4 - The analysts should have a consensus of increasing sales and earnings projected for the future

Well how do the criteria stack up?

1 - In the last month the stock has closed lower 8 times and lost 20.76%
2 - Barchart's technical indicators have 12 of 13 sell signals
3 - The stock is trading below it's 20, 50 and 100 day moving average
4 - Analysts predict lower sales, operating profit and net earning for next year
5 - The nail in the coffin -- Analysts consensus is a 5 year compounded EPS loss of -24.9%

Recommendation - Despite some other sites having a hold recommendation I'm dropping ODP like a hot potato. They are too many companies out there making money for me to invest in a wing and a prayer.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: no positions at the time of publication

On the sideline for the second day

2010-01-28T17:17:23Z

I just ran an hourly chart on the Value line Index - an arithmetic index of 1700 stock followed by Value Line. The index shows trading below its 20, 50 and 100 hourly moving averages.

The index is trading at 2235.80 with resistance at 2267.55 and support at 2214.83.

My advice is to trim stocks trading below their 50 day moving averages but I'd not replace them until I see some support in the market.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

I'm on the sidelines - Want to join me?

2010-01-26T20:01:52Z

This is just a quick note to tell you that I'm sitting on the sidelines right now until after I see how the market reacts on Thursday to the State of the Union address Wednesday evening. I've learned in the last few years how I can be lulled into a trance because I see market and economic signs that are either positive or negative, so I place my bet on that direction. Then someone opens their mouth on TV or at a press conference and I have months of gains wiped out in an instant. Long trades tank or short positions need to be covered because of a short term media generated blip. I'm not blaming Obama on this; it just happens. Press conferences by Bush, Greenspan, Obama and Bernanke have all caused me to take a hit. I blame no one but other panicky investors.

I do believe that in the long run, the only thing that counts is earnings. My accounting background makes me a fundamentalist at heart. Companies with increasing earnings eventually go up and companies with increasing losses eventually go down. It's that in between time that bothers me. The real numbers and the perceived numbers sometimes have a disconnect and it's during that period of disconnect that people get hurt.

My decision to procrastinate is a decision. I am cutting Factset Research (FDS) from my Wall Street Survivor portfolio. They seem to be having just that disconnect I'm talking about and I don't know why. Although the numbers and press look good the stock is taking a hit so I'm out. I'll think about replacing the funds but not before I see how the market reacts to the State of the Union address.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Prez shoots the market in the foot

2010-01-23T19:06:39Z

Every week after the market closes on Friday I go to Barchart and use the same methodology to gauge what happened to the market in the previous week and plan what my strategy will be for the next week. Things started out fine early in the week but then our Prez dropped a bomb when he demonized the banks and everything on Wall Street. Most of the middle class owns a mutual fund, has an IRA or a securities account and has a bank account and/or loans with a bank. The confidence that the middle class has in these institutions is the key to this economic recovery. The balance and direction of the stock market is tied to the confidence people have in the banks and securities firms. I find it hard that he did not know the consequence of his attacks. Enough of that let's see what kind of damage he did.

Value Line Index -- contains 1700 stocks so it is much broader than the S&P 500 or the very narrow Dow 30 -- 20 DMA is sensitive and signaling caution

1 - The Index was down 3.37% for the week and is down .61% for the month
2 - The Index closed below its 20 day moving average but is still above the 50 and 100 DMA
3 - Barchart's 13 technical indicators signal a short term 60% sell signal but an overall hold

Barchart market momentum -- contains 6000 stocks -- the percentage of stocks trading above their daily moving averages for various time frames -- 20 DMA also signaling caution

1 - 20 DMA -- only 33.90% trading above their DMA -- that's less than half!
2 - 50 DMA -- 55.50% trading above their 50 DMA
3 - 100 DMA -- 69.20% trading above their 100 DMA

The ratio of stocks hitting new highs to stocks hitting new lows for various time frames -- above 1.0 bullish, 1.0 neutral, below .99 bearish -- all 3 time frames bearish

1 - 20 day new high/new low ratio -- 484/2347 = .21
2 - 65 day new high/new low ratio -- 272/327 = .83
3 - 100 day new high/ new low ratio -- 208/229 = .91

Summary and strategy: The stock market has taken a blow to the gut given by the person who is supposed to be leading the recovery. He sees the key as new jobs but he is attacking the institutions that can lend the money and raise the capital to make those new jobs possible. This next week I will trim any stocks failing to maintain a price above its 50 DMA but will not be replacing in my portfolios until I see the Value Line Index recover above its 20 DMA. I don't spit into the wind.

Wall Street Survivor results: I took it on the chin this week. The market as measured by the S&P 500 down 2.09% month to date and the leader Anthony Miraydari is up 30.14% so far this month. I'm down in the 7th out of 8th place with a loss of 3.61% month to date -- maybe next week.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com.

Estee Lauder is more than make-up on a pig

2010-01-22T17:11:18Z

Sometimes a stock comes up on my Barchart screening for stocks hitting new highs just out of the blue. Estee Lauder (EL) might be more than just shear illusion and might actually be a thing of beauty. We all have heard the name and if you look in your wife's cabinet you will probably find the products. Before you think I'm sexist they also make Aramis; and I've been using those products since I was in college. So maybe I change my title to "Just make-up on a boar"

Estee Lauder Co. manufacturers and marketers of skin care, makeup, fragrance and hair care products. Brand names include Estee Lauder, Clinique, Aramis, Prescriptives, Origins, M.A.C, Bobbi Brown essentials, La Mer, jane, Aveda, Stila, Jo Malone and Bumble and bumble. The company is also the global licensee for fragrances and cosmetics sold under the TommyHilfiger, Donna Karan and Kate Spade brands. You can't walk through Nordstroms without being sprayed with one of their products.

I first noticed the stock because all of Barchart's 13 technical indicators signaled a 100% buy rating. The stock hasn't closed below its 50 day moving average since back in October of last year and has had a 30.77% price appreciation in the last 65 days.

On a fundamental basis analyst expect the stock to have a 5.3% increase in revenue next year and a 15.7% earnings increase. The best part is they expect that EPS increase to continue for the next 5 years at that same rate. There are 6 major buy recommendations and 9 analysts have increased their earning projections in the last week alone.

On other sites Wall Street Survivor readers give the stock a 5/5 Survivor Sentiment followed by a 4/5 fundamental rating and a 5/5 technical rating. Motley Fool CAPS members think the stock will out perform the market by a vote of 123 to 7 with the All Stars in agreement 40 to 15.

Warren Buffett always says he doesn't buy stocks he buys companies he understands and that he will want to hold for a lifetime. This company has seen a lot of competitors come and go and is still around to make us all appear a little bit above average.

Recommendation: Buy Estee Lauder below 55 with a stop loss no lower than 48.

Jim Van Meerten is an investor who write about financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: No positions in EL at the time of publication

Is NutriSystem the Biggest Loser?

2010-01-21T16:05:51Z

There is a special situation you all need to monitor. There is something going on with NutriSystem (NTRI) and I'm not sure what it is. NutriSystem is a provider of weight management products and services. They offer an at-home weight loss program based on portion-controlled, lower Glycemic Index prepared meals, weight loss plans, and private telephone and online support. Well that's the company's line anyway.

What they really offer is a hope and a prayer and maybe a shoulder to cry on. I don't think there is a person in America that doesn't understand that if you want to loss weight you just need to eat less and exercise more but their ads tell you otherwise. They offer the promise of success. So do the analysts following this stock.

The more analysts that jump on board this stock the lower the price goes. There will be a profit to be made here for those that know what they are doing and are nimble enough to execute the proper trades.

Analysts have 3 buy ratings out there and Zacks recently came out with a strong buy. The consensus is that sales will grow by 13.2% next year and earning by a whopping 56.6%, Estimates of a 5 year compounded growth rate of 16% make this a stock to watch.

On some sites like Wall Street Survivor their readers give the stock a 5/5 Survivor Sentiment rating. On Motley Fool the CAPS members think the stock will out perform the market with a vote of 815 to 97 and the All Stars have a similar vote of 215 to 23.

So why aren't I on board with the rest of the world? Barchart has this stock rated as a short term sell. The stock has lost value in 11 of the last 20 trading sessions and is down 28.07% in the last 20 sessions. This is why I'm not following the rest of the lemmings. Here's my recommendation:

I think the stock has promise. Watch the price carefully and buy on the dip. Place a protective stop loss very closely on your position in case the pundits are wrong.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides.

Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: No positions in NTRI at the time of publication

Stryker operates on profits

2010-01-20T16:27:33Z

Health care is on center stage these days. It doesn't matter whether you believe in universal health care, public or private, individually insured or tax payer funded; there will always be people that need surgery. Stryker (SYK) does everything imaginable in the surgical arena.

Stryker Corporation develops, manufactures, and markets specialty surgical and medical products, including orthopaedic implants, bone cement, trauma systems used in bone repair, powered surgical instruments, endoscopic systems, craniomaxillofacial fixation devices, specialty surgical equipment used in neurosurgery and patient care and handling equipment for the global market and provide outpatient physical and occupational rehabilitation services. Stryker products will be in almost every operating room you will find.

The stock has a large following and there are 11 buy recommendations out there from major brokerage firms. Analysts predict a 7.8% increase in sales next year and an 11.6% increase in earnings per share. A compounded 5 year EPS growth rate of 11.11% is expected.

On a technical basis Barchart has a buy signal on 12 of its 13 technical indicators for an overall buy rating of 96%. The stock has had month over month price appreciation in the last 5 months and just keeps on truckin'.

Other sites like Wall Street Survivor readers give the stock a 5/5 Survivor Sentiment rating. Motley Fool CAPS members feel the stock will out perform the market by a vote of 1344 to 37 with the All Stars in agreement 500 to 9.

The smart boys, the short sellers have closed out positions since last year from a high of 12 million shares last February down to around 6.5 million at the end of the year.

Recommendation: SYK looks like a buy to me around 56 with a protective stop loss no lower than 52.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: No positions in SYK at the time of publication

Citi - Wall Street pumpo and dump?

2010-01-19T19:46:21Z

As I'm writing this article Citi (C) is the leading volume leader today and is out trading the second place stock by 6 to 1. They announced another loss and the stock goes up. I think it's time you all take a step back and look at what you're doing.

If I told you I had a stock that in December 2006 sold for 51.54 and last year in March sold for 97 cents, just announced that it lost 7.6 billion dollars in the last quarter, has negative cash flow, negative earnings, negative profit margins and negative return on investments but is a real buy you would laugh right in my face.

I keep reading about all the penny stock pump and dump stocks and I think this one qualifies. This time instead of a smokey back room with a bunch of kids fresh out of college with liberal arts degrees calling every sucker who has ever expressed an interest in the stock market we have some of the largest brokerage firms in the world endorsing this stock. There are actually 7 buys and only 4 sells out there by major firms. They all have this too big to fail mentality and they as selling it to all the sheep who are just dying to be slaughtered.

Let's look at the facts. I already mentioned the fundamentals and they stink. The stock is trading below it's 50 & 100 day moving averages and the 20 day moving average has been sliding down since last October. Barchart's 13 technical indicators have a sell signal on 8 of them for a 56% sell rating. There are approximately 6000 tradeable stocks to choose from and you think this is the best one you all can find?

My recommendation: A fool and his money can be parted if you think that Citi (C) is the best stock on the market. I am not a buyer of this stock and it would take a big, big change in the fundamentals of this sinking battleship to make me even take a flyer here. You really can't find a better stock to buy with your hard earned money?

Disclosure: I hold no position in Citi at the time of publication.

Jim Van Meerten is an investor who writes about financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Health care gatekeeper - UAM

2010-01-19T17:36:16Z

Health care has so many moving parts that sometimes it's hard to track them all. First there is access to health care professionals like doctors. nurses and EMT's. You don't feel well or you're having some emergency issue and need to see a professional fast. In the US we all seem to have initial access to these. Anyone can call 911, go to an emergency room or get an sick visit appointment with a doctor. If you are bleeding, having a heart attack or broken bones -- you will be treated. After a doctor has examined you and determined that you are really sick is when the problems start.

After the doctor has seen you, you'll need access to labs, MRIs, CAT scans and all those diagnostic tests that are used to find out what's wrong and how to fix it. Here's where the gate keepers come in. After this point your care will be determined by your ability to get the bills paid. If you don't have what Obama terms as a "Cadillac Health Plan" the tests you get may be prioritized not by your medical needs but your financial ability to pay. After your ailment is diagnosed, care boils down strictly to your ability to pay. In the treatment phase the money is where the rubber meets the road. So how can money be made?

Health care insurance and health care management is the gate keeper between your ailment and your treatment and Universal American (UAM) is involved in both. They offer all kinds of health insurance products mainly to the senior market. They offer both comprehensive co-payment and reimbursement insurance plans. Additionally they offer heath care management systems to other insurers, health care professionals and hospitals. I've read articles that claim over 20% of all health care costs are in these gate keeping administrative areas so we are talking big bucks here and I think they are poised to get more than their fair share of the market.

Analysts following this stock think that there will be a 2.3% increase in sales next year and an 18.5% increase in earning per share. The consensus is for an 8% EPS growth rate for at least the next 5 years. Positive sales and earning growth is what we look for.

I think the stock is undervalued and it shows in the recent 65 day price appreciation of 63.80%. All 13 of Barchart's technical indicators signal buy for a 100% Barchart buy rating. The stock has had price appreciation in 14 of the last 20 trading session and was 4 for 5 recently.

On other sites Wall Street Survivor readers give the stock a 5/5 Survivor Sentiment rating and Motley Fool members think the stock will out perform the market by a vote of 54 to 4. The All Stars confirm 26 to 1.

Recommendation: I recently sold Verizon (VZ) in my Wall Street Survivor portfolio due to deteriorating price performance and failure to maintain a price above its 50 day moving average. Universal American ( UAM) is in the center of the health care market and has been having positive price appreciation recently plus positive sales and earnings projections. I'm adding it to my WSS portfolio around 14 and will use a moving protective stop loss no lower than 11.50.

I hold no positions in Universal American at the time of publication

Jim Van Meerten is an investor who writes about financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Will the market stall?

2010-01-16T18:20:15Z

I love flying small planes. My first flying lesson was in a J-3 Cub at a grass field in Newberry, SC. Under the wing was a little horn that would beep if the plane was going to stall. When you heard the noise you had to make a quick decision: either drop the nose and apply power or let it stall and hope you didn't spin and lose control. The market is right in that stall warning place now and you have to make your decision: 1-- false alarm buy more on the dip, 2 -- tighten my stop losses and ride it out, or 3 -- the market is in a true stall and it's time top go short.

Let's step back and go through my standard weekly exercise on evaluating the market by using some of the data readily available on Barchart. Actually I do this every evening but just publish it once a week.

Value Line Index - contains 1700 stocks so it's broader than the S&P 500 or Dow 30 a lot of others use -- Not as strong as last week but still no sign of panic

1 - The Index was up 3 days and down 2 days for a net loss of .82% for the week
2 - The Index is still closed above its 20, 5o and 100 day moving average
3 - 9 of the 13 Barchart technical indicators give buy signals -- that's fewer than last week but still a 20% short term buy and a 56% overall buy rating

Barchart market momentum -- approximately 6000 stocks -- the percentage of stock trading above their daily moving average for various time frames -- still good but weakening on the short term

1 - 20 DMA -- 66.84% are trading above the DMA
2 - 50 DMA -- 78.96% are trading above the DMA
3 - 100DMA -- 82.97% are trading above the DMA

Ratio of stocks hitting new highs to stock hitting new lows for various time periods -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- Still more new highs than new lows but weakening

1 - 20 day new high/new low ratio -- 872/569 = 1.53
2 - 50 day new high/new low ratio -- 545/75 = 7.27
3 - 100 day new high/new low ratio -- 423/52 = 8.13

Summary and my investing strategy for the upcoming week: The market is strong but not as strong as it was last week. This week I will make sure I have all my stop losses were I feel comfortable. I will not replace any till I see what the market does each day. I'm not ready to go short but I do heed the warning signs. In order for me to present a "Fair and Unbalanced View" -- to paraphrase Fox -- I'd like to share an article by Michael Shulman titled : Shorting the Double Dip. He's one of the smartest guys I know and although I don't agree with him 100% he's that little horn on the wing giving out an early warning I'm not getting from the other instruments on my dashboard.

Over on Wall Street Survivor the contributors to Top Stocks that recommend stock still have that little friendly competition with our model portfolios. The S&P was up .42% month to date but our leader so far this month Anthony Mirhaydari with a nice gain of 8.24%. I'm down in the number 4 spot with a gain of 3.33% so far this month.

Disclosure : I do not hold positions in any of the stocks in my Wall Street Survivor portfolio

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Profit from your fear of hackers

2010-01-15T17:43:15Z

Back when I first got out of college I was an Internal Auditor at Retail Credit Company - later renamed Equifax, Inc. Back then the company was on the cutting edge in data security, but since it was a closed system computer security was making sure no one could enter your computer room, cut off your land line connection or power source and all your back up data and programs were properly secured off site in a vault. People had to physically get into your installation to do damage.

Boy have things changed. Hackers with a $500 computer and an Internet connection in Nigeria or Romania can raise havoc to computers any where in the world. They can access not only private computers, but even the computers of companies, governments and even worse defense systems. Data and access is everywhere and lots of hackers consider it a challenge. If I can believe my spyware detection programs even the computer I use at home has 15 - 35 hacking attempts a day. Identity theft is a fear and concern of anyone who does anything on line.

Luckily we can all make a profit not only on the prevention of data theft but the fear that drives software and computer users to purchase and constantly upgrade their protection software. Symantec ( SYMC ) is at the center of this industry and provides Internet security technology in the form of anti-virus protection, Internet content and e-mail filtering, and mobile code detection technologies. Look down on your tool bar and you just might see their logo.

The company is making money and has a large Wall Street following. Analysts think the company will increase sales by 4.2% and earning per share by 7.6% next year. They estimate a 5 year annual growth in EPS of 9.23% per year. The 31 analysts presently following the stock have 21 buy recommendation with the others recommending hold and no major firms signal a sell. In the past year short interest has come down from 33 million shares to 22 million shares by year end.

The company has had price advances on 11 of the last 20 trading sessions and was also had 5 increases on the last 5 sessions. They have enjoyed a 65 day price appreciation of 21.24%. All 13 of Barchart's technical indicators signal buy for a 100% buy signal.

On other sites Wall Street Survivor readers give it a 5/5 Survivor Sentiment rating and the Motley Fool crowd thinks the stock will out perform the market by a vote of 461 to 94. The All Stars concur with a vote of 125 to 25. Fool's Wall Street columnist have buy stories out 19 to 1 but the lone dissenter's vote was back in 2007 -- too far back to even count.

Recommendation: Access to computer and mobile device data has never been more open and available but with that open access are open threats from hackers. Symantec is a leader in protecting your computer's data. The stock is making money and has a positive 5 year consensus to increase sales and earning. Barchart's 13 technical indicators all signal buy and other sites agree. Buy around 19 and have a protective stop loss no lower than 17.50.

Disclosure : no positions in this stock at the time of publication

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

A Dow favorite

2010-01-14T19:26:34Z

Drugs have always fascinated me - the legitimate kind of course. What can I say I was in high school and college during the 60's? The reason drugs hold my interest is I'm amazed how by adding some chemicals to your body, the body either begins rejecting the disease that has taken over or turns off its bad habits and makes you well. No surgery, just the addition of some chemicals and poof -- wellness.

One of the best drug companies is Merck (MRK). It's one of the largest companies in the world and a Dow 30 component. They make drugs for both humans and animals. What a market - curing our families, pets and livestock. I can't read a magazine or turn on my TV without being exposed to one of their ads. See what you recognize from this list: Singular -- asthma and allergies, Fosamax -- osteoporosis, Procepia -- male pattern baldness or Gardacil -- cervical cancer. They do a great job of not only discovering new drugs -- with new patents of course -- but also manufacturing, marketing and distributing them. All full service drug powerhouse.

Analysts love this stock too with 10 buy, 5 hold and no sell recommendations. They look for 67.0% growth in sales next year with a 6.1 EPS growth and additional positive EPS growth for the next 5 years. The smart boys of Wall Street -- the short sellers -- made a big 180 and cut their short interest from a high of 206 million in the fall to only 23 million by year end.

Barchart's 13 technical indicators all signal buy; its not often a Dow 30 get a 100% buy signal. Since the stock's low on 3/9/09 the stock has gained 49.29% and since mid July has never seen a day below its 100 day moving average.

On other sites Wall Street Survivor readers give the stock a 5/5 Survivor Sentiment rating. The Motley Fool CAPS members think the stock will out perform the market by a vote of 2338 to 184 with the All Stars in agreement voting 705 to 38. Even the Wall Street columnists Fool follows have had 27 to 1 favorable endorsements.

Recommendation: All portfolios need some foundation stocks and what better one then Merck (MRK). They find, manufacturer, market and distribute drugs for humans, pets and livestock. Their products a some of the most recognizable and they keep adding to the pipeline all the time. Growth expected in both sales and earnings for the next 5 years and a positive following with short interest falling like a rock. The technicals are recently very positive. Purchase around 40 and since this is a long term holding use the 100 day moving average of 36 as your stop loss. Just keep sliding that stop loss up on a monthly basis to preserve your long term profits.

Disclosure: No holding in Merck at the time of publication

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Cutting edge medicine

2010-01-13T18:58:28Z

I always begin my search for good investments by screening on Barchart for those companies hitting the most new highs recently. Illumina (ILMN) has had price appreciation on 15 of the last 20 trading sessions and is 5 for 5 recently. There has been a 57.01% price appreciation in the last 65 days.

ILMN is a developer of tools for the analysis of genetic variation and function. Hopefully, that information that could be used to improve drugs and therapies, customize diagnoses and treatment, and cure disease. Molecular medicine is a new and growing field. I've heard Warren Buffet advice that you shouldn't invest in a company you don't understand but although everything that they do might be over my head I do know that the analysis of DNA to fight both inherited and acquired diseases and viruses is the direction medicine is headed. Not everything can be cured with an antibiotic anymore.

Of the 15 analysts following this stock 10 of the 15 have buy recommendations in with the other 5 giving holds. They are looking for a 22.5% increase in sales next year and a 35.1% increase in EPS. Their expected 5 year compounded EPS growth rate of 19.98% is a big reason to consider this as a long term holding.

On a technical basis Barchart's 5 short term technical indicators all signal buy. Other sites like Wall Street Survivor have rating of a 5/5 Survivor Sentiment rating, a 5/5 technical rating and a 5/5 fundamental rating. Motley Fool CAPS members think the stock will outperform the market by a vote of 536 to 43 with the All Stars in agreement 192 to 13. The Wall Street columnists that Fool follows give it a 16 to 1 vote. The lone dissenting vote is from Jim Cramer and he hasn't reviewed the stock since February 2007. The stock has increase 117.16% since then.

Recommendation: This stock has it all. They are on the cutting edge of medical research. They have great fundamentals with analysts predicting increases in both sales and earnings. I do have one reservation. In the last quarter there has been an increase in short interests. Because of this please keep your stop losses tight. The stock can be purchased around 43 and set your initial stop loss no lower than 30 and be prepared to move it up to keep this trade profitable.

Disclosure: I hold no positions in Illumina at the time of publication

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com