How 'bout that stock market?

[jond]

Anyone here in bonds?
Looks like maybe a collapse?

 

[docjohn]

I got out of my last bond fund last week.....there are plenty of stocks with dividend yields greater than 4%. On the stock front I'm currently evaluating tuesday morning group,urban outfiters, and extreme networks,on the wacky china front china ritar power..

 

[sahtt]

In my opinion nothing in this world is guaranteed. If the market tanks, companies cut back and eventually yields get hit. What about the folks that owned these companies before 2008. If you owned LINE at $40, you would have lost almost everything in 2008.

There is no question that these companies have performed well since hitting "the bottom". During recessions you would expect value based companies to be the best performing and the ones you mentioned are all somewhat value based; though LINE and KMP's potential earnings growth for 2011 are impressive at 17 and 21% with LINE outperforming the other two with stronger profit margins.

Even near retirement, I think every portfolio should have some growth companies even if its just a small percentage.

With that said, growth companies have done even better since the 2008 rebound. Since "the bottom", the tech sector has performed with Apple (AAPL) having a 376%+ return with iPOD mania (I don't own one and don't plan to; its just another toy). The "cloud computing" companies such as Rackspace (RAX) with a 625% return since 2008. In my opinion that lifted the networking sector such as F5 (FFIV) and the data warehousing (NZ). Online video has been popular with Liberty Media (LCAPA). Netflix (NFLX) has had a good run. Gold companies such as AEM have performed well (200+%) since 2008; though I try to avoid anything related to the commodities market.

I'm not one for chasing returns but if the company has good growth potential and the balance sheet looks good, why not? Find a good base entry point, and have an exit strategy. If you do that the risk is low.

Interesting data points. When you buy a given security is more important than what that security is. Our entire investing structure for the laymen ignores this but that's the price of ignorance I suppose. The key to my previous statements were the prices I paid. It's not KMP I like, it's KMP in its totality at a certain price point. Even though it still yields 5-6% at 70 a share, I'm not buying more because risk adjusted it's not at the level I need (extremely favorable risk vs reward). If it was a tech company with no yield I'd have to either micromanage the price level or do what I do for AAPL, which is buy as much as I could afford when the valuation was extremely cheap (<100) and hold it 'indefinitely'. I couldn't help but sell some when it broke 200, but obviously that didn't work out ideal.

MLP's are structured and forced by law to pay dividends. Corporate structures can suspend dividends at any time for any reason. Reliable firms with long term dividend maintenance like XOM usually barely out yield treasuries by more than 1-2 points.

 

[wctsao]

I noticed that there are certain industries that are on the uptrend no matter what the overall market is doing. I run daily scans for new stocks and its a pain to find out the industry for that company.

So I went to NASDAQ to get the stock list from AMEX, NYSE, and NASDAQ. Their files contain the industry information for their stocks. StrategyDesk contains a notes column that you can store your own information.

After some digging I found that StrategyDesk stores notes information in a notes.xml file in the StrategyDesk root folder. I studied the schema and wrote some macros to create the tags the notes.xml file like. I then dumped all the information for the exchanges into an Access database table with field names that matched the notes.xml schema. I then dumped the data using the XML feature to create an XML file that was very close to the notes.xml schema.

A few seach and replaces and I now have a notes.xml file that contains the industry for almost every stock in the three exchanges. A few stocks didn't have an industry name so they will so up as "n/a".

Now when you run your screens, the notes column will pop up the industry for that particular stock. You can then group them by industry to gauge what people are interested in. This is also helpful when your managing portfolios with a large number of stocks. You can group your stocks to see which industries are doing well and which ones are no longer trending.

Attached is a notes.txt that I renamed for the attachment. Its really a notes.zip file.

1. Download file and unzip
2. Backup your current notes.xml file in the StrategyDesk root folder in case you want to back out these changes.
3. Drop the new notes.xml file in the root folder.

Now when you type in a stock or dump a list of stocks, the industry names will appear next to them when you show the notes column. A few will have "n/a" because the original file from NASDAQ didn't have that info. You can updates the notes manually for those stocks. The updated information will be added to the notes file.

(I updated the file to use the industry names from the AAII database which has more listing. This file should cover 9800+ stocks. This file is 50% larger than the previous, same zip format renamed as .txt)

After using it for a while, I noticed that sometimes StrategyDesk has problems reading the notes.xml file if the notes column gets changed manually. I'll get a parse error sometimes. It could be a buffer over run error. If I don't change the notes.xml file, everything is fine. Just keep a backup copy of the file somewhere to replace the notes.xml if it gets corrupted.

 

[Jett]

I would love to open up a short position on the "new" GM today.

 

[jond]

Is anyone planning an exit strategy to get out before QE2 stops?
I'm trying to decide how much to pull out, and if I should wait another 3-4 weeks or no?

 

[jond]

I would love to open up a short position on the "new" GM today.

Looks like you would have made around 10% if you shorted GM back when you posted this

 

[robr]

Sure wish I was one of those guys who could buy Linkedin at $45

 

[SilverStone05]

Sure wish I was one of those guys who could buy Linkedin at $45

Why can't you?

You might want to look into a new trading platform. :biggrin:

 

[jond]

Sure wish I was one of those guys who could buy Linkedin at $45

A $45 yeah. But now with a P/E of 50+, the only thing I would do is short it.
Edit, googling around, it looks like the P/E is over 500!!!!!
That's the downside of being in first, is you can't sell, and it's guaranteed to plummet from here.
I bet it's at $40 by the end of July.

 

[robr]

A $45 yeah. But now with a P/E of 50+, the only thing I would do is short it.
Edit, googling around, it looks like the P/E is over 500!!!!!
That's the downside of being in first, is you can't sell, and it's guaranteed to plummet from here.
I bet it's at $40 by the end of July.

You ruined my plan. I wanted to sell it just after open when it hit 90

 

[robr]

Nice AAPL jump.

 

[Big_D]

Nice AAPL jump.

Yeah, I wanted to buy 100 shares before market close but unfortunately was too busy at work. Oh well...:frown:

 

[jond]

Nice AAPL jump.

Question IMO, is the next stop $400/share?
If I had more guts I would short apple.

 

[heySkippy]

Question IMO, is the next stop $400/share?

Looks like the next stop is back over $600. Up $50 early this AM.

 

[kookoo4nsx]

Apple should be at a new all time high with those blowout earnings. The market does not have a good "feel" right now. One thing that concerns me is the debt ceiling limit which should be hit by the end of summer. This is the type of market that it pays to be a good stock picker and not let things get too far away from you on the downside.

 

[sahtt]

Question IMO, is the next stop $400/share?
If I had more guts I would short apple.

..and been blown out $50 a share. People have been trying to short AAPL for the past 3 years. Everyone of them is in some trader graveyard with the other guys who've been trying to short the yen for the past 15 years.

They've beaten earnings every quarter for half a decade. Their P/E still isn't all that high and their balance sheet is impeccable. Why you'd get short AAPL instead of NFLX or some other questionable company is beyond me.

Don't fight the trend my friend! And the risk vs reward is terrible getting short AAPL in the 500's unless you think the entire market is going to be crushed. And even then, AAPL has so much cash per share and such a great balance sheet it will go down less than the vast majority of other firms. I haven't bought AAPL since it was <$100 and have sold out of all but a small piece (limit sell at $648.75) but I wouldn't go short.

 

[bambbrose]

..and been blown out $50 a share. People have been trying to short AAPL for the past 3 years. Everyone of them is in some trader graveyard with the other guys who've been trying to short the yen for the past 15 years.

They've beaten earnings every quarter for half a decade. Their P/E still isn't all that high and their balance sheet is impeccable. Why you'd get short AAPL instead of NFLX or some other questionable company is beyond me.

Don't fight the trend my friend! And the risk vs reward is terrible getting short AAPL in the 500's unless you think the entire market is going to be crushed. And even then, AAPL has so much cash per share and such a great balance sheet it will go down less than the vast majority of other firms. I haven't bought AAPL since it was <$100 and have sold out of all but a small piece (limit sell at $648.75) but I wouldn't go short.

My AAPL limit sell is remarkably close to yours

Was getting worried until the earnings statement came out.

 

[robr]

I got clobbered on WDC. Not even sure why, their earnings report was very positive, yet they dropped 15% immediately after. I suck at this game.

"Western Digital, which blew away earnings estimates and offered better-than-expected fourth-quarter guidance, plunged 14% in hot and nasty volume."

 

[Ultraman]

WDC makes hard drives and those devices will eventually be replaced by flash memory. It's a dying industry and the reason for their stock price to rise was due to the flood in Thailand, I think their customers ordered more of their stuff to offset shortages.

Due to this reason it's not a long term investement, you need to get in and get out fast, not buy and hold.

You need to find the next boom and invest in those stocks.

Try INTC, MSFT or CSCO for large cap.

Or BRCM, JDSU, FFIV, or NVDA for more spec plays.

 

[robr]

Whether true or not, how does a phenomenal earnings report suddenly change any of it? Would it have gone up on a bad earnings report? Damned if you do, damned if you don't.

WDC makes hard drives and those devices will eventually be replaced by flash memory. It's a dying industry and the reason for their stock price to rise was due to the flood in Thailand, I think their customers ordered more of their stuff to offset shortages.

Due to this reason it's not a long term investement, you need to get in and get out fast, not buy and hold.

You need to find the next boom and invest in those stocks.

Try INTC, MSFT or CSCO for large cap.

Or BRCM, JDSU, FFIV, or NVDA for more spec plays.

 

[Ultraman]

Whether true or not, how does a phenomenal earnings report suddenly change any of it? Would it have gone up on a bad earnings report? Damned if you do, damned if you don't.

Could be due to many different reasons. How's their outlook into the next quarter? The market usually trades 6 months ahead. Also, their stock price is sitting on 52 week high when they reported, so unless they deliver a blowout quarter the price will usually correct itself.

Other times could be just money managers controlling the price direction. They create a panic sell to shake off weak investors before move the price to the upper right.

It's not easy to determine what's exactly happening behind the scene so that's why I recommend invest in the bigger theme so in case there's a price correction we can cost average in.

 

[Ultraman]

In response to your other question, let's say if they miss the number, the stock price could easily drop another 10 - 15% on top. This just happened to Deckers (DECK).

For WDC, I see the price is sitting on strong support so I see a good chance for a bounce from here. For the risk taker can add more shares, but longer term still questionable for this industry IMHO.

 

[robr]

Revenue projections look great!

Western Digital Beats Analyst Estimates Silly

By Seth Jayson | More Articles
April 27, 2012 | Comments (1)

Western Digital (NYSE: WDC ) reported earnings on April 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 30 (Q3), Western Digital crushed expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share increased significantly.

Margins expanded across the board.

Revenue details
Western Digital tallied revenue of $3.04 billion. The 16 analysts polled by S&P Capital IQ anticipated revenue of $2.42 billion on the same basis. GAAP reported sales were 35% higher than the prior-year quarter's $2.25 billion.

EPS details
EPS came in at $2.52. The 19 earnings estimates compiled by S&P Capital IQ predicted $1.55 per share. GAAP EPS of $1.96 for Q3 were 216% higher than the prior-year quarter's $0.62 per share.

Margin details
For the quarter, gross margin was 32.2%, 1,400 basis points better than the prior-year quarter. Operating margin was 18.4%, 1,090 basis points better than the prior-year quarter. Net margin was 15.9%, 940 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $4.41 billion. On the bottom line, the average EPS estimate is $2.48.

Next year's average estimate for revenue is $11.70 billion. The average EPS estimate is $6.90.

Source:
http://www.fool.com/investing/general/2012/04/27/western-digital-beats-analyst-estimates-silly.aspx

 

[Ultraman]

I say this one is a perfect example of "sell on the news" scenario.

Looking at the price action right before the report, people bid up the price in anticipation and sell on the news when report came out. Basically taking profits off the table.

Smart and patient investor could starting accumulating the shares at this price point.