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JimVanMeerten (56.34)

American Capital -- Capital appreciation plus income



March 17, 2011 – Comments (0) | RELATED TICKERS: AGNC

This morning I added American Capital Agency Group (AGNC) to the Barchart Van Meerten New High portfolio.  For those of you not familiar with the requirements to be included in this momentum portfolio a stock must trade over 100K share per day, sell for above 1 dollar, hit new highs in at least 50% of the last 20 trading sessions, have a Barchart short term technical buy signal of at least 80% and also have positive support from both the professional and amateur investing community.  Let's look at this stock,

American Capital Agency Group (AGNC)  is a newly-organized Delaware corporation formed to invest exclusively in single-family residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by a U.S. Government agency or a U.S. Government-sponsored entity. The Company will be externally managed and advised by American Capital Agency Management, LLC, a subsidiary of a wholly-owned portfolio company of American Capital. The Company will elect to be taxed, and intends to qualify, as a real estate investment trust for federal income tax purposes.

Technical Factors:

1 - 80% Barchart short term technical buy signal

2 - Trend Spotter (tm) buy signal

3 - 96% Barchart overall buy signal

4 - 14 new highs and up 3.51% in the last month

5 - Relative Strength Index 72.02% and rising

6 - Trades around 30.39 with a 50 day moving average of 29.20

Fundamental Factors:

1 - Wall Street brokerage analysts have released 8 buy and 7 hold recommendation on this company

2 - Revenue is  projected to increase by 105.30% this year and 109.70% next year

Investor Sentiment:

1 - The CAPS members on Motley Fool vote 492 to 26 that this stock will beat the market

2 - The more experienced All Stars agree with a vote of 129 to 10

One general comment:  A stock is not added to the portfolio just because its popular.  The first and biggest requirement is current and positive momentum.   Next those stocks that are not getting positive support from both the professional and general investors are eliminated.  The stocks  remaining are then considered.

This second cut is a realization that a stock enjoying positive momentum will not continue upward unless it continues to have investor support and positive press.

Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs  in his daily blog -- Barchart Portfolio Blogs.

Through Marketocracy Capital Management  you can have a Separately Managed Account that mirrors his Barchart Van Meerten New High model portfolio.

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