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Jobe01 (33.09)

My First Post

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August 09, 2009 – Comments (4) | RELATED TICKERS: AKAM , QID , CNTF

I have learned, through good and bad experience, through many years of losses and gains, that one has to look past what the analysts are saying.  Like Lemmings, they tend to run in the same direction.  I consider myself a hybrid contrarion.  Howver, I do my research.  The stocks you'll find me recommending have as a priority a strong balance sheet.  High cash assets, little or no debt.  Next I look for valuation relative to the cash and book value.  I seek out stocks that, if I'm lucky, are trading at or below cash.  As you can tell, they tend to be far between.  That said, I'll take stocks that are close in rhat regard. 

I also look for companies that have increasing revenues, lowering operational cost as a portion of revenues, an excellent product mix, little dependence on one or a few customers.  It's also important that the stock not be trading at a recent high.  I like stocks which are overlooked or misread.  Take Akam, a recent choice of mine.  After reading the earnings release, reviewing their balance sheet, where they're investing there money.  Where the stock was trading as result of the release, and fundatmentaly, the stock look like a steal, so I went long at $16.10.  That was two weeks ago.

Another requirement is that insiders are buying or at least not selling the stock.  Insiders know what's going on with a company.  If they are buying in droves leadng up to an earnings release, you can bet the release will be strong.  Also, a stock that has a high % of insiders as owners is very attractive to me.  Additionally, you want a stock which produces a product in demand, which room for a lot of growth.

 So, that all that fundamental data, then set it aside as being a buy.  Next, chart the stock.  See where it's currently trading relative to the last 3, 6, 9 months, and the year.  Also, take a look at the rsi.  Ideally, the stock will be trading at or near it's 50 day average.  The RSI will be below 50, but preferably close to 30. Look for narrow bollinger bands, as that indicates a breakout higher, should the rsi be near 30.

 Finally, be patient, wait for you entry.  Pick an entry point when the stock is at a recent low relative to history.   If all these stars align, pounce,  Should you get a good run, be certain to sell the stock at an rsi of 70+.

That's how I do things.  In the last year, my investment portfolio has more than doubled.  Some of my decisions have a shorterm negative impact as my calls can be contrarion.  I bought the QIDs when the techs were soaring as I see the recent tech run as illusory.  The QIDs are oversold, and due for a runup.  I can speak about that in more detail later.

 

Jobe

4 Comments – Post Your Own

#1) On August 10, 2009 at 1:43 AM, ChrisGraley (28.70) wrote:

Good post Jobe.

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#2) On August 10, 2009 at 8:53 AM, Jobe01 (33.09) wrote:

Thanks for the response Chris.  I tried to respond directly, but, couldn't figure out how to.  I noticed several typos in my first post.  I'll attempt to improve on that. 

In case you haven't already taken a look at these stocks, I'm reviewing Crus, cscx, and cytx for possible investments.  Thanks again for responding.

 

Jobe

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#3) On August 10, 2009 at 10:03 AM, russiangambit (28.98) wrote:

100% agree with  evrything you said. I might even try setting up a filter on MSN Money for this since it is so clearly laid out. Thanks.

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#4) On August 10, 2009 at 11:02 AM, Jobe01 (33.09) wrote:

Thanks for the comment russian.  Filters are great, and very well may give you a number of potential candidates.  In addition to the filters, I'd take a look at the company data available elsewhere, as your own judgement is necessary in making a decision, given whatever your parameters are.  Good luck, and thanks again for the comment.

 

Jobe

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