Earnings ( EPS ) Growth Momentum

SIGM VRGY PRGO UTHR

2007-11-29T03:44:00.000-08:00

A few stocks I am interested in or have got in during weekness are PRGO UTHR. VRGY might turn out good.

Actually here is a list of resilient stocks from Stockbee, should provide good ideas when the market turns back up. I am not yet able to trust the action in the market, so I am doing more of short term trading for the time being.

http://stockbee.blogspot.com/2007/11/75-resilient-stocks.html

I have owned SIGM from last earnings season, and will add more when the post earnings bull flag forms. I see lot of upside till next earnings season. Stockdoctor is also very excited about it.

Cheers!
Lazy

Roller coaster Ride...

2007-11-14T03:48:00.000-08:00

The Roller coaster ride continues, nothing much to report, watching from the sidelines. I have closed most of my positions at different times during last week, should have done earlier, being in training for the whole week did not help. Another foolishness on my part that killed me further was that I did not have stop loss orders on 3 of my open positions. On further research I found the stop loss orders had expired and I never put them back! So much for monitoring my positions every night!!

My current open positions are only small positions in old ones which are way up from where I had bought last year.

SIRF - Sirf Technologies Holdings Inc.

2007-11-02T19:07:00.000-07:00

Another Earnings play, SIRF - Sirf Technologies Holdings Inc. Big quarter and is holding up strongly in this screwed up market, got in today.

Last couple of days I have not been able to follow the markets regularly. Other good earnings plays to keep an eye would be UTHR, SYNA, HMSY, MA, MSTR, HOS etc.

Will be in a training whole of next week, so might be away from the blog too.

Cheers!
Lazy

Solitary Trader

2007-10-27T14:44:00.000-07:00

I found about Solitary Trader from this post of Stockbee:

http://stockbee.blogspot.com/2007/10/trading-earnings.html

Solitary Trader's earnings trading method made lot of sense. Some of my EPS Momo buys are on earnings announcement day or post earnings bull flag buy. Hence I plan to follow solitary trader blog regularly and also learn the particular trading style better. I have included the blog in my list of blogs. Solitary trader was not blogging for a while, but now I see there have been regular posts.

Here is the link: http://solitarytrader.blogspot.com/

If nothing else, check out his log cabin office, really cool!

Cheers!
Lazy

SWIR - Sierra Wireless Inc.

2007-10-26T18:14:00.000-07:00

Today I picked up some shares in SWIR - Sierra Wireless Inc. They reported a big quarter, and future looks promising.

I know, putting my money in two similar companies (couple of days back I got into NVTL). Actually, NVTL got a boost today from SWIR results! NVTL reports early Nov.

But the wireless field is hot so I will monitor which one does better and move my money into the stronger of the two.

Still ruing my decision to have put such an aggressive stop in SGR, it has moved up fast and left me behind, though I will keep an eye. But on the other hand, MOS has been fabulous.

Cheers!
Lazy.

NVTL - Novatel Wireless Inc.

2007-10-24T19:33:00.000-07:00

Today NVTL dived down on news that QCOM plans to sell a similar product, but I feel near term the stock should do okay, so bought some @21. Lets see how that pans out.

Cramer touted SGR and it popped up, I am still interested in that stock.

Keeping an eye on CRNT and SILC.

Cheers!

Lazy

Tough Day!

2007-10-22T17:13:00.000-07:00

On days like this, I really miss my savings account :)

Was busy all day, missed the action in CRNT and LDK. Will keep an eye on CRNT. AAPL should lead the way tomorrow. My holding in SNCR got a boost due to AAPL, so indirectly I played AAPL. Something wrong with SILC, got kicked out from my remaining shares. Also, got kicked out of GMKT, I like that company, will try to get back in!

I keep missing some of the good moves in my core watchlist like the ones we saw today or over the past few days - CRNT, BCSI, MTL, JASO, CDS etc. So, here are some more that I am keeping an eye so, that if something interesting happens someone can take some action - QMAR, FSLR, GBT, SVA, WYNN, STAR, HMSY, SYNA, ULBI etc along with the ones mentioned yesterday - GSB PTT CY CKSW

ACO keeps pushing higher, better keep an eye!

Cheers!
Lazy

GSB - Globalscape Inc.

2007-10-20T22:11:00.000-07:00

Ok here is a new one I came across recently - Globalscape Inc. (GSB). Its a growth story in the making, and recently market has discovered/accepted the fact (reflected in the share price appreciation). Revenue has been growing steadily for some quarters now, and earnings is catching up! As you know, I do not delve too much into the future assumptions - like prospects, DCF etc etc, but I will just give the current growth and financial numbers in my spreadsheet image. In the current market weakness, it is holding up quite well, so any dips might be a good buying opportunity. I do not like the cash situation, additionally, it has a very low float and is low priced, so quite speculative.

(Click on the image to view it bigger)

Others I am keeping an eye on are CY, CKSW and PTT. Picked up some ANTP on Friday.

Cheers!
Lazy

Busy most of the Week...

2007-10-16T03:21:00.000-07:00

I am in training from Monday-Thursday. No, it is not one of those investment trainings. Its one of my day job related training, a Project Management Course called Risk Management. Hopefully I can use some of the concepts in my trading too :))

So, I will be away from the markets and maybe from this blog too for sometime.

Missed some of the earnings related action today. SGR moved back up. ANTP EDU STRN made good moves, Hopefully they will still provide good entry later this week.

Happy Trading!

Cheers!
Lazy.

A Funny story and smallcaps.us made me money!

2007-10-12T20:07:00.000-07:00

I think everyone has a hidden trait in them which draws them to cheap stocks, the ones below $5 with the hope that one of these little companies will make it big and fly to $20-$30 and make them tons of money.

Well atleast I am one of those guys! Yeah I know, I am a cheapo!

Lot of you might be knowing FRPT (Force Protection Inc.). It was one of those EPS momentum based big movers last year. It moved from around $3 to $30.

Well when the first news came out that they had received their first order from US Army sometime back in 2003, it was an OTCBB stock trading around 40 cents. I saw the news and I bought it right away, hoping to make tons of money! It went down to 20 cents (due to heavy dilution) and kept going down, and I held on. Finally, it reverse split and the price became $4, it kept falling again, it fell all the way to 69 cents around December 2005. My position in that stock was worthless and I sold it in December 2005 for tax purposes.

If you look at the 3 year chart of FRPT, you will certainly call me the biggest loser on earth!!! Just when I should have bought loads of FRPT, I sold it instead and never looked back. It first moved from OTCBB to AMEX and then to NASDAQ. In the process it shot to $30, as I had predicted when I had bought the stock in the first place. Well so much for timing and patience.

I hope you too found my story funny!

Anyway, so I have this thing for cheap small/micro cap stocks. That was the reason I signed up at http://www.smallcaps.us/. They are free, independent and unbiased, so I usually just follow their picks, some of them do quite well. One company had caught my eye, Hemispherx BioPharma Inc - HEB

smallcaps.us kept saying this is one of the most undervalued micro cap stocks. Somehow I took the chance and bought first at around 1.45 and then around 1.25 and held on. Today its high was 2.02, I sold some at 1.98. Hope to see it continue upwards. Anyways, these folks made me money, and a mention and thanks was on the cards!

Cheers!
Lazy

Ugly Day - Oct 11, 2007 and PRXI

2007-10-11T18:55:00.001-07:00

Before the fall I had sold half my position in LDK at 50.50 (another preset limit sell order). So, that turned out to be a good move. And I also opened a small position in PRXI in the morning when it looked like it wouldn't fall any further. It showed strength later, so that's good.

It would be prudent to be defensive tomorrow, after the sudden nose dive we saw today. I had last checked my portfolio before heading out for lunch around 12:30pm, my whole portfolio was up 2.5%. Next I checked around 2:45pm it was down 3%!!! I had been kicked out of SGR (this one moves downwards faster than the market), bought some more UVE without any of my knowledge!

That's the price you pay for having highly volatile low float stocks and also trying to maintain a portfolio in auto mode - aka - stop loss orders and preset limit buy orders at prices much below the current market prices.

Anyway not much damage done on the whole, provided market follows a few range days and does not nose dive further. Pundits were advising to be cautious after such a huge rally past few weeks, but today's action was quick.

Cheers!
Lazy

SGR - Shaw Group

2007-10-10T17:51:00.000-07:00

Got into SGR after they reported a terrific qtr. I had a low limit order and a sudden dip mid morning filled me. LDK, VMW, MOS made good moves. Otherwise a quiet day, mostly away from my computer.

ARTW had a great qtr, and the stock shot up like an arrow, so I will wait for a dip before considering.

Was watching PRXI after hours, the numbers looked good to me but it seems they gave a -ve surprise by a penny so I will stay away for the moment. VOXX might be interesting tomorrow.

Cheers
Lazy

STV, VMW, LDK Solar and MOS - Mosaic Co.

2007-10-09T17:53:00.000-07:00

Ok yesterday I was half kidding, when I said, by the time I am ready to buy STV it would have alreay shot to 60! I didn't mean in ONE DAY! That's what it almost did today. Today's high is 55.31. Holy Cow!

LDK - LDK Solar Co. Ltd. is very risky, but I got in for a quick play today, not sure if it will work out as I wish! Else I will get out quickly.

Ok, this one is more like my type of stock, or rather this blog type of stock. Its Mosaic Co. - MOS. Maybe you can call this one as a blog pick.

MOS is another potash play, if you know POT you will surely like MOS. Well today they reported steller earnings. EPS up 180% and revenue up 55.5% and it has been showing big numbers for couple of quarters now. I did not waste time getting in as soon as I saw the announcement!

Before I forget, go VMW!

Cheers
Lazy!

STV - China Digital TV Holding

2007-10-08T16:44:00.000-07:00

No! That's not my pick, though at first glance the numbers look quite good!

But, I am just amazed how this Chinese Tsunami has taken the market by storm. This one started trading yesterday and opened today around 30 and shot up to 40! Wow!

Will keep an eye though, once the IPO volatility settles, might give it another look. But by that time it might shoot to 60, who knows about these guys!

On the other front, not much to report. Saw how CRNT is being butchered by the analysts.

I am keeping an eye on NVTL - Novatel Wireless, had good news and an upgrade today. This one is also one of my watchlist stocks.

Cheers!
Lazy

Watchlist and Research

2007-10-07T05:43:00.000-07:00

As I had mentioned earlier, I create my watchlist from various sources:

1. MSN screening - I screen for stocks with qtr over qtr EPS growth rates of atleast 100 and revenue growth rates of atleast 30 (I keep playing with these numbers to get potential candidates). Then I also put in a criteria for price appreciation. This gives me about 100 stocks. I am already familiar with a lot of them , its the new ones that pop up once in a while. I then do further research on them. Post earnings season, new candidates keep popping up.

2. Other Sources - Daily news, other blogs, Most Price % Change list. Here are some links:
http://stage.theflyonthewall.com/entry.php
http://www.marketwatch.com/search/?doctype=806
http://finance.yahoo.com/gainers?e=us

When I find a potential candidate I will run it against my own home grown analysis system. It might sound very sophisticated, but what it does is scrap data from freely available information on the web and crunches some numbers and statistics. But it is fully automated and it takes maybe 20 sec for a stock. I provide a small but very relevant portion of that output in excel format along with my picks that I post on my blog.

Things I look at are explosive eps and revenue growth rates (highest priority), Low float, ROE, ROA, ROIC, Profit Margins, FCF/Equity, Insider Transactions, level of Debt, Cash situation, Share Buyback, small dividends maybe.

When I say freely available sources, these are mostly pages from Yahoo Finance, MSN Money and Google Finance. One very important and very visual page from MSN money even Stockbee stresses, is this one:

This one is for UVE:
http://moneycentral.msn.com/investor/invsub/results/hilite.asp?Symbol=uve

Looking at the bar graphs on the page itself gives you an idea that this one looks promising (though I do not visit this page, my software grabs data from here)

One look at this one, and you can tell, why I will avoid CHTR:
http://moneycentral.msn.com/investor/invsub/results/hilite.asp?Symbol=chtr

Hope this helps, send me emails/comments with your questions, suggestions, feedback, criticism. I appreciate it!

Cheers!
Lazy

CPRT - Copart Inc.

2007-10-07T05:13:00.000-07:00

CPRT - Copart Inc. is not from my core watchlist. Sometime back I got a big discount email from Motley Fool Stock Advisor, I subscribed just for the heck of it. I load their picks into a watchlist and keep an eye. (Anyone subscribing to their Hidden Gems Service, please send me an email). It seems CRNT was a hidden gems pick, that gets me interested.

As it is not my core holding, I was not sure if I should post it here, but then thought otherwise.

Following their earnings announcement, CPRT made a big move, so I was keeping an eye. It eventually formed a nice bull flag. Though it is a slow grower by my standards, revenues have increased substantially, by about 15M, due to accusations in UK, EPS went up 20%, they have increased their share buy back program and generate hordes of free cash flow.

So, I started a position in CPRT as it broke the bull flag trend line. Hope to see it continue its move up.

Cheers!
Lazy

DSX - Diana Shipping Inc

2007-10-05T20:41:00.000-07:00

Alas! I could claim DSX is my pick. Not really! It was picked by StockDoctor couple of days back. This company keeps appearing in my scans and I like it, another positive being, it is in one of the hottest sectors - dry bulk shippers. Just look at DRYS and EXM, you will get the idea. Might get into it soon. And with a name like "Diana", hard to resist! Don't you agree? :)

Wow! Just noticed now, Stock Doctor has added my blog to his blogroll. Thanks Stock Doctor, really appreciate it.

Before I forget, I was kicked out of my position in CRNT. Will stay away from it for a while! Let it heal and get this dilution business out of the way.

RIMM did a fantastic move today, it is one of my watchlist stocks, had considered buying it post-split when it was lingering around 80, never got to actually hitting the buy button!

UVE is in a terrific uptrend, I plan to add to my position on weakness (or strength).

I will do a post on my views on buying on weakness or strength!

Cheers!
Lazy

What difference a day can make....

2007-10-03T18:35:00.000-07:00

Though not as if my portfolio lost tons, but much different from yesterday!

CRNT killed me, I am guessing tomorrow it will hit my stop :(

Rest of the stocks were okay, UVE and GMKT were up. Today was mostly away from my computer so never got a chance to follow the Chinese stocks, which never seem to quit! Oh well!

Cheers!
Lazy

Best Day! and Secondary Offering Dip Buying

2007-10-02T17:42:00.000-07:00

Today was the best day in my trading history, markets were flat but my portfolio went up as much in a day that I do not see in most months!

UVE , CRNT , CHNR (only part of the move), GMKT (one of my holdings from pre-correction), VMW .....all made big moves!

I took a technical trade in CHNR, so sold it quite early but still did very good :)

I do not know what is going on with UVE , I had mentioned it few days back, that this one has potential, did not realise the move would be so fast!

Also yesterday, I got into one of my technical candidates that I post in my technical blog. The chart looked very promising. It is XOMA, that too made a big move today.

Ok, remind me something. I have to add "Secondary Offering Dip Buy" as one of my buying strategies, used that today to add to my position in CRNT. Whenever a company announces a secondary offering, its stock price dips, but if it is a momentum stock, it does not take even a few hours to recover from the negative news. Recent examples would be JASO and SIGM, and also saw the strategy in this article

Cheers!
Lazy

CRNT

2007-10-01T17:24:00.000-07:00

I opened a position in CRNT today, will add more. Looks like IBD wrote about it, so the huge interest. Good day on the whole.

Someone left a comment in my blog, thanks!

They wanted to know how do I build my watchlist. I find some potential stocks through screening (MSN screener), some from news or other blogs. Basically what I am looking in a stock is that it has started upward momentum and has shown explosive earnings and revenue growth atleast in the last couple of quarters if not more!

I then run them through my home grown (proprietary :) ) analysis system to decide if they are worth pursuing!

Cheers!
Lazy

Vital Stocks

2007-09-29T06:45:00.000-07:00

Another financial blog that I liked is Vital Stocks

They have other services too but I linked just the blog.

Not sure if they add any of their own views or just report Zacks analysis, maybe they are just an arm of Zacks. But some good ideas and analysis and focuses mainly on earnings growth and positive surprises.

I have included a link under the blogs I follow.

Cheers!
Lazy

UVE - Universal Insurance Holdings Inc

2007-09-28T20:21:00.000-07:00

Another little company popped up on my scan, its called Universal Insurance Holdings Inc - UVE

I will have to start running my scans during the week too. If I had found UVE on Wednesday, I could have earned myself some dividends. It seems record date for next dividend was the 27th/Thursday.

Anyway I plan to keep an eye on this one. Though its a home insurance underwriter, it is based in Fort Lauderdale, Florida, so I am guessing business is good, the numbers look very promising, has been increasing revenues and earnings at a terrific rate. Hordes of cash, and pays out dividends. But these smaller companies are always a bit speculative.

(Click on the image to show larger image)

On other stories, LPHI had a good day, after the split, price volume action looks very promising.

Cheers!

Lazy

ICFI - ICF International Inc.

2007-09-27T18:18:00.000-07:00

I had put a limit order at 27.75 for ICFI (ICF International Inc.), got filled today. This is only a partial buy, I will add more based on strength. Though the volume on this one tends to keep low, the price action has interested me. It is a management services company and the numbers look good to me. New orders have been flowing in quite frequently, so hopefully they will keep up the massive growth rate. Only area of concern is they are very low on cash, on top of that the cash flow was negative in the most recent quarter.

Today finally mustered enough courage to let go of my remaining shares of AKAM, with a huge percentage loss! With explosive growth of online streaming videos, I still believe in the company, but the market always has the last word!

Still keeping an eye on PRCP, CRNT and CHNR

Cheers!

Lazy

LPHI CRNT UA

2007-09-26T18:36:00.000-07:00

Couple of days back I was planning to sell LPHI and wait for good news before buying again, as I like the company a lot. I am sure it has lot of upside potential if it can maintain the growth rate, which I believe it will. Neither did I get a chance to sell, nor did we have to wait long for news. Hope it keeps on with the upside momentum.

Another stock that was on my list but never got a chance to buy is CRNT (Ceragon Networks Ltd.), hope there is a pullback and I get a decent price.

Not sure if UA (Under Armour, Inc.) would be a good buy. If it falls further, I might be tempted!

Cheers!
Lazy

Stock Doctor

2007-09-24T18:11:00.000-07:00

Found a blog, liked what I saw, so I have included it in my list of blogs on the right. Its called Stock Doctor

The picks are good and most are based on earnings momentum. I plan to follow it regularly.

I had 2 Chinese companies on my EPS Momo watchlist: CHNR and JRJC. Both went bonkers and I missed both! Oh well, that's what I am missing I guess, nimbleness. We were seeing all Chinese stocks go up. JRJC was one of the first, based on that I should have atleast bought CHNR before today. Today, whole day I was busy in meetings. Even never got a chance to sell LPHI before it fell, knew it would. Forgetful day! Oh, on the bright side, SNCR, VMW and CROX made good and predictable moves.

Forgot to mention earlier, based on my regrettable experience with GOOG, I have got into VMW. Might not be as explosive as google, but this company has got potential, believe me, I work in IT!

Cheers!
Lazy

Earnings Momentum

2007-09-23T12:38:00.001-07:00

I dug out this old article, which reiterates the importance of Earnings Momentum. It says:

In a December 1997 issue of Barron's, a Merrill Lynch poll found that the top strategy among 122 institutions surveyed was to buy stocks of companies that exceed earnings expectations and sell the companies that fall short. Quarterly earnings reports are among the most powerful of the underlying fundamental factors that drive stock prices. In many cases, the magnitude of a stock's quarterly earnings surprise can be a short-term catalyst for the equity's performance.

Rest of it at this link....

http://www.schaeffersresearch.com/schaeffersu/options/expectational/fundamental/earnings.aspx

The Little Book that Beats the Market - Joel Greenblatt

2007-09-23T10:10:00.000-07:00

I was reading this book - The Little Book that Beats the Market by Joel Greenblatt on the metro and could not help wonder how nice it would have been if I could have read the first few chapters when I was a teenager. These chapters give a very lay man's view of the basis of the stock market and theoretically why a company's stock goes up or down. I recommend the initial chapters to all middle school kids! These days schools might have good exposure to the stock market but in our days, especially in India, where I grew up, nothing!

Rest of the book is fine, just that it is not my cup of tea.

Cheers!
Lazy.

LPHI - Life Partners Holdings Inc.

2007-09-23T07:50:00.000-07:00

Some of the numbers of PRCP in my earlier post might not look accurate, that's true. I do not go for exact calculations, I just use simple rough calculations, as I am more interested in comparing numbers between various potential candidates. That's why I am providing numbers for LPHI here to give an idea.

I like LPHI, the numbers are staggering. Did not own it until recently. When it fell to 36-37 after some predictions for next qtr which did not live up to analysts expectations, I bought some as it seemed momentum value to me, and it promptly fell to 33, oh well! It has come up, but the price/volume action is totally messed up. Maybe I will sell and wait for some favourable news when it starts moving up again. Any insights are welcome!

Cheers!

Lazy

PRCP - Perceptron Inc Continued....

2007-09-23T07:32:00.001-07:00

Here are some numbers on PRCP. No Debt, thats good. Big jump in EPS and Revenue this mrq. Revenue has been growing steadily. Looking at the other numbers you can tell it is a potential turn around candidate, so lets see how things develop.

PRCP - Perceptron Inc

2007-09-22T19:06:00.000-07:00

PRCP - Perceptron Inc appeared on my scan, looks promising, broke out of its neckline two days ago and has moved up quite strongly on big relative volume. Hopefully will pullback and provide better entry.

I am too tired to post the numbers from excel right now, will do that tomorrow.

Cheers!
Lazy

Missing out on certain opportunities/strategies

2007-09-22T15:43:00.000-07:00

After a few years in the market I have found this strategy has worked very well for me, considering how little time I am able to devote to the markets, (literally, 15-20 minutes during market hours, and 1/2 hr every night). The weekends I am at home, I spend maybe couple of hours. I am not sure if I will be able to handle more time consuming strategies which promise to give better edge in the market.

I am Stockbee's big fan. I feel I can learn a lot from him as I think my strategy is one of the strategies he has discarded to move to more profitable strategies. But not sure if I will have the time to prepare and trade those strategies. But maybe I should atleast learn the good strategies and hope I can make use of them later.

And I miss his market monitor! He has moved to a donation based service for some of his products! Though I stay away from paid advice, his I hope is different and there will be chance to learn and not be spoon fed!

Cheers!
Lazy.

My Strategy - Part IV - Selling

2007-09-22T14:48:00.000-07:00

Now that I have bought a bunch of stocks when do I sell them? Lets review the strategies I follow:

Too extended - Sometimes these fast movers get too extended, even by their standards, a pullback is eminent. I sell some on strength and then if it pulls back enough, buy back some. Sometimes they never pullback and keep going much higher, tough luck, but that's okay, you made decent money on the part you have sold and you still have some which is making money. Its part of the game. Recent Example: CROX quickly moving from 45 to 60 and SNCR galloping from 30s to 45. I took some off the plate!
Hitting Stop - Some of these fast movers reverse and hit my stop. Sometimes I put very strict stops for half my positions and a bit relaxed for my other half. I usually put my stop below the recent low, unless it is very far down. Then I look for support areas on the charts and put my stop below that. Recent Example: SIGM - Initially stop would be below 39.04 (most recent low) lets say 38.75, but as there is no other recent low and the stock is now over 50, stop has to be raised. Look at the chart. 45.50 was resistance area, so now that should act as support, so stop goes around 45.40. Maybe half at 45.40 and half even higher.
Technical Sell - If the stock goes down and I have not sold yet or has not hit my stop, I might decide to wait. And it starts creating a bearish flag, then I sell right away. Recent Example: LPHI (Life Partners Holdings Inc.) From its high of 52, it fell to around 40-39. Suppose I am still holding it. Then for 2 days it created a bear flag, and I should have exited like a horse out of the gate! After that it fell like a knife!
Better Opportunities - I think all of us are familiar with this strategy, I spot a better opportunity, I will move money from one of my laggards and put into it. Current Hypothetical Example: I should have moved out of SILC and put my money into JRJC. I wish!

I think that's all on selling, I can keep going on and on on stops, raising stops, and also about trailing stops, but maybe I will hold for later or if someone has any questions. I do not use trailing stops with my EPS momo trades.

Cheers!

Lazy

My Strategy - Part III - Buying

2007-09-22T08:11:00.000-07:00

Ok, now I have a list of great EPS momo stocks I like, what now! Here comes the real part, the actual buying and selling. Lets focus on the buying in this post. I have various buying strategies, mostly based on fundamental and technical indicators, while sometime it is a more personal indicator, like my time and availability factor. Here are the buying strategies I apply depending on the situation:

Earning Day Join the Herd - Good stock, good uptrend, good EPS growth, and the most recent qtr gives big EPS jump or a substantial earnings surprise, I try to buy it pre-open or during the market hours on pull backs. Usually works well for higher float stocks as they take time to move up. Recent Example: GME (GameStop Corp.) after beating analysts expectations by 4 cents, I got in at 46.
Post Earnings Technical or Pullback Buy - Similar stock as in first case, only difference is that it has low float. Low float stocks do not give a good entry, they just zoom up on earnings day (or maybe I am not able to follow the markets most of that day)! Then I wait for it to pull back over the next couple of days before buying, sometimes it even fills up the earnings day gap before moving up, or it forms a bull flag then I use technical rules to buy. Recent Example: SIGM (Sigma Design Inc.) after beating by 14 cents, shot up to 45, over the next couple of days it pulled back to around 40 when I bought it.
General Technical Buy - A stock from my list, makes a big move, many times without any news as such. I am sitting there amazed, wondering what has hit me, cursing myself for not taking a position sooner. Anyway if after the initial move, the stock forms a nice looking bull flag, I use technical rules to start a position, buying if the stock moves above the neckline, putting a stop below the low of the flag. Recent and very bad Example: SILC (Silicom Ltd) recently shot up from 22 to 26. Then it created a bull flag and I put a stop buy order just over 25. It then moved up to 28. Should have sold, anyway it has crashed down, stopping half my position (as the other half I put lower stop as I still believe its a strong growth stock, and it will go up. Emotions kill me!) and I am still in the red with the rest.
Dip Buy: Very risky, but has worked quite well for me usually during corrections. I will put a conditional limit buy order a bit below the recent lows and a stop sell order. I usually take smaller positions under this method, so can afford to have a more relaxed stop. I have missed quite some big movers as they never fell to my price, but the ones I catch have been profitable. Recent Example: CROX (Crocs. Inc.) during the rollercoaster ride over the last couple of months, market dipped big time twice, first time CROX went down to 47.01, so I put an order for 47, next whipsaw I got filled but it actually went all the way down to 44.10, oh well! Good that never hit my stop. But then it went all the way to 60 quite quickly, sold some at 60, still have some left. But the "hole in the sole" escalator story does not bode well, though it is holding above 50DMA and I personally feel, CROX is headed for bigger things a bit longer term, lets see.
Momentum Value Buy - I have coined this term (at least I believe so). A strong growth stock suddenly falls 20-30% due to some rumour or seemingly bad news and the market reacts too strongly, illogically! Not from classical valuation point of view but from growth potential point of view, the current price is a actually a bargain - its a momentum value. Recent Example: SNCR (Syncronoss Technologies, Inc.) Steve Jobs lowered iphone price and SNCR got hammered, from 40 it fell to around 30, I bought quite a few around 32, come on, lowering of iphone prices is good for SNCR right! That's what I call momentum value, and it got reflected right away as the stock raced to 45. It is again getting hammered, presumably because a director sold at 38-39, I hope it is something more serious than that! For all you know, that Director's daughter might be getting married this weekend!

I hope I have covered most of it, next post I will cover selling, and some more posts to talk a bit more on specific stocks.

Note: Most of the buys mentioned above were during the market correction, so I was picking smaller positions.

Trivia! Significance of today, 70 years ago

2007-09-21T11:36:00.000-07:00

"The Hobbit"--English writer and scholar J. R. R. Tolkien's coming-of-age fantasy about a comfort-loving "hobbit" (a smaller relative of Man) who joins a quest for a dragon's treasure--was first published on September 21, 1937. Originally begun about 1930 as a story to entertain his four children, "The Hobbit" included pictures drawn by the author (an accomplished amateur artist), and was so popular that its publisher asked for a sequel. The result, 17 years later, was Tolkien's masterpiece, "The Lord of the Rings".

Prosper.com

2007-09-19T18:34:00.000-07:00

Anyone familiar with Prosper.com a borrowing and lending site, the returns are pretty good, but risks are high too, and key word is to diversify, sounds very similar to the stock market! Anyone up for a study on which one is better?

Cheers!
Lazy

SILC JRJC

2007-09-19T18:31:00.000-07:00

Today, before I had time to check my account, SILC was already butchered by a downgrade, anyway I will leave it to either hit my stop or go up, lets see! I still feel its a solid growth company.

On the contrary JRJC rocketed up, wish I could say I own some shares :( It is on my list of eps momo, but never got to actually buying it!

Cheers!
Lazy

Feds make the day!

2007-09-18T18:44:00.000-07:00

No cut or a quarter point cut would have hit most of my stops, so Feds made my day, lets see how is the followup.

What's up with SNCR, it went bonkers even before the announcement?? Anyway I am not complaining.

SIGM also had a good day, while CROX and SILC were mostly quiet.

Ok, I know, I am giving away some of my holdings!

But most happy with the action in AKAM, finally it moved a bit after all that shoving and pushing. I know! What am I doing with AKAM, its one of those old stocks that I still have some shares left.

Another embarrassment is LPHI, thankfully that also moved up a bit, but more details on each trade in later posts.

Feds saved the big guys and even small fish (investors) like us, Govt has some plans for the struggling homeowners, but I feel all this is too late, I really feel bad for all those thousands of folks who already had to foreclose :( what happens to them???

Explosive Stocks

2007-09-16T19:58:00.000-07:00

From the links on Stockbee blog, I came across another blog which I liked a lot, it is called Explosive Stocks. Very interesting and some really explosive picks. Last post was in August, must be on vacation!

Cheers
Lazy

My Stategy - Part II

2007-09-16T17:23:00.001-07:00

As I have mentioned, I like to keep things simple. That's why I like blogs like Stockbee, Alpha Trends and Stockcoach as I have mentioned here. They all keep things simple but achieve excellent results.

Now back to my strategy,

I can screen for a bunch of stocks that are going up, say 20-30% in a quarter, 100-200-300% in a year, making 52 week highs, all time highs. These are mostly small or mid-cap low float stocks. These are the momentum stocks, trending upwards, I would like to buy them in the hope that they will keep going further up, that there are even greater fools than me who are ready to pay more than me! But how do I know tomorrow these stocks will not reverse and nose dive maybe 20-50%. I don't! I have no idea! Maybe I was the greatest fool who bought right at the peak and is left holding the bag.

But what if someone told me a subset of these stocks have historically proven record that they have a higher probability of keeping on going up than the rest, they share an unique characteristics - exploding earnings growth (and also for the ones that are followed by analysts, their ability to show earnings surprises quarter after quarter).

That brings us to the title of this blog - earnings/eps growth + momentum

So, I have reduced the number of candidates that I have to deal with and in the process also ensured that my candidates have much higher probability to keep on going up. Most of the past huge winners had these characteristics - NTRI, TASR, HANS, FRPT, CROX etc

Two issues:
1. Am I choosing such great stocks that they can never reverse and go down 50% as soon as I buy them, on the contrary they can,these are low float, high beta volatile stocks, any bad news, negative earnings surprise will butcher them, downward momentum will be much greater. So, what to do? Use strict stops, be very disciplined in that area of trading. Not all will go up, some will hit the stops - but on the long run those losses are minimal compared to the winners. As William O'Neil says, it is like insurance.
2. Won't I miss some huge winners that are not in my subset of stocks. You bet! Biotech companies getting FDA approvals, stocks moving on hope, anticipation, big news etc. I will miss them, and lose some great opportunities but tell me, who is able to catch all the great opportunities anyway. I might actually trade some, but they will be outside my core trading strategy. (Another way of looking at it is, if it is such a great news, that should lead to earnings momentum in the future, then they will become part of my universe of potential candidates :) )

As I am a great fan of Stockbee, maybe I should use his analogy - my strategy is a cross of his earnings momentum + double trouble strategies. Even if I get in a bit late, (as I am waiting for trend to be fully established) I am happy if I can catch the major earnings momentum related price appreciation.

In another post, I will give more sources and books that have helped me derive my strategy over the years.

Details on when to buy and when to sell in later posts.

Cheers!
Lazy

My Strategy - Part I

2007-09-16T16:37:00.000-07:00

I try to keep things simple! Thats my motto in life as well as in trading/investing.

If you show me two strategies, one requires an MBA and 3 hours/day of my time and returns 30% annually. The other requires 30 mintues/day of my time and is so easy a 15 yr kid can do it, but returns 20% annually, guess which method I will choose. Thats right, the second one - reasons being 1) I do not have an MBA 2) each day I have only 30 minutes for the markets 3) I am very lazy :)

So I will choose the second strategy and then try to squeeze 30% from it :)

Okay, so what would be a good strategy which does not require too much thinking/efforts, does not require too much of my time and if executed effectively gives steller returns! Options are-
1) Value Investing: Would have been the best strategy for me, buy and forget. But needs quite some time and efforts to analyse and also I am very fidgetty kind of person, I need results right away, I cannot wait for years for the street to acknowledge the true value.
2) Techincal or Event based Swing Trading: Neither very difficult nor time consuming, I have tried it in the past with great results but to be really successful you need to monitor the markets quite frequently during trading hours, which I do not have the luxury currently (day job too demanding!).
3) Momentum/Growth: Identify what is going up and join the crowd, easy to identify, only difficulty is to know when to buy and when to sell, that mostly dictates your returns.

So, as might be obvious I went with the third method but added some icing to fit it in my groove!

Details in Part II. Dinner time!

Cheers!
Lazy

Parting Ways...

2007-09-16T16:27:00.000-07:00

I started blogging to share my technical based daily lists, which I post in the Lazy Investor blog.

But I realized, I felt like discussing my earnings growth momentum based trading strategies, its successes and failures and in the process teach and learn.

But including these posts under the technical blog would have been confusing so instead decided to part ways and start a parallel blog!

Cheers!
Lazy.