STO = Something to Own

STO came up in my search for undervalued stock with upside potential in mid October. Over the last eighteen months the stock price has found support at the 18.50 level. During the past two trading sessions it has crossed above both the 50 dma and the 200 dma.

Statoil ASA (STO) engages in the exploration, production, transportation, refining, and marketing of petroleum and petroleum-derived products. The company involves in the exploration, development, and production of crude oil and natural gas in Norway and internationally, as well as extraction of natural gas liquids. It also transports and markets natural gas and natural gas products; and operates 2,000 full-service stations in Scandinavia, Poland, the Baltic States, and Russia.

Positive aspects are:

1. Early developing chart pattern. Recent break up above the 50 dma and 200 dma.
2. Price support at 18.50, limiting the downside exposure.
3. Good average daily volume of about 1.7 million shares.
4. Estimated earnings are on the rise.
5. Forward P/E ratio is at about 9.
6. Dividend is at 3.6%.
7. Number of funds owning STO has increased over the last 4 quarters.

With yesterday's closing price at 21.88, STO may be worth owning.
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Grab the Dividend from ARCC

In late August '08 ARCC (then at 12.36) looked like a good prospect for profit. Since that time and until March '09, we experienced an uncontrollable downfall. The banking debacle and the dismal stock market behavior eroded the original investment, a good dividend and the chances for any possible gains.

We stuck to our guns, weathered the storm and now at 16.64, we have gained an annualized return of about 23.9% (including dividends).

Ares Capital Corporation (ARCC) is a private equity firm specializing in acquisition, recapitalization, restructurings, rescue financing, and leveraged buyout transactions of middle market companies.

Pluses for ARCC are:

•Acceptable chart pattern.
•Consistent uptrend and possible support at 16.50, the mid term rising bottom's line.
•A desirable average daily volume of over 1.4 million shares.
•A very nice dividend yield of 8.5%, ex-dividend date is only 13 days away.
•An 11.17 forward P/E ratio.

I find ARCC a good place to park some funds.

My thanks to Paul V. for bringing this security up to my attention in early April '10. Paul you were right on target.
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BCE is Still Sending Good Signals

I wrote about BCE about one year ago (see 11/17/09 blog). Since then, we have seen a gain of 31.6% (not including a 5.7% dividend), a very respectable return. On three ocasions BCE was highlighted in this blog's "stocks to Watch" list.

An updated view of BCE's attractive signs are:

•Fine chart pattern.
•Consistent uptrend and signifficant support at 32, the long term rising bottom's line.
•A good average daily volume of over 705,000 shares.
•A very nice dividend yield of 5.2%, ex-dividend date is only 14 days away.
•Forward P/E ratio is at 11.48.

At this point, I am inclined to increase a long position in BCE (trading this morning at 33.83).
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TMO is on a Steady Pace

On a day when many securities retreated, TMO went against the grain and kept above it's rising bottom's line.

Thermo Fisher Scientific Inc Co (TMO) provides analytical instruments, equipment, reagents and consumables, software, and services for research, manufacture, analysis, discovery, and diagnostics. In layman's terms, a company in the healthcare industry which provides medical instruments and supplies.

Barring any unforeseen major turn in the market, TMO (now trading at 51.53) is poised to reach the 55 level and beyond within the next six weeks.

Positive aspects of TMO:

1. Chart pattern shows a tendency for the stock price to stay above the rising bottom's line.
2. Consistent uptrend and rebound from the lows of August 31 '10.
3. Good average daily volume of about 2.9 million shares.
4. Earnings per share have increased during the past several years.
5. Forward P/E ratio is at about 12.88.
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HRS Rises as a Top Pick

HRS has risen to near the top of my list in a few weeks. With higher lows over the past four and one half months, crossing above both the 50 dma and the 200 dma and maintaining a rising bottoms line, this choice is worth a longer look.

Harris Corporation (HRS), together with its subsidiaries, operates as a communications and information technology company that serves government and commercial markets worldwide.

Some of the good points:

1. Early developing chart pattern. Recent break up above the 50 dma and 200 dma.
2. Consistent uptrend and rebound from the lows of July 1 '10.
3. Good average daily volume of about 950,000 shares.
4. Earnings per share have increased during the last eight years.
5. Forward P/E ratio is at about 10.
6. Dividend increased to 2.2%.


With Friday's closing price at 46.18, HRS could be poised for a smooth ride.
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WATG Makes the Cut

WATG has been in my short list from late April. Since then, in early May, the stock value took a 40% tumble (from about 12 to 7). Finally, in the past five months, it found a base at around 8. Meanwhile, it maintained a range above the 200 dma and on October 11, it rose above the 50 dma in a definite manner. In my view, these are positive technical signals.

Wonder Auto Technology, Inc.(WATG), in the Chinese auto parts sector, through its subsidiaries, engages in the design, development, manufacture, and marketing of electrical parts, suspension products, and engine components.

Heavy short positions may be forced to cover if the uptrend continues, thus catapulting the stock price.

Positives are:

•Good chart pattern. Recent break up above the 50 dma.
•Consistent uptrend and rebound from the lows of late August '10.
•Good average daily volume of about 520,000 shares.
•Forward P/E ratio is at about 11.


Closing yesterday at 10.40, WATG appears to be an attractive prospect.
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Primed for Picking: CEPH

Cephalon's Inc. (CEPH) stock price has shown a consistent improvement over the past six weeks, in addition, it has formed a solid base spanning three months at the 55 level.

Cephalon, Inc., is a biopharmaceutical company, which engages in the discovery, development, and commercialization of products for central nervous system, inflammatory disease, pain, and oncology therapeutic areas.

Positives are:

•Good chart pattern.
•Consistent uptrend and rebound from the lows of late August '10.
•Excellent average daily volume of about 1.2 million shares.
•Increased fund interest since June '10.
•Forward P/E ratio is at about 9.

Trading at 64.10, CEPH seems to be a good prospect.
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Stocks to Watch - October 17, 2010

Watch list for October 17, 2010

AVT-----------27.63
STO-----------22.08
WATG--------10.07

AVT distributes electronics, STO is a Norwegian oil and gas company, WATG is a Chinese auto parts manufacturer.

We'll be checking the performance of these picks in a few weeks.
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Results for "Stocks to Watch - Sept 13, '10"

For the period of 9/13/10 thru 10/15/10, this was our watch list and outcome:


Stock Symbol-------9/13/10----------------10/15/10

BCE------------------31.85-------------------33.57 (up 5.40%)
FMCN----------------20.36-------------------24.00 (up 17.88%)
NVS------------------54.42-------------------59.02 (up 8.45%)

The outcome was very good, our average gain for this period was 10.58% while the S&P 500 gained about 4.84% during the same interval of time.
We are back on track.
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Being Patient With Covidien

We noticed Covidien (COV) at 36.05 on June 13, 2009. Since then, it had a good run and hovered at the 52.00 level between January 20 and April 20 of this year. Not bad, if you chose to sell; but we are not going to talk about "what could have been". If you are still holding on to the stock, all you have to show is about 1.9% in dividends plus a 5.1% gain in stock value, that is still alright in this day and age.

Yesterday COV's stock price touched the 50 day moving average at 38.27 and closing just below it at 37.90, I expect the move in the next two days to be up and break above that line, if so, we can see a sharp increase in price in the following week or two. Good time to buy again or increase our long position in Covidien.
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Stocks to Watch - September 13, 2010

Watch list for September 13, 2010

BCE--------31.85
FMCN------20.36
NVS--------54.42

Rather than issuing a new list at the begining of each month, I think it is better to let market conditions dictate the timing in which we pick the stocks which show a hint of a positive outlook.

Still like NVS, a foreign drug company; BCE, a Canadian telecom and FMCN, a Chinese advertising firm.

We'll be checking the performance of these picks in a few weeks.
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Bouncing Back

It is still early but we may have been right on our call of August 12, 2010. The S&P500 index held its ground at around the 1050 level (closed at 1047.22 on 8/26/10) and since then, in nearly four weeks, it has gained about 6% from those lows.

Technically, I could see a continuation of the uptrend for at least the next quarter. This may be a good time to pick up some bargains.
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...and the beat goes on

Yesterday, we experienced a tremendous beating of most of the markets and individual stocks. This morning, we expect that the downtrend to continue in a significant manner, at least for the early part of the trading day.

If the S&P 500 Index closes today below the 50 day moving average at 1087, then the downward momentum will continue with the next support level at 1023, that would represent an additional 6% drop in the index.

Should the index retreat reach near the 1050 level and bounce back in the next two weeks, then we can view the chart as having formed a reverse "head and shoulders pattern". In that case, it may be a good time to go bottom fishing for some bargains. These are the times when we position our funds for future profits.
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Results for "Stocks to Watch - July '10"

A bit late with the results but here they go:

For the part of the month of July, this was our watch list and outcome:


Stock Symbol-------7/11/10---------------7/31/10

NLY-----------------18.15-----------------17.40 (down 4.31%)
NVS-----------------49.55-----------------48.74 (down 1.66%)

The outcome was not good, our average loss for this period was 2.99% while the S&P 500 gained about 2.19% from 7/11/10 thru 7/31/10.
Back to the drawing board.
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Stocks to Watch - July '10

Watch list for July '10

NLY--------18.15
NVS--------49.55

We issued this list a bit late this month, still like NLY and included a foreign drug company. We'll be checking the performance of these picks by the end of July.
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Results for "Stocks to Watch - June '10"

For the month of June, this was our watch list and outcome:


Stock Symbol-------6/1/10---------------6/30/10

NLY-----------------16.96-----------------17.15 (up 1.12%)
QSFT----------------19.35----------------18.04 (down 9.32%)

The outcome was dismal, our average loss for this month was 4.10% while the S&P 500 declined about 5.39% in June, thus closing a painful Q2.
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Searching for a Safe Haven in DUK

Our stock holdings have been taking a serious beating as of late. We wonder when the markets will find a consolidation base and reverse the present course. We have experienced the worst Q2 in a while.

For those of us that are trying to weather the storm, and have kept some cash on the sidelines, this may be a good time to look at a relatively safer investment in Duke Energy Corp. (DUK).

DUK is selling this morning at 16.10, dividend yield is at 6.0%, heavy average daily volume of near 10 million shares.

This utility company could be a good place to park funds and get a return that is more attractive than cd's and savings accounts. I don't expect DUK to appreciate greatly since the stock price fluctuations are limited and slow.
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Stocks to Watch - June '10

Watch list for June '10

NLY--------16.96
QSFT------19.35

This month we have a financial and a technology company. We'll be checking the performance of these picks by the end of June.
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Results for "Stocks to Watch - May '10"

For the month of May, this was our watch list and outcome:


Stock Symbol-------5/1/10---------------5/31/10

AYR-----------------12.01-----------------9.85 (down 17.99%)
NOC-----------------67.83----------------60.49 (down 10.82%)

Results were not memorable, our average loss for this month was 14.40% compared to the S&P 500 which declined about 9.18% in May, not a good show for those of us who remained long in the market.
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Stocks to Watch - May '10

Watch list for May '10

AYR-------12.01
NOC-------67.83

This month we have an aircraft leasing and an aerospace/defense company. We'll be checking the performance of these picks by the end of May.
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Results for "Stocks to Watch - April '10"

For the month of April, this was our watch list and outcome:


Stock Symbol-------4/1/10---------------4/30/10

AAN----------------22.53----------------22.57 (up .16%)
AIZ-----------------34.89----------------36.43 (up 4.41%)
RCII----------------23.87----------------25.82 (up 8.17%)


Our average gain for this month was 4.25% compared to the S&P 500 which saw a 1.48% increase in April.
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BINGO! AKAM Gives Us Something to Smile About

On good earnings report, Akamai Technologies, Inc. (AKAM) has gained about 15% in today's early trades.
Back on 2/25/09 I liked AKAM at 18.23, today we see a huge pop and trading at 38.25 (a 110% return in 14 months).
My rule is: too high + too fast = cash-in.
I say take profits and look for other oportunities.
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USU on the Upswing

Increasing my long position on USU.
Chart and future prospects look promising, trading this morning at 6.43.
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Stocks to Watch - April '10

Watch list for April '10

AAN------22.53 (after 3/2 split on 4/16/10)
AIZ-------34.89
RCII------23.87

This month we have a retailer, an insurance company and a rental company. We'll be checking the performance of these picks by the end of April.
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Results for "Stocks to Watch - March '10"

For the month of March, this was our watch list and outcome:


Stock Symbol-------3/1/10---------------3/31/10

DECK----------------120.20--------------138.00 (up 14.81%)
ENDP----------------22.75----------------23.69 (up 4.13%)
RTN-----------------56.24----------------57.12 (up 1.56%)


Our average gain for this month was 6.83% compared to the S&P 500 which saw a 5.88% increase in March.
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Stocks to Watch - March '10

Watch list for March '10

DECK----120.20
ENDP-----22.75
RTN------56.24

We have chosen a mix of sectors for this month. We'll be checking the performance of these picks by the end of March.
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Results for "Stocks to Watch - February '10"

For the month of February, we chose to follow these stocks :


Stock Symbol-------2/2/10---------------2/26/10

AMGN----------------58.72----------------56.61 (down 3.59%)
CEPH----------------64.80----------------68.67 (up 5.97%)
GENZ----------------54.19----------------57.20 (up 5.55%)


Our average gain for this month was 2.64% compared to the S&P 500 which saw a 2.85% increase in February.
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Stocks to Watch - February '10

Watch list for February '10

AMGN----58.72
CEPH----64.80
GENZ----54.19

It appears that biotech may be the flavor of the month. We'll check the performance of these companies in about four weeks.
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Results for "Stocks to Watch - January '10"

For the month of January, we chose to follow these stocks :


Stock Symbol-------1/1/10---------------1/31/10

BCE-----------------27.61----------------25.75 (down 7.22%)
CEPH----------------62.42----------------63.84 (up 2.27%)
NLY-----------------17.35----------------17.38 (up .17%)


The average loss for this month was 1.59% compared to the S&P 500 which deteriorated 3.84% for January.
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Stocks to Watch - January '10

Watch list for January '10

BCE-----27.61
CEPH---62.42
NLY-----17.35

We'll check the performance of these companies at the end of the month.
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Results for "Stocks to Watch - December '09"

For the month of December, we chose to follow these stocks :


Stock Symbol------12/1/09--------------12/31/09

BCE-----------------26.50----------------27.61 (up 4.19%)
DUK-----------------16.68----------------17.21 (up 3.18%)
RTN-----------------51.53----------------51.52 (down .02%)


The average return for this month was 2.45% compared to the S&P 500 which gained 1.78% for December. Happy with the results.
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