Wednesday, November 30, 2011

EBIX Performs as Predicted

In less than one month, EBIX has moved from 15.53 (see this blog 11/2/11) to over 21.00, that's a 35% return in in my book.

I am tempted to hold on to the stock provided it closes any day this week above 20.95, thus getting near a seven month high. Any significant rise in volume combined with an increase in price could trigger further buying to cover massive short positions.

We'll wait and see.

Sunday, November 06, 2011

KRO , a Stock to be Considered

Consistent insider buying over the past three months, coupled with an upside-down head-and-shoulders chart pattern, Kronos Worldwide, Inc. (KRO) has caught my eye.

Kronos Worldwide, Inc. engages in the production and marketing of titanium dioxide pigments primarily in North America and Europe.

Good trading volume, low P/E and adequate yield make this stock a fair prospect. It may be a bit early in the cycle but I am willing to inch into this opportunity, believing that a short term support level exists at 19.50 (closing on Friday at 22.67).

More Comments on EBIX

The article in this morning's Seeking Alpha seems to go along with my earlier post.

2 Tech Stocks To Buy On Any Pullback


Wednesday, November 02, 2011

EBIX Could Make a Turnaround

Having lost about 50% of it's value since March 24 '11, EBIX Inc.'s (EBIX) stock has found a base and could be poised for a rebound.

Ebix, Inc. provides on-demand software and e-commerce solutions to the insurance industry.

Here are some of the positive aspects:

1. 3 month support base at about 15.
2. Crossed and held above the 50 dma for 7 trading days; note that
yesterday it broke the pattern and, if not reversed, could retest
the lows.
3. Price support at about 15, limiting the downside exposure.
4. Adequate average daily volume of about 527 thousand shares.
5. Earnings have increased annually for at least 8 years, with a slight
decrease estimated for '12.
6. Forward P/E ratio is estimated around the mid 9's.
7. The stock is heavily shorted, so the bearish pressure could keep it
down for a while, or propel it on a "short squeeze".

Closing yesterday at 15.53, EBIX is a stock to be considered.

Sunday, October 09, 2011

Here We Go Again With AVT

What can I tell you? It has been a love-hate relationship with Avnet Inc (AVT).

Looking back at the notes of July 18, 2011, we saw continuing deterioration of AVT's price (then at 28.91). Soon after that date, on August 9 to be exact, AVT saw a new 52 week low at 23.69.

With good support at 25.00, it crossed above the 50 day moving average and had solid gains in the last four sessions despite an erratic and uncertain market behavior.

I am tempted to consider AVT a buy on a pullback between 26.25 and 27.50.

Thursday, September 22, 2011

Some Back Up Information on the State of the Markets

This article was published earlier today at, including observations by Jon Najarian whom I consider a very qualified commentator and investor. Something worth reading along the lines with my previous blog.

Nice to know that a knowledgeable advisor shares similar opinions.

Jon Najarian: Buy the Fear, Technical Signs Suggest Lows Hold

One Final Blowout

At this time, I'd like to see the S&P500 hold above the 1120 level and a final blowout like the one we are experiencing today combined with heavy volume. This action could be viewed as a healthy, and painful, purge of the markets.
We shall see if this holds true in the coming weeks.

Tuesday, September 06, 2011

The Ongoing Bear Market May Find Support Soon

Alright, we are piling up paper losses and it seems like there is no end to this downward spiral.
Looking at the S&P500 chart, i see a hint of some near term support. Should the S&P500 index close at or above 1120 within the next two weeks, I would expect this point to be the bottom and we could see a turn around of the markets.
Look for stocks in the heavy construction sector to be the leaders in this cycle. Some of these candidates are: Granite Construction Inc. (GVA 18.20), Terex Corp. (TEX 14.32), Foster Wheeler (FWLT 21.40) and KBR Inc. (KBR 27.26) to name a few.
Extreme caution should be taken before going "all in" at this time, we must be very selective in our choices.

Tuesday, August 23, 2011

The Future of Shopping (by CSCO)

CSCO seems to have a clue. Thank you SIB for sending me this info.

Click on the link below to view:

The Future of Shopping.

Monday, August 08, 2011

The Bottom is Falling, the Bottom is Falling!

It appears that this is the one-two punch that we hoped would not occur.

With no significant support level in sight, I am not sure how long this free fall will continue. One thing is certain, the markets are oversold and there may not be too many sellers left holding securities. Simply put, an oversold market could be recognized when 80% or more of the stocks have dramatically fallen below their 200 day moving average.

Thursday's rout left us numb, Friday's see-saw behavior eliminated those who placed "stop loss" orders and today's trounce could have weeded-out many of the willing and unwilling sellers remaining. Meanwhile, a serious blow has been inflicted to our markets.

Questions remain:
Are we near the next bottom?
Have we seen the worst of it?

After the dust settles, the few left standing will get to fight another day.

Thursday, August 04, 2011

Put Up Your DUK 's

While we are getting hammered in the markets, there is no evidence of a let up. Times like these are when traders start to look for signs of stock market capitulation as a signal marking the unpredictable bottom. Capitulation is associated with routs as investors “give up” on stocks entirely and move into less risky investments. What we would see is panic selling on big volumes while the crowd runs for the exits. Although it is usually brief and somewhat terrifying, true capitulation often means that the sell off has finally run its course, and prices begin to feel for the bottom.

To stick our necks out and go long in this environment requires great intestinal fortitude. With that mindset, I feel that a safer route at this time is to load up on Duke Energy Corp. (DUK).

Over the past twenty months, we contemplated DUK as a good alternative to the miserable returns that banks were offering through their CD's and savings accounts. DUK was mentioned in this blog's watch list on 12/1/09 when it was trading at 16.68; then on 6/30/10 we got serious and saw a buying opportunity at 16.10.

The yield that we receive from DUK at the present time is 5.40%, ex-dividend coming up in less than one week (8/10/11), the stock is trading at 18.25 and holding steady (down .20) in an uncertain climate.

An Article With Some Merit

Just released, an article by Cody Willard:

This young stock analyst has gotten it right several times in the past. I tend to agree with his opinion on the timing of the market. Only time will tell.

Friday, July 29, 2011

Political Tug of War

While our elected officials in Washington wage a "Political Tug of War" we see our savings and investments deteriorate. The markets react to the fateful statements and predictions we hear from the politicians and in the news.

This is a time when a vast majority of investors and not so wise advisers seek safety outside of the stock market. I say go against the grain.

If we can weather these dismal times and events, we could see an improvement in the markets. Sure, this turn around will take several months and perhaps one to two years to develop but I believe that it is too late to try to save what is left of our investments. Stay put, no time to panic.

My guess is that, at the eleventh hour, there will be a compromise in Capital Hill on the debt. Let's just hope that no long lasting and permanent damage was inflicted to our economy.

Thursday, July 28, 2011

Better Late Than Never, Goldman Sachs Likes CSCO

Today Goldman Sachs raised its 12-month price target on Cisco Systems by 34% to $21. On these news, CSCO jumped almost 3% this morning to 16.15.

Welcome news.

Keeping Track

Past performances and current holdings mentioned in this blog can be viewed and tracked at the following link:

Monday, July 18, 2011

Abandon the AVT Ship!

We have held our expectations a bit high for an early choice, Avnet Inc. (AVT).

Caught our eye on 6/5/08 at 30.33.
Resurfaced on our watch list on 10/17/10 for a chance to lower the average cost and buy it at 27.63. Overall, the average cost was 28.98.

Stock action for AVT has been less than desirable. I say, let's drop it and call it even.

Technically, the stock price has deteriorated from the highs on 5/12/11 of 38.00; at this point, trading at 28.91 I see no support level until it reaches 22.50, a possible scenario.

Wednesday, July 13, 2011

Does GM have Enough Power and Momentum to Climb the Hill?

After many years of turmoil in the auto industry, emerging from bankruptcy and reissuing new stock in mid November '10; General Motors (GM) could be a buy candidate for the longer term.

These are some of the interesting signs:

1. Early developing chart with a possible upside-down head and shoulders pattern.
2. Recent break up above the 50 dma.
3. Price support at about 28.60, limiting the downside exposure.
4. Excellent average daily volume of about 14.3 million shares.
5. Estimated earnings continuing to climb.
6. Forward P/E ratio is estimated around the low 6's.
7. Number of funds owning GM has increased over the last 3 quarters.
8. Price well under the recent IPO (33.00).
9. A public push to "buy American".

Trading at this time at 30.84, GM is worth keeping an eye on.

Thursday, June 16, 2011

We Have Hit the Jackpot with SUG

During the last three years SUG was mentioned on many occasions in this blog as a buy candidate.
Commented on 5/23/08 at 26.42.
Liked it even better on 1/29/09 to lower the average cost and buy it at 13.30.
Added to choice stocks on 7/25/09 at 19.80.
Featured on the watch list on 8/19/09 at 19.04.
Again included in the watch list on 8/22/09 at 20.85.

We have had several opportunities to load up on SUG. For those who took advantage of these observations, kudos to you!

Today, Energy Transfer Equity announced that it is buying Southern Union Co. (SUG) for 33.00 per share... JACKPOT!!!

Trading at this time for 33.15 on the news, I am glad to cash in on a long awaited result.
This transaction represents a 25.5% return from the original comment price, not including an average yield of about 2.5%.
Had those of you who followed this security bought into weakness, you may have realized a total profit of nearly 75% over the past three years while the S&P 500 experienced an 8% loss, nothing to sneeze at.

Sunday, May 15, 2011

PWER Keeps on Drawing Attention

This morning we received another write-up about PWER, this time from

Professional stock researchers and investors are taking positions in this stock.

Friday, May 13, 2011

More Positive Comments on PWER

Today's article on "":

Two weeks after the comment on this blog (and a 7.19% gain), another article confirms our views.

We'll see in the coming weeks if we still stand firm on our convictions.

Monday, May 02, 2011

More Comments About PWER

This morning I came across this article from, it talks about the posibility of a short squeeze.
We could be on to something with PWER.

We'll see after the earnings are released.

Friday, April 29, 2011

It is Not Lights Out for PWER

PWER has been trading below its 50 and 200 day moving averages since 2/4/11, thus missing the ride up that the market has enjoyed. During this period, the technology sector has been lagging and oil prices have skyrocketed.
Again, eyes are turning to alternative energy. A cycle we have witnessed in the past.

Power-One, Inc. (PWER) designs, manufactures, and markets power conversion and power management solutions for the renewable energy, communications infrastructure, and other high technology markets.

PWER's chart pattern begins to look attractive and if, in the next week or so, it breaks and closes above the 50 dma at 8.27 (8.21 at the close of 4/28/11), it could take us to the 10.50 level within 3 months.

Now, this prospect is somewhat risky since there are sizeable short positions in the stock. As a contrarian investor, I am expecting a two stage surge in the stock price and a "short squeeze".

With a volume of 4.7 million shares in daily trading , a chart pattern at a crossroads and the connection to the alternative energy sector, I would consider PWER a candidate to place some bets with risk capital.

Wednesday, March 30, 2011

CEPH Receives a Hostile Bid

Had my eye on this one (CEPH) since November '09. Kept it in my watch list into February '10. Pulled the trigger on November 24, '10 at 64.10.
Today, CEPH received a hostile bid from Valeant for 73.00 per share. With a trading price of about 75.20, it is a good time to exit.

Sure, hostile takeovers may attract other suitors and higher bids... but then, the deal could fall apart.

Sudden spikes concern me and, with gains of 17.30% in four months, I would not hesitate to cash in.

Tuesday, March 22, 2011

An Update on CSCO

Today's article from reinforces a view published in this blog about CSCO on 2/10/11:

Closing at 17.39 yesterday, this may be a good time to own or double up on this giant and consider it as a long term investment.

Tuesday, March 15, 2011

Do Not Sell Into a Panic!

History has proven that panic selling is not a wise move.
The markets are off about 2.5% this morning, for those who have the intestinal fortitude, this may be the time go long in the market.
Read this article just published:

Stay calm and take advantage of the investment opportunities out there.

Monday, March 07, 2011

Stocks to Watch - March 7, '11

Watch list for March 7, 2011


BX is into asset management; I still like STO.

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

Results for "Stocks to Watch - Oct 17, '10"

It has been a while, four and one half months to be exact, since I wrote about a stock watch list.
Unpredictable turn of events led to choppy markets and a more difficult environment for a stock picker.

For the period of 10/17/10 thru 3/4/11, this was our watch list and outcome:

Stock Symbol-------10/17/10------------------3/4/11

AVT------------------27.63-------------------34.18 (up 23.71%)
STO------------------22.08-------------------27.67 (up 25.32%)
WATG----------------10.07--------------------6.85 (down 31.98%)

The outcome was not so good, WATG has been on a slide and was the only pick that kept the average returns down, bad choice.
Our average gain for this period was 5.68% while the S&P 500 rose about 12.32% in the same stretch of time.

We'll sharpen up our pencils and try to do better.

Thursday, February 10, 2011

Ooooops! CSCO Takes a Dive

For the third time in six months, Cisco Systems, Inc. (CSCO) has gapped down in a significant way coupled with huge trading volumes.

Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry worldwide.

Again, some Wall Street analysts downgraded the stock, citing concerns about higher competition and lower margins.

My belief is that the selling is overdone and that CSCO is not going away. Trading this morning at 19.17, closing in on a short-term support at 19.00; this could be an oportunity to get in at a good level.

Obviously, CSCO has shown to be very volatile and out of favor; with a contrarian view I am inclined to call this one a buy candidate.

Thursday, February 03, 2011

The "Dead Cat Bounce" Theory

Over the years, traders have been searching for consistent behavior in stock prices.
One of the theories is the "Dead Cat Bounce" syndrome.

My take on the "DCB" goes like this: If a stock goes down drastically (10-20%), over a short period of time (1-3 days), with extremely heavy volume (300%+ the average daily volume); chances are that within the mext 6 months or so, the stock price may bounce back to retrace to a level halfway up the gap... That did not sound right. Did it?

For example: a stock closes on a given day at 40.00 with an average daily volume of 500 thousand shares/day. Next trading day, it goes down to 34.00 (off 6.00 or -15%) with a volume of 2 million shares on bad news (such as disappointing earnings); it is possible that, in the mext 3-6 months, the price could fill the gap to its halfway point (approx. 37.00).

Now, this is only a theory and a very risky way to invest. The risk to reward ratio are somewhat commensurate.

The bad news that drive the stock price down cannot be so negative that would have a long term effect on the stock valuation. In fact, it could become a bargain if there is an over-reaction by the sellers and the news are viewed as short term.

Having followed this theory over a period of several years, I have gone one step further and "honed out" this approach. The parameters are: two gaps down (10% or more each) within a period of four months, on heavy volume (3x the average daily volume), then consider buying the stock within one week after the second drop. The company should show consistent earnings and trade a minimum of 300 thousand shares on the average.

Two examples are: CSCO and SMCI (take a look at the one year chart)

It is good to remember that most of the capital at risk could very well disappear on additional bad news or a market downturn.

Sunday, January 09, 2011

TMO , Still a Favorite

Even though TMO has gained about 9.4% in just seven weeks and nearing its 52 week high, it remains one of my favorite investments.

Highlighted in this blog on November 22 '10, Thermo Fisher Scientific Inc. Co. (TMO) has performed in a very consistent manner. In my opinion, this one has some steam left and it can conceivably reach the low 60's in the next three months.

Last traded at 56.37, TMO should be considered an outperform/buy candidate.