Ready to Fold some – Portfolio as of 08/13/2012

I guess it’s time to take some profits my friends. Cash = 25%. Portfolio as of 08/03/2012

I still see opportunities such as LNKD@$102, MELI @$84, TDC@75.1, ROST@65, DKS@50.5, HIBB@63  and UTHR@52.1. But I would suggest that purchases of ROST, DKS and HIBB should be avoided till the earnings are out.

Earning’s gain. See CRUS below.


Earning’s Pain. See Priceline below.

If you can take a hit please feel free to buy 50% position in ROST and DKS.

JPM=3% (Entered at $33.9)

DG = 5% (Enetered at $51)

TFM=5% (Entered at $59.5)

WWWW=3% (Entered at $17.5 AND Will add more after $20)

STX = 1% (Sold some at $33.1). Why Did I buy?

EMC = 4% (Expect it to reach $29.5) . Reasons of purchase.

AAPL = 4% (Set more buy @ $569)

WDC = 6% (Expect it to reach $49.5) Why Did I buy?

QCOM=5% (Expect it to reach $69, if it stays over $59 for few more days) Why Did I buy?

APA=3% (Sold some at $88) Reasons

HAL =5% (Expect it to reach $40) Reasons

UA=3% (Set additional buys @ $54.9) Reasons of purchase.

SCSS=2% (Set additional buys at $25.9) Reasons of purchase.

SWKS=4% (Will add more at $25.9) Reasons of purchase.

EQIX=5% Reasons of purchase.

ALLT=4% – Will it miss next quarter’s earnings?

ALXN=6% Reasons

FFIV =3% (In Red) Reasons

F=5% (In Red) – Worst Mistake Ever

TLT=2% (Sold most TLT last week)

Lastly, I got this in the email today morning –

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Portfolio as of 08/03/2012

With almost nothing on the side, we move into a new week. Cash = 15%. Portfolio as of 7/28/2012

I still see opportunities such as LNKD@$102, MELI @$81, TDC@75.1, ROST@65, DKS@52, HIBB@63  and UTHR@52.1.

JPM=3% (Entered at $33.9)

DG = 5% (Enetered at $51)

TFM=5% (Entered at $59.5)

WWWW=3% (Entered at $17.5 AND Will add more after $20)

STX = 3% (Might add more depending on OCZ acquisition and today’s results). Why Did I buy?

EMC = 4% (Expect it to reach $29.5) . Reasons of purchase.

AAPL = 4% (Set more buy @ $569)

WDC = 6% (Expect it to reach $49.5) Why Did I buy?

QCOM=5% (Expect it to reach $69, if it stays over $59 for few more days) Why Did I buy?

APA=6% (Expect it to reach $119) Reasons – VERY DISAPPOINTED WITH THE EARNINGS, THINKING OF CUTTING BACK 50%.

HAL =5% (Expect it to reach $40) Reasons

UA=3% (Set additional buys @ $54.9) Reasons of purchase.

SCSS=2% (Set additional buys at $25.9) Reasons of purchase.

SWKS=4% (Will add more at $25.9) Reasons of purchase.

EQIX=5% Reasons of purchase.

ALLT=4% — Will it miss next quarter’s earnings?

ALXN=6% Reasons

FFIV =3% (In Red) Reasons

F=5% (In Red) — Worst Mistake Ever

TLT=2% (Sold most TLT last week)

Portfolio as of 7/28/2012

I have been expanding my foot print slowly but steadily. Portfolio as of 7/16/2012.
Cash = 30%

STX = 3% (Might add more depending on OCZ acquisition and today’s results). Why Did I buy?

EMC = 4% (Expect it to reach $29.5) . Reasons of purchase.

AAPL = 4% (Set more buy @ $569)

WDC = 6% (Expect it to reach $49.5) Why Did I buy?

QCOM=5% (Expect it to reach $69, if it stays over $59 for few more days) Why Did I buy?

APA=6% (Expect it to reach $119) Reasons

HAL =5% (Expect it to reach $40) Reasons

UA=3% (Set additional buys @ $54.9) Reasons of purchase.

SCSS=2% (Set additional buys at $25.9) Reasons of purchase.

SWKS=4% (Will add more at $25.9) Reasons of purchase.

EQIX=5% Reasons of purchase.

ALLT=4%

ALXN=6% Reasons

FFIV =3% (In Red) Reasons

F=5% (In Red)

TLT=5%

Bernanke does it again!

There is just too much to write. So I will split this post into two – Bernanke and Non-Bernanke (vis-a-vis the earnings).

After being down 82 points in the early going the Dow reversed course and closed 78 points higher on Tuesday. Wow! Then the Nasdaq surged 1.1% as the technology sector led the market today.

The reversal was due to Fed Bernanke’s testimony this morning that the Fed is willing to do what it takes if the economy and labor markets do not improve.  He expects historically low rates to remain in place at least until the end of 2014 and most importantly he convinced the participants that the policymakers at the central bank seem to be preparing for additional moves to spur the economy in the weeks or months ahead.

This low interest rate environment should help stem any serious correction in the market averages.

So, where does yesterday’s trading action leave us now? First, I don’t think that this is a short squeeze anymore. Second, yesterday qualified as a decent follow through day from Friday’s key reversal which is a positive development.

Moreover, the basing action in some stocks and the sector rotation is almost clear now. One last thing to notice is that the junta seems to have realized that the tech and oil & gas stocks have been beaten to death. See below –

In fact we see rise or less “severe” damage to stocks even after the poor guidance.

  1. To exemplify, look at the the turn around in STX after it pre-announced a revenue miss by 0.5 Billion dollars (seriously!) or even QCOM which reported fiscal Q3 revenue and earnings per share a little light of consensus, and a Q4 view below analysts’ estimates.
  2. And of course an earnings beat is amply getting rewarded. e.g. MLNX – up 43% after hours, SCSS – up 17% after hours and SWKS – up 10% after hours.

So step in but be cautious.

Food for thought –

  • FDA approves Vivus’s diet pill (ABC)
  • Over 70% of earnings beating estimates (REU)

 

 

 

Portfolio as of 5/2/2012

STX – 4% (Sold some today)

WDC – 7%

APA – 6% (Super Long Term)

QCOM – 6%  (Super Long Term)

ALLT – 5% ( Added some more after recent earnings)

GNC – 5%

FFIV – 7%  (Super Long Term)

URI – 7%

HAL – 6%  (Super Long Term)

VMW – 7%  ( Long Term)

TXRH – 3% (Initiated Yesterday)

UA – 3% ( Stop set at $93 and will add if it goes above $103)

TLT – 6%

F – 7%  (Super Long Term)

SWI – 3% ( Will add more around $43.9)

PCLN – 3% (Took significant profit off the table recently)  (Long Term)

CASH – 10%

Stocks which make up less than 5% of PORTFOLIO might be sold or added based on criteria, market condition, etc. I am very nimble and hence very low turn around time.

Earnings – STX, URI and ISRG

We are not out of the woods yet, but today’s price action is a step in the right direction.  The Dow posted its best day since March 13th gaining 194 points +1.50% and in the process moved back above its 50 day moving average.  The S&P 500 and NASDAQ also moved above their 50 day lines gaining +1.55% and +1.82% respectively. NASDAQ made its biggest gains since Dec 20th, 2011. Advancing stocks led declining stocks by 3.25 to 1 on both the NYSE and NASDAQ. But the turnover was slightly lower in both the exchange.

This rally was courtesy – demand of Spanish bonds and good earnings. The investors showed good appetite for Spanish bonds, even though the yields on 10 year notes spiked. It’s early in the earnings reporting season, but as of Tuesday morning 74% of the 39 companies that have reported exceeded analysts’ expectations. But the fickleness of news and volatility of the market definitely reminds me of last year. So being defensive is not bad at all. That said, I am taking out the small index short but will leave the BLV and TLT in place.

Lastly, a buy order of AAPL set long time ago at $581 got triggered today. Let’s see where it takes us.

EARNINGS –

Seagate technologies, STX, the one that I have advocated for last month or so came out with flying colors.

The hard drive maker brought in revenue of $4.4 billion, up from $2.7 billion in the prior year’s quarter, and above the average analysts’ forecast of $4.38 billion. Excluding items, Seagate earned $2.64 a share on net income of $1.2 billion, up from 25 cents a share and $113 million in the prior year’s quarter. Analysts surveyed by Thomson Reuters were looking for earnings of $2.11 a share.

Seagate also achieved a gross margin of 37% during the third quarter, comfortably above its forecast of 33%. These margins are strongest in company’s history. Seagate reaffirmed its $5 billion revenue target for its fiscal fourth quarter on Tuesday, as well as its $20 billion goal for calendar year 2012. The hard drive specialist also raised its fourth-quarter gross margin forecast from 33% to 34.5%.

This stock has formed a two month-long base and will breakout with a gap tomorrow. If you are interested then set a buy for $28.7 and double it up if it goes below $28. If we are in a bull we will go up till $30 in next few days or so. Following is an older chart of STX but the picture still remains the same expect for another blockbuster earnings.

United Rentals, URI,  is the one that I bought around $42 when it broke out a month ago but got out when it went below $40 and 50 DMA. The company mainly rents construction and industrial equipment in North America, including backhoes, forklifts and heaters. It also sells some new and used gear. The company has moved away from the construction rentals with the purchase of RSC holdings that gave URI quite a bit of industrial exposure.

United Rentals earned 36 cents a share in first quarter, reversing a 32-cent loss in the same quarter last year, and trouncing the Street’s estimate of 5 cents. Sales climbed 25% to $656 million, easily topping projections of $610 mil. For the prior three-quarters, sales grew 13%, 18% and 25%. The company’s rental revenue increased 21% in the quarter, reflecting year-over-year increases of 6.3% in rental rates and 18.4% in the volume of equipment on rent. 

“Once again, we drove profitable growth faster than the construction recovery,” CEO Michael Kneeland said. “Both core areas of our business — general rentals and specialty operations — realized higher rates year-over-year on a fleet that was about $600 million larger on average.”

Tomorrow URI will open above consolidation. Once again if this is a bull market it will start drifting towards $50. Remember PEAD.

Intuitive Surgical, ISRG, is a medical robot maker and has been one of the strongest leader of this bull.

The medical robotics maker’s earnings rose 35% to $3.50 a share. Revenue climbed 28% to $495 million. Analysts polled by Thomson Reuters expected Intuitive Surgical to earn $3.14 a share on sales of $464.7 million. Intuitive Surgical also forecast 2012 sales will rise about 20% from 2011’s $1.76 billion. It had expected 17% to 19% growth. A key to growth has been winning acceptance for robotic-assisted surgery in more procedures. The company said da Vinci-assisted procedures grew 29% in Q1 from a year earlier.

Gross margin edged up to 71.9% from 71.8%. Revenue from instruments and accessories climbed 32%, while services revenue jumped 27%. Systems revenue grew 24%, as da Vinci systems sold rose to 140 units from 120 units a year earlier. 

With a new product in late 2011, Intuitive Surgical aims to expand robotics-assisted surgery to gallbladder operations and cardiac procedures, such as heart valve repairs.

I am a big fan of this company and owned it’s share for short period prior to last quarter’s revenue. I will add some if the price drops to $555.

IBM and INTC

There were other earnings such as IBM’s better than expected earnings but a slight miss on revenue side. Chipmaker Intel  posted better-than-expected first-quarter results, easing concerns that sluggish PC sales might weigh on its performance. The Santa Clara, Calif.-based company also forecast revenue for the current quarter above analyst expectations. But the company said its gross profit margin would fall this quarter. Intel earned 53 cents a share in the first quarter, down 5% from the year-earlier quarter but 3 cents better than analysts were expecting. Sales rose 0.5% to $12.91 billion, vs. views of $12.84 billion.

Tomorrow’s earnings –

Date After Close Before Open
18-Apr KMP
VMW
MLNX
FFIV
SCSS
PLCM
CLB PII
QCOM
CBST HAL
YUM
EBAY
TSCO

More on the day Ahead

Portfolio As of 4/12/2012

Cash 40%.

Portfolio –

AAPL – 3%

PCLN- 4%

STX – 6%

WDC – 6%

HLF – 3%

SCSS – 4%

SXCI – 4%

QCOM – 6%

BLV – 3%

TLT – 3%

RWM – 3%

FFIV – 3%

F – 6%

APA – 6%

Sold last week –

CLR, WLL, ALLT, GNC, LNKD (I know!)

Reasons for the sale –

  1. Market broke 2 critical supports last week – 4 month old trendline and 50 DMA. Let’s wait till the market moves above 50 MA and makes new high, convincingly  (no double tops please:().
  2. The earnings season is underway. It’s better to reduce the high fliers by 50% to avoid losing profits.
  3. Quite a few breakouts in last couple of weeks have stalled, failed and occurred at below average volume – such as SWI, WDC, LVS, etc.
  4. Old adage – Sell in summer and go somewhere ( dont ask me where!.)

Lastly I added small positions of defensive stocks as mentioned earlier – BLV, TLT and RWM.

Week ahead –

  1. Stay defensive, preserve capital below the prior trading range. Above the range, expect a move back to and above the prior highs.
  2. Do not trade intraday, but rather focus on setups and keep an eye on earnings
  3. U.S. week ahead (Reuters)
  4. Next week’s trading radar (Minyanville)

Good Reads –