Flat Week As Consolidation Continues

The broad market ended the week flat in a quiet week of economic and business news. The broad market has been consolidating over the past few weeks, which we view as a positive sign. The stock market has simply had an astounding run since March of this year. Frankly, the market could use a breather, otherwise risk of a major pullback or meltdown will grow. How long will this consolidation period last? Another month or most of 2010? We recently reviewed the 10 year chart on the S&P Index and found the price action eerily similar between the last two market cycles. For example, in 2003 like 2009, stock market performance was exceptional. The year 2003 marked the beginning of the next bull market, just like how we believe 2009 will come to be viewed. In 2004, the stock market was mostly flat as the market consolidated for most of the year. We suspect 2010 will be very similar to 2004. Next year may bring positive gains, but we think those returns will be far lower over all than what we saw in 2009. That is not a bad thing, remember it sure beats a down market. The economy, while showing small signs of life, still has a long way to go before strong growth begins. We think this market consolidation period will likely extend well into 2010 given the weak economy and how far the stock market recovery has already moved. However, we know our stock selection strategy can do very well even when the broad market shows slower growth. Our strategy is always focused on those companies that show the strongest momentum, and there will always be a few stocks moving well even in a slower market. We look at consolidation periods as an excellent time to invest selectively in just those stocks.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept VSE Corp (VSEC, Business Services), Gulf Resources (GFRE, Chemical Manufacturing) and HealthSpring (HS, Accident & Health) on our watch list. But pickings were pretty slim from our stock screen this week as the market has been consolidating recently. From our screen, we identified two more stocks that we find interesting. World Accep Corp (WRLD, Financial Services) has had a strong run since late October. The fundamentals look very good as this stock got hammered in the financial meltdown and is just now starting to recover. We like the upside potential on World as there is plenty of room to rise before the stock comes close to pre-meltdown highs. The downside risk is that the financial industry may come under pricing pressure over the near term from stock dilutions as more financial companies follow Bank of America's lead to raise capital for TARP repayment. Our other new addition is Nash Finch Company (NAFC, Grocery), a food distributor for retail grocery and military commissaries. The stock price has been consolidating over the past few weeks and is up about 20% over the past three months. The big story was the latest quarterly earnings that were released on November 12 that exceeded expectations by 76%, a big surprise. We think the company is positioned for a repeat performance in the next quarter.

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com

Employment Figures Lift Market

The broad market hit new highs as the S&P climbed 1.3% higher for the week. It was a positive week which got a jump start when fears over Dubai’s credit situation subsided. The Dubai crisis started last week and frankly we felt got way overblown, a stance that the market softened this week with more encouraging news from Dubai. But the bigger player last week was the employment report which came in better than expected, with fewer jobs being lost than expected. Furthermore, prior month employment figures were revised to show smaller drops as well. The end result was an unemployment rate that fell from 10.2% to 10%. Now before we get out the party favors, it is important to recognize that the economy is still losing more jobs than are being created. But the good news is that the jobs reports lends additional support to the position that the economy is not getting worse. The other big news was Bank of America and their plan to fully repay the government TARP money by year end. B of A plans to sell stock to raise the necessary capital. We would expect more banks to follow suit and that is a sign that capital and liquidity positions have been improving at financial institutions. We watched Michael Milken of the Milken foundation speak recently and he quoted figures suggesting that more capital was raised in recent periods than in our entire corporate history. We translate that to mean that corporations have significantly improved their capital and liquidity positions, and that gives us more confidence that corporate America will weather this storm just fine. We still expect the economy recovery to be anemic for some time, as consumers, investors, and companies will be slow to use their pent up cash. But once the recovery gains momentum, it could be a strong one given all of this cash on the sidelines! All in all, we still consider current stock market levels reasonable and plan to stay invested.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept VSE Corp (VSEC, Business Services) and have added two new stocks Gulf Resources (GFRE, Chemical Manufacturing) and HealthSpring (HS, Accident & Health). Last week we purchased Telenor (TELNY) and Bucyrus (BUCY) so we have removed those two stock from our watch list. HealthSpring is a managed care organization with a primary focus on Medicare. The stock has been on a tear recently and the fundamentals remain very strong. We actually are looking at buying a call option on HealthSpring if we can get in at an attractive premium. Gulf Resources is also an interesting play. The company manufactures and sells chemical products used in oil exploration, wastewater processing, and papermaking processes. The company sells their products in China, which is the country with the strongest growth prospects. On a percentage basis, the stock price has risen astronomically, nearly 1000% over the past year. However, that was from a very low stock price which sometimes can distort percentage gains. The stock still trades around $10 and we still think there is room to run. However, stock price volatility has risen sharply over the past three months, so we know buying this stock could be a very bumpy ride over the near term.

Retirement Portfolio up 58% YTD!

Market Hits 1100!

Market Beating Foresight: Fresh New Highs Before Ending Flat

The broad market hit a fresh new high early before ending the week flat. The S&P broke through the 1100 level but finished the week slightly off those highs. Not a bad showing in light of a slow week in terms of market moving news. Third quarter earnings season is now mostly over. This week retailers were in the news with most reporting earnings that met or exceeded expectations. Dell was a disappointment which may have fanned the selling pressure late in the week. It was also a light week on news from the economic front. An influential banking analyst recently came out suggesting they were as bearish as they have been in a long time and that we would experience a double dip recession next year. Surely the strong market advance since March is fueling much of the bearish sentiment, but the market has also shown resiliency. We still view the 1100 level on the S&P as a very significant resistant level. If the market can hold this level near term, we plan to become more aggressive with our call option trading. As for stocks, we plan to stay mostly fully invested, but also do not have as great an urgency to replace stocks that have been sold. In other words, we will be more selective on the stocks we do buy, even if that means we sit on cash a little longer.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept VSE Corp (VSEC, Business Services), Telenor (TELNY, Telecommunications), Conseco (CNO, Insurance), and Bucyrus International (BUCY, Const. & Agric. Machinery). We added two new stocks to our watch list including Paragon Shipping (PRGN, Water Transportation) and Patriot Coal (PCX, Coal). Paragon is a stock that was severely beaten down over the past two years but has been making a recovery over the past six months. On a valuation basis the stock is really cheap, but the near term economic outlook still pressures company prospects. However, the company is well positioned long term and continues to expand its long term contracts. Once shipping volumes begin to grow, Paragon should do very well. Patriot Coal was also newly added to our watch list, a company that has been on our list before. Patriot is not in a flashy industry, but its stock has done very well over the past year despite what should have been a difficult year. The company is very attractively valued with a stock price that continues to move up steadily. Patriot Coal stock does show volatility, so patient investors may get the best price when buying on dips. We have dropped Kapstone Paper due to increased levels of volatility that have pressured the stock price downward, a little too sharply for us. Overall we still like this market and would encourage investors to continue buying on dips. The stock market will likely remain very bumpy, particularly until the market can demonstrate strong resistence at the 1100 level on the S&P.

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com

Weekly Stock Market Update

Market Beating Foresight: Broad Market Reaches 52 Week High

The broad market hit a 52 week high on Wednesday and finished the week 2.3% higher. The market strength shown over the past two weeks is encouraging, although the S&P still has not broken that sticky 1100 level. Declines in the dollar and positive corporate earnings remain the big drivers of the market. Consumer confidence levels came in lower than expected, but the market was able to shrug off those concerns. Third quarter earnings report are mostly complete and generally speaking have been better than expected. However, we would note one recent statistic that suggests only 27% of companies were able to increase revenue year to year. Cost cuts and reduced spending has helped companies short term, but over time more companies will have to show top line revenue gains to ensure sustainable long term growth. We believe that a slow recovery will continue to challenge and pressure revenue growth into next year. For us, the 1100 mark on the S&P is a very significant resistant level. We will be more comfortable with current market highs once the market breaks through and holds that 1100 level.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept Kapstone Paper & Packaging (KPPC, Paper Products), VSE Corp (VSEC, Business Services), Telenor (TELNY, Telecommunications), Conseco (CNO, Insurance), and Bucyrus International (BUCY, Const. & Agric. Machinery). We added one new stock to our watch list and that is Par Pharmaceutical. This company develops, manufactures, and distributes generic and branded drugs in the United States. Par has had strong growth rates over the past year and the stock price has reflected that in the price momentum shown over the past six months. The PE is a little higher than what we look for at 22, but we think the higher price is worth the risk given prospects for company growth. Overall we still like this market and would encourage investors to continue buying on dips. The stock market will likely remain very bumpy, until investor and consumer confidence reach higher levels. Show patience on down days and take some profits when the market moves up sharply. We will become even more bullish once the market breaks and holds the 1100 level on the S&P Index.

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com

Weekly Stocks Market Recap

Market Beating Foresight: Strong Recovery From Prior Week

The broad market made a strong recovery from the prior week rising 3.2% as the advanced quelled some recent fears over a looming market meltdown. The stock market as a whole has stayed pretty resilient despite the strong advance since March. We still expect the market to remain very bumpy, but do not expect another big meltdown. In fact we took a couple of short positions against the market index when fears ran high to take advantage of what we thought was an overcorrection. All in all, most economic measures and corporate earnings reports have been better than expected. Recent productivity measures released last week marked the highest gains since 2003. The ISM Manufacturing index for October also cam in better than expected. Several large companies announced positive earnings surprises. The primary negative has been unemployment which has now reached the highest levels since 1983. But remember the unemployment rate is a lagging indicator and that will not improve until later as the economic advance gains more traction. In fact, we think the unemployment rate will continue to rise well in 2010 as a sign of how slow the recovery will be. However, the good news is that other economic factors have begun to show improvement which should provided continued support for the stock market.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept Kapstone Paper & Packaging (KPPC, Paper Products), VSE Corp (VSEC, Business Services), Telenor (TELNY, Telecommunications), Conseco (CNO, Insurance), and Bucyrus International (BUCY, Const. & Agric. Machinery). We added one new stock to our watch list and that is Decker Outdoor Corp (DECK, Footwear). Decker is engaged in designing, producing, and managing footwear and other accessories including handbags, headwear, and outerwear. Decker recently released quarterly earnings that exceeded estimates and even went so far as to raise their outlook for 2010. We view that as a very positive statement in light of ongoing recessionary pressures. The fundamentals look good and its PE remains one of the lowest in the industry. Chart action has also been good as the stock has been consolidating recently at a price level high enough that leaves no overhead over the past year. Remember, we look for stocks trading near highs that we expect to go higher and Decker fits the bill. The one concern is that short interest on the stock is very high near 18% which suggest investors expect the price to fall. However, we view that as a contrarian indicator, meaning the higher it is, the more likely the price will go up. Why is that? Investors that have already sold the stock (short position) will eventually have to buy the stock back, and that demand forces prices to rise. In fact, if the price continues to rise, these short sellers will likely force the stock sharply higher as they rush in to cover their positions. Overall we still like this market and would encourage investors to continue buying on dips. The stock market will likely remain very bumpy, until investor and consumer confidence reach higher levels. Show patience on down days and take some profits when the market moves up sharply. Remember, little pigs get fat, while hogs get slaughtered!

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com

Weekly Stock Market Update

Market Beating Foresight: 3rd Quarter Reporting in Full Swing

Third quarter reporting is now in full swing with the results to date somewhat mixed. Despite mixed results the broad market was able to rise 1.5% for the week. Financial services got a boost from JP Morgan, Goldman Sachs, and Citigroup all of which reported better than expected results. Bank of America on the other hand was a major disappointment as losses widen greater than expected. The soon to be retirement of CEO Ken Lewis also played into the selling pressure on B of A stock. Overall, results were mixed at reports on both IBM and GE added to the selling pressure. Third quarter reports will continue for a few more weeks and we expect more of the same. That is, mixed results, with the majority of companies struggling to meet top line revenue targets. We hope the market can carry current price levels through the end of the year, and frankly do not expect another big market rise. However, we also do not expect a big market downturn unless upcoming third quarter reporting deteriorates significantly. We expect fourth quarter reports show more favorable trends and would expect the market to have another bounce early next year as a result. We plan to buy on dips to be invested in the market in advance of that anticipated price rise.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? Our Momentum and Value stock screen has uncovered several Hot Stocks. The Breakout Stocks on our list that remain from last week include Kapstone Paper & Packaging (KPPC, Paper Products), Walter Energy (WLT, Coal), VSE Corp (VSEC, Business Services), and Hi-Tech Pharmacal (HITK, Biotechnology & Drugs). Newly added to our watch list this week are Breitburn Energy Partners (BBEP, Oil & Gas) and KMG Chemicals (KMGB, Chemical Manufacturing). Breitburn is an independent oil and gas partnership focused on acquisition, exploitation, and development of oil and gas properties. The BBEP stock price has been on a tear, but we consider the stock valuation still very reasonable. However, oil and gas stocks have been rocky over the past year, so investors need to be prepared for that volatility when choosing to buy. KMG Chemicals is the other new stock we added, a company that manufactures, formulates, and distributes specialty chemicals. We really like this stock and may buy early next week. The KMGB price chart is very strong and the stock valuation is very reasonable in light of past earnings and sales growth. Furthermore, institutional ownership remains low, so additional buying interest could really propel the stock higher. We think this stock could be poised for big gains given all these factors, and of course will only benefit further as the economy rebounds.

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com

Labor Day Outlook

Market Beating Foresight: Is Sentiment Changing

The stock market lost ground last week as the S&P dropped -1.2%. The week started with declines, but did recover some of those losses by the end of the week. Economic data was mixed as the Manufacturing Indexes showed improvement along with pending home sales. Payroll data was released on Friday and those numbers too were better than expected. But the market seemed spooked by an unemployment rate that rose more than expected. We sense that market sentiment is becoming more pessimistic with traders selling good news while bad news carrys more weight than it did just a few short weeks ago. September is traditionally the worst performing month and that too may be adding to the caution. The economy is still in declining although the pace of the declines has decreased. The worst may be over, but it will take time before consumer confidence returns and that is an essential ingredient for economic growth. We expect the unemployment rate to continue rising into next year, and those job losses will dampen any recovery. All signs still suggest that the recovery will be slow and could take several years as consumers regain confidence, rebuild wealth and reduce debt loads. Over the short term we expect the market to remain very bumpy, in range bound trading. We can make money in such a market by taking gains more quickly and turning over stocks more frequently. If volatility stays low, we know our trading strategy will exploit current market conditions, allowing expansion of our performance lead over competitors, as well as the broad market index.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? Our Momentum and Value stock screen has uncovered several Hot Stocks. The Breakout Stocks on our list include Credit Accep Corp (CACC, Consumer Financial Services), Allion Healthcare (ALLI, Healthcare), World Accep Corp (WRLD, Consumer Financial Services), Kapstone Paper & Packaging (KPPC, Paper Products), Del Monte Foods (DLM, Food Processing), and Walter Energy (WLT, Coal). CACC, ALLI, and WRLD are carryovers from our buy list last week. We are adding three new stocks to our buy list for this week. Kapstone Paper has had strong price action over the past six months, but remains very reasonably priced. Institutional ownership is on the light side which could provide additional pop to the stock price if they join the party. This one does have a very high amount of short interest 32%, meaning investors expect the price to drop which adds risk to a buy. However, we sometimes view high levels of short interest as a contrarian play in that if the stock price rises, short sellers will have to buy to cover, propelling the stock even higher. We also added Del Monte Foods to our buy list. We have traded DLM before for profit, so we already know this company. The stock price has been on a steady trend upward now since December of last year. Prospects for the company look decent as commodity prices have been improving which lowers costs and increases margins. Walter Energy was our last addition for the week. WLT produces coal primarily for the steel industry. Stock prices have been rising recently from very depressed levels due to economic conditions. The economy will temper industrial demand and company growth, but this company has been very profitable despite the difficult economic times. At some point the economy will begin to slowly turn and that will give an added boost to Walter Energy. We purchased Five Star Quality and Satyam for our portfolio last week and as is our practice, we removed them from our current buy list. We also dropped Bucyrus and American Equity Life from our buy list as both came significant selling pressure. Overall we think the market is reasonably price and expect a narrow trading range over the near term. The market is still weak and trying to find its legs, so the ride could still be quite bumpy for the remainder of the year. This is a good time to take some gains if you have them and reinvest into new stocks.

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com