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

53% Gain on Sale of Sepracor

We just sold our position in Sepracor for a 53% gain in just four months. Takeover rumors were rampant which prompted the exchange to put trading on hold before the market closed for the day. Fortunately we were able to get out just in time. There could be more upside if the takeover becomes real, but with gains like what we had, it's just not worth the risk to hold. Better to take the gains when you have them.

Portfolio Return Highest Among US Stock Funds

Market Beating Stocks Lives Up to Name; Leaves Stock Funds In Dust

So how do our returns compare? Recent reports on stock fund rankings and S&P Index losses make our 12.9% annualized return look exceptional! The September 2009 edition of Kiplinger Personal Finance magazine ranks the performance of the 450 biggest and best performing stock based funds. The article, Stock Fund Rankings, further separates the stock funds into funds that invest primarily in US stocks and those that represent more of an International flavor. Kiplinger highlights the 3 year annualized return across all 450 funds for the period June 2006 to June 2009. For comparison, we calculated a 12.9% annualized return over that same 3 year period on our portfolio. At first glance, that might not seem so great, but remember that period covers the worst recessionary period since the Great Depression. For a market comparison, Kiplinger highlights that the S&P 500 Stock Index carried an annualized loss of -8.2% over the same time period.

Clearly, we beat the market by a large margin, but how did our portfolio compare against the professional fund managers? Fortunately, the Kiplinger article provides a basis for which to compare. Kiplinger identified 450 funds for which 322 were US based stock funds. Of those 322 funds, NOT ONE beat our results! That is right, our Retirement Portfolio beat ALL 322 stock funds in performance over the most recent three year period! That is truly exceptional. You might also ask, how did we do against all 450 professionally managed funds reported in this article, which includes the internationally based stock funds? Our performance was better than all 450 funds with only four exceptions! All four exceptions represented China based funds, no surprise given the strength of that economy and market over this difficult period. So all in all, we outperformed all 322 US based stock funds, as well as 446 out of the total 450 funds that were presented by Kiplinger magazine. Needless to say we are extremely happy with our performance. Furthermore, we are very confident in how well our stock selection and portfolio management strategy stacks up in the marketplace!

Weekly Stock Market Recap

Market Beating Foresight: Market Hits Fresh New Highs

Volatility returned as the Stock Market hits fresh new highs for 2009. For the week the broad market (S&P) ended 2.2% higher, a strong turnaround from earlier in the week. For the most part economic data was poor with jobless claims rising more than expected and housing data failing to meet consensus estimates. The stock market was able to shrug off the bad news and rise further. By the end of the week, better than expected home sales were released which helped the market realize a weekly gain. A lot more economic data is due for release next week, which we expect will confirm an economy that is slowly beginning to stabilize. Most key measures are still declining, but the pace of decline has certainly slowed. We think the worst is over, but acknowledge that the recovery will likely be weak and slow. We just do not see a quick return to the high flying days of the past few years. The de-leveraging underway amongst consumers and businesses will temper spending and economic growth. That said, we think the stock market is still an excellent place to invest. We are very optimistic that our stock selection strategy and portfolio management approach will significantly outperform the market indexes in this environment. Frankly, we would welcome a stock market with lower volatility, even if that means somewhat slower market appreciation. We know our strategy can far exceed market returns in just such an environment.

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 Babcock & Brown (FLY, Rental & Leasing), Innophos Holdings (IPHS, Chemical Manufacturing), Core Mark Holding (CORE, Retail Grocery, Bucyrus Intl (BUCY, Constr. & Agric Machinery), Credit Accep Corp (CACC, Consumer Financial Services), and World Accep Corp (WRLD, Consumer Financial Services). Babcock & Brown stock price is now up 22% since we first added to our buy list. We still like the company prospects although price momentum has slowed recently. Innophos has also been on our list for a while and is up 16% from our initial buy list price. We just purchased a call option on Innophos for our Aggressive Portfolio last week. Core Mark Holdings has been steady in August and is up 5% from our buy price. Bucyrus Intl was just added last week and we have not yet decided on whether to buy the stock or a call option. This week we are also adding two new stocks in Credit Accep Corp and World Accep Corp. Both companies are in the consumer finance space and are showing very strong momentum. Financial stocks in general have shown much strength over the past few months from what were very oversold levels. We dropped Incredimail, Joy Global, and NRG Energy from our buy list. Incredimal is already up nearly 40% since we first recommended and we do not want to chase the stock. Company prospects remain very strong, its just that the stock is now not as cheap as it once was. We recently purchased both Joy Global and NRG Energy for our stock portfolios, and our practice is to remove stocks we buy from our buy list. Subscribers that are looking for ideas on stocks to buy should always check our buy list as well as stocks we have recently purchased for our portfolios. All in all, we remain optimistic long term and would encourage investors to stay invested and not risk missing out on the next big move. However, it is always prudent to take some gains off the table when there is a big advance, just as we recently did with our 75% gain on Boise stock over just two short weeks. Volatility did rise last week and that is a trend that may continue as the market marches forward. As a result of that volatility, stock prices could swing in wider ranges over coming weeks. In that light, we suggest using that volatility as an advantage by investing in opportunities whenever the market moves sharply down.

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

Weekly Stock Recap

Market Beating Foresight: Summer Swoon Stokes Anxiety

The market lost ground for the fourth straight week as the summer swoon stoked more anxiety amongst investors. The market has been in the doldrums as concerns rise over the progress and outlook for an economic recovery. There was not a lot of economic news or quarterly earnings reports last week, but what was shared was not good. Oil led the market lower as concerns over declining oil demand from a faltering economy drove prices sharply down. The most recent ISM Services report showed economic contraction and jobless claims continue to rise. On a positive note, U.S. Treasury yields dropped significantly as investor demand drove prices higher which lowered yields. Smaller yields are good for Mortgage Rates as they trend closely the yield direction on longer term treasuries. To us, the market decline over the past four weeks is not all that surprising. We view recent performance as a correction and consolidation from the big run-up that started in March. The market had simply moved too far too fast and needed to catch its breath. Hopefully, four weeks of decline is all that is needed! The calendar next week will bring a heavy dose of economic data on inflation, production, retail sales, housing and jobless claims. In addition, reporting for second quarter earnings will be in full swing and will continue over the next few weeks. We believe the developments over the next few weeks have the potential to swing the market in a major way. Those developments could have a significant impact on the trend and direction that the stock market takes for the remainder of the year. We still view the stock market as reasonably priced, but caution that trading could become very volatile over the next few weeks. At the annual halfway point, the broad market is now down -2.7%. We still expect the market to finish with a positive annual return, that is as long as we avoid another market meltdown. We do have concerns that the market could test the lows hit earlier this year, but do not think that scenario is likely. We plan to stay fully invested in our stock portfolios and also plan to increase investment allocations in our options portfolio. The recent downturn in the oil industry has really pressured the stocks that we own related to that industry. We plan to carefully review these holdings over the near term and will make investment decisions based on future outlooks and price momentum.