IT'S NEVER WRONG TO TAKE PROFIT
SELL TUI AT OPENING (2.7)
Energy stocks appear to lose some momentum and I am pare some exposures, even though I still believe strongly that they will come through for the next two quarters. 20% return is really not that bad in a couple of weeks, in relation to the overall return objectives. If the momentum continues to move downward, we should be able to pick up a few with lower prices.
SELL DY AT OPENING (1.31)
This is a different story. There are simply too much exposure in this, which I do not believe will move at all, probably until 2006. Even that depending on the decent level of nickel price. Dead money for a while.
BUY CLC.UN (11.76)
A part of strategy to shift a portion of the portfolio into trusts, with objective to achieve 10% overall return. CLC currently yields only 8.0%, but it is in a very stable business with a steady growth, good management, strong balance sheet, and proven records. There is a good chance that distribution may increase by a couple of ticks next fiscal year. The fundamentals of the healthy care industry appears to be positive as spending is on the rise. The trust has not run up as much as others. Overall, I believe that 10% should be easily achievable.
ENERGY
A sea of red in the energy patch. Let's see if we can figure out why. (1) The temptation to take profit is huge. Energy stocks have gone up at least 20% in the past few weeks, and well over 50% for the year. As said earlier, it is never a bad thing to take some off the table. (2) Oil's one-day reversal from $54 top is perceived as a bad omen, particularly for speculators; (3) INTC and YHOO give traders reasons to shift sectors from energy to tech. You can almost feel the euphoria in the air, they are practically giddy. Pity the euphoria is short lived; (4) PD pre-announced, lowering its earnings expectation. Service stocks got hammered. Hello, didn't we all know that drillers' earnings will miss due to wet weather? No matter.
BUY ATY @20.99
ATY is in a sweet spot. Market share up; new products; new revenue streams (including royalties, a QCOM model); governance issue pretty much resolved; Q3 results exceeded, guidance up; analysts loved it; buy-side managers can't afford not to having it; valuation reasonable; cash flow strong; balance sheet non-issue. Concerns relate to the overall condition of the market, particularly the tech. If it can go through this Q3 season without serious damage, it could reach 25 by the year end. A 20% upside with a limited down side risk. After all, the results were out and no skeletons in the closet.
Earlier returns of reports are not encouraging, SNDK missed big and got slammed (down 20%). NVLS met but guided cautiously (down 9%); AAPL on the other hand, exceeded and up by 7%; SOX appears to be under pressure tomorrow. My early thesis appears unfolding. I may have to endure some volatility for ATY;
Energy stocks appear to lose some momentum and I am pare some exposures, even though I still believe strongly that they will come through for the next two quarters. 20% return is really not that bad in a couple of weeks, in relation to the overall return objectives. If the momentum continues to move downward, we should be able to pick up a few with lower prices.
SELL DY AT OPENING (1.31)
This is a different story. There are simply too much exposure in this, which I do not believe will move at all, probably until 2006. Even that depending on the decent level of nickel price. Dead money for a while.
BUY CLC.UN (11.76)
A part of strategy to shift a portion of the portfolio into trusts, with objective to achieve 10% overall return. CLC currently yields only 8.0%, but it is in a very stable business with a steady growth, good management, strong balance sheet, and proven records. There is a good chance that distribution may increase by a couple of ticks next fiscal year. The fundamentals of the healthy care industry appears to be positive as spending is on the rise. The trust has not run up as much as others. Overall, I believe that 10% should be easily achievable.
ENERGY
A sea of red in the energy patch. Let's see if we can figure out why. (1) The temptation to take profit is huge. Energy stocks have gone up at least 20% in the past few weeks, and well over 50% for the year. As said earlier, it is never a bad thing to take some off the table. (2) Oil's one-day reversal from $54 top is perceived as a bad omen, particularly for speculators; (3) INTC and YHOO give traders reasons to shift sectors from energy to tech. You can almost feel the euphoria in the air, they are practically giddy. Pity the euphoria is short lived; (4) PD pre-announced, lowering its earnings expectation. Service stocks got hammered. Hello, didn't we all know that drillers' earnings will miss due to wet weather? No matter.
BUY ATY @20.99
ATY is in a sweet spot. Market share up; new products; new revenue streams (including royalties, a QCOM model); governance issue pretty much resolved; Q3 results exceeded, guidance up; analysts loved it; buy-side managers can't afford not to having it; valuation reasonable; cash flow strong; balance sheet non-issue. Concerns relate to the overall condition of the market, particularly the tech. If it can go through this Q3 season without serious damage, it could reach 25 by the year end. A 20% upside with a limited down side risk. After all, the results were out and no skeletons in the closet.
Earlier returns of reports are not encouraging, SNDK missed big and got slammed (down 20%). NVLS met but guided cautiously (down 9%); AAPL on the other hand, exceeded and up by 7%; SOX appears to be under pressure tomorrow. My early thesis appears unfolding. I may have to endure some volatility for ATY;
posted by ZIGZAG at 10/13/2004 08:39:00 AM
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