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November 10, 2016

This Is Sector Rotation

The sector rotation is going out of big tech and into financials, healthcare, possibly defense and transportation. This is essentially a strong bull market move. It's interesting tech is not leading the way but people are obviously positioning for the presidency and congress. I was wondering if the fall in tech had something to do with possible tariffs coming on tech companies in Asia if we start taxing China. I think it might have something to do with that but its just capital going from one sector to others here regardless.

The call I made here on the blog to buy biotech and financials was pretty epic the other day. Biotech is outperforming big-time. The other macro thing going on here is long term US treasuries are continuing to crash. Ticker TBT is the way to go as I have been talking about here for some time.

After surveying some scans and putting things together I have a great watchlist. I really like this small-cap Scorpio Bulkers SALT. It's a shipper. Breakout on trend on high unusual volume, earnings guidance is trending up and is improving. "I have to be able to draw it in crayon" -Peter Lynch

HEAR needs 1.45 to start to clear this long flag.

On the short side I like HADV EA GORO short. From Twitter Marc Lehman ‏@markflowchatter Sell side desk indicating 2 leading $EA titles are being discounted 40% at Target and Walmart = slow pre orders for holiday sales

November 9, 2016

Net Current Asset Stock STLY

Stanley Furniture (STLY) is a well known brand in the furniture industry. With the stock just around a $1.00 a share it's below net current asset value or quick liquidation value. Because a lot of their assets are in furniture inventory this isn't a true "liquidation" value. The margin of safety would peg the stock much lower than net current assets. This is still a compelling net-net. It is a good one I believe if only because it is not a perennial one. Net current asset stocks that suddenly become this cheap that are retail with a good brand name often work out.

Net current assets are 19.2 mil. Market cap is 16 mil. I read the last quarterly and its just not being managed well. They have some apparently short-term supply chain issues. It's a decent net-net especially if they can turn it around any. Things are going poorly at the moment. They have cashed out life insurance policies to raise cash. This is as much a turnaround play as a value play. That's something to keep in mind.

November 7, 2016

The Stock Market Amid Elections

The major US equity markets have been consolidating for days going into this past weekend. Today, November 7th we are seeing a surge in high beta names and corporate bonds. I strongly believe this is a clear signal that this recent downturn was simply a bull flag. It's not to late to back up the truck long equities for the rest of the year. I especially like financials via the etf (XLF) and the biotech sector with (IBB). Financials are breaking out here. Biotech has just put in a confirmed pipe bottom formation near multi-year support. I see confirmation of follow through in equities in looking at high yield corporate bonds. They gaped up big in the morning. A Hillary Clinton or Trump presidency will be pro banks and financials.

full disclosure: long UYG and BIB the double long XLF and IBB etfs