LiveRocket Week 4 Performance: Up 2%

A solid week with almost all stocks up strong.

I am not including STOPs at this time. I am adjusting the model to optimize the STOPs.













A lot of economic data is mixed. Unemployment moved up slightly, but jobless claims went down. Manufacturing went down. Are we heading up or down?
I’ve said it before (last week in fact): housing and autos are tanking, all else is fairly stable.

Housing is crashing and burning.Even the NY Times questions the validity of statistics that report mild price drops. One thing is clear: another 30,000 housing construction workers were laid off in November and almost 17,000 workers that made housing products were laid off. That’s not all. Ownit, California’s 11th largest sub-prime lenders, went bankrupt this week and fired 800 people. http://online.barrons.com/public/article/SB116554091799444154-swmkmppqGO0aEcaUu_8z3fHdm1k_20071209.html?mod=9_0002_b_online_exclusives_weekend

The bleed is everywhere and will accelerate.
I even had a real estate broker call me after 2 years to ask if I was in the market. Smell the desperation? We talked and she finally admitted that business was slow and she had a 2nd job working for a local bank dealing with offloading their foreclosures.

The rest of the world seems pretty strong. India and China are still growing 9%+. Japan and Europe are also growing. The EU even raised interest rates.

In addition to global strength, inventory management is the key behind this soft landing. From oil to copper to silicon wafers, prices are high because supply is low. Supply is low because of underinvestment and better global inventory management. As a result, many manufacturers don’t need to suddenly slash prices or fire lots of people.
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Pre-earnings excitement/anxiety
We are now at the period where we will see pre-earnings announcements. Expect enormous focus on consumer spending. Best Buy reports and I expect to hear about LCD TV mania.
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Oil drilling and consolidation
Oil drillers were handed a present: the Gulf of Mexico was opened to more drilling. Additionally, rumors of consolidation are picking up. There really are very few similarly cash rich, low PE companies out there.
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So here is the weekly stock results
HIGH TECH & SERVICES
AMX – Up 3.5%. No news. One interesting thing was the performance on a down day: barely budged. Lots of strength.
CTSH – Flat. No news.
INFY – Up 4%
NUAN – Flat (was up 4% early in the week). Down after announcing a purchase of MobileVoiceControl. This enables better entry into the cell phone market. This was a very smart play. They are branching out into cell phones and opening up a totally new business

SEMICONDUCTOR
TRID – Down 1% (was up 5% early in the week). The Chief Accountant was fired and MIPS fired off a lawsuit. I call this a great buy opportunity.
UCTT – Up 2%. Strong consolidation at $13.

OIL EQUIPMENT/SERVICES
ATW – Up 2%. Earnings were released.
Earnings up 350% ($0.22 vs $0.74) but they missed expectations by 7%
Revenue up 77% and they beat expectations by 2%
The conference call is delayed to Monday, but I’d like to know why the earnings missed. On the other hand, the spread of estimates was huge (from $.70 to $0.93). I’d also like visibility to cash flow. One thing is clear – there is strength here when a company misses expectations but still rises.
CLB – Up 3.5%
ESV – Flat but intraday trading was always negative.
MDR – Down 2%. No news except for being awarded a contract to build 2 wellheads in Qatar.

FINANCE
CSH – Up 4%. Wachovia rated CSH as an outperform, putting it ahead of EZPW. The basis for the rating is the belief that CSH is better positioned in a downturn. Basically the reason we bought it. http://biz.yahoo.com/ap/061207/specialty_finance_ahead_of_the_bell.html?.v=1
OCN – Down 1%

BIOTECH
DIGE – Down 5%. Piper Jaffrey downgraded because they have hit price targets. At the same time, the #2 French insurer has approved the HPV test as standard. I suspect that the downgrade would not have been released if Piper knew about the upside. Once a procedure is 100% reimbursed, expect millions of women to have it done.
HOLX – Up 3%. No news.
ILMN – Up 6.5%. No news, but I think the rise is a response to the overselling of last week.
IMA – Down 1.5%

AEROSPACE & RELATED
PCP – Up 2.5%+. This is a rock solid stock. As long as Boeing is doing business, PCP will be successful. And Boeing keeps picking up more and more orders.
TIE – Up 5%. There is a lot of resistance above $33.5.