LiveRocket Week 6 Performance - Up 2%

This was a solid week for us.

As we approach the end of the earnings season, I am expecting some pullback. I am trying to decide whether I want to focus on preserving our capital by cashing out of a few companies or letting the investments ride.

The week was mostly up for us, although today took a lot of bite out. I take comfort in the fact that all stocks pulled back and nothing specific happened. On top which the prices fell on low volume.

Oil in particular took center stage. The cold wave that hit will last another 10 days – expect to see record inventory drops. That will make our equipment/service companies move up.
The following quote summarizes the position we are in (from Goldman Sachs)
``Those [oil] price rises you've seen over the course of the past few years are related to the structural underinvestment and the depletion of excess capacity,'' Gutman said. ``The current investment phase is far from over.''
Investment means oil drilling and so forth.

AMX – Up 4%. A great earnings release. This is a definite keeper.

ATW – Up 1%. Solid earnings. Why I really like ATW:
It is incredibly undervalued. This is a cash machine, generating $12 in cash per share over the next 2 years.
Potential acquisition. Larger drilling companies could grow a lot faster and meet demands sooner by acquiring ATW.
My only concern with them is that they are completely under contract – revenues are locked in but operating costs are trending up.

CLB – Flat.

CSH – Down 3% but on low volume.

CTSH – Up 8% on great earnings.

DIGE – Up 1% following a delay by the competition (Roche)

DO – Up 1% after great earnings. Interestingly, a lot of calls were bought.

ESV – Down 2.3%. I expect ESV to beat expectations: there were no hurricanes to affect the utilization. These guys are approaching a 10 P/E this quarter. I also expect earnings guidance to be raised.

HOLX – Down 4%. In fact, I see weakness since the earnings release. I think we should take our money and run.

IMA – Up 1%

INFY – Up 1%

MDR – Down 1%. They can’t seem to break thru the $52 price and stay above it.

NUAN – Up 22%. Great earnings release. I am looking for them to go up further due to options pressure next week, and then I’ll cash out. I like that they were up today on a down day. One reason I like NUAN is that the technology is here to stay.

PCP – Up 2%

TIE – Up 2%. TIE briefly shot up to $35 on Tuesday on heavy volume. I say “hedge fund buying.” When you compare ATI, RTI, & TIE, you notice that TIE is lagging its competitors. They have seen their stock rise 60%+ in 4 months. I think TIE is overdue for a major run-up.

UCTT – Down 5%. Frankly I am concerned about UCTT. They release earnings and I expect them to be a big blowout. I base that on the results of other Semi equipment vendors which have been strong. But the forward guidance is what matters. Major memory chip producers – UCTT customers – are showing signs of short term price problems. They may push out some capital expenditures.