LiveRocket Week 23 Performance - Down 1.2%

Ok, the markets crashed this week, and so did we. But not as much.
My strategy revolves around a TIE/TRID surge this year. I can be patient with both because I suspect TIE will hit $42+ (adding 6% to our performance) and TRID will hit $29 (adding 4%). So I am willing to wait for 10%+ by year end.


HIGH TECH
AMX – Down 2.9%.
CTSH – Down 3.4%. reversed last week’s gains. We are dumping this after next earnings release. We can do better and get back in at another time. It has been a drag for too long.
NUAN – Down 1.25%. I think they weathered last week really well. They also hit a 52 week high this week.
PWR – Down 4.6%. After racing up ~6% last week, we are ok on this pullback. I did see that Friday was a very deep drop down to <$28 before recovering. TRID– Down 1%. A very important bit of news was released – LCD TV sales continue to boom. Other consumer electronics devices are slowing down, but LCD TVs are hitting their stride as they start to become price competitive with regular CRT TVs. http://www.eetimes.com/news/semi/showArticle.jhtml;jsessionid=ZFYEXEEEMNHL4QSNDLRCKHSCJUNN2JVN?articleID=199902751
And
http://www.informationweek.com/showArticle.jhtml;jsessionid=ZFYEXEEEMNHL4QSNDLRCKHSCJUNN2JVN?articleID=199202957

What interests me is when I compare volume shipments and revenue. Q1 volume shipments were up 25% year-over-year. Meanwhile, April sales rose 80% to $400M. The surge in revenue indicates that higher dollar TVs are dominating sales. Indeed, Ass for 32” LCD TVs have dropped only $40 since last year: from $1016 to $976 . That is where TRID plays.
Given the ongoing sales strength and given the October deadline to state earnings (4 months away) I think we buy more.

UCTT – Flat. My concern is that there is a definite slowdown in chip sales and that inevitably flows back to semi equipment. However, I think UCTT is positioned fine because they are growing their customer base: a slight drop in one customer should be offset by an increase in sales to another. Time to add more.

OIL SERVICES/EQUIPMENT
ATW – Down 2.3%.
CLB – Down 2%.
ESV – Down 2.9% but it set a new 52 week high this week. Also, we got paid a $0.03 dividend (total $3.9)
MDR – Down 1.9% after setting another new high. It’s the curse of Cramer: he highlighted MDR.

BIOTECH
DIGE – Up 25.6%. It is 10% below the buy-out price. Time to buy calls.
HOLX – Up 4% on strong volume.
IMA – Down 1%. Volume is very high, and that’s a good sign. They got a good upgrade from HOLD to BUY from Stifel Nicolas.

OTHER
KSU – Down 4%.
OCN – Down 2%. They bought another company for $55M cash. I can’t find much because the company is private, but they seem to also be a collections agency.
PCP – Down 0.6% and they paid a $0.03 dividend (that’s another $3). And Boeing sold 22 planes to Russia. Demand for PCP just keeps growing.
TIE – Down 4.8%. Just stupid.

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Brief technical analysis
AMX – trading far above its 50/100/200 DMA. RSI is also showing signs of being overbought. If there is an earnings miss, watch out.
CTSH – No surprise here considering that it is trading at a 7 month low. It is far below the 50/100/200 DMA. But the MACD shows signs of returning interest.
NUAN pulled back to its 50 DMA and it should be moving up from here.
PWR interest remains high as the MACD and RSI show but it is flagging. That could be a sign of moderating interest, but I think PWR should show strong quarterly results.
NUAN – the 50/100/200 DMA average have converged and TRID is trading at that point. This stock goes nowhere until the options overhang goes away and earnings are cleared up. Then it will show up on everybody’s radar.
UCTT has dropped down to exactly its 200 DMA and the MACD shows rebounding interest. A good sign to buy more.
ATW – goldilocks: not hot, not cold – just right
CLB is trading at its 50 DMA. I bought when they had diverged dramatically from the 50/100/200 DMA because I thought they would be breaking out. I was wrong.
MDR is hot – interest is strong and it has diverged from the 50 DMA. However, I think this is just a delayed response to sector fund rotation that is recognizing the strong profits here.
HOLX dipped down to its 200 DMA before moving up to its 100 DMA. It needs to get bought out.
IMA has surged and demand is strong.
KSU also looks like goldilocks
OCN is holding steady at $14 and that’s where its averages would have it. I do see some weakness, but I think this is a stealth company.
PCP – has been trading slightly above the 50/100/200 DMA but considering the forward P/E of 16, that’s fine.
TIE shows signs of being oversold.

News bits

Bernanke dashed hopes that the Fed was planning to lower rates anytime soon. Most interesting was the opinion that the economy will rebound in 6 months or so. I have a hard time believing that. He could be trying to talk things up or he could be thinking that America will benefit from global spending.

Meanwhile, oil prices continue to bounce around.
The owners of DO bought another company (Dominion). I mentioned that DO did not merit a premium because they would not be sold. Looks like I was right.

ILMN is making a strong move up. I think biotechs are going to be a sector that will be rotated into. I did buy ILMN when it crashed.

HOLX continues to creep up.

IMA fell a bit after announcing another purchase. This company is starting to look like a mini Johnson and Johnson.

NTRI keeps making a strong run, nearing $70 - it was ~$50 just 3 months ago. I think it is overshooting.

Sprint is making a big move up. I really think they are going to be bought by a cable company.

US Manufacturing and the Housing Downturn

Some 25% of the US economy is tied to housing including furniture and appliances.
Since most of those items are made offshore, who really suffers when we stop buying?

I think the US trade defict may actually improve a bit

DIGE being bought for $61 per share

A Dutch company announced intent to buy DIGE for ~$61 per share

Stay tuned