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11 May

Monday May 11, 2015

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I’m starting to fill the portfolio and plan to pick up another long term position this week. Started in on SD from last week’s watch list.

AKS, ANGI, GLUU, ZNGA – Best of breed. These ideas I really like but have climbed too far way from an oversold condition for me to buy here, so we’ll keep them on the master watch list for now.

CWCO – Story stock. Starting to come in for us, let’s watch and see how it handles this $11 support and consider a starter entry.

LQMT – Story stock. Started off hot +15% but dipped after another dull earnings report. Earnings has never been a driver for Liquidmetal so it’s to be expected. I plan to add more shares in the coming weeks, hopefully around $.10 if it comes in some, though I’m fine adding more at $.13 if it doesn’t.

SD – Best of breed. Continues to trade weak as the company has fallen on hard times. This is the core strategy behind best of breed, scooping it up at a discount until the company recovers. So for now, despite the mixed earnings and subsequent antitrust news, I still plan to ride this trade for the long term. If shares base above $1.40 I’ll probably stick to the plan and pick up 5,000 more shares soon.

Here’s this week’s ideas.

SONS – Best of breed. Added Sonus Networks to the master watch list. Coming out of oversold, lots of cash and no debt so they should be able to turn these hard times around. A move back into the gap could deliver a nice 30 – 50% return.

AUY – Best of breed. Added Yamana Gold to the master watch list. Gold appears to have found a bottom and AUY is trading significantly lower than its book of $7.68.  With a multiple bottom around $3.60 I’m interested in starting in soon.

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6 Comments

  1. michel_desroches

    have you taken SD off the best breed watch list? or was it not on it? im not sure now. getting ready to buy some share at this bargain low if its still a best breed option.

    Reply
    • Jason Bond

      I have not taken it off yet, the idea with best of breed is to buy the stock when the company falls on hard times, which is what we’ve done, the risk is we don’t know if they’ll return to best of breed and deliver our big return. It’s hard to time the bottom, the bigger question is can they recovery or are they cooked.

      Reply
  2. jim_bothwell

    Jason, SD has had a terrible last few days in price, news, downgrades, etc… Have the recent fundamentals for this company unexpectedly changed so much that it may be now be in real trouble? I know there was an initial stop loss of $1.69 which it quickly dropped below. And then today it dropped below the base of $1.40…. I averaged in over a week or so and am still hanging on long term but this one is getting a little scary. Hopefully all this is just a blip before it makes an eventual big recovery. Jim

    Reply
    • Jason Bond

      Hi Jim, all valid concerns they are definitely struggling, I’m going to see how it handles this $1.40 range and decide if it’s time to cut the loss or ride it out.

      Reply
  3. lars_hamilton

    Hi Jason, I’ve been watching your responses here and the watchlist as you add and remove stocks, but am I missing emails or texts when something goes the wrong way? Does this service only include updates through a weekly letter or does it have email or text updates when you notice something other than what you originally planned, like with SD this week? I am really excited for this service as I am at work all day during market hours and can’t be glued to the charts. What’s your best advice for making sure we know when to exit as well? I noticed the original stop price of 1.69 and then a range price of 1.40 to watch, but noticed SD dropped off the list around 1.25. I really hope to learn your methodology here. Thanks for taking your time to help out guys like me looking to get a good foundation.

    Reply
    • lars_hamilton

      Sorry, just saw the email – got lost among the others today. Text notification on the sell side would be great to cut through my inbox! Feel free to disregard the first post though! Thanks!

      Reply

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