If we see higher risk assets further over-valued, do not chase the move, but rather sell into price ...
The Best and the Rest
06/02/2006 12:00 am EST
By reviewing the trading activity of the 70,000+ investors on his Web site, Ken Kam isolates stocks being bought by the best performing stockpickers, while concurrently being sold by the rest. Here’s a trio of stocks that shows this pattern.
"The ‘Best Investors’ are those whose performance rank in the top 25%. The balance are considered the "Rest." In our Markscope newsletter, we profile several stocks that are being bought by the ‘best while being sold by the ‘rest’— which indicates to us that the stock is a buy.
"Founded in 1997, Youbet.com (UBET NASDAQ) is the largest Internet provider of horse racing content where members can watch and bet on horse races throughout the US from the comfort of their homes. Youbet.com is an official online wagering platform of Churchill Downs and the Kentucky Derby. UBET has a market cap under $200 million. The company is profitable and recently made an acquisition to expand its reach.
"After falling from $25 to less than $1 after the bust of the dot-com bubble in 2000, UBET has begun to prove itself as a real business. The Best have seen that potential all along as it has been a sizable position for the past several years. UBET’s encouraging report of increased EBIDTA and anticipation of record performance during the Kentucky Derby inspired the Best to increase their sizable position by almost 100% over the past month. This stock is now in the top 4% of the Best portfolios.
"Founded in 1962, Vishay Intertechnology (VSH NYSE) is a major supplier of electronic components and is number one worldwide in many of these components. Vishay's ability to provide ‘one-stop shop’ service, innovations in technology, superior product quality, successful acquisition strategy, and focus on cost reduction has made the company a global industry leader. The company has a $3 billion market cap and is in the upper quartile of its 52-week range.
"The Best Investors have increased their holdings by almost 400% over the past six months while the stock was trading in the $13s. The stock has appreciated nicely and the Best have been rewarded with a return of nearly 30% over the last couple of months. The company seems to be gaining momentum in its earnings and the Best see this as an opportunity to invest in a high quality and industry leading company at a discounted price.
"As one of the largest telecommunication companies in the world, Nippon Telegraph & Telephone Corp. (NTT NYSE) provides fixed and mobile voice-related services, Internet Protocol/packet communications services, sales of telecom equipment, systems integration, and other telecommunications related services in Japan. The company has a market cap of $33 billion and a dividend of 1%.
"The Best Investors see NTT as a value play and a way to reduce risk of a portfolio. Despite the disappointment over mobile numbers in its latest quarterly report, this stock is a good way to reduce the risk of a portfolio with its low volatility, strong currency, and large market cap. The Best increased their holdings by 34%, while the Rest decreased their holdings by 3%."
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