Trading is not a game of exacts. Perfectionists need not apply. Markets are made up of many irration...
Briefly Speaking ...
07/09/2004 12:00 am EST
Here we offer a six-pack of ideas: an addiction treatment play Mark Leibovit; a sentiment forecast from George Muzea; a new favorite from bank stock specialist, Doug Hughes; a trading play from Joe Sunderman; and a value "land" pick from Alexander Green.
"Our latest trading buy is Hythiam Inc. (HTM ASE)," says trading expert Mark Leibovit, editor of VRTrader. "Its HANDS treatment protocol is designed to treat addictions to alcohol, cocaine, and other addictive stimulants. HANDS is used for neurostabilization and detoxification from alcohol and/or addictive psychostimulants designed to simultaneously eliminate cravings, enhance cognitive function and facilitate a pain-free withdrawal, resulting in accelerated recovery. Technically, HTM has declined from 7.40 to 2.70 and is at or approaching major technical support. We have added HTM to our trading positions for an intermediate move back toward $5.00. No stop at this time, recognizing we're trying to catch a falling knife into theoretical support."
"Insiders are negative across all market caps," says George Muzea, editor of Magic T. "The problem is not with their selling but their lack of insider buying, a sign that they see little value at current levels. For the first time ever, there are no insider open market buys in the NASDAQ 100. I recommend you avoid stocks in this index. And while insiders are cautious, the public is not. Momentum investors have come back in the market and I judge them to still be in the ebullient phase. July sometimes brings a summer rally. However, with insiders now in the 'stay out' camp, one should be very selective in buying and use a trading mentality. I also expect that mutual funds will start to sell their losers beginning in early August this year. My advice is to stay on the sidelines and be patient."
"The bank stock market and over-all market continue their very choppy ways and we would stay only with the best asset quality banks and best franchises in very hot markets," notes Doug Hughes, editor of Bankstock Newsletter. "Our latest new feature is First Bank of Long Island (FLIC NASDAQ), with 24 locations in Nassau and Suffolk Counties, and 3 new locations in NYC. They're going after high net worth clients as many of their branches are in some of the hottest real estate markets in the country. Total assets are over $900 million and growing. They have strong net interest margins and very few bad loans. The bank has grown earnings at 16%+ for the past 20-25 years and also has increased their cash dividend 19% per year in that time. Wow! This is a solid performing bank with great asset quality and they should earn over $3.00 a share in 2004."
"Quicksilver Resources (KWK NYSE) is an independent exploration firm that owns interests in more than 5,700 wells in Indiana, Michigan, Montana, Wyoming, and Canada," notes Joe Sunderman , in The Daily Contrarian . "The stock is the focus of some extremely heavy pessimistic sentiment. The number of shares sold short spiked 14% higher in June to 6.07 million. This accumulation of bearish bets accounts for more than 44% of the equity's total float and would take almost 12 days to cover. An unwinding of these positions could easily fuel a rally in the shares. While options open interest is light on KWK, investors are displaying a definite preference for puts over calls. Wall Street hasn't completely jumped on the bandwagon either, and any upgrades could boost the security higher. Technically, the shares continue to rally along the support of their 10-day moving average and are now trading at an all-time high. Traders should target a move to 39.60 with a stop on a trade below 31.83."
"Our analysts spend a lot of time sifting through data, calculating a company's net worth and earnings potential," notes Alexander Green, investment director of the Oxford Club. "A good example is Dan Ferris' recommendation of Hawaii-based conglomerate Alexander & Baldwin (ALEX NASDAQ). Dan camped out in Hawaii's government buildings, going through thousands of musty land records, to determine exactly what lands the firm held, and what they were truly worth. What he found is pretty surprising. Dan explains, 'ALEX owns 90,600 acres of Hawaiian land. Almost all of it is carried on the books at its original average cost of just $150 an acre. Some of that land is worth in excess of $1 million per acre today.' I'd add that ALEX isn't just attractive based on undervalued assets. Earnings are on fire as well. In the first quarter, revenues rose 26%, to $344.9 million, and net income skyrocketed 151%."
The key risk-on and off drivers today are the same – U.S. politics, global growth, other centr...