The "Best" and the "Rest"

12/03/2004 12:00 am EST

Focus:

Ken Kam

CEO, Marketocracy, Inc.

Through his Marketocracy Web site, Ken Kam monitors the trading activity of over 70,000 investors. HisStock Alert service isolates those stocks being bought by the best performing stock pickers, while being sold by the rest. Here are his latest "strong buy" alerts.

"99 Cents Only Stores (NDN NYSE) is a deep-discount US retailer of general merchandise. Recently, the company reported earnings that fell below analyst expectations. The results also were much lower than the same quarter one year ago, though they did include an increase in sales over that same period. After holding a steady position in the company through August and September, the top groupthe best stock pickers among those we monitor began to add modestly to their position in NDN over the course of early and middle October. However, the buys increased considerably in recent weeks, a period, which saw the best increase their investment in NDN by 52%. The purchases were all made at $15.44 per share. Meanwhile, the ‘rest’ decreased their holdings by 15% over the same recent period.

"Internet Security Systems (ISSX NASDAQ) is a provider of network security products and services that help to protect businesses from network and system risks. The company recently released earnings showing a 17% increase in net income over sequential quarters, during a quarter where they purchased back shares of their own stock. Though the best performing stock pickers had been heavy seller of ISSX as recently as mid-October, they have begun buying heavily back into this information technology security company. The best cut their holdings in half during the middle of last month; however, they've returned to increase their holdings of ISSX by 78% in recent weeks. The buys came at prices between $21.04 and $22.28. At the same time, the rest have been sellers, reducing their position in ISSX by 2%.

"E*Trade Group (ET NYSE) is a global financial services holding company that offers a range of financial products to both retail and institutional customers. The firm is engaged in a heated battle for customers with several other financial services companies, including Charles Schwab, which has recently restructured management and strategies to win new accounts. E*Trade had been a steady holding throughout the end of summer and into the fall. Then, in the beginning of October, the top group reduced their holdings by roughly 25%. But in recent two weeks, they've bought back into shares of the stock, even as the rest continue to sell. The group's purchases were all made between $12.00-$13.30 per share. In the past two weeks, the best have increased shares held by 13%, while the rest decreased their holdings by 1%.

"ASA Limited (ASA NYSE) is a closed-end investment company organized to provide investors a vehicle to invest in a portfolio consisting of stocks of companies conducting gold mining and related activities in South Africa. The company recently announced its quarterly dividend, which ended up being lower than prior quarterly dividends due to lower net investment income. After holding their largest position in ASA ever during this summer, the ‘best’ cut their position by over 70% during the beginning of August. Over the next couple of months, that position remained light, until the last several weeks of November. During that period, the best have been buying back into the ASA position, increasing their holdings over the last two weeks by 28%. During the same two-week period, the rest decreased their holdings by 3%.

"Georgia Gulf (GGC NYSE) is a North American manufacturer and international marketer of two integrated product lines, chlorovinyls, and aromatics. Wall Street analysts have been upgrading shares of the company as demand has remained strong for the company's ethylene product line. The best have been steadily buying into shares of GGC over the last 12 months. However, buying has increased dramatically amongst the best as the year has progressed. Since just August, the group has doubled their stake in GGC, culminating with a 25% increase in the last 14 days. Meanwhile, the rest have been sellers of the company and have reduced their overall position by 5% in the last 14 days.

"ShopKo Stores (SKO NYSE) provides general merchandise and retail health services through two business segments: ShopKo Retail and Pamida Retail. The company increased 3rd quarter profits on improved margins, while sales actually fell during the period. ShopKo has been a longer-term, steady holding for the best investors. They did temporarily increase their investment in SKO during September, before reducing the position back to historical averages. In the last two weeks, the best have once again increased the position, this time adding 31% to their total holdings of SKO. During the same period, the rest have decreased their investment in the company by 1%."

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