5 Stocks I Like

Still feeling bullish

2006-12-08T06:19:00.000-08:00

The bulls and bears continue to battle for control of the market. Will we get a year end rally, a fizzle, a sideways drift? I don't know, but I am betting on the bullish side, adding to my long positions and going on margin. Here are some of my recent buys:

* WFII - $2.45
* ICE - $105.19
* EPP - $125.55
* PCP - $76.83
* GRP - $44.43
* HP - $27.59
* DO - $81.85
* DRQ - $44.05
* CHK - $32.15

Pink Sheet Stocking Stuffer

2006-12-06T09:07:00.000-08:00

Every once in while, I like to take a flyer on left-for-dead company showing some recent strength. This time around, the company is Calpine. CPNLQ is selling off generation capacity at a time when utilities are scrambling to ramp up. Recent sales have been at premium prices and the stock is responding accordingly.

At less than $1/share, CPNLQ is going to be quite volatile. So I am limiting my downside risk by taking a small position. My goal will be a 50-75% gain, for which I am willing to risk a 25% loss. It won't make or break my holiday season, but could be a nice stocking stuffer.

Stay with Station

2006-12-04T08:18:00.000-08:00

On Friday, I recommended going long STN at $68.40. Today, they received an all-cash buyout offer from their management for $82.00.

While I love a 20% gain in one day, I don't think the play is done yet. $82 is roughly the 52-week high, meaning the offer doesn't really provide much of a premium to the market's valuation of the company. I think the offer will go up.

Just trail a stop around $81 to protect the windfall and let it run.

I'm Either Really Clever or Really Stupid

2006-12-01T14:40:00.000-08:00

The market took a serious dive this morning after the second regional Fed manufacturing report in two days showed a greater-than-expected slowdown in the economy. Being in a bullish frame of mind, I took the opportunity to add to my long positions. This will either turn out to be a brilliant move or a costly one. If you'd like to play along, here's what I bought:

* TYC - $30.48
* STN - $68.4
* LMT $90.68
* BA - $89.55
* ID - $16.61
* GS - $193.02
* TRF - $79.05

Recent Purchases

2006-11-30T10:23:00.000-08:00

As an indicator of where I see opportunities in the market right now, here are several long positions I've established/added to in the last 24 hours:

* LNG - $31
* VLO - $55.15
* HOG - $74.3
* RIMM - $134.12
* AAPL - $92.25
* COGN - $39.37
* SSO - $87.4
* QLD - $89.6
* SLW - $11.75
* EWW - $48.25
* XHB - $36.36
* NTES - $18.37
* IIH - $5.62

The rally remains intact

2006-11-30T06:07:00.000-08:00

On Monday, the market corrected pretty hard, but in the last two days, it has rallied right back. This leaves the uptrend in tact.

Even better, there are plenty of Bears out there and they are piling on risky bets. The open put interest on the S&P is growing even as the volatily spreads increase. If the market continues to rally, these bets are going to unwind, pushing it even higher.

Watch the SPY - if it remains above $140 (the strike price of greatest open put interest), stay long the market. The bears will have to start becoming bulls and we'll get that Christmas/Chanukah/Kwanzaa/Eid ul-Adh rally everyone loves to talk about.

The (fake) Boobie Prize

2006-11-19T07:59:00.000-08:00

On Friday, the FDA approved the use of silicon breast implants, reversing a 14-year ban. The big winner in this move is MNT, the leading maker of silicon implants.

The stock reacted to the news immediately, going from $46 to $53 in the Friday aftermarket. I think it will come back in to test recent highs in the $50-51 range, at which point, it will be a good buy.

Adding MRVL to the Semis list

2006-11-18T12:55:00.000-08:00

The semis continue to look good. So, I am adding more of them to the mix. Yesterday, MRVL took a dive at the opening, then came back strong. I picked some up at $19.12 on the rebound. I see downside of no more than $1 and upside of $6-7.

Play Gaming w/ IBM

2006-11-17T13:05:00.000-08:00

Video game companies have been on a roll lately. ERTS, ATVI, MSFT, GME etc. are all at or near 52-week highs. So, is it too late to jump on this bandwagon? Well, you can wait for a pullback in the names above, OR, you can jump on IBM now.

IBM makes the chips that run all three major gaming platforms. Along with ERTS, it's the 800-pound gorilla arms dealer in this war. However, IBM sports a P/E of 14.3 and PEG of 1.5 - a bit more attractive than ERTS' P/E of 43.6 and PEG of 2.8.

With growth in most of IBM other business segments, incl. defense and business tech, now looks like a great time to pick some up.

The Next VFCorp

2006-11-17T12:23:00.000-08:00

Back on June 2, I recommended VFC, when it was trading around $64. My thesis was that the 80s were coming back into style and that VFC - with its great 80s brands like Vans, Reef, Nautica, Tommy Hilfiger, North Face, Wrangler, Lee, etc. - would benefit.

Now that VFC is up over 20%, it is time to move into the next 80s comeback story - KTO.

Anyone who did any outdoor activities in the 80s knows KTO's brands - K2, Volkl, Marker, Marmot, Rawlings, Shakespear, Brass Eagle (this last one is probably only know by the paintballers, but it's dominant in its space).

In addition to it's great brands, KTO has improving fundamentals and a huge short ratio (16+ days) that could make for a nice run. Jump in while the getting is good at $14.

Oil Bottoming

2006-11-15T10:17:00.000-08:00

Oil prices seem to be bottoming, making this a good time to start nibbling on energy stocks. For stability, go with the majors via the IYE. For beta, go with the oil services via the OIH.

India Breaking Out

2006-11-15T09:12:00.000-08:00

Late last week, the Indian stock market broke through resistence created by the monumental down-turn it suffered during the Summer. There has been good follow through this week and Indian stocks appear to be in full break-out mode.

The easiest way to play is with one of the ETFs: IIF, IFN

You can also play with:

Banks: IBN, HDB
Tech Outsourcing: SAY, INFY, WIT
Generic Drugs: RDY

Stick with NKE

2006-11-15T08:05:00.000-08:00

Back on November 2, I suggested adding to NKE holdings. Since then, the stock is up 5% and today we found out part of the reason why - Warren Buffet's BRK is building its position in NKE. This puts a floor under the shares, so let the position run. We'll probably see some "me too" investors jump in based on the Buffet disclosure.

1389 is the magic number

2006-11-14T09:00:00.000-08:00

If the S&P500 index closes above 1389 today, expect another leg up in this rally before we see a pullback.

Two Semi Plays

2006-11-14T08:02:00.000-08:00

BRCM - Announced new line of GbE Switches w/ on-chip MIPS for the SMB market. In English, this product line will make it easy for small and medium businesses to move to the high-speed ethernet, opening up a lucrative market for BRCM.

AMAT - Announced a new CVD Platform capable of 150wph. In english, this product will enable semiconductor manufacturers to increase their throughput by 50% and reduce cost by 30% - that's huge. [Caution: AMAT reports earnings tomorrow, so could be volatile]

Continuing to Nibble on Tech and Industrials

2006-11-13T08:45:00.000-08:00

The uptrend in the market continues. I am essentially fully invested, but continuing to nibble on new longs as I take profits in areas that have already had good runs.

My two favorite areas to continue buying are technology and industrials, particularly enterprise software and industrial chemicals. I am playing with ETFs - IGV, XLB - and individual stocks - ORCL, DD.

CSCO Kid Rides Again

2006-11-08T15:18:00.000-08:00

Monday I suggested going long networking. Today CSCO reiterated that call by beating already-raised analyst expectations (and jumping 8% in after hours trading). Both their core business and the new set top box business showed strong growth. If you don't already own CSCO, I still see upside in it.

Dems Should Benefit Biotech

2006-11-08T06:17:00.000-08:00

There is tons of chatter this morning about what yesterday's election results mean to the stock market. Without turning this into a political diatribe, I would like to highlight one sector that I think will benefit from increased Democratic presence in Congress - Biotech.

As you know, I have been bullish on biotech for quite a while, but the prospect (and now reality) of the Democrats gaining seats has caused me to increase my leverage to the sector, mostly through short-term and LEAP calls on the BBH.

I will continue to add selectively to those positions (beware of the countervailing trend against high P/E stocks as the economy slows) in the coming weeks, making biotech my second largest sector weighting (Business IT is first).

For those looking to jump in now, but without the resources to buy the BBH (which trades in $19,000 increments) or the desire to use options, I recommend the PBE.

Networking is back

2006-11-06T15:18:00.000-08:00

Technology has definitely been showing leadership of late - enterprise software, Internet, gaming, all doing well. Now, networking is joining the party. CSCO, JNPR, NT, FNSR are all starting to move as telcos and Fortune 500s ramp up their network investments.

The easiest way to play is with the IGN ETF.

Use this dip as a buying opportunity

2006-11-02T14:03:00.000-08:00

The last several weeks I have been doing more profit taking than buying. Now, that is about to change. I expect the next 12-18 months to be excellent for the stock market (barring a major geopolitical snafu) as we finally get some multiple expansion, so I am treating the current pullback as a buying opportunity.

I particularly like information technology (aimed at businesses), biotechnology, telecom, late stage cyclicals, healthcare/pharma, and emerging markets.

A few of my favorite individual stocks:

* ABB
* AMGN
* CMCSA
* GOOG
* MSFT
* NKE
* ORCL
* WMI

Taking More Profits on Spain, Moving to EM

2006-11-02T08:18:00.000-08:00

At the end of Sept., I took profits on the EWP at $46.7. Yesterday, it hit $51, so I sold 25% of my remaining holdings.

Spain has been on fire, but I am now moving from European to emerging markets positions for my overseas holdings, in search of some additional beta. The money coming out of EWP is primarily going into EWZ and FXI.

Adding to Emerging Market Holdings

2006-10-31T11:44:00.000-08:00

2 weeks ago, I started building up my emerging market positions (with the EEM) again after the downturn they took this Summer. I am now adding to specific country positions, primarily holdings in China and Brazil. The easiest way to play those two countries is through their ETFs - FXI, EWZ.

Gold Looks Ready To Shine

2006-10-31T09:56:00.000-08:00

For those who follow technical analysis, gold is setting up nicely for a big rally. It tested (and held) support around $570 twice in the last several months (June and October) and is now rallying above recent resistance levels. With uncertainty regarding the outcome in Iraq and other geopolitical uncertainties increasing, I see the upside potential in gold far outweighing the downside potential.

The easiest way to play is through the GLD ETF. I am buying at $59.5-60, with a stop at $59 and a price target of $62.5-63. If GLD breaks $63, I'm going to take some profits and let the rest run to around $67.

Better Living Through Chemicals

2006-10-27T06:35:00.000-07:00

With natural gas and oil prices remaining relatively low and industrial production remaining strong, I am going to take this opportunity to add some major chemical names to my portfolio. My favorite plays are the best-of-breed names:

* DD
* DOW
* ROH

The '09 at-the-money LEAP calls look particularly attractive.

Gotta Sell Some GOOG :-(

2006-10-23T14:12:00.000-07:00

OK - it's my favorite stock in the world. I tout it several times a quarter. Nonetheless, even I have to sell some of my GOOG when it goes up more than 15% in 3 days. I sold 20% today around $475 and hope to buy it back in the $430-$450 range. I also closed out my November 06 Calls and plan to buy some '09 LEAPs on any major pullback.