Today I bought back Medifast (MED).

12/31/2009    14:31:53    Bought  16  MED  @  31.2594

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MED bought back

After Medifast Inc. (MED) has been sold today I got back to my computer to search what happened beneath the surface. Was there something wrong fundamentally with the stock which just emerged on? I couldn’t find anything. At least anything, which would diminish the value of this stock as a long term investment.

The only news I was able to find is that the CEO of the company, Michael S. McDevitt, sold 30,000 shares on 12/28 at $35.30.

That’s it? This is what caused the sell off at so heavy volume today so the stock lost more than 10% today? I couldn’t believe that professional traders and investors would dump the stock just because a CEO sold 30k of his holdings? The CEO sold ca 0.027% of the total shares held by insiders and a little less than 10% of his own shares and the market panicked about it? I cannot believe it, unless there is something more which wasn’t published yet.

I would agree if CEO sold 50k or 100k of his shares (ca 300k total), than it would be a significant red flag. Today’s action when compared to the technicals and fundamentals of the stock confirms me that it was an action of the crowd of amateurs. I would even agree with profit taking, because the stock was climbing steep up for pretty long time and it raised from $6.5 to $30 per share which is impressive.

I checked the stock as if I would be buying it: its fundamental data, technical screening and I didn’t find any significant problem with the stock. When comparing weekly chart with daily chart I have a strong uptrend and this sell off is actually creating a buy opportunity. I am going to wait for confirmation either tomorrow or in January and if my analysis is correct I will buy this excellent stock back. If the technicals fail and the stock will continue falling I might try shorting the stock. But I will see either tomorrow or next year.

The only regretful thing is that I was stopped out by this panic, but rules are rules and since I cannot watch my holding as closely as I wish the trailing stop loss is my major exit strategy. However, I believe Medifast Inc. has a great potential for further growth and I am definitely going to watch this stock closely.

This is a post from: Hello Suckers .... If you want to know more about investing in stocks using Reverse Scale Strategy or my Portfolio performance visit Hello Suckers ... blog today.

Did market panicked about Medifast Inc?

Technorati Tags: Medifast Inc., MED, stock, long term investment, CEO, company, shares, heavy volume, traders, investors, insiders

Medifast sharply reversed today and hit my stop loss. The stock looks great and this seems to be a profit taking after long run. Now I will wait for either a reversal or short term short sell.

12/30/2009    13:36:14    Sold  19  MED  @  29.9606

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MED sold on sharp decline

Today I bought 19 shares of Telestone Technologies Corp. (TSTC), a Chinese wireless provider. The stock is in my screen list for some time, has strong uptrend on daily and weekly frame, fundamental ratios I watch are excellent (revenue growth, price growth, EPS growth… and others) and the stock keeps hitting 52 week highs. Chinese market is still emerging and since we are at the edge of the recovery, the telecommunication in that country will be growing.

12/29/2009    14:10:12    Bought  19  TSTC  @  20.51

This is a post from: Hello Suckers .... If you want to know more about investing in stocks using Reverse Scale Strategy or my Portfolio performance visit Hello Suckers ... blog today.

TSTC added to portfolio

This is a post from: Hello Suckers .... If you want to know more about investing in stocks using Reverse Scale Strategy or my Portfolio performance visit Hello Suckers ... blog today.

Merry Christmas investors!