108 Stocks Returning 10% This Week

I will import the entire list of stocks >$2 billion market cap and >$10 which returned 10% or more tomorrow but here is a sneak preview of interesting names. I am excluding beaten down financials like Freddie Mac (+32%), or names that were buyouts or that I know of were earnings play like J Crew. Now some of these were simply stocks that had been speculators dreams during the last round of "good times" in September and October, and were beat to a pulp once those lemmings jumped off the cliff once the market turned against them, whereas others might be signaling strength due to institutional interest. Sorting which is which is the key...

>20% (9 names)
Of interest: Diana Shipping (DSX), Masimo (MASI), Sohu.com (SOHU)

>15% but <20%>
Fund Holdings: Sterlite Industries (SLT), Mechel (MTL), Suntech Power (STP), Millicom International Cellular (MICC), CNH Global (CNH)

Of interest: Sunpower (SPWR), Banco Itau (ITU), Garmin (GRMN), VMWare (VMW), Intuitive Surgical (ISRG)

>10% but <15%>
Fund Holdings: New Oriental Education (EDU), Agco (AG), Mosaic (MOS), First Solar (FSLR), KBR (KBR), Gafisa (GFA), Potash (POT), Mastercard (MA), McDermott (MDR), CF Industries (CF), Foster Wheeler (FWLT), India Fund (IFN), NII Holdings (NIHD), Research in Motion (RIMM)

Of interest: Gamestop (GME), DryShips (DRYS), Titanium Metals (TIE), Cleveland Cliffs (CLF), Focus Media (FMCN), JA Solar (JASO) [note: this was a holding entering the week], Amazon.com (AMZN), Manitowoc (MTW), Banco Bradesco (BBD), Cemex (CX), lululemon (LULU), Cummins Engine (CMI)

****
An interesting list. Looking over the portfolio I have 53 long positions (some smaller than $2 billion market cap) and 19 are in the list above (20 if you count JA Solar which was sold this week). On weeks like we just had this is especially interesting of a time frame to see where the money is flowing. Again, some of these names have been beaten to pieces so they were destined for big rebounds, but happily it appears that when the market changes from fear to greed the fund is full of stocks that people want to be in.

Below $2 billion market cap there are more names (for example between $1 billion and $2 billion are 51 names) but you start entering an arena with far more speculative fare once you get into small caps... i.e. stocks that lost 50% of their value in the selloff and now made back 10-15%.

Symbol	Company Name	% Price Change 1 Week
GLYT	Genlyte Group Inc	52.6
FRE	Freddie Mac Ord Shs	32.5
JCG	J Crew Group Inc	25.8
CHU	China Unicom Depository Receipt	23.1
DSX	Diana Shipping Inc	23
MOGN	MGI Pharma Inc	21.6
SOHU	Sohu.com Inc	21.4
CBG	CB Richard Ellis Group Inc	20
TNH	Terra Nitrogen Co LP	19.7
CREE	Cree Inc	19.4
FNM	Fannie Mae Ord Shs	19.3
SNDA	Shanda Interactive Entertainment Ltd	18.9
SLT	Sterlite Industries ADR Repstg One Ord Shs	17.9
SPWR	SunPower Corp	17.4
MTL	Mechel ADR Rep 3 Ord Shs	17.4
ITU	Banco Itau Holding Financeira ADR Each Representing One Pref	17.4
NPD	China Nepstar Chain Drugstore Ltd	17.2
SPLS	Staples Inc	17.1
VCLK	ValueClick Inc	16.9
STP	Suntech Power Holdings Co Ltd	16.3
GRMN	Garmin Ltd	16.3
ATVI	Activision Inc	16.1
DCI	Donaldson Company, Inc	16
MICC	Millicom International Cellular Ord Shs	16
VMW	VMware Inc	15.9
CENX	Century Aluminum Co	15.2
ISRG	Intuitive Surgical Inc	15.1
CNH	CNH Global NV	15
WFR	MEMC Electronic Materials Inc	14.9
GME	GameStop Ord Shs Class A	14.6
EDU	New Oriental Education & Technology Group Inc	14.4
CN	China Netcom Depository Receipt	14.4
BKD	Brookdale Senior Living Inc	14.3
DRYS	DryShips Inc	14.2
NETC	Net Servicos de Comunicacao ADR	14.2
AG	AGCO Corp	14.2
CLWR	Clearwire Corp	14.1
TIE	Titanium Metals Ord Shs	13.9
CHA	China Telecom ADR	13.8
SNP	China Petroleum and Chemical (Sinopec) ADR Repstng 100 H Ord	13.7
BMO	BANK OF MONTREAL	13.6
TD	Toronto Dominion Ord Shs	13.6
MOS	Mosaic Co	13.4
CISG	CNinsure Inc	13
BEAV	BE Aerospace Inc	12.9
FSLR	First Solar Inc	12.9
KBR	KBR Inc	12.8
JLL	Jones Lang LaSalle Inc	12.4
ROH	Rohm and Haas Co	12.4
CLF	Cleveland Cliffs Ord Shs	12.1
IHS	Information Handling Services Inc	12.1
CFC	Countrywide Financial Corp	12.1
FMCN	Focus Media Holding Ltd	12.1
MER	Merrill Lynch Ord Shs	12
NAVZ	Navistar International Ord Shs	11.9
PDCO	Patterson Companies Inc	11.9
EXPE	Expedia Inc	11.9
OEH	Orient Express Hotels Ltd	11.8
AMZN	Amazon.com Inc	11.8
JASO	JA Solar Holdings Co Ltd	11.7
CSE	CapitalSource Inc	11.7
MPEL	Melco PBL Entertainment (Macau) Ltd	11.7
UBS	UBS AG Ord Shs	11.6
IVSBF	Investor Class B Ord Shs	11.5
NVDA	NVIDIA Corp	11.5
MTW	Manitowoc Co Inc	11.3
UBB	Unibanco Depository Receipt	11.3
BBD	Banco Bradesco ADR representing one Preference Share	11.3
ARA	Aracruz Celulose ADR	11.2
NUE	Nucor Corp	11.2
GFA	Gafisa ADR Representing 2 Ord Shs	11.1
KEX	Kirby Corp	11.1
LBTYA	Liberty Global Class A Ord Shs	11.1
LAZ	Lazard Ord Shs	11
CY	Cypress Semiconductor Corp	11
MFG	Mizuho Financial Group ADR Reprg 1/500 Share of Ord Shs	11
FIG	Fortress Investment Group LLC	10.9
POT	POTASH CORPORATION OF SASKATCHEWAN INC	10.9
ALB	Albemarle Corp	10.8
KMX	Carmax Inc	10.8
MA	MasterCard Inc	10.8
MEOH	METHANEX CORPORATION	10.7
CBH	Commerce Bancorp Inc	10.7
MDR	McDermott International Inc	10.7
ILMN	Illumina Inc	10.6
CPRT	Copart Inc	10.6
BAK	Braskem ADR	10.6
CF	CF Industries Holdings Inc	10.6
BRC	Brady Corp	10.5
NLC	Nalco Holding Co	10.5
JNS	Janus Capital Group Inc	10.5
VRSN	Verisign Ord Shs	10.5
XL	XL Capital Class A Ord Shs	10.5
DLB	Dolby Laboratories Inc	10.4
MLM	Martin Marietta Materials Inc	10.4
FWLT	Foster Wheeler Ord Shs	10.4
CX	Cemex ADR Repstg Ten Ord Participation Share Certificates	10.4
NSANY	Nissan Motor Depository Receipt	10.4
IFN	India Fund ETF	10.3
GNA	Gerdau AmeriStl Ord Shs	10.3
BCS	Barclays ADR	10.2
DELL	Dell Inc	10.1
LULU	lululemon athletica inc	10
PTV	Pactiv Corp	10
PCS	MetroPCS Communications Inc	10
NIHD	NII Holdings Inc	10
CMI	Cummins Inc	10
AIB	Allied Irish Bks Depository Receipt	10
SNE	Sony Rep 1 Ord Shs ADR	10

A New Position Started Friday: KHD Humbolt Wedag (KHD)

I didn't have time to write a full entry on this new name to the portfolio yesterday, but I added a starter position in this very interesting Hong Kong based infrastructure name: KHD Humbolt Wedag (KDH). Yes that's a mouthful.

I actually found this name in my ever constant search for new and better ideas through an article on Seeking Alpha.

• KHD Humboldt Wedag International, Ltd. (KHD) has spent two years transforming itself from a financial services company into a global infrastructure company. Prior to November 1, 2005 the company was known as MFC Bancorp.
• The transition was completed in the 3rd quarter and now the company is focused on their core business of (from their website): supplying proprietary technologies, equipment and engineering/design services for cement, coal and minerals processing. KHD through its subsidiaries offers their clients all over the world engineering services, machinery, plant and processes as well as process automation, installation and commissioning. The services include staff training as well as pre- and after-sales services through to feasibility studies and financing concepts. This array of supplies and services includes, in particular, the modernization of existing facilities for capacity increases and, for reducing the specific energy demand and the burden on the environment.
• First, KHD’s primary markets are Asia, Russia and eastern Europe. It also does business in the Middle East and Africa. All are strong growth areas for infrastructure.
• Second, revenues are earnings are growing at 50% to 100% rates over 2006 quarters and year to date. The company’s backlog of signed orders is also growing: on Sept. 30 the backlog was $762 million, by Nov. 14 it was up to $925 million. The company has done $420 million in revenue for the first 9 months of 2007.
• Third, the company has a PE of 21 on trailing earnings and over $9 a share in cash. The stock is very fairly valued for this type of growth. I believe the transition from financial services has not yet been noticed by the general market.
• Finally, the company is followed by very few analysts. Yahoo finance shows one, TradeKing has no earning estimates available, there is very little info out on the Internet about the company. So you have a $1 billion market cap, international stock doing infrastructure business in emerging markets, that hasn’t been discovered. Sounds to me like a recipe for some outstanding stock price appreciation.

Well I couldn't of dreamed up a better scenario myself. For those who have been following along you know I love the infrastructure group for: little exposure to domestic US economy, exposure to energy markets, exposure to petrodollars, growing backlogs, etc etc. I also love any companies with exposure to truly emerging markets such as Africa, Eastern Europe, and the Middle East. (For example my investment in Millicom Cellular International (MICC)). So here is a name that appears to be a home run.

Now I will say normally I have a lot of suspicion for companies that are completely changing their line of business, but it appears, over time this seems to be a legitimate and in fact very successful transformation. The numbers in the latest earnings report are truly impressive.

• Revenue for first 9 months of 2007 +75% over 2006
• Net income for first 9 months of 2007 +102% over 2006
• Revenue for Q3 2007 +54% over Q3 2006
• Net income for Q3 2007 +63% over Q3 2006
• Backlog was $762M on Sept 30, 2007 - as of Nov 14, 2007 it increased to $925M

So obviously these are heady numbers and while I don't expect this pace to continue as the company grows larger it looks headed for a nice 30% growth rate for the near term. Analysts are not on board with that, claiming despite 40% revenue growth rate projections for 2008, EPS will only grow by 18% (this could be due in part to higher tax rates, I am not sure yet). Despite this impressive growth background, KHD Humbolt Wedag is valued at only 18x 2007 estimates and 15.5x 2008 estimates (which appear on the surface to be too low). So we get quality growth at a low price - the best of both worlds.

Motley Fool also weighed in on KHD Humbolt Wedag in an August article:

• With all of the troubles in residential real estate, and the worries over weakness in commercial real estate, it might be a bit surprising to see a company that helps build cement plants continue to post amazing growth.
• The strength behind KHD's growth is that it has a truly international business. The difference being that KHD receives an even smaller percentage of its sales from the U.S., which has helped to shelter it from some of the worries recently plaguing our markets.
• 70% of the company's order intake during the second quarter came from Asia, Russia, and Eastern Europe. The company's partnership with CITIC Heavy Machinery will likely provide another stream of earnings starting next year.
• Some might quibble that the 13% gross margins are far below last quarter's results, but the company advised last quarter that those results weren't sustainable. Through the first six months of the year, the company's 16% gross margin is right on par with historical results.
• Overall, the coal and minerals sales only represent about 15% of the current backlog.
• KHD would like to do an acquisition in this sector, and it has the cash and overall balance sheet strength to make one, but it can't find an attractively priced target. It's willing to wait, and in the meantime, the company is pursuing partnerships here and in waste treatment. That should help diversify its revenue stream away from cement engineering, projects where growth will inevitably level off.

So as we've seen with some smaller cap stocks of late in the international arena, when the US market weakens people start tossing the smaller fare out the window the quickest. Stocks like WuXi PharmaTecth (WX) from China, Gafisa (GFA) from Brazil, and Mechel (MTL) were treated like Rosie O'Donnel at a Republican caucus. (i.e. not good) So buying a stock like this carries the risk of "baby get thrown out with bathwater" when the market turns south, plus it carries the inevitable fear of global slowdown risk. While I think that will be a misguided assumption it does not mean these type of stocks cannot lose 1/3rd of their value very quickly while panicky investors flee. Won't mean a change in fundamentals, simply a change in perception. In fact, KHD Humbolt Wedag has already taken quite a hit - the stock peaked near $46 on Halloween and has lost a third of its value simply due to 'fear'.

On a technical basis, the stock's 200 day moving average has been in the mid $28s, which is where the stock fell to in the worst of the selling. It has since recovered a bit, and made a nice 4-5% type of move Friday. What I would like to see now is a move back above the 50 day moving average ($34 and falling by the day) to establish a clear new uptrend. However, I am willing to start a stake here, with the understanding the stock could be relatively range bound until it breaks over this $34 level. So a break above $34 would be bullish, a break below $29 would be bearish and everything in between those 2 levels is sort of 'white noise' from a technical standpoint.

I began my KHD Humbolt Wedag position with a 250 share stake in the mid $31s, or roughly $7.7K (0.7% stake). On either a breakout above $34 or a pullback to $29 I will add a larger stake in this position.

Long all names mentioned in story in fund; long none in personal account

Bookkeeping: 'Rising Tide' Performance Week 17

Week 17 performance of the mutual fund

Comments: An interesting week to say the least (aren't they all?). After a terrible open Monday after a post Turkey day rally last Friday, every index was officially in correction mode. The mood was horrible and talk of bear markets approaching were everywhere. You'd think that was a month or 2 months ago - it was just 3 days ago. After a spike down Tuesday that had us test the August lows - it looked like the bull case was lost. Then out of the air as we touched 10% correction, the helicopters and unicorns united in a magical symphony and we had a reversal and a great day for the 'indexes', but paltry volume and weak breadth (many stocks were still down Tuesday). Strange how every time we are on the precipice the indexes (which take far less buying power) reverse - when many stocks stay in bad shape. Well that index reversal was enough to bring the bulls back and Wednesday we had a full bore rally from top to bottom, followed by a quiet Thursday (unless you were in solar or dry bulk stocks). Thursday night investors were treated to the treat that is a Ben Bernanke signal of future rate cuts (insert needle here), following by a uppercut to the jaw of the bears to news Friday morning that legal debts would no longer matter (for potentially 7 years) for those silly subprime borrowers. We are well on the way to bailouts - and I can only assume this is the beginning. Bulls rejoiced, free market disciples were aghast, and we partied like it was 1999. Late Friday we had a dip and confusion reigned momentarily but 'market forces' got back to work in the last few minutes of the session to make sure the week ended with a bang! Magic!

For the fund, I did, as promised selling into the rally to get more 'neutral' from a very long exposure last week. And I did more buying of short exposure as the week passed - while this held back the fund quite a bit (to the tune of over 1% of return) it's a disciplined conviction until the overall index charts show more staying power. In the future I will just have to remember that at every 10% correction the full faith and power of the federal government will come riding on their white horses (along with those pesky computers who run Wall Street) and every 10% correction must be bought. We will apparently never be allowed to have a (gasp) 15% downturn or (horror) 20%.... ever.... now that I know the playbook (which has obviously changed since 2002), I will learn and adapt. But for now we've put a quick 5.5%-6.0% rally and one would think... wait, thinking is wrong. Conventional wisdom would say... wait, conventional wisdom is moot in a government supported market.... well the truth is who knows. We could be at all time highs by middle of next week with all the kool aid running through our veins now. Or down 5%. Just take it day by day. Old playbooks have been burnt - when market forces are not allowed to play out, you cannot even fathom to guess what will happen. I will see what the government wants us to do, and then follow along. "Take me to your leader"..... Wheeee....

The S&P 500 was up 2.8% and Russell 1000 was up 2.9% his week. I know you'd think they would be up much more but remember, we had a terrible Monday (I know, that feels like eons ago). Rising Tide Growth Fund pulled through like a champ with a up 4.1% week only held back by large short exposure in the back half of the week (without which the fund would of been up roughly 5.5%). But that's ok, I like insurance in this market where 300 point Dow moves are now 'expected'. So a nice 1.16 to 1.3% type of outperformance this week and it was great to see the vast majority of fund holdings outperform the indexes by a mile once the veil of darkness over the markets was lifted. When we go through such severe downturns so quickly, one begins to doubt the stocks but these holdings really put on a heck of a show once we left the domain of "every stock stinks, they all go to $0" type thinking. So the fund is nearly back to the +15% over indexes I want to achieve every year...

I can't even hazard to guess where we go from here. The market is under the influence of pressures that are not 'measurable', so I am simply going to rely on technicals at this point. We are still below S&P 1490, when we eventually get the government to push us through that level, I will drop these short positions and join the party with toga in hand. It's as simple as that. Feels 'great' to have so many people looking over our shoulders to make sure nothing gets out of hand to the downside. If we dare go down, I am sure that will be 'fixed' too, soon enough. I'm sure someone from Omar or Bahrain is itching to buy some Etrade or Washington Mutual or (insert troubled institution of your choice here)! And another problem disappears just like that. Magic!

Price of Rising Tide Growth: $11.573
Lifetime Performance to date (vs Aug 3, 2007): +15.73%

Comparable S&P 500: 1,481.1 (+1.09%)
Comparable Russell 1000: 806.5 (+1.29%)

Fund return vs S&P 500: +14.64%
Fund return vs Russell 1000: +14.44%

Last week's results here.

Since the market cap of the median stock in the Rising Tide Growth fund (median $9.8 Billion as of November 07) is significantly below the SP500 index (median $13.1 Billion as of September 07) but higher than the median market cap in the Russell 1000 (median market cap $5.8 Billion as of September 07), I am measuring the fund against both indexes. Click here to see all fund's holdings as of mid November 2007.

Basis for indexes is 5 day weighted average of closing prices Aug 3-9
SP500 : 1,465.2
Russell 1000 : 796.2

To see why I use the 5 day weighted average of the first 5 trading days to smooth out the volatility of the indexes as the fund launched, see here.

Please click here: fund performance for previous updates

3 Similar Charts - Making Some Buys

With my newfound (ahem) optimism, and oodles of cash I am making some small purchases today since most of this week has been sales. I am not making huge buys... just toes in water additions. Totally unrelated to the rest of this post I added to my Research in Motion (RIMM) which is down 6% on "channel checks" blah blah downgrade.

For illustrative purposes on how I am allowing technical signs to guide the positions near term - I offer 3 stocks: CNH Global (CNH), McDermott (MDR), and National Oilwell Varco (NOV).

1) I mentioned McDermott (MDR) yesterday as a stock that was rising from below the 50 day moving average and was reaching important resistance (so I cut back since it had a pretty nice bounce from lows). Well it did break through later in the day, jumped up today, and now has fallen right back to resistance (from above instead of below). While still in (to me) a precarious position (it could go either way) just to make reader msb happy I did offer a small buy (see now that's an interactive mutual fund). Please note the word "small" (it is still a sub 1% position). I am not going to commit further until it either makes a more strong move upward and/or S&P 500 makes a push above 1490. Yesterday's close was the first time over the 50 day moving average and if it holds $53 today that would be a second day - if the market improves this is the type of position I'd then add to as it would be without any near term resistance to impede a run upward. But it could just as easily break down and bring reader msb to tears... So this is chart #1



2) CNH Global (CNH) an agriculture equipment play has been strangely week despite great news from competitor Deere (DE) and great earnings. Most likely the culprit is the strong euro which hurts exports and exposure to construction (just like Deere) in part of its business. But the chart improved tremendously the past week, and it also broke back above its 50 day moving average, and after spiking this AM has pulled back very nicely to its 50 day this afternoon (down 2%)... I actually like this chart more than McDermott since this is the 3rd day its held its 50 day moving average of $57. So I am adding here. So this is chart #2



3) National Oilwell Varco (NOV) an oil services stock is not faring as well. It was in a very similar setup to McDermott (MDR) yesterday but has failed to push through its 50 day moving average of $69 today. It is sort of just hanging around right at resistance. Really up to 4 PM yesterday the chart of McDermott and National Oilwell Varco were identical. Only difference is McDermott looks far stronger today. Again I like all these names fundamentally but I want to see technicals that confirm. National Oilwell Varco with a strong day or two should join the other two but for now I am holding off adding any. So this is chart #3.



So 3 charts, on 3 stocks I like, 1 strong buy (CNH Global), 1 touchy buy (McDermott) and 1 still waiting on (National Oilwell Varco). Love the long term fundamentals on each, I am just wanting the market to tell me they also love the fundamentals and are ready to put their money where their mouth is....

And away we go... I finally put some money to work on the long side. Thanks Ben!

Long all 4 names in fund; long none in personal account

Less Dogma, More Money

Ok, after a morning of intellectual puking, have to get back to the market.

Rev Shark over at Realmoney.com - one of my favorite web authors said it best today; so I will just follow this credo and ignore the revulsion at what is going on

In addition to the very dovish Federal Reserve, the Treasury Secretary is strong arming banks into foregoing any action to deal with defaulting sub-prime mortgages. Even if you aren't appalled by this gross governmental meddling in the free enterprise system you have to wonder if we are simply delaying the Day of Reckoning and making the eventual pain even worse.

Even though there are some serious doubts about whether this government intrusion into the mortgage mess makes business sense, the market's immediate reaction is positive. With the Fed cutting rates and people being allowed to not pay their legal debts, we have an increase in liquidity and that is enough of a band-aid to hold us up and even bring in buyers who want to ride the wave of short-term optimism.

I find the whole idea of the government (and a Republican administration nonetheless!) telling banks how to deal with sub-prime loans sickening, short-sighted and a bad precedent, but our job here isn't to discuss political philosophy. Our job is to try to make some money and the market is having a positive reason to the news this morning. The question we have to ponder is whether this news is going to give us some legs into the Fed meeting that is scheduled for Dec. 11.

Back in August we ran hot and heavy into, and out of, the Fed meeting as the market seized on the belief that the Fed cut was the salve the market needed. For a while the market seemed to have lost confidence that the Fed could solve all our problems, but in the last few days belief in the Fed as our savior seems to have been restored.

So let's revisit all the 'good things' in a purely market standpoint

1. All branches of government (save judicial?) will do whatever it takes going into an election year to keep any slowdown contained to a bare minimum
2. We have a literal printing press shoveling an