Monday, September 1, 2008

32 Stocks Returning 8%+ this Week

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A bit of an ominous sign in this week's list - despite a slightly down market (2 big down days, 2 big up days) there are very few stocks making large weekly gains. Usually in a week with less than 1 % move down we'd see 60+ names making 8%+. Now we have half. Showcasing the flip flop nature of this market - what works one day, fails 3 days later (taking back the gains). Sustained gains are simply very difficult to find.

Criteria
  1. Market capitalization $1.75B+
  2. Average trading volume 100K+
  3. Stock price $10+
  4. Return this week 8%+
Green names we own, blue names we have owned in the past or discussed in the blog. A very odd mix this week - a few financials (AIG? Really?), a few home builders, and lo and behold a few refiners. We highlighted the strength in former fund holding Titanium Metals (TIE) last week [Bullish Action in Titanium Metals] and continue to point to LDK Solar (LDK) as the new "favorite" among solar investors. Scratching my head at the strength in fertilizer name Terra Nitrogen (TNH) - not sure if there is something company specific because the group did not have a big move.

As for housing stocks at some point in the next 2 years this will be THE biggest % gainer move - in fact it could happen multiple times as people are just antsy to jump back into this group calling a bottom - many of the same people who called it last year, and 2 years ago. It really doesn't matter if they are "correct" - if enough people believe in it, they can move the stocks up. We saw some bullish action last week, but I actually sold into the rally (Lennar) but if the strength continues I'll get back my position. My first impulse is to question any strength because my belief is the bottom in housing is a long way off - but again it really doesn't matter if we look back in 6 months when housing remains listless and say "that was silly that people jumped into housing stocks" - if the stocks go up XX% because enough people "believe" - it won't matter if the evidence is contrary in half a year. See multiple huge rallies in beaten down financials over the past year for example. Perception is reality. That said in 2 years or so I could see a very housing heavy portfolio as I do believe when the "turn" is finally upon us the hedge funds will be buying these stocks en masse and housing stocks will be like fertilizer stocks of 2007. Will it make sense? Not really - we have a historic overhang and when the housing market "rebounds" it won't be anything like we saw in 2001-2006. Just like technology never "rebounded" like the days of 98-00, but that won't stop people from chasing the elusive unicorn. So we'll be there too hanging on their coattails. But for now it's more bluster than reality, in my view.

Symbol Company Name % Price 1 Week
MBI MBIA Inc 59.0
TIE Titanium Metals Corp 18.2
LVS Las Vegas Sands Corp 17.6
TNH Terra Nitrogen Co LP 13.6
KBH KB Home 13.5
SLM SLM Corp 12.6
MER Merrill Lynch & Co Inc 12.4
TSO Tesoro Corp 12.3
LDK LDK Solar Co Ltd 11.9
LEH Lehman Brothers Holdings Inc 11.7
SUN Sunoco Inc 11.5
XCO EXCO Resources Inc 11.4
LEN Lennar Corp 11.2
RMBS Rambus Inc 11.1
FTO Frontier Oil Corp 10.8
WB Wachovia Corp 10.7
TIF Tiffany & Co 10.5
CEO CNOOC ADR 10.4
YZC Yanzhou Coal Mining ADR 10.1
UTIW UTi Worldwide Inc 10.0
DHI D.R. Horton Inc 9.8
FRO Frontline Ltd 9.7
TCB TCF Financial Corp 9.7
AXE Anixter International Inc 9.5
OB OneBeacon Insurance Group 9.5
NS NuStar Energy LP 9.3
FAF First American Corp 9.1
CSE CapitalSource Inc 8.5
BKD Brookdale Senior Living Inc 8.4
BTE Baytex Energy Trust Units 8.3
AIG AIG-AMERIC.INT.GRP 8.2
SLH Solera Holdings Inc 8.0

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