Billyjoes Top 10 Cheap Stocks

[billyjoe]

Week 9 Cheap Stock Portfolio Monday--Boy squeezing this thread in is like trying to get it through the eye of a needle. Lots of information to digest.

Opening prices

HOM 5.21--stopped at 4.95
MED 5.92
MOSS 5.76

TLF 6.90
NUAN 8.33
RWC 7.45

PRFT 9.75
GEOI 9.45
EGY 4.59
LPSN 5.65

Today's best RWC +10.95% GEOI +9.92% PRFT +3.12% MED +2.89% LPSN +2.31%

billyjoe

[billyjoe]

Cheap Stock Port Week 9 Tuesday

TLF stopped 6.56 funds remaining $95,072

Early Movers : NUAN +2.24% GEOI +6.02% RWC +6.57%


billyjoe

[billyjoe]

Cheap Stock Port Week 9 Tuesday

To date we have 2 positions stopped HOM and TLF. We have $190,082 from them to reinvest either Wednesday or Thursday. Of our 8 remaining positions only NUAN is below it's purchase price and by less than 1%. Here are the highlights of our other positions:

PRFT--unchanged
EGY--+.9%
MOSS--+1.9%
LPSN---+2.65%

MED---+5.57%
GEOI--+12.6%
RWC---+22.8%

Three more decent days and we're in the $$$


billyjoe

[billyjoe]

Cheap Stock Port Week 9 Wednesday

HOM sale $95,010 to [email protected] now worth $95,643

TLF sale $95,072 to [email protected] stopped at 10.56 worth $91,627

MED stopped today value $102,027

GEOI stopped today value $111,746

RWC stopped today value $119,060

From our 4 stopped positions we have $424,460 to reinvest tomorrow if any of the remaining 5 , MOSS NUAN PRFT EGY LPSN look promising.

billyjoe

[billyjoe]

Was surprised to see 2 of my remaining 5 , EGY and MOSS listed in the top 100 of 3500 largest traded companies in Joel Greenblatt's "Little Book that Beats the Market". This means they are in the top 3% when adding ROE + earnings. These are screened from companies with cap > 50 million. Smallest company on list is NATH 57.2 mil. Largest is BSX 21.7bil.

billyjoe

[billyjoe]

Cheap Stock Port Week 9 Thursday

Two more stopped : PRFT $95,897 and LPSN $98,761

We're not too certain where the market is heading so we're only reinvesting $400,000 today. $100,000 in [email protected] and $300,000 in EGY @4.77. We've got about $217,000 in cash. Remaining positions MOSS , EGY , and LPSN.

billyjoe

[DSteckler]

Are these real trades or a hypothetical portfolio?

[billyjoe]

Dave,
Hypothetical, a ten week experiment. While you're here, any thoughts on EGY? Thanks

billyjoe

[DSteckler]

Egy

<< any thoughts on EGY? >>

Shooting star bar so far today. It's moved up almost non-stop since late October. Oil's up big again today and I would think it's got to take some profits soon but the Feb. crude contract is actually coming out of a short consolidation zone so it could continue moving up another couple of dollars per barrel.

[DSteckler]

<< Hypothetical >>

Billyjoe, what slippage factor are you using in your return calculations?

[billyjoe]

Dave,
I'm just figuring a flat $300 for transaction fees most weeks. I know that's unrealistic considering some of the buys are up to $400,000 worth of a $6.00 stock, but I'm trying to keep it as simple as possible. What is reverse slippage called? I actually got one for about .04 under my order a couple weeks ago, but that may be an exception to the rule. In theory, these are not all market orders, but most of the buys are. Sells are limit orders to prevent getting killed in pre-market as happened with HOM in week #2. How much slippage do you allow for?

billyjoe

[billyjoe]

Cheap Stock Port Week 9 Thursday

Stopped today:

NUAN $96,697
PRFT 95,897
EGY 99,564
LPSN 98,761

Our only remaining stock is MOSS , with reinvested funds from HOM and $100,000 reinvested today from previous stopped positions is worth $304,133 and we have cash totalling $702,800 for grand total of $1,006,933. Will decide tomorrow what to do. Stop at 2% of open tomorrow.

billyjoe

[DSteckler]

<< I'm just figuring a flat $300 for transaction fees most weeks. How much slippage do you allow for? >>

It's a function of average daily volume and price per share. If you're buying $500,000 of a $10 stock with an ADV of 150,000 shares per day, you'd be accounting for 1/3 of the ADV. No way you'd buy that much w/o running up the stock price or taking several days to get filled on a limit order.

In the above example, assume your commission costs are 1 cent/share; that's $500. Now figure an average of 2% for a slippage factor, which is realistic in a thinner ADV stock; that's an additional $1,000. Round trip you're looking at $3,000 in fees and slippage, not $300.

Even with a more liquid stock, say a $20 stock with 1% slippage, you're looking 25,000 shares: $250 in commissions plus $250 in slippage, for a roundtrip expense of $1,000.

I've seen slippage in even more liquid stocks that for one reason or another trade with a larger spread, to be as high as 3%. On a $20 stock that's only 60 cents. If you assume you're using limit orders, it's unrealistic to think you'll be filled on all the shares of a low-priced stock at your limit price on the day of purchase.

[billyjoe]

Dave,
I should figure $1000 per stock in the port. instead of $100,000. But the higher figure makes things more interesting. You said I couldn't purchase 1/3 of the daily average volume without driving up the price. That's certainly true but couldn't the subsequent rise in price more than make up for the slippage? Especially when buying large amounts of the same stock for several weeks in a row. Of course I'm also selling large amounts of the same stocks each week.

billyjoe

[billyjoe]

Week 9 Cheap Stock Port Friday

We started today with 1 stock left MOSS @6.11 .We sold it @6.19 resulting in a nice profit for the day and the week.

Starting today with lots of cash $702,800 we decided not to reinvest

MOSS started with initial position $105,903 , it's money reinvested from sale of HOM $97,237 , and later reinvested funds that had grown to $100,993.

Todays gain before the sale made the initial position worth $107,465 , the HOM reinvested money worth $98,019 , and the $100,993 worth $102,483.

We sold everything resulting in $1,010,767 minus transaction fees of $300 leaves us with a $10,467 profit or 1.05%

billyjoe