PTRY - breakout candidate

[DSteckler]

Nice move today. Still in the consolidation zone but close to breaking out.

[ParkTwain]

You can easily search for breakout candidates (to new 52-week highs) using MSN Money's Java-based stock screener. There is a search parameter for "current price = no more than X% below 52-week high". (I would use 3% to 5%.) For each stock found, look also for a Bollinger Band width measure less than about 1.5 std devs (as found at Stockcharts.com), and you're most of the way there.

If you're using something more esoteric to identify your picks, please post.

[DSteckler]

I've owned PTRY for several months now. I'll have to go back and find what screen I used to identify the stock.

[skiracer]

I've owned PTRY for several months now. I'll have to go back and find what screen I used to identify the stock.

Where was your initial entry?

[DSteckler]

Various prices between 39 and 39.70, back in late June.

[skiracer]

So you rode it up to the $42.50 range and then back down to $32 range. It always amazes me that people have the fortitude to stay with a position through that kind of swing. What do you see there that kept you in it through all of that. It doesn't matter now because it certainly has paid off. Did you ever consider taking your profits at around $42 and getting back in after it had bottomed? I mean when it was dropping to $32 what were you thinking?

[DSteckler]

So you rode it up to the $42.50 range and then back down to $32 range. It always amazes me that people have the fortitude to stay with a position through that kind of swing. What do you see there that kept you in it through all of that. It doesn't matter now because it certainly has paid off. Did you ever consider taking your profits at around $42 and getting back in after it had bottomed? I mean when it was dropping to $32 what were you thinking?

PTRY was from a value-oriented model. I stay long the trade as long as the system doesn't kick me out. The pullbacks can be a bit scary but the system works - in Nov. and Dec. combined the model was up 4.5% while the SPX was up about 3.5% in the same two months.

[skiracer]

PTRY was from a value-oriented model. I stay long the trade as long as the system doesn't kick me out. The pullbacks can be a bit scary but the system works - in Nov. and Dec. combined the model was up 4.5% while the SPX was up about 3.5% in the same two months.

Dave,
I like the stuff your putting up on your posts. Always like seeing and reading others ideas about all of this. Ya never know when you might glean something that will make your own arsenal better. I'm strictly short term swing trading with a few longer term positions if the momentum stays strong. The reason I questioned your position in PTRY an holding through that downturn was because I was interested in your stop placement or if you even use them in your strategys. If it's not a bother an you don't mind answering my question about stops. Do you use them, what % is your limit, or do you use some moving average, fib. line, or trend line, or nothing at all. Do you usually have a plan as far as entry triggers, targets, an exits? Hope you don't mind me grilling you on all of this. Ed

[DSteckler]

Dave,
The reason I questioned your position in PTRY an holding through that downturn was because I was interested in your stop placement or if you even use them in your strategys.

Excellent question, Ed. The answer depends upon the strategy used.

I manage multiple portfolios, some growth, some value, and some swing. Swing candidates use sell stops and trailing stops, and partial profits are taken when the profit equals the risk in the trade.

For example, look at the ELN trade I placed Tuesday. I selected the stock using a Cooper 1-2-3-4 pullback strategy. The sell stop is a tick or two below Tuesday's low of 13.73 so let's use 13.65 in this example. Assume my entry price was 14. My risk is 35 cents therefore I'll sell half my shares once the reward equals the risk, or a price objective of $14.35. That was reached today so I would sell half the shares. The balance of the position is held using a trailing stop.

Value and growth selections are screened with a bias towards fundamental factors rather than technical factors. These positions are held as long as the stock continues to come up on my filter screen regardless of price action, up or down. Sell stops are not used in these portfolios.

Now obviously, if the price performance is trending lower long enough I'll eventually get kicked out of the position. But how long that takes is an unknown and what happens if some negative news comes out that kills the stock? Or what if the stock loses half its value before it gets kicked out of the portfolio? How is risk managed?

Risk is managed by holding a large portfolio of growth and value positions. I typically hold between 50 and 75 of these stocks so no one position is usually more than 2% of the portfolio. Even if one turns out to be a meltdown, it won't hurt my overall portfolio too bad because it's such a small position.

The downside to this is that one monster won't dramatically boost portfolio performance, either. But that's okay - with these portfolios I get paid to turn in relatively steady index-beating performance year after year, not to double the portfolio value every year (although that would be nice!). To use a baseball analogy, I'm like the utility player who hits lots of singles and doubles, along with the occasional triple or home run, and the occasional strike out as well.

[mrmarket]

Do these guys own their own real estate or do they sell and lease back the properties?

[skiracer]

Do these guys own their own real estate or do they sell and lease back the properties?

Who are you talking to?

[mrmarket]

Who are you talking to?

To whomever knows anything about PTRY's business.