The Columbus Day Top 5

[Tatnic]

I have analyzed my dump and have included that these 5 stocks are my favorites:

FMD MTEX PCLN PSPT ZONS


Which one do you like the best..and why?

I will buy one of these stocks in the next few days.

I couldn't get thru the whole list without falling asleep, but I found some that I'm sure would never get to the top 5 for the simple reason that they're trading too close to the 40 week average. I'll look at these and pick my "favorite"...here's the list: abax, ads, afg, az, bwp, pjc, qsii. None are trading higher than 13% over their 40 week (at the time I checked, which I believe was last thursday, the 12th). I'm going to judge my selection on the income statement, balance sheet and cash flow. Not gonna spend that much time, its more of a relative comparison and its not a fundamental analysis either. Will also look at insider activity.

I'm doing this out of curiosity. I don't necessarily think one of these will do any better than Ernie's top 5 for the simple reason that the market is very favorable at this point for momentum stocks. That could change in a month or so.

[Tatnic]

I couldn't get thru the whole list without falling asleep, but I found some that I'm sure would never get to the top 5 for the simple reason that they're trading too close to the 40 week average. I'll look at these and pick my "favorite"...here's the list: abax, ads, afg, az, bwp, pjc, qsii. None are trading higher than 13% over their 40 week (at the time I checked, which I believe was last thursday, the 12th). I'm going to judge my selection on the income statement, balance sheet and cash flow. Not gonna spend that much time, its more of a relative comparison and its not a fundamental analysis either. Will also look at insider activity.

I'm doing this out of curiosity. I don't necessarily think one of these will do any better than Ernie's top 5 for the simple reason that the market is very favorable at this point for momentum stocks. That could change in a month or so.

the only one I found that is decent looking is qsii.

Don't forget this week's inflation numbers...could be a very strange week with those and option expiry thrown in.

[threadogie]

MTEX crashes 12%

20.35 was the buy point off the right side momentum base. Ativo Research 10/7 overall BUY signal now a sell as momentum now unfavorable. Ativo reports real sales growth past 4 quarters also declining at a 6% rate.

A note on ZONS: ZONS sell off late last week related to Systemax Inc (SYX) accounting problems. SYX this week drops off the #1 IBD ranking, that is drops off the page completely.

[spikefader]

MTEX offers good r/r here. Since my post price has dropped to $16.68, so risk is now only $0.20 to make $9.42. R/R 47.1! LOL ever heard of such a thing! Frankly the inverted SHS pattern not looking so hot with that last few minutes of selling.....but a stop under today's low makes for outstanding numbers.

http://www.technicaltrades.net/2006/10/16/mtex/

[spikefader]

MTEX offers good r/r here. Since my post price has dropped to $16.68, so risk is now only $0.20 to make $9.42. R/R 47.1! LOL ever heard of such a thing! Frankly the inverted SHS pattern not looking so hot with that last few minutes of selling.....but a stop under today's low makes for outstanding numbers.

http://www.technicaltrades.net/2006/10/16/mtex/

Quickly takes the risk. Now sets up short side as per http://www.technicaltrades.net/2006/...x-short-setup/ with r/r of 21.

[Tatnic]

20.35 was the buy point off the right side momentum base. Ativo Research 10/7 overall BUY signal now a sell as momentum now unfavorable. Ativo reports real sales growth past 4 quarters also declining at a 6% rate.

A note on ZONS: ZONS sell off late last week related to Systemax Inc (SYX) accounting problems. SYX this week drops off the #1 IBD ranking, that is drops off the page completely.

well, that's 40% of the top 5 that have shit the bed. But at least they'll get down to better buy points. Small caps + extended charts = crapola..not always but in my experience more often than not. Now small caps with good numbers trading at a discount are a much better proposition..these would be considered "value" stocks for those of you that have never heard that term.

[New-born baby]

Quickly takes the risk. Now sets up short side as per http://www.technicaltrades.net/2006/...x-short-setup/ with r/r of 21.

What an ugly spike down today. Yes, short this one.

[billyjoe]

I couldn't get thru the whole list without falling asleep, but I found some that I'm sure would never get to the top 5 for the simple reason that they're trading too close to the 40 week average. I'll look at these and pick my "favorite"...here's the list: abax, ads, afg, az, bwp, pjc, qsii. None are trading higher than 13% over their 40 week (at the time I checked, which I believe was last thursday, the 12th). I'm going to judge my selection on the income statement, balance sheet and cash flow. Not gonna spend that much time, its more of a relative comparison and its not a fundamental analysis either. Will also look at insider activity.

I'm doing this out of curiosity. I don't necessarily think one of these will do any better than Ernie's top 5 for the simple reason that the market is very favorable at this point for momentum stocks. That could change in a month or so.

Tatnic,
You've mentioned checking the balance sheet more than once. Could you tell us what you look for good and bad that might tip you off to a potential winner or loser ? I find it interesting comparing goodwill and intangibles of similar companies. Start your own thread . You'll get lots of readers.

--------------billyjoe

[casinoboy3]

The top 5 were posted last Wednesday. Judging on what has normally happened in the past the next sequence of events would probably go something like this: MM would have likely chosen and bought ZONS or MTEX on Thursday, claiming to sell at a 15% gain in 4-6 weeks. Instead, the stock falls by about 15% over the course of the next week (like they have), steadly going down to about a 20-25%+ loss over the course of the next couple months. Then, it reverses and begins to steadily rise, and MM will get his 15% gain around Spring or so - outperforming the market in the process.

I'm very curious to see what will happen this time.

[Tatnic]

Tatnic,
You've mentioned checking the balance sheet more than once. Could you tell us what you look for good and bad that might tip you off to a potential winner or loser ? I find it interesting comparing goodwill and intangibles of similar companies. Start your own thread . You'll get lots of readers.

--------------billyjoe

Billyjoe...I look at a number of things. On the income statement I like to see increasing revenues, margins, and operating income. Net income is also important but I personally focus first on operating income increases and how they compare to increases in cash flow from operations.

On the balance sheet, I look for increases in net tangibles year over year and the last 4 qtrs. I like to see steady increases of >30% per year for growth stocks. Often times you'll see net tangibles peter out before the stock price does, but there are also stocks that have negative net tangibles and high stock prices (gm is one that comes to mind and by rights it should be a single digit stock but its still well-loved by the street). I also like to see retained earnings increasing over time. I don't bother with stock holder equity since it contains goodwill and intangibles and is a fluff number in many instances. Its also used to inflate return on equity and book value numbers so those I also discount heavily.

Cash flow from operations should be steadily increasing...for a healthy growth stock those increases should be over 20% per year. Check out goog for an example of a very healthy growth stock. You won't find many with numbers any stronger. Yet it has hit its 40 week several times this year, so it pays to be patient even with the leaders. Easier said than done.

I don't have a desire to start my own thread and may not be ab le to keep up my current spate of posting...things change.

[Risky]

I'm going for Zons

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFA136606%2D2CC6%2D4078%2D9A9C%2D86C44410EE40%7D&scid=2&dist=partner

[Rob]

FMD MTEX PCLN PSPT ZONS
Which one do you like the best..and why?

Out of those I would have to go with FMD. Students need to borrow money. The price of higher education is outpacing the cost of living by an astounding rate. First Marblehead's revenue and earnings growth, while slowing a little, is still pretty impressive. The P/E of 18 is neither low nor high, but at 67.70, FMD only needs to hit 77.86 for a 15% gain, which looks like a reasonably good probability at this point.

Oh look .... FMD is up about 19% since I selected it. (There has been a 3:2 split in the interim.)

Rob scores again.

Rob would have scored even better had he actually purchased the darn thing.