Stenzrob's specials

[mrmarket]

A little riskier than $$$MR. MARKET$$$ stocks but they have great fundamentals and are growth stories in the making with red-hot price momentum.

[stenzrob]

Thanks, Ernie. My very own little padded room.

For those who may not know, I use one simple screen to find stocks of small and micro-cap companies having solid fundamentals and high revenue growth that have relatively low price/sales ratio. Profitability not required, but progress toward profitability is required. P/E ratios are meaningless, I use price/sales ratio to judge valuation.

The screen only turns up candidates - I buy and sell from this list after doing additional research and chart study. I do not have a time limit or a sell target when I buy - I will cut losses if something changes, either with the company or the stock losing momentum. If the company continues to perform, and the stock keeps going up, I'll ride it for as long as I can.

As of today (9/26/03), the screen turns up 30 candidates.
The top 25 are:
GIGM, ESLR, SFCC, SYMM, GSIC, EWEB, ITXC, LENS, CRDN, FARO, CLZR, SWIR, GMAI, PRCP, QVDX, MSI, SNCI, EONC, CRIO, ECHO, MERX, TRCI, SMSC, CARN, ADEX

GIGM has been at the top of the list for a while now, and I bought it at $1.60 on August 5, 2003. Thom Calandra of cbs marketwatch was nice enough to feature it in his newsletter recently, and it is now jumping on heavy volume. I'm up about 75% on it in 6 weeks, but I believe it is not done yet, so I'm still in it. Calandra compared it to CHINA and SOHU.

HBIO was on the screen and I bought it for $6 about two weeks ago. It's up 25% since then, but it fell off the list when the price/sales ratio got above 3.0.

CRIO is another favorite of mine. Unlike some others, I trade it, trying to time the cycles as best I can. First bought it at $1.60 and rode for awhile, I have sold at $3.15, rebought at $3, sold again at $3.15, and just rebought it again today for $2.79.

I'm also currently long in QVDX, TRCI, and MTEX.


Since April 8, when I put some extra cash to work and starting using this method, my portfolio is up 146%, while the nasdaq is up 29.5%. That's an average of just under 4% a week.

[Anonymous]

Bear/bull market

With such high octane picks, it might be interesting to determine how stenzrob's picks do in different market environments.

[Anonymous]

Suggestion for people with Stenzrob picks

You might find it very hard to mimic stenzrob's picks, as he buys and sells the stocks quite often and it could be hard for you to replicate (keep up with the trades)---just a cautious note as the large number of ins and outs are very different from Ernie's.

[sbarclay8308]

Stenzrob.. The screening that you do, is it an automated process?

I am writing my MM Simulator in Micr$soft.Net for the WWW and
will be pulling data in to it .. Hoping to allow someone to come to
the site and tweak the parameters and get thier own picks..

Would you be interested in parting with your process so I could
do the same with it? By putting all the stock data into a local
database I feel I could make a few tools that everyone could
benefit from. I have the hardware/Disk storage and more CPU
capacity than NASA (pre 1987 of course)...

And yes for anyone reading this thread.. I am a geek..

[stenzrob]

for sbarclay8308
- the screen is automated, but the buying and selling is not. I use msn moneycentral to screen for this:

Revenue Growth:
Rev Growth Qtr vs Qtr > 25%
Rev Growth Yr vs Yr = High As Possible

Momentum:
3 month Relative Strength > 85
Avg Daily Vol Last Month > 50,000
Avg Daily Vol Last Qtr > Avg Daily Vol Last Year

Valuation:
Price/Sales Ratio < 3.0

Financial Strength:
Debt/Equity Ratio < 0.3
Current Ratio > 1.3

Last Price > $1.5
Market Cap < $500M

Profitability is not a requirement, but I look at it.
Chart over the last 6 months should show strong advances on high volume and pullbacks on low volume, and it's on the pullbacks where I try to buy.

Today I bought more MTEX at $5.71 where a recent gap has filled.
It actually had fallen off my screen because the 3 month RSI is low, but everything else matches. 6 month and 1 year performance is very good.

[stenzrob]

Re: Bear/bull market

With such high octane picks, it might be interesting to determine how stenzrob's picks do in different market environments.

Well, bruce, let's look at last week, when the market was down.

My marketocracy fund that is not very actively managed, just a big basket of stocks from my screen, was down a lot more than the market.

http://www.marketocracy.com/cgi-bin/WebObjects/Portfolio.woa/ps/FundPublicPage/source=NkMaBbHbDpAnOfOlMaKiAbDe

Now, I know you have no reason to believe me, and I really don't care, but as you say, I trade a lot. That same week, my personal portfolio was essentially unchanged, because I bailed out of a few positions.

[mrmarket]

Re: Bear/bull market

With such high octane picks, it might be interesting to determine how stenzrob's picks do in different market environments.

Well, bruce, let's look at last week, when the market was down.

My marketocracy fund that is not very actively managed, just a big basket of stocks from my screen, was down a lot more than the market.

http://www.marketocracy.com/cgi-bin/WebObjects/Portfolio.woa/ps/FundPublicPage/source=NkMaBbHbDpAnOfOlMaKiAbDe

Now, I know you have no reason to believe me, and I really don't care, but as you say, I trade a lot. That same week, my personal portfolio was essentially unchanged, because I bailed out of a few positions.

Stenzrob,

Your picks are great.

As some of you may remember, I had my issues with your risky ideas, and it is true that very few of your picks will ever make my screens. But I think this is a function of having different investment objectives rather than different ideas of what makes a stock a good pick. Furthermore, I am seasoned enough to know that there is more than one way to make money in the market. While your style is a little too risky for my tastes, you've certainly won over some fans in the Mr. Market legion.

[stenzrob]

Re: Bear/bull market

Stenzrob,

Your picks are great.

As some of you may remember, I had my issues with your risky ideas, and it is true that very few of your picks will ever make my screens. But I think this is a function of having different investment objectives rather than different ideas of what makes a stock a good pick. Furthermore, I am seasoned enough to know that there is more than one way to make money in the market. While your style is a little too risky for my tastes, you've certainly won over some fans in the Mr. Market legion.

Thanks, Ernie. Different strokes for different folks, man.

There is occasionally some overlap between our picks - FARO made your screen, but not the final five. SFCC was a pick of yours that was on my list, too. What is more likely, I believe and hope, and I guess we'll find out in the years to come, is that my picks show up on your >100% up for the year screen about 1 year after they show up on mine.

[the_daqman]

Re: Bear/bull market

With such high octane picks, it might be interesting to determine how stenzrob's picks do in different market environments.

why would someone use the same strategy thru changing market environments

[investing_fool]

Does anybody else get the feeling this market is going to roll over and die? (for a couple weeks or a month at least)

Decent rebound today for the techs, but heaviest days lately have been on the downside

[Anonymous]

Stenzrob and his picks

Stenzrob-I do believe what you say, and in fact do respect your picks and your passion for stocks.

[Anonymous]

Daqman's post

It was just a subject to raise (how the picks perform in different environments---it is like when magazines rate funds and how they perform in different type of markets (bull/bear). As to your question on why stick with the same strategy, that is a great subject to discuss---Warren Buffett for instance does not change styles and I would say in general some investors do and some don't---just matters what you are comfortable with IMHO.

[stenzrob]

Re: Bear/bull market

With such high octane picks, it might be interesting to determine how stenzrob's picks do in different market environments.

why would someone use the same strategy thru changing market environments

dagman,
Since the screen looks for particular characteristics of both the company and the stock, the same strategy could indeed work through changing market environments. What would change is the industries in which those stocks are found.
It will be intersting to see how it works out as conditions change, as I have only been using this particular strategy since April.

$$$Mr Market$$$ was successful in finding momentum stocks through the downturn.

[mimo_100]

roll me over

Does anybody else get the feeling this market is going to roll over and die? (for a couple weeks or a month at least)

Decent rebound today for the techs, but heaviest days lately have been on the downside

I agree. I believe the next month or so could be pretty treacherous.
The good news is that stocks that remain strong, during this period, will be the ones to buy. The bad news, how does one identify them?

Tim