bankedout's trading journal

[bankedout]

Today my buy stop for WSCI triggered and I purchased 83 shares @ $7.60

[bankedout]

With FUTU opening at $3.00 yesterday I thought there was a chance I could unload my shares this morning at a price way above my estimate of fair value. I guess everyone else felt the same way..... I guess I will become a reluctant "investor" in the stock.

FONR had a nice pop yesterday and IMH had a nice day today. REED looks like it is getting ready to go again.

Still my buy stop in RFIL has not triggered.

[bankedout]

Today I sold 276 SGRP at $1.93 That position was overweight and I want to add new positions to my portfolio. I was waiting a while for SGPR to rally a bit to lighten my load. I still own 324 shares of SGRP

[bankedout]

Today I purchased 168 shares of VSR @ $3.70 They just won a large military contract and the stock is selling for .29 Price/Sales & 8 Price/Earnings. However if you look at their enterprise value it is even more of a bargain.

[bankedout]

How do you know you are in a bull market? When your portfolio shows a lot of nice % gains.

[sd]

Congratulations on how well your picks have done!
While the market is slightly bullish;
Your stock picking criteria has to be credited -with the majority of your success-
I'm assuming you select from stocks meeting certain fundamental criteria, as well as how it's positioned technically?
You have a mix of sectors
It's certainly working well!
I'm envious!!!
Continued success! SD

[bankedout]

The current mix is all micro caps (below 100 Million). I think this area of the market has the greatest chance for mis-pricings due to low institutional ownership, low dollar/volume of shares traded.

I also try to get in at a share price in the single digits (below $10 per share). However if I find a stock that is priced higher that I think looks good I will purchase it. My thoughts are the lower priced stocks are less "discovered" and when they get to a higher price the added attention could provide additional price momentum.

I want to have good news coming out from the company. Good results with sales growth, or management very confident about sales growth in the near future. Also, just becoming profitable has been a theme. New products/services or acquisition of business that should positively impact results going forward. Insiders purchasing the stock, and/or institutions purchasing.

The company selling for a price that I can understand. Meaning price/sales or price/book or price/earnings somewhat reasonable considering growth prospects. This has excluded all of the hot biotechnology stocks for me.

I'm avoiding micro cap banks, even though they are under heavy accumulation. I don't understand what drives them to become momentum stocks?

On the technical side, I definitely want to see some rapid price appreciation, showing interest in the stock and a price moving up at a good pace. I like to see at least some heavy volume relative to the past. I like to see a stock that was "dead" for a few years before the recent run up. More volume on up days than down days. On spike down days a close significantly higher than the low of the day, or in the near term future price rebounding.

That is the kind of stuff I'm focused on. The frustrating time was when big institutional money was coming in to the market. All the large caps were rising and my stocks were falling. However that has appeared to have passed for now.

I have no stops on any positions, so the gains are not locked in by any means. So it isn't time to pop open the bubbly just yet.....

[bankedout]

To see some of the ratios of my portfolio (RFIL is just a placeholder, my buy stop hasn't triggered yet):

[bankedout]

Today I sold my remaining 146 shares of WZE for $4.55 The stock isn't acting right lately. I'll keep an eye on it for a possible re-entry. Tomorrow the ticker symbol changes to FU.

I do still have my 200 shares of FUTU that I received as a dividend.

My transactions were:

B 150 $4.32 8/23/12
B 50 $4.99 8/30/12

S 54 $4.30 9/18/12
S 146 $4.55 10/18/12

[bankedout]

Today I purchased 114 shares of SNFCA at $5.47 The company is growing nicely and trading for very low multiples of sales/earnings/book value per share.

[sd]

I think you've done exceptionally well - And you have targeted and timed your picks carefully, and have been rewarded with some very substantial gains in a relatively short period of time-
Good trading!
As you noted, there has been a swing in the market, and you've caught a nice upside momentum-
As we enter earnings season, and the market is likely getting 'testy' , You are willing to hold without stops- That's gutsy.

Your ratios show a very large price range, with all the positions still having room to meet their past highs!
Several of the PE ratios are quite high- 183 for STRM at a 52 week high, and 89 for MSON -down 5% below it's 52 week high.
Since you do factor in fundamental information in your selections, those 2 high PE's did not dissuade you from taking the position?
Thanks for posting the information, as well as your impressive results! SD

[bankedout]

Thank you for all the compliments sd! I feel like my strategy is working well lately. I hope I can continue to do well and adapt to a changing market.

As far as high PEs go, sometimes when a company is just becoming profitable, or growing quickly it will have a higher PE ratio.

In the case of STRM, look at Free Cash Flow versus Net Income here:

finance.yahoo.com/q/ks?s=STRM+Key+Statistics

It starts to look like a better deal. Free Cash Flow & Cash From Operations are good things to look for. Earnings can be effected by so many factors.

With MSON, with revenue growing at a 41% pace, their PE is scheduled to come down (forward PE of 19)

finance.yahoo.com/q/ks?s=mson&ql=1

But again, PE isn't everything to me. I look at growth rates, new business announcements which will effect future growth rates, price to sales ratio, and price to book ratio.

Some industries have higher multiples than others typically. Both STRM & MSON are in higher multiple categories.

Also, I purchased both stocks at lower prices than today, so the multiples were a bit lower back then.

All that being said, I prefer low "value" ratios and high growth rates when possible. Then the value investors and growth investors can get excited about the same stock. Combine that with some upward price momentum, and you attract momentum traders as well. It can propel a stock upward pretty quickly.

Best of luck to you as well. Also, I do try to post my trades here in real time. So if you ever want to buy a couple of shares of one of my picks, feel free to follow along. Of course I can't guarantee my picks will pan out!

[bankedout]

It looks like the Nasdaq is going to drag down this market.

I sold a bunch this morning:

S 226 CPSS $3.45

S 191 MSON $4.52

S 100 REED $6.50

S 140 STRM $5.75

S 87 IMH $11.30

I'll update more later.

[bankedout]

S 160 FONR $6.45

[bankedout]

S 324 SGRP $2.02