This Week's Activity – September 14, 2013:
Special thanks to Trey D. this week because he
had to fix the Mutual Fund Evaluator data look up function on Saturday because
it stopped working. We download all of
our financial data from several free public websites and sometimes they change
their coding which then means our look up functions no longer work. This seems to happen about every couple of
months. Each time it is a fire drill for
Trey to figure out what they changed and then to change our look up function to
get the data we need from the new way it is being presented by the public website.
The Dow Jones 30 Industrials stock market index
has been staying around 15,000 since May 7.
This week it was up 3%. See the Dow chart here: http://finance.yahoo.com/echarts?s=%5EDJI+Interactive#symbol=%5Edji;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Here is an excellent article with logical reasons
why a market drop of 15% could happen soon. http://money.msn.com/top-stocks/7-signs-of-the-next-financial-crisis I am looking at all my holdings that are below where I bought them and
deciding which ones have the least probability of EVER coming back. If their chances of coming back are low, then
I should be better off to sell them now and take my loss so I can have the cash
freed up to buy better companies after the next market dip. As I make my choices and sell some of my
losers, these sales will appear in the “Stock Sells for This Week” section
below. I sold nothing this week.
My 4 Rules of Investing are:
Rule #1: Don't Lose Money, Buy only good
companies that won't go bankrupt, and wait until their stock price goes back
up.
Rule #2: Don't Get Greedy, Sell at 10% to 20%
Gain, or 5 years worth of dividend gain.
Rule #3: Be patient, Good companies won't go
out of Business, dividend pays while you wait.
Rule #4: Buy Companies with Dividend & Low
Debt & Low Goodwill
(These 4 Rules are always shown in the StockEvaluator.xls
spreadsheet at Col. W.)
Since I think a market drop is coming soon, I believe
that I am still following Rule #1 (Don’t Lose Money) even when I sell stocks
for a loss, because their price will go down along with the market drop, so by
selling now, I am preserving the value they are at now, and not letting them go
back down again. The important task will
be to find better companies or mutual funds to buy going forward.
Here is a very helpful weblink to
Kiplinger.com that shows mutual fund performance for up to 20 years for 12
different categories of funds. http://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php I prefer large cap stock funds and this list shows the 10 best
performing funds for the past 1, 3, 5, 10 & 20 year periods. I used this list to be sure I have these 20
year excellent performers in Mutual Fund Evaluator.xls.
StockEvaluator “Short List” shows only companies that are within 5% of
their 52 week low AND have less than 5 Red cells. This week 8 companies are on the short
list. I researched 2 of them.
DK is Delek US Holdings, operates as an
integrated downstream energy company that operates in petroleum refining,
logistics, and convenience store retailing businesses. DK most recent quarter (6/30/2013) revenues
were up 5.3% but earnings were down 31%.
At $21.95 DK is down very near their price of July 30, 2012, but still way
above their $7.30 range they traded in from 2009 to late 2010. They peaked at $40 in March of 2013. Current P/E is 4.7, dividend is 2.5%, Cash
flow is negative $142 million, Inventories increased by $130 million this most
recent quarter, Insider ownership is 54%.
DK sold $176 million more of their stock into the market in late
2012. So that is where the money is
coming from to support the huge negative cash flow. DK is also part of Delek Group (DLEKG.TA) an
Israeli company with several other publicly traded divisions including DLEN, DLEA,
DEDRL, AVNRL. I am sure that Delek knows
how to use all the stock market money raised from these separate publicly
traded divisions, but I do not feel comfortable buying a company with so many
different divisions all trading publicly.
PTGI is Primus Telecommunications. They provide integrated facilities-based
communications services primarily in Canada
and the United States
Volatility” sort shows only companies that have: Average Daily
Price Volatility >3% ;
Within 5% of their 52 week low ; Less than 6
Red cells and Profit >0%. This week’s
list has 2 companies, DK and PTGI (see analysis above). Neither of these look good to me.
MutualFundEvaluator short list has 43 funds this
week, all but 1 are bond funds which I believe will continue to go lower until
interest rates go about 1% higher and The Fed decreases the Quantitative Easing
(QE) bond buying. Finally we have a
non-bond fund on the Short List. It is
FRIFX, a Fidelity Stock REIT fund.
FRIFX
Current Price: $11.16
All time high $12.37 on 5/13/2013
Now back down to price of 6/25/2012
5 Year Low of $6.22 on 3/2/2009
5 Year Return: 10.01%
10 Year Return: 7.11%
Dividend Yield: 4.74%
Years Up=7
Years Down=2
I am not going to buy FRIFX, but it is the
first non-bond fund to get on the short list for over 6 months. I think more non-bond funds will start
joining the list so pretty soon we will finally have some more alternatives to
choose from. I am hoping to be able to
buy funds closer to their 5 year low prices when the market finally takes a
dip.
You can download all these specially sorted
spreadsheets at www.UltimateStockFinder.com
Next Monthly Meeting 2nd Tuesday of every Month:
Tuesday, October 8, 2013 , 7:30 PM at my
house.
Here are my Stock BUYs for This Week:
Buy Company Buy
Date Bought Price
Target Sell
----- --------- ----- ------------
none
Here are my Stock SELLs for This Week:
Sell Company Sell Buy
Buy
Date
Sold
Price Price Date
----- --------- ------- ------- ------------
none
Here are my Option (CALL or PUT) Sells for This Week:
I only do Covered CALLs or Cash Secured PUTs
Option
Sell Stock
Strike Expiration Option
Type
Date Symbol Price Date
Price
------
------ -------- ------ ---------- --------
None
StockEvaluator and Mutual FundEvaluator spreadsheets are available
for download at www.ultimatestockfinder.com
Remember to send me any other stocks or
mutual funds that you would like to see added to the Evaluator
spreadsheets, and any other investing ideas, information or questions that
you want to share.
Thanks,
John D.
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