Investment Idea Sharing Nov. 9, 2013

This Week's Activity – November 9, 2013: 

Remember Investment Idea Sharing monthly meeting is 7:30PM next Tuesday Nov. 12, 2013 at my house.

Weblink to this table:http://www.ultimatestockfinder.com/weekly_index_summary.GIF

This week, the Dow Jones 30 hit a new all time high of 15,797.  World wide indexes finished the week mixed.  

I still think the markets are overpriced.  But, I am always looking for good values, and this week I found EXC (Exelon, electric utility, 4.3% dividend) and EZPW (EZ Corp, pay day loans and pawn).  Instead of buying them, I sold PUT’s with strike prices below the 52 week lows for each stock, see below in “Stock Buys for this Week”

EXC is at a 10 year low because EXC is the largest nuclear power utility in America (17 reactors  which generate 20% of the US Nuclear industry’s power capacity) but the stock market is concerned about nuclear costs being uncompetitive when compared to the extremely low prices right now for natural gas.  I believe that EXC will come back and it pays a 4.3% dividend while we wait.

Here is a Forbes article describing this current situation for EXC:

http://www.forbes.com/sites/jeffmcmahon/2013/11/06/nuclear-keeps-exelon-bright/

Here is the 10 year chart for EXC:

http://finance.yahoo.com/echarts?s=EXC#symbol=exc;range=20031017,20131104;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

EZPW has been on the Stock Evaluator “Short List” for the past 3 weeks, and this week reported for year end 2013 with only a small increase in annual revenues and a decrease in profits, though still profitable.  These numbers dropped EZPW stock price from $15.71 on Monday to $11.34 on Friday, which is a 5 year low.  I believe the market has overreacted. 

Here is an article summarizing EZPW fiscal year end report for Sept. 30, 2013:

http://finance.yahoo.com/news/ezcorp-reports-2013-revenues-more-124500068.html

Here is the 10 year chart for EZPW: http://finance.yahoo.com/echarts?s=EZPW+Interactive#symbol=ezpw;range=20030620,20131108;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

StockEvaluator “Short List”

No ‘Short List’ this week due to continued Yahoo Finance data feed problems.  Please use FinViz.com link.

http://finviz.com/screener.ashx?v=111&f=fa_ltdebteq_u1,fa_netmargin_pos,fa_payoutratio_u70,fa_pb_u2,fa_pe_low,fa_ps_u1,fa_salesqoq_pos,ta_highlow52w_a0to10h&ft=4 

This week’s FinViz screen returned 8 companies:  CIG, LF, MDC, MIL, RCII, SENEA, SGM, ZA.

Stock Evaluator “Volatility Sort”

No ‘Volatility Sort’ this week due to Yahoo Finance data feed problems.  Please use FinViz.com link.  http://finviz.com/screener.ashx?v=111&f=fa_netmargin_pos,fa_payoutratio_u70,fa_pb_u3,fa_ps_u2,fa_salesqoq_pos,ta_highlow52w_a0to10h,ta_volatility_wo6&ft=4

This week, 2 companies are on the FinViz list.  They are: IRG , RTK 

   

MutualFundEvaluator “Short List” shows funds that are within 3% of their 52 week low AND have less than 3 Red cells.  This week’s list has 38 funds.  All except 1 are Bond funds, which are all still 3 to 5% above their lows from 2006 to 2008 before The FED dropped interest rates to bring the U.S. out of the recession.  Remember, when interest rates go down, bond prices go up, and when interest rates go up, bond prices go down.  These bond funds only pay about a 3 to 4% annual dividend and I think they will go down another 3 to 4% when The FED finally lets interest rates go back to historic levels.  So we lose a whole year’s worth of interest if we buy back in too soon.  For example, PRGMX closed the week at $9.52, down from 2011 high of $10.22, but still above 2007 low of $9.14.  My target buy price for PRGMX is $9.35.

Here is the 10 year chart for PRGMX that shows these price ranges:

http://finance.yahoo.com/echarts?s=PRGMX+Interactive#symbol=prgmx;range=20011213,20131108;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Watching the interest rate on 10 year treasury notes gives another hint of when these bond fund prices will get back to normal.  As this interest rate comes back up, the prices of these bond mutual funds will go down.  The interest rate on 10 year treasury notes closed this week at 2.75%, up from 2012 low of 1.50%, but way below 2006 - 2007 highs of 5.2%.  My minimum target for 10 year interest rates is 3.5% before I will be ready to buy back into bond mutual funds.

Here is a chart showing interest rates over the past 13 years for 10 year treasury notes:

http://finance.yahoo.com/echarts?s=%5ETNX+Interactive#symbol=%5Etnx;range=19991021,20131108;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Next Monthly Meeting 2nd Tuesday of every Month:

Tuesday, November 12, 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 Last Week:

I only do Covered CALLs or Cash Secured PUTs

Option  Sell    Stock    Strike   Expiration   Option  

Type    Date   Symbol  Price      Date         Price    

------  ------  --------  ------  ----------  --------

PUT    11/8    EXC       $28      Apr 2014   $1.80

PUT    11/8    EZPW    $12.50  Mar 2014   $1.30

StockEvaluator and Mutual FundEvaluator spreadsheets are available for download at www.ultimatestockfinder.com

Please remember to send me any other investing ideas, information or questions that you want to share with the group.

Thanks,

John D.

Disclosure: The author has no positions in any of the stocks or mutual funds mentioned in this article unless clearly stated above. We certify that except as cited herein, this is our work product. We received no compensation or other inducement from any party to produce this article.  Please see our full legal disclaimer at:  http://www.ultimatestockfinder.com/stockevaluator_disclaimer.html

______________________________________________

Visit Our Website UltimateStockFinder.com for More Investing Ideas:

At "Stock Evaluator", you can download various pre-sorted views of this week's StockEvaluator spreadsheet.  All the financial data is refreshed on Friday night into StockEvaluator which contains over 2,900 company stocks.  We will add any company you would like to the list. Download "StockEvaluator spreadsheet" at: http://www.ultimatestockfinder.com/ 

Also, you can sign in and view the Ultimate Stock Finder watchlist on Yahoo Finance

At “Mutual Fund Evaluator” download this weeks MutualFundEvaluator spreadsheet.

MutualFundEvaluator is also updated weekly and currently contains over 900 mutual funds.

Run the various Ctrl-_ sort commands in StockEvaluator and MutualFundEvaluator to bring the best companies to the top based on their key financial values. 

Also, View our YouTube training videos to learn how to use StockEvaluator and MutualFundEvaluator.

At "Training" read more information on how we do our investments.

   “Training Module 1 - Why Use StockEvaluator.xls  And How to Use It”

   "How We Use PUTs and CALLs to Minimize Risk and Increase Profit on Each Buy & Sell"

   "S&P 500 Total Return Comparison" spreadsheet for 25 year comparisons of many funds

   "Compare Annuity Returns, Expenses and Death Benefit v.s. Managing it Yourself"

At "Links" you can find our favorite links for good investing information including:

   Screener for New 52 week lows

   Screener for Good Fundamental Values

   Screener for Stocks with High Volatility

   Links that show current P/E values for the major worldwide indexes. 

   Current Prices and 52 week ranges for major commodities

Visit Our Blog and Facebook pages:

Blog:  http://ultimatestockfinder.blogspot.com/

Facebook:  http://www.facebook.com/UltimateStockFinder

To Remove Your Name from this email distribution list, reply to me and I will delete your name.  You will still be able to check the Ultimate Stock Finder Blog and Facebook pages to read this same eMail update.