I have been re-running the "leadership" scan I started a few weeks ago, but unfortunatley I have data from only one other source, Zacks.com. I also have dat from yahoo finance's screener, but unfortunately they have some weird HTML formatting in their spreadsheet that I'm going to have to fix before I can scan that. Google finance also has a screener, but the results are not in a downloadable format. So, for right now, I am comparing the data from zacks with that from Finviz,. So far all I have screened for is a 5 year earnings growth rate of 25% or better, and a return on equity of 17% or higher. With those criteria I get 167 socks from Zacks, and 238 from Finviz. Among the stocks from Zacks, there are 61 that are not in the Fonviz screen, with the most notable being AMZN. There are 132 in the Finviz screen not in the Zacks screen. It is probably not terribly important, since out of the 10 stocks I come up with every week there are no more than one or two that are debatable as leadership material, but I will start checking the data against more than one source, and if I can get the damn yahoo spreadsheet problem fixed, I'll have 3 sources.
Monday, May 31, 2010
I was rummaging through the EIA website this morning, something I have been remiss about lately, which is perhaps the best, most unbiased source of information on energy resources. I found a series of data on Gulf of Mexico oil production which I found quite intersting, especially after graphing the data. It is unclear if this is total Gulf of Mexico production (U.S. and Mexico combined) or just U.S. production, but from this data, it is becoming clear that Gulf of Mexico production has peaked, and has started it's decline. The black line is total production, but what is really frightening is the red line, which represents production in waters less than 200 meters deep. The blue line is production in waters greater than 200 M deep, which, obviously, is more expensive and riskier. For the "drill, baby, drill" crowd, this should be pretty sobering news.
I saw an interesting story in the news the other day:
(Emphasis and comments in italics mine)
It seems that BP, after causing the biggest environmental catastrophe since Chernobyl, are now able to determine, with government cooperation, what information the public may or may not obtain? Hmmmm, sound like a merger of State and Corporate power. There is a word for it, it;s on the tip of my tongue, now what is it?
Sunday, May 30, 2010
A ponzi scheme, as I described it last week, is destined to collapse because the earnings (usually non-existent) are outweighed by payments to investors. The early investors are paid by payments made by later investors (with the scammer, of course, taking a cut as well). This can go on for quite some time, as long as there is an infinite supply of new investors with new money, and there is a shrinking supply of old investors taking money out. Once the inflow of new money decreases to the point that money leaving exceeds money coming in, the scheme is exposed and collapses. But as long as that new money comes in, schemes can go for years, even blatantly under the noses of regulators (the Madoff case in particular comes to mind) before unraveling. So, what we have is a pool of money with an outflow, to investors thinking they are "returns" on their investments, and and inflow of new investors; money, As long as the inflow is greater than the outflow, all is well. But since there is no real "return" on the investment, and there is not an infinite number of new investors waiting to put money in, the scheme will eventually fail.
That is a basic description of a ponzi scheme, and while I was thinking about it, it struck me that there are several similarities to fractional reserve banking (I gave wikipedia's definition of both in a post last weekend, but here and here are links to them). Actually, instead of similar, they are more like mirror images. A ponzi requires a constant inflow of money, while fractional reserve banking requires a constant outflow of money. In a fractional reserve system, banks are able to create money, basically out of thin air, in the form of credit, and profit off the interest on the balance paid back. In such a system, if the outflow exceeds the inflow, the system is able to sustain itself. It is when there are either no more able borrowers, or those who are able borrowers no longer want to borrow, that the system gets into trouble. In order to sustain itself, it has to find new borrowers, and this is what we have been seeing for the last 20 years or so. The level of debt, both private nad public, has reached a saturation point, and the only way the system could expand was the pool of borrowers, thus the "sub-prime"mortgages and it's variants, along with such things as credit cards being sent to your dog, 60 month (or longer) car loans,, home equity lines of credit, etc. At some point there is a "tipping point" where the system can no longer sustain the debt it has created. The result of that is defaulted loans, bank failures (as outlined in my earlier post tonight), and loss of confidence in the banking system. The final act, a run on the banks and the failure of the banking system, was the root cause of the Great Depression, a fate we have so far avoided, but it hasn't been without it's costs. there has been a massive shift of private debt into public debt, and while it has saved thee banking system for now, in the long run it threatens the stability of governments all over the world.
I hope I have not over simplified this, as I am no expert on the subject, but the more I delve into it, the more it seems that what happened in 2008-2009 was inevitable, and there can be a case made that it was no accident, and the more it seems likely it will happen again. I plan to do more on this in the future to see just how far this rabbit hole goes.
In a surprise move, the FDIC took over 5 banks, despite this being a holiday weekend. They were:
- Bank of Florida-Southeast, Florida
- Bank of Florida-Southwest, Florida
- Bank of Florida-Tampa Bay, Florida
- Sun West Bank, Nevada
- Granite Community Bank, California
The 3 Florida Banks were all subsidiaries of the Bank of Florida, BOFL on the Nasdaq, which dropped 60% after hours on Friday. That brings the 2010 bank body count to 78.
There were only two stocks on the earnings list reporting last week, and I did not have much time yesterday to do any changes to the charts. From top to bottom the lines represent: red-EPS growth rat, black, revenue growth rate, red, EPS, black-price, blue-price relative to SPX. The black bars on the bottom are volume.
First up is TLVT, which I do not have current revenue data on. EPS grew this quarter, but at a very low rate. The acceleration came due to the negative growth last quarter. This appears to be losing it's status as a high growth stock, but an interesting point here is that price is sitting right about on the pivot point from the 2008 high. This is a Spanish IT company, and from what I have gathered in the news, the growth prospects in Spain are not very high right now,
DMND has been pretty consistent and has shown flashes of high growth. This is a prime example of the proper use of "operating earnings": it's GAAP earnings this quarter were -.22, but that was due to buying out another company (apparently a cash transaction, which hit the bottom line). However, the operating earnings, when you backed out the acquisition costs, were .30, so I went with that. Revenue growth supports the earnngs growth, so in this case the use of operating earnings is not meant to pull the wool over investors eyes, unlike some other companies (cough...AAPL...cough).
Saturday, May 29, 2010
|Ticker||Price as a % of 52 Wk H-L Range||Return on Equity||50-Day Simple Moving Average||20 day v/ms|
I ran a new leadership scan tonight and came up with 17 stocks that are pretty qualified. I sorted by 20 day volume per millions shares and took the top 10. Since we have a long weekend, I may play around with this a little more and see if I can come up with a method I can use on a permanent basis. I am also going to check other scanners, such as Yahoo, to see if I come up with much different stocks. I'm not sure the data from Finviz is all that up to date or accurate, and I want to double check it against other sources. Another thing I want to do is come up with an easy way to integrate the last one or two quarters' earnings growth into the scan, but so far have come up with nothing.
I had only 2 stocks from the earnings list reporting last week, TLVT and DMND, both reporting a quarter of accelerating growth.
All spreadsheets have now been updated. I had to delete some data from the third page of the relative strength spreadsheet to get it to load, so if you want to enter them into a screener, the first column of tickers are from Zacks, the second column from Finviz (most are the same, but something like MOG.A in Zacks is MOG-A in Finviz).
Here are the results of this week's relative strength scan. This week I had about 1350 stocks in the relative strength range, almost double what we had last week. The left 3 columns are the stocks retained from last week's list, the middle 4 are the new stocks this week, and the right 4 are the stocks from last week that were removed. Once again we have higher than average turnover.
The spreadsheet will be uploaded later today.
SAM was the second biggest gainer. This was one of the stocks affected by the flash crash, trading as low as .01, but apparently those trades have been cancelled, thank God, or this chart would be unreadable. The blew arrow is last Friday's candle, which happened to be it's most recent bounce off the 50dma, Since then the price relative line has nearly gone straight up. This has also had a huge increase in average daily volume, another bullish factor in a leading stock.
AIXG was the second biggest decliner. This must have awfully good fundamentals, because a chart like this is just not IBD 100 material, It began the week well under the 200dma, and is now even farther below it. Price relative hit a six month low on the most recent swoon, something you don't see very often..
One thing of interest I saw in IBD this morning: historically, June and July have not had a succussful follow through days in the last 10 years (as I recall last year, the market had never been declares "in correction" when it reversed in July, thus no follow through day). August, however, has had 4 in the last 10 years.
Friday, May 28, 2010
There were 44 new highs today, here is the list.
These are the high volume advancer and decliners from the relative strength list.
|Ticker||Relative Volume||Change||Ticker||Relative Volume||Change|
I will have a complete earnings summary this weekend. have a good long weekend.
We are So far in the midst of a long awaited correction, but there is still the possibility of a reversal here and another move up. There are a huge number of possibities, from a 4-6 month W shape, another V shape, or an outright bear market, or even another visit to that devilish 666 on the SPX, and frankly, none of them will surprise me.
I will have the new highs update shortly.,
|Ticker||50-Day Simple Moving Average||52-Week High||Change||Volume|
Here is today's look at the market leadership. There are only a couple up on the day, but all are still above the 50dma. Several of them are in bases and appear to be getting ready for breakouts, so if we do get a follow through day nest week, those will be the ones to watch for.
Here is a link to the charts.
I have 28 new highs so far, with breakouts in KFED, OVTI, CCIX, ULTA, XEC, and BJ. There was nothing scheduled to report today, but last night we had ESL, up 3.8%, UPI down 0.2%, and DMND up 4.4%.
Thursday, May 27, 2010
There were 38 new highs today, here is the list.
These are the high volume advancers and decliners from the relative strength list.
|Ticker||Relative Volume||Change||Ticker||Relative Volume||Change|
After the close we have reports from DMND, up 4% after hours, UPI down 1%, and ESL up 6%.
I have nothing scheduled for tomorrow.\