Odds-On Price Gain Forecasts By Market-Makers - For 20 Well Known Stocks, 20 Least Known Ones

 |  Includes: CELG, CRM, MA, SSYS, WIRE
by: Peter F. Way, CFA


Forecasts are implied from Market-Maker [MM] hedging of firm capital put at risk to balance “other side of the trade” in volume orders by big-money fund clients.

The forecasts are all tested by actual price performance of prior forecasts, similar in balance of upside to downside prospects, under strict, time efficient discipline.

Listed investment candidates are screened from over 2,500 Stocks and ETFs, analyzed daily for over a decade.

Specific price sell targets and holding period time limits are suggested, shown with past actual worst-case price drawdowns from cost in the 3 months following each forecast date.

Up-to-date guidance is presented from the best-informed market pro players, on names likely to be in your equity portfolio, and others you may not know, but should.

We use logic and understanding of how markets work to translate, via intelligent behavior analysis, the MMs' self-protective actions into specific price range forecasts. Then we keep book on how well their previous forecasts were subsequently borne out in the reality of the marketplace.

That's what produced this table of the stocks and ETFs of greatest interest to readers, contributors, and commenters at Seeking Alpha. And of equally-rewarding names that only a few are aware of.

These "Good" scoring names are those where, at current forecast levels, the MMs have demonstrated skill in being able to foresee what was likely to be coming in specific prices. This analysis is all about the likely price performance of stocks in coming days, weeks and months. Not a rehash of what has happened in the past, except as a scorecard on how well the MMs have foreseen what is coming.

That's as the MMs see it. Today.

Tomorrow will be somewhat different, and weeks from now, maybe even the reverse of now.

Those changes are called opportunities by wealth-building active investors. They are called time-assassins for the buy and hold deluded. It's your choice which theology you want to follow. We make it easier and far more rewarding for those choosing the active investment path. There are hundreds of great, well-managed companies out there. But these are the ones whose price performances, near term, are likely to please you most.

Here's the current odds-on choices:

Click to enlarge

The current market-maker price range forecasts are in the table's first two columns, followed by Monday's closing price. Their upside price change promise from that close to the top of the forecast range is shown in the Sell Target column. Next to that Reward prospect is the actual risk exposure of worst-case price drawdowns (from cost) experienced in the 3 months following all previous forecasts of the last 5 years that had upside to downside proportions like the current forecast.

That gain-to-pain balance is measured by the Range Index, which tells what percent of the whole forecast price range lies below the current market quote. That balance has been a consistently useful discriminator of future price performances on an issue-by-issue basis in our daily analyses over the past decade-plus.

We use the Range Index [RI] to stratify past price performances, as indicated in the Sample Size column which shows how many days' forecasts are available to be observed in the past 5 years, and how many of those have had RIs like the present.

The various performance data are the outcome of a sell discipline requiring closeout of an acquired position at the first instance of its price reaching or exceeding the top of the forecast range, or no later than 3 months after the forecast date, regardless of price. The Win Odds tell how many times out of 100 positions produced a gain.

The credible ratio compares the actual previously achieved % Payoff gains with those being offered at present. The Reward to Risk ratio compares the Sell Target goals with the average worst-case price drawdown duresses experienced on the way to achieving each position's closeout.

We have ranked the rows of the table by the intensity of Seeking Alpha readership attention, with the issues most intensely followed at the top of the first 20, and those with the most exclusive in interest at the top of the second 20. All of the issues have been carefully screened to focus on names most likely to produce attractive profits in limited time periods, with minimal price drawdown experiences. Any one should be considered a timely wealth-building opportunity.

Quickly recognizable are Stratasys (NASDAQ:SSYS), Celgene (NASDAQ:CELG), Mastercard (NYSE:MA), and Salesforce (NYSE:CRM). Less so are Encore Wire (NASDAQ:WIRE), Huron Consulting (NASDAQ:HURN), and NetScout Systems (NASDAQ:NTCT). But the latter ones might do even better than the famous.

As the blue summary rows of the table indicate, Win Odds are typically better than 9 out of 10, and drawdown exposures typically only about half of the double-digit gain potentials. Average holding periods of less than two months allow for compounding the gains on each capital commitment six times or more each year. That allows annual rates of gain in excess of +100% Interestingly, the past performance of the less-known items has exceeded the average of the well known choices.

All of these investment candidates have far more desirable characteristics than the buy-and-hold investors' market proxy, the SPDR S&P500 ETF (NYSEARCA:SPY). Its prior history at current forecast levels is but 1/5th the annual rate of return of the average active investment stock. Even the average of the forecastable population of 2537 names does better on most counts.

This article is offered as a price/value/timeliness guide, not a full-fledged investment research analysis. So do the necessary due diligence on those items that capture your attention. Good luck in your wealth-building.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.