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Brad Kenagy's  Instablog

Brad Kenagy
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History/Trading Style: I have been investing for 7 years. The subjects I focus primarily on are finding undervalued stocks through a variety of methods, building custom portfolio's of ETFs, Technical analysis of stocks and ETFs.
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  • Undervalued Stock Of The Week: 6 Month Report Card

    In the table below are the results so far of my undervalued stock of the week series. I have been pleasantly surprised by how well my picks have done, albeit in a strong market, the real test will come when there is a market correction. So far 14 out of my 19 picks have outperformed the S&P 500 (NYSEARCA:SPY) and on average by a decent margin. Even if I exclude my best pick of HIMX, my picks have significantly outperformed the SPY. In addition the percentage changes below DO NOT take into account dividends, so the returns on a total return basis would be higher for those stocks that pay a dividend. Himax (NASDAQ:HIMX) was my first pick and has been the biggest winner so far rising 157% since my article. Overall I am very pleased with the results so far, and I look forward to providing more picks in 2014.

     

     

    Article dateSymbolCompany% ChngSPY % ChngOutperform ?
    6/20/2013HIMXHimax Technologies Inc ADS157.17%15.34%Yes
    6/26/2013FDXFedEx Corp45.81%14.81%Yes
    7/2/2013COLRockwell Collins Inc17.27%14.04%Yes
    7/9/2013AGCOAGCO Corp11.70%11.34%Yes
    7/16/2013SODASodaStream International-12.95%9.75%No
    7/31/2013MRCMRC Global18.27%8.97%Yes
    8/7/2013TGHTextainer Group Holdings Ltd16.44%8.67%Yes
    8/22/2013AAPAdvance Auto Parts Inc34.38%10.71%Yes
    8/29/2013RCIRogers Communications Inc Cl B11.58%11.99%No
    9/5/2013VMIValmont Industries Inc8.08%10.78%No
    9/18/2013DOXAmdocs Ltd10.32%6.24%Yes
    9/26/2013FLFoot Locker Inc25.09%8.34%Yes
    10/10/2013CVSCVS Caremark21.87%8.68%Yes
    10/23/2013LNDCLandec Corp3.54%5.12%No
    11/2/2013UNPUnion Pacific Corp8.69%4.34%Yes
    11/17/2013SWISolarWinds16.78%2.11%Yes
    11/22/2013HLSHealthsouth Corp-3.73%1.68%No
    12/6/2013OASOasis Petroleum6.98%1.61%Yes
    12/19/2013IGTInternational Game Technology2.38%1.30%Yes
          
      Average21.03%8.20% 
      Average Ex HIMX13.47%7.80% 
      Median11.70%8.68% 
          
      Number of Picks that have Outperformed SPY14/19 OR73.68% 
    Tags: SPY, HIMX
    Dec 29 12:09 PM | Link | 1 Comment
  • Undervalued Stock Of The Week List

    Below is a list of all my picks that I have done for my Undervalued Stock Of The Week series

    • HIMX Himax Technologies
    • FDX FedEx Corp
    • COL Rockwell Collins Inc
    • AGCO AGCO Corp
    • SODA SodaStream International Ltd
    • MRC MRC Global
    • TGH Textainer Group Holdings Ltd
    • AAP Advance Auto Parts Inc
    • RCI Rogers Communications Inc Cl B
    • VMI Valmont Industries Inc
    • DOX Amdocs Ltd
    • FL Foot Locker Inc
    • CVS CVS Caremark
    • LNDC Landec Corporation
    • UNP Union Pacific Corp
    • SWI SolarWinds
    • HLS Healthsouth Corp
    • OAS Oasis Petroleum
    Dec 08 10:57 PM | Link | Comment!
  • Warning! Dow, And Transports Signal Correction Is Coming.

    A long term technical indicator I use which compares the returns of the Dow Jones Industrial average (NYSEARCA:DIA) and the Dow Jones Transportation average (NYSEARCA:IYT) has flashed a SELL signal as of yesterday. The indicator consists of the following:

    1. Comparison of the percent change in the Dow to the Transports.

    2. Multiple comparisons of the trend of the Simple moving average, and exponential moving average for the Dow.

    3. Lack of Positive volume.

    4. Lack of meaningful money flow.

    5. Use of Price channels.

    Overall using those 5 indicators, I get twelve criteria that make up my indicator. I created this indicator two years ago and it has proved extremely reliable. The indicator is only triggered when all 12 criteria are met. This has only occurred 3 times before yesterday since January of 2004, which is when data starts for IYT. So a total of 4 occurrences during a 9 year span. After each of the previous signals stocks had meaningful correction, with one of the three being extremely severe. In the charts below I will show what happened after each signal was triggered.

    The first Sell signal was triggered on 9/19/2007, extremely close to the previous all-time high. What makes this different from other the two other occurrences, besides the current one, is that the whole candle is above the upper price band [red line], and subsequently that was near the top and stocks fell substantially afterwards.

    (click to enlarge)

    The second sell signal was triggered on 4/19/2010 and had a correction of about 12% over the two months following the sell signal. Also, notice from the chart below that the candle is below the upper price band [red line].

    (click to enlarge)

    The third sell signal was triggered on 4/26/2012, and has a correction of around 8.4% over the following month and a half. Again the candle was below the upper price band.

    (click to enlarge)

    The fourth signal that occurred yesterday, had its candle ABOVE the upper price band, which has only occurred the last time the market was near an all-time high and fell substantially afterwards. Only time will tell how big the coming correction will be. But using history as a guide, I would be very wary of the Dow, Dow Transports and stocks (NYSEARCA:SPY) in general.

    (click to enlarge)

    For those that have the thinkorswim platform here is the code for my custom indicator, that you can copy and paste into a new study:

    Declare Lower;

    input price = close;
    input length = 200;
    input displace = 0;
    input malength = 9;
    input exlength = 50;
    input mflength = 21;
    input movingAvgLength = 1;
    input displace2 = -1;
    input blength = 20;

    def UpperBand = Highest(high[-displace2 + 1], blength);

    def MFI = Average(moneyflow(high, close, low, volume, length), movingAvgLength);

    def SMA = Average(price[-displace], malength);
    def AvgExp = ExpAverage(price[-displace], length);
    def AvgExp2 = ExpAverage(price[-displace], exlength);
    def Dow= close("DIA");
    def transports= close("IYT");

    def chng1=((dow-dow[1])/dow[1]);
    def chng2=((transports-transports[1])/transports[1]);

    def ind= (chng1-chng2)*100;

    plot data=IF((if(ind>1,1,0)+
    if(chng1*100>.5,1,0)+
    if(chng2*100<-.5,1,0)+
    if(close>avgexp,1,0)+
    if(sma>avgexp,1,0)+
    if(sma>sma[1],1,0)+
    if(sma>avgexp2,1,0)+
    if(volume<volume[1],1,0)+
    if(avgexp2>avgexp,1,0)+
    if(MFI<70,1,0)+
    if(close>avgexp2,1,0)+
    if(open[1]<upperband[1],1,0))==12,1,0);

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SPY, DIA, IYT
    Apr 03 12:33 PM | Link | 4 Comments
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