ATP Oil & Gas Plunges on Q2 Earnings: The Market Doesn't Get It [View article]
Sabrient's fundamentals-based quantitative ratings algorithm gives ATPG a Strong Sell rating, with a Value score of 39 and a Composite Score (across Value, Growth, Momentum, Earnings, Balance Sheet, Group Strength) of 12 (out of 100). Also, I see that Audit Integrity gives it a Very Aggressive rating (the worst) for forensic accounting & corp governance.
ETF Strategies for Recession-Proofing Your Portfolio [View article]
Actually, a long/short approach can be effective in all market conditions, not just when you feel it's time to hedge against a recession. Employ a proven model that identifies the highest quality stocks or ETFs to trade long and the lowest quality stocks to trade short, and seek to capture the performance spread. You can also use put options if you prefer not to short stocks or ETFs, and buying inverse ETFs on the weaker sectors works well, too.
Probably a better value play in the wake of this catastrophy is Transocean (RIG). It's been beaten down by the BP spill. But the quantitative Sabrient Ratings Algorithm upgraded it to Strong Buy on valuation this week. Value score is 99 (out of 100), Fundamental score 98, Outlook score 94. Momentum score is a dismal 1, of course.
Shipping: A Beaten-Up Industry Set to Embark on a Comeback [View article]
I perused all the shippers in Sabrient's quantitative ratings algorithm, and we don't have many Buys at the moment. Mostly Holds and a few Sells. The problem seems to be poor Growth scores. However, I see plenty of reasonable Value scores. NMM has been on a nice uptrend, which has likely impacted its Value score, coming in at 58 (out of 100). However, it's Growth score is a relatively high 69. VLCCF has a lot of desirable qualities in our system. Top Value scores are in GNK, SSW, DSX, and NM. Sabrient.com/individuals
Choosing the Right Sector ETF: A Seeking Alpha Expert Panel [View article]
Great idea for a panel discussion. I'm looking forward to listening in. Another approach is to employ a proven sector rotation model, or an enhanced long/short ETF model (top-ranked stocks from top-ranked sectors and low-ranked stocks from low-ranked sectors). This is a trading strategy rather than an investing strategy, but it can be quite appealing to many. I blog every week about one such approach in my Sector Detector column.
If You Have Been Waiting For An Apple Entry Point, Wait No Longer [View article]
From a purely quant perspective in Sabrient's models, AAPL remains a StrongBuy with a perfect 100 Growth Score. It also boasts a 96 Momentum Score, which considers price, earnings, and group momentum factors. And it has a solid forensic accounting score (i.e., no red flags indicating questionable or "aggressive" practices -- no surprise given the tremendous cash position). From my personal perspective, my teenage daughters and every one of their friends own at least one Apple product -- usually several. Apple's innovation, branding, customer service, and customer loyalty are unsurpassed. I am still a PC & BlackBerry user myself, but I constantly feel the pressure from the Apple juggernaut.
Our quant models love RIMM, too. A great pairs trade going into earnings was long RIMM, short PALM. RIMM has been rated StrongBuy and PALM rated StrongSell by Sabrient's ratings algorithm.
Bulls Seek New Blood To Boost Conviction [View article]
JJC is an exchange-traded note (ETN) tied to copper futures contracts, and as such it is not included in Sabrient's SectorCast rankings, which creates bottom-up aggregate profiles of ETFs based on the underlying equity scores. What I can say is that from a chart perspective, JJC has fallen hard this month and today it is threatening to close below its 200-day simple moving average. On the other hand, its oscillators have become oversold and price should be getting ready to at least stabilize and perhaps bounce back. Whether it's only a dead cat bounce remains to be seen. From a fundamental perspective, the iShares Basic Materials ETF (IYM), which includes copper miners, continues to rank low in the Sabrient rankings, primarily driven by modest low-term growth projections and net downgrades from the Wall Street analyst community.
Bulls Are Thankful For An Entry Point [View article]
Thanks for all your good and challenging comments. To me, bulls are those accumulating long positions and bears are those accumulating short positions or distributing/liquidating long positions. The intraday traders are merely providing liquidity. With this combination of low volume and low volatility, the accumulators of longs have been creeping the market higher, mostly unchallenged YTD, but I believe we'll need to see increased volume coupled with a thrust off of short-term oversold technicals to push through current resistance levels.
I don't have a TV at the office, so I don't know what the TV personalities have to say. I scan a host of blogs for independent insights and thought-provoking ideas. I do read some mainstream end-of-day market summaries to learn what they say are the consensus "drivers of the day." In any case, I believe that fundamentals drive the market in the longer-term and technicals drive it shorter-term. That's why the market will often shrug off bad news quickly when the chart says it "wants" to rally.
So long as the world remains awash in fiat currency, U.S. stock market fundamentals on balance look pretty good. The commentators can always come up with a reason-of-the-day for market behavior, when in fact the market simply has been in rally mode in which only a major external event could stop it.
But again, we now find it trying to test resistance yet again, and I just don't know if there is enough power right now to push through. That doesn't necessarily imply that a massive selloff is in store, with bulls deciding its time to give up on any chance of further gains and protect profits. But a stronger test of conviction might be needed to attract more cash at these levels.
I can appreciate the view that the market (and the economy) has become a house-of-cards due to collapse. Such massive manipulation of the free market just seems wrong. It might well turn out that we have chosen to avoid enduring a little discomfort now in exchange for severe pain in the future. No, the eventual unwinding of the balance sheets probably won't be pretty. I just don't see any indications that such a scenario is imminent.
Mark, your premise that "puny volume" in an ETF translates into poor liquidity ("difficult to move in and out of") is in error. In fact, so long as the underlying constituents are highly liquid, the ETF is also highly liquid with virtually no discount/premium to NAV. There is a whole industry of Authorized Participants and Liquidity Providers set up to ensure just that -- so even if you want to sell an amount that is a multiple of the average daily volume, you will still get a price very close to the NAV of the underlying stocks.
Also, I see that the bulk of your list comprises speculative gold, emerging markets, and leveraged ETFs, which most investors shy away from. I'd like to see a similar list of top performers among unleveraged ETFs holding diversified portfolios of U.S. stocks.
For example, if you look at an ETF like NFO, which tracks (full disclosure: my firm) Sabrient's Insider Sentiment Index, it is a way to follow those who are closest to a given company -- corp officers and Wall Street analysts who follow the firm. It holds 100 high-profile stocks reflecting positive sentiment and has an unleveraged YTD return of about 18%, which easily outperforms both the cap-weighted SPY and the equal-weighted RSP, and a 4-STAR Morningstar rating. Although it has relatively low daily volume (approx 25,000 shares), the bid/ask spread is only a couple of pennies with very low variance from NAV.
Hedge Fund Maverick Capital Has Its Highest Tech Exposure Ever [View article]
Sabrient's fundamentals-based quant algorithm has been rating the Technology iShare IYW near the top of the U.S. sector rankings for awhile now, along with Healthcare IYH. www.sabrient.com/blog/... Also, our models have recently put Buy ratings back on MSFT, INTC, and APOL on good valuations. On the other hand, CTV was just downgraded from Buy to Hold after its big price spike.
5 ETFs to Play the Coming Wind Energy Revolution [View article]
Sabrient's SectorCast ETF quantitative rankings employs a bottom-up composite profile of the underlying stocks to score and rate the ETF. PBW is the only one on the list that we currently rank, and it gets a score of 74 (out of 100) and an Attractive rating. It is particularly strong in long-term projected growth and analyst's recent upward earnings revisions. (Note that it was just downgraded this week from Very Attractive on valuation, as its score dropped from last week's 82.)
Sabrient's fundamentals-based quantitative models like SKX a lot. The Sabrient Ratings Algorithm gives it a Strong Buy rating since mid-July, and it scores a 99 out of 100 in the forward-looking Company Outlook Score, an 89 Growth Score, and an 84 in the Operational Quality Trend Score. In fact, we just added it today to our Investor's (H)Edge long/short portfolio.
Two Promising Picks in the Energy Patch [View article]
Let me chime in with Sabrient's fundamentals-based quantitative scoring for these stocks. From a value perspective, MUR carries a Value score of 94 (out of 100), and PBR scores an 87. Our ratings algorithm also likes MRO, RIG, NE, and COP. In particular, beaten-down drillers NE and RIG each carry a Value score of 99 and are rated Buys at these price levels.
Western Digital: Great Upside Potential With Limited Downside [View article]
Both WDC and STX are two of Sabrient's top-ranked stocks in our fundamentals-based quantitative ratings algorithm. Both are rated as Strong Buys with composite scores near a perfect 100. They should be leaders in a recovering economy. We agree with your assessment.
ATP Oil & Gas Plunges on Q2 Earnings: The Market Doesn't Get It [View article]
ETF Strategies for Recession-Proofing Your Portfolio [View article]
Is BP Becoming a Value Play? [View article]
Shipping: A Beaten-Up Industry Set to Embark on a Comeback [View article]
Choosing the Right Sector ETF: A Seeking Alpha Expert Panel [View article]
Another approach is to employ a proven sector rotation model, or an enhanced long/short ETF model (top-ranked stocks from top-ranked sectors and low-ranked stocks from low-ranked sectors). This is a trading strategy rather than an investing strategy, but it can be quite appealing to many. I blog every week about one such approach in my Sector Detector column.
If You Have Been Waiting For An Apple Entry Point, Wait No Longer [View article]
RIM: 'I’m Not Dead Yet' [View article]
Bulls Seek New Blood To Boost Conviction [View article]
Bulls Are Thankful For An Entry Point [View article]
I don't have a TV at the office, so I don't know what the TV personalities have to say. I scan a host of blogs for independent insights and thought-provoking ideas. I do read some mainstream end-of-day market summaries to learn what they say are the consensus "drivers of the day." In any case, I believe that fundamentals drive the market in the longer-term and technicals drive it shorter-term. That's why the market will often shrug off bad news quickly when the chart says it "wants" to rally.
So long as the world remains awash in fiat currency, U.S. stock market fundamentals on balance look pretty good. The commentators can always come up with a reason-of-the-day for market behavior, when in fact the market simply has been in rally mode in which only a major external event could stop it.
But again, we now find it trying to test resistance yet again, and I just don't know if there is enough power right now to push through. That doesn't necessarily imply that a massive selloff is in store, with bulls deciding its time to give up on any chance of further gains and protect profits. But a stronger test of conviction might be needed to attract more cash at these levels.
I can appreciate the view that the market (and the economy) has become a house-of-cards due to collapse. Such massive manipulation of the free market just seems wrong. It might well turn out that we have chosen to avoid enduring a little discomfort now in exchange for severe pain in the future. No, the eventual unwinding of the balance sheets probably won't be pretty. I just don't see any indications that such a scenario is imminent.
Top 30 'Liquid' ETFs [View article]
Also, I see that the bulk of your list comprises speculative gold, emerging markets, and leveraged ETFs, which most investors shy away from. I'd like to see a similar list of top performers among unleveraged ETFs holding diversified portfolios of U.S. stocks.
For example, if you look at an ETF like NFO, which tracks (full disclosure: my firm) Sabrient's Insider Sentiment Index, it is a way to follow those who are closest to a given company -- corp officers and Wall Street analysts who follow the firm. It holds 100 high-profile stocks reflecting positive sentiment and has an unleveraged YTD return of about 18%, which easily outperforms both the cap-weighted SPY and the equal-weighted RSP, and a 4-STAR Morningstar rating. Although it has relatively low daily volume (approx 25,000 shares), the bid/ask spread is only a couple of pennies with very low variance from NAV.
Hedge Fund Maverick Capital Has Its Highest Tech Exposure Ever [View article]
5 ETFs to Play the Coming Wind Energy Revolution [View article]
Skechers: Shape Up Your Portfolio [View article]
Two Promising Picks in the Energy Patch [View article]
Western Digital: Great Upside Potential With Limited Downside [View article]