Stephen Castellano's  Instablog

Focus List Update - Intra-Day Alert, 2PM
We are issuing an intra-day alert on our weekly focus list stocks. We will follow up with more detail later.

New stocks for the week, April 23 to April 30, 2010
As of ~2pm, Friday, April 23, 2010, there are 7 new "high-quality" stock ideas, three of which make our focus list. There are also 12 new "low-quality" stocks, including three focus list ideas. Focus list ideas are derived from additional forward looking factors.

High Quality
New "high-quality" ideas for the week include Tractor Supply Company (TSCO), Tupperware Brands Corporation (TUP), McDonald's Corp. (MCD), Coca-Cola FEMSA S.A.B de CV (KOF), Fifth Third Bancorp (FITB), Wells Fargo & Company (WFC) and AmerisourceBergen Corporation (ABC).

Our three "high-quality" focus list ideas include TSCO, TUP and MCD.

Low Quality
New "low-quality" ideas for the week include Panasonic Corporation (PC), Nabors Industries Ltd. (NBR), AMB Property Corp. (AMB), SunTrust Banks, Inc. (STI), Janus Capital Group Inc. (JNS), Randgold Resources Ltd. (GOLD), Reliance Steel & Aluminum Co. (RS), Harmony Gold Mining Co. Ltd. (HMY), China Unicom (Hong Kong) Limited (CHU), Indosat tbk PT (IIT), Alliant Energy Corporation (LNT) and PPL Corporation (PPL).

Our three "low-quality" focus list ideas include NBR, CHU, PPL.

About the Focus List Update
Weekly Focus List Update ideas, which we have only been tracking since March 5, 2010, are generated in a similar way to the Ascendere Long/Short Model Portfolio, which rebalances roughly 80-100 stocks on a monthly basis. Unlike our monthly model portfolio, we have not backtested the factors in our weekly focus list, but we would not be sharing these ideas unless we thought they could show some promise on average over time. We realize the higher frequency of this strategy may be introducing some noise to the process.

Perhaps one way to cut through the noise is to compare these weekly lists with lists from other sources. For example, a number of the stocks on these weekly updates have appeared on Goldman Sachs's Conviction Lists a few days or weeks later. Domtar Corp. (UFS) is a good recent example. We note that some of the best names on this list have preempted a number of sell side upgrades, as described in our "Nostradamus" report, and such stocks seem to show the most promise.

A pdf of this report is available here.

Risks and Disclaimers
Investing in stocks nclude a high degree of risk, including the risk of total loss. We are not soliciting the sale of any security. We do our best to provide relatively and accurate data and analysis, but make no guarantee.

"High-Quality" Stocks Off the "Buy List"

"Low-Quality Stocks Off the" Sell List"