NormK's  Instablog

I've been dabbling in a few unusual commodity stocks which have come down recently, but which I believe have tremendous value since they are both diversified and offer more "niche" products than typical commodities.  Among them are:

Metals & Mining
REE  RARE ELEMENT RES LTD ORDINARY SHARES (CANADA)
SLT   STERLITE INDUSTRIES (INDIA) LTD.

SLT in particular, is coupled somewhat to the construction industry in India, which I believe will continue to accelerate even with a temporary slowdown in other parts of the world.  India's tech machine continues to need new facilities.  REE is a more volatile stock that is well off it's April 14th high but seems to have found a nice support level.

Energy
Among energy stocks, I also tend to look at niche markets where i believe there is hidden growth.  Among those I like at current levels are:

NRGY  INERGY L.P.
TGP    Teekay LNG Partners L.P.

Inergy is a dividend play and a leading provider of propane gas in the US. TGP, also a dividend play, should perform nicely as Japan's demand for liquefied natural gas to replace nuclear plants that have failed or have been shut down for long-term safety inspections converts to real imports.

Apparel
My daughter, who just graduated from Long Beach State's renowned Fashion Merchandising and Design Program, recommends two niche apparel companies:

JOEZ  Joe's Jeans Inc
KID     Kid Brands Inc.

Both of these have had it rough going lately and are not going to recover too quickly but she thinks they are both great companies that offer quality, in demand products.  Look for a nice recovery and a chance to double your money on these two if you're comfortable with speculative stocks with a 1-2 year time horizon.

 

Disclosure: I am long REE, SLT, NRGY, TGP, JOEZ, KID.

I like to trade penny stocks, which, as an individual investor makes me, by definition, a gambler.  I get the same thrill and disappoint making and losing money on them as I do playing craps in Vegas.

I've been following some big mover penny stocks over the past few months and have my own heuristic algorithms to trade them.  Fortunately, I've beat the average and made pretty good money purely on my admittedly "speculative technical" trading algorithms.  My approach is bidirectional -- sometimes I buy when a stock made a big move up, and other times when a stock makes a big move down.  One stock I bought recently was Novogen Limited (ADR) (NASDAQ:NVGN), an Australian biotech.  The stock has nearly linearly fallen from $15 back in 2006 to below $1 in mid-2010 where it stayed flat until late Jan 2011 when it spiked up to ~$1.50.   Then it trailed back all the way down to 50 cents in early March and then spiked up to $2.50 a couple weeks gao. Since then it has fallen back to $1.50 or lower.  One parameter in my algorithm is that the stock needs good volume, which NVGN definitely has had in the past week.  While I'm disappointed at the drop, I know that's mainly emotional which is not good since it floods my head with thoughts of "fraud" or "manipulation."  I know I'm also looking at a very small window in time so there's no "patience" here. 

Penny biotech stocks, of which there are many, are often in two categories:

1. Teetering on the brink of collapse, or
2. Mainly a patent holder with little, if any, real research activity

Not sure about NVGN but I am guessing the main reason for the spike up on Monday was their wholly owned subsidiary Marshall Edwards (NASDAQ:MSHL) released somewhat positive results of an ovarian cancer treatment
http://www.novogen.com/news/news0501.cfm?mainsection=05&subsection=03&newsid=357 but the positive effect on the stock was clearly short-lived.  There's no other news I've found on the move up or down, which isn't surprising for penny stocks as my fellow traders know.  An article on http://www.proactiveinvestors.com.au says "the company saying it was 'unaware of any specific reasons' for the sudden investor interest." 

When your penny stock investment takes a dive, the hardest question becomes, should I buy more or cut my losses.  A hint on my technical approach says that if there's very little volume on the down side, it's usually small profit-takers so you shouldn't judge this to mean it's fallen out of favor.  Following my own advice, I've recently doubled up my position at $1.66.  Now I'll just have to wait to see if this company has legs.

I am invested in JPS - Nuveen Quality Preferred Income Fund 2.  It's a closed end fund investing in high dividend paying companies.  They pay a very attractive dividend.  The price has been going down a little lately so I've been dollar-cost average buying on the decline.  I started investing in them right around the October 2008 crash so I'm already up 100% or more.  I attribute the decline mainly to two factors:

1. They went up too fast and peaked.  Hedgers saw this and sold at the top.
2. I believe the instability of financials is partly to blame since quite a few of their top holdings are banks that pay dividends.  Last published, 4 out of their top five were these financial institutions: Wachovia, Barclays, Deutsche Bank, Rabobank Nederland

But they also invest in many other non-financial companies, many of which are doing quite well.  So I expect this fund to not-only recover to their 52-week high but surpass it significantly, especially if we see a more permanent recovery in financials.  Overall, I think it's one of the best quality holdings in my portfolio at the moment.

I'd like to hear your comments on the reason for this decline in JPS and related funds.