______________________________________________________________________________
Issue No. 46 –October 3, 2005
Prescott, Arizona Systems@WiserTrader.com
______________________________________________________________________________
1.0
Trading
Over the past three weeks
results were presented showing the individual effects of year ago price to
earnings ratio (PE), year ago price to book ratio (PB) and year ago price to
sales ratio (PS) on current stock prices one year later. The analysis series
continues with the effect that year ago return on equity (ROE) has had on one
year price performance.
1.1 ROE
The analysis again involved NYSE, NASDAQ and AMEX stocks
that had earnings and were priced above $4. The study eliminated Advanced
Depository Receipts, Over the Counter Stocks and Exchange Traded Funds. Since
more information was available than for the previous price studies, the result this
time was the slightly larger group of 3607 stocks shown in Figure 1. The chart
on the left strangely implies an inverse relationship between ROE and 52 week
price gain.
FIGURE 1
© 2005 WiserTrader.com, LLC. Members of wisertrader.com are neither licensed
brokers nor licensed advisors. Trades discussed represent recommendations
made by the editor for the wisertrader.com portfolio. The newsletter and web
site are for information only and should not be considered as personal advice.
While it is believed that the posted information is factual, mistakes can be
made in transcription. Investors should trade stocks only after verifying all
information and consulting with a licensed broker or adviser. WiserTrader.commarkets third party trading systems but has no other affiliation
with trading system companies.
As is typical for such data, the zoomed
in chart on the right shows that for low values of ROE, one could have obtained
a wide range of possible outcomes.
The 3,607 stocks were sorted into seven ROE ranges
and used to plot 52 week price gain histograms. The data is summarized in
Figure 2. Market data for the past year shows that the probability of minimal price
gains of 25% or less is 60 to 70%, nearly independent of ROE. The higher the
value of ROE, the greater the probability of price gains of 25% or greater.
Unlike the pattern that was
seen with extreme PE ranges (less than 10 and greater than 50), extreme ranges
of PB (less than 1 and greater than 10) and PS values less than 0.5, values of
ROE of 50 to 100% contained the predominant number of stocks with price gains
of 50% to more than 100%. This is as one would expect.
FIGURE 2
The percentages of stocks
in Figure 2 can be treated as probabilities of price gains for ROE ranges over
the past year only. How investors evaluate stocks from year to year may go a
long way to explain the annual change in the character of the market. Higher
ROE values produced the highest price gains, as one might expect. However, the
correlation is not as orderly as one might expect, perhaps due to sporadic use
of ROE among investors. In fact different degrees of use by investors of
measures of stock value such as PE, PB and PS may also explain why each has had
a somewhat unique characteristic correlation with price behavior over the past
year. Recently, many investors have abandoned buy and hold measures of value
in favor of market timing measures of growth and momentum. The next two weeks
will take a look at the effects of year ago EPS and sales growth rates.
2.0 Market Analysis
The market was absorbed this
week by a concern that consumer spending would decrease as a result of higher
energy prices, particularly gasoline, natural gas and home heating oil, and Fed
comments that housing prices may be a bubble that will soon pop. While
consumer confidence decreased, energy prices rose and home building decreased.
Still energy is only 6% of consumer spending and home building remains near
record levels. It is also noteworthy that earnings warnings have been limited
compared to previous quarters. Because of this, and it is a cautionary note,
earnings expectations for the S&P 500 in the third quarter may be a little
optimistic at 18%, as compared with 12% for the first half of the year.
Figure 3 compares index
tracking stocks for the major averages with Sector SPDR’s.
.
FIGURE 3
In Table 2A, the broader
market edged upward for the week. Key industry ETF’s in Table 2A are Biotech
and Semiconductors which confirm the NASDAQ. Transportation confirms the Dow
Jones Industrial Average according to Dow Theory. Banking and Financials are
confirming indicators for the S&P 500. Gold and Real Estate are respective
indicators for the inverse health of the currency and consumer spending.
Table 2A
Index Tracking
Stocks, Key Industry ETF’s and Sector SPDR’s
|
|
1 month
|
1 wk ago
|
2 wks ago
|
3 wks ago
|
4 wks ago
|
|
DIA (DOW)
|
1.1%
|
1.6%
|
-2.0%
|
-0.5%
|
2.1%
|
|
QQQQ (NASDAQ 100)
|
1.8%
|
1.8%
|
-1.6%
|
-0.6%
|
2.2%
|
|
SPY (S&P 500)
|
0.6%
|
1.3%
|
-1.7%
|
-0.9%
|
1.9%
|
|
IWM (Russell 2000)
|
0.3%
|
1.9%
|
-2.6%
|
-0.7%
|
1.8%
|
|
GLD, GOLD
|
5.5%
|
0.9%
|
1.0%
|
2.2%
|
1.3%
|
|
RKH, Banking
|
-2.9%
|
-0.9%
|
-2.8%
|
0.1%
|
0.8%
|
|
IYT, Transportation
|
2.2%
|
3.1%
|
-0.5%
|
0.5%
|
-0.9%
|
|
SMH, Semiconductors
|
1.3%
|
2.0%
|
-1.9%
|
-1.2%
|
2.4%
|
|
BBH, Biotechnology
|
-3.0%
|
-0.9%
|
-3.0%
|
-0.8%
|
1.7%
|
|
IYR, Real Estate
|
-1.4%
|
2.5%
|
-4.2%
|
-1.0%
|
1.4%
|
|
OIH, Oil
|
5.0%
|
3.3%
|
0.4%
|
-1.5%
|
2.7%
|
|
XLE,
Energy
|
5.3%
|
2.1%
|
0.5%
|
-1.0%
|
3.6%
|
|
XLU,
Utilities
|
1.8%
|
2.8%
|
-2.7%
|
0.5%
|
1.3%
|
|
XLB,
Materials
|
0.0%
|
1.6%
|
-2.7%
|
-0.6%
|
1.8%
|
|
XLI,
Industrial
|
1.3%
|
1.4%
|
-1.2%
|
-0.4%
|
1.6%
|
|
XLK,
Technology
|
0.8%
|
1.6%
|
-2.0%
|
-0.3%
|
1.5%
|
|
XLV,
Healthcare
|
-0.8%
|
-0.4%
|
-1.7%
|
-1.3%
|
2.5%
|
|
XLF,
Financials
|
0.1%
|
0.6%
|
-2.0%
|
0.3%
|
1.3%
|
|
XLP,
Consumer Staples
|
0.9%
|
2.4%
|
-1.5%
|
-1.2%
|
1.2%
|
|
XLY,
Consumer Discretionary
|
-1.7%
|
0.6%
|
-2.6%
|
-2.0%
|
2.3%
|
Major Indices
For the Past Week:
Dow Jones +1.4%
NASDAQ +1.7%
S&P500 Index +1.1%
Russell 2000 +1.9%
30 Year Bond 4.568%
10 Year Note 4.328%
Leading Industries
For the Past Week:
General Mining
Pipelines
Consumer Electronics
Nonferrous Metals
Water
Trucking
Nondurable Household Products
Oil Equipment, Services & Dis
Food Products
Food Producers
Lagging Industries
For the Past Week:
Brewers
Mortgage Finance
Medical Equipment
Paper
Recreational Products
Distillers & Vintners
Medical Supplies
Home Improvement Retailers
Toys
Mobile Telecommunications
Leading Industries
For the Past Month:
Gold Mining
Nonferrous Metals
General Mining
Mining
Platinum & Precious Metals
Water
Coal
Railroads
Exploration & Production
Pipelines
Lagging Industries
For the Past Month:
Aluminum
Mortgage Finance
Tires
Real Estate Holding & Develop
Auto Parts
Furnishings
Automobiles & Parts
Transportation Services
Medical Equipment
Containers & Packaging
Crude Oil $66.24
Gold for the past 30 days:
USD + 6.16%
CAD + 4.34%
CHF +11.00%
GBP +10.32%
EUR +10.10%
JPY + 9.59%
3.0 Procedure
The following watch lists contain
stock candidates for consideration. They are not necessarily trades.
Categories include check lists for insider buying and cash rich companies, as
well as, filters that employ stock picking methods used by master traders.
Current stock rankings are
based on the degree to which stocks are overbought or over sold based on the
Williams %R for the past two trading days. Two columns are labeled “%R1”
and “%R2” with “%R2” indicating the Williams %R for the most recent trading
day. Of course, values more negative than -80 are oversold and those less
negative than -20 are overbought.
A column labeled “Weekly %
Gain” was added to show the inverse relationship between price action over the
past week and the Williams %R. With this systematic way of ranking stocks, the
complete list of stocks for each filter is presented.
One should keep in mind
that oversold stocks are not necessarily ready to move upward. They could very
well be in a condition of continuous decline. The lists are meant to serve as
a starting point for further due diligence.
The “Reference” is the date
that a stock passed the indicated filter and was first added to or returned to
the list. The “% Change” is how the price has changed since the reference date.
Stocks that are down 10% or more after being listed are removed. The “% from Max”
is the percentage the price has declined from the maximum price reached since
the reference date. Stocks that are down 8% from their highs after being
listed are flagged in yellow. Stocks that are down 15% from their highs after
being listed are removed. More information on filters is available on the web
site.
A performance summary of
filtering techniques for check lists and master trader selection methods is
given in Table 3A.
Table 3A
Stock Filter Summary
|
Filter
|
Avg. % Change Since Listed
|
Avg. % Change Friday
|
1 Month
|
1 Week Ago
|
2 weeks Ago
|
3 Weeks Ago
|
4 Weeks Ago
|
|
Net Insider Buying
|
12.9%
|
-1.0%
|
10.5%
|
14.6%
|
-4.1%
|
0.5%
|
0.2%
|
|
Cash Rich Companies
|
-2.5%
|
0.7%
|
-5.6%
|
2.1%
|
-2.5%
|
-4.2%
|
-1.1%
|
|
Growth Momentum Stocks
|
12.8%
|
0.1%
|
2.2%
|
2.1%
|
-1.0%
|
-0.4%
|
1.6%
|
|
Lynch Stocks
|
16.5%
|
0.0%
|
4.5%
|
1.9%
|
-0.7%
|
1.6%
|
1.7%
|
|
Buffett Stocks
|
13.9%
|
0.5%
|
2.1%
|
0.6%
|
-1.1%
|
1.0%
|
1.5%
|
|
Graham Stocks
|
12.2%
|
0.1%
|
1.4%
|
1.9%
|
-2.0%
|
0.1%
|
1.4%
|
|
Templeton Stocks
|
2.8%
|
0.0%
|
1.1%
|
1.1%
|
-0.7%
|
-0.3%
|
1.0%
|
|
Zweig Stocks
|
13.8%
|
0.2%
|
4.6%
|
3.5%
|
-1.0%
|
-1.0%
|
3.0%
|
|
Average
|
10.3%
|
0.1%
|
2.6%
|
3.5%
|
-1.6%
|
-0.3%
|
1.2%
|
Key
|
Passed
Recent Filter
|
|
Price
declined by half of stop loss setting
|
|
Oversold
based on Williams %R (%R2 is most recent)
|
|
Overbought
based on Williams %R
(%R2 is most recent)
|
Companies that have
experienced net insider buying within the past 6 months of 5% or more of issued
stock are listed in Table 3B. These stocks should also appear in one of the master
trader screens or meet additional screening criteria before being given serious
consideration. This list is a mixture of stocks that are optionable and those
that are not.
Table 3B
Net Insider Buying Check List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
AMIC
|
08/26/05
|
-6.4%
|
American
Independence Corp.
|
Financial
|
Insurance
(Miscellaneous)
|
-6.7%
|
-2.9%
|
-100
|
-100
|
|
KIRK
|
09/30/05
|
0.0%
|
Kirkland's, Inc.
|
Services
|
Retail
(Specialty Non-Apparel)
|
0.0%
|
-9.9%
|
-94
|
-94
|
|
RGN
|
09/30/05
|
0.0%
|
RegeneRx
Biopharmaceut.
|
Health Care
|
Biotechnology
& Drugs
|
0.0%
|
-3.3%
|
-89
|
-89
|
|
RNAI
|
08/19/05
|
21.9%
|
Sirna
Therapeutics, Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
-6.4%
|
2.8%
|
-63
|
-63
|
|
REDE
|
09/02/05
|
1.2%
|
RedEnvelope,
Inc.
|
Services
|
Retail
(Catalog & Mail Order)
|
-5.0%
|
2.9%
|
-75
|
-62
|
|
MEMY
|
09/30/05
|
0.0%
|
Memory
Pharmaceuticals Corp.
|
Health
Care
|
Biotechnology
& Drugs
|
0.0%
|
48.9%
|
-34
|
-34
|
|
IRN
|
08/05/05
|
20.2%
|
Rewards
Network Inc.
|
Services
|
Business
Services
|
-0.9%
|
11.8%
|
-21
|
-21
|
|
MEAD
|
09/30/05
|
0.0%
|
Meade
Instruments Corp.
|
Technology
|
Scientific
& Technical Instruments
|
0.0%
|
9.9%
|
-13
|
-13
|
|
CRTX
|
08/12/05
|
64.7%
|
Critical
Therapeutics, Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
0.0%
|
51.9%
|
-8
|
-8
|
|
PCTY
|
09/16/05
|
27.9%
|
Party City
Corporation
|
Services
|
Retail
(Specialty Non-Apparel)
|
-0.1%
|
34.1%
|
-2
|
-2
|
Companies with net cash positions
that comprise at least 40% of their share price are listed in Table 3C. These
stocks should also appear in one of the master trader screens or meet
additional screening criteria before being given serious consideration. Again
this list is a mixture of stocks that are optionable and those that are not.
Table 3C
Capital Rich Companies Check List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
EXAR
|
09/16/05
|
-0.7%
|
Exar
Corporation
|
Technology
|
Semiconductors
|
-0.7%
|
3.5%
|
-55
|
-49
|
|
WSC
|
07/01/05
|
-4.3%
|
Wesco
Financial Corporation
|
Conglomerates
|
Conglomerates
|
-4.3%
|
0.8%
|
-38
|
-38
|
For the screen in
Table 3D, the number of selections is reduced by selecting only optionable
stocks having P/E’s less than 30.
Table 3D
Growth Momentum Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
SFY
|
04/22/05
|
62.1%
|
Swift
Energy Company
|
Energy
|
Oil &
Gas Operations
|
-6.4%
|
0.0%
|
-85
|
-85
|
|
BDK
|
04/29/05
|
-1.8%
|
The Black
& Decker Corporation
|
Consumer
Cyclical
|
Appliances
& Tools
|
-11.7%
|
-1.2%
|
-71
|
-63
|
|
TDY
|
04/29/05
|
13.3%
|
Teledyne
Technologies Incorporated
|
Services
|
Business
Services
|
-11.6%
|
1.4%
|
-65
|
-54
|
|
ADVNB
|
05/20/05
|
13.3%
|
Advanta
Corp.
|
Financial
|
Consumer
Financial Services
|
-7.8%
|
-3.5%
|
-50
|
-50
|
|
SYT
|
04/08/05
|
-1.7%
|
Syngenta
AG (ADR)
|
Basic
Materials
|
Chemical
Manufacturing
|
-6.2%
|
1.9%
|
-56
|
-50
|
|
EXP
|
07/29/05
|
18.2%
|
Eagle
Materials, Inc.
|
Capital
Goods
|
Construction
- Raw Materials
|
0.0%
|
5.8%
|
-23
|
-23
|
|
LM
|
08/12/05
|
0.6%
|
Legg
Mason, Inc.
|
Financial
|
Investment
Services
|
0.0%
|
1.4%
|
-19
|
-19
|
|
OSK
|
03/12/05
|
9.4%
|
Oshkosh
Truck Corporation
|
Consumer
Cyclical
|
Auto &
Truck Manufacturers
|
-0.5%
|
4.7%
|
-18
|
-18
|
|
PKX
|
09/30/05
|
0.0%
|
POSCO
(ADR)
|
Basic
Materials
|
Iron &
Steel
|
0.0%
|
4.4%
|
-18
|
-18
|
|
UNH
|
04/15/05
|
20.5%
|
UnitedHealth
Group Inc.
|
Financial
|
Insurance
(Accident & Health)
|
0.0%
|
2.2%
|
-11
|
-11
|
|
BHP
|
09/09/05
|
8.3%
|
BHP
Billiton Limited (ADR)
|
Basic
Materials
|
Metal
Mining
|
-0.2%
|
4.9%
|
-9
|
-9
|
|
CHE
|
05/06/05
|
11.6%
|
Chemed
Corporation
|
Services
|
Business
Services
|
-3.5%
|
2.9%
|
-8
|
-8
|
For the Peter Lynch screen
in Table 3E, the number of selections is reduced by selecting only optionable
stocks having P/E’s less than 30.
Table 3E
Peter Lynch Value Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
SKM
|
02/07/05
|
8.3%
|
SK Telecom
Co., Ltd. (ADR)
|
Services
|
Communications
Services
|
-5.6%
|
-1.6%
|
-96
|
-96
|
|
SKM
|
09/30/05
|
0.0%
|
SK Telecom
Co., Ltd. (ADR)
|
Services
|
Communications
Services
|
0.0%
|
-1.6%
|
-96
|
-96
|
|
RD
|
04/29/05
|
7.8%
|
Royal
Dutch Petroleum Co.
|
Services
|
Printing
& Publishing
|
-6.3%
|
-2.0%
|
-87
|
-87
|
|
BTI
|
08/12/05
|
5.1%
|
British
American Tobacco (ADR)
|
Consumer
Non-Cyclical
|
Tobacco
|
-2.9%
|
-2.9%
|
-64
|
-64
|
|
KOF
|
04/29/05
|
17.0%
|
Coca-Cola
FEMSA, S.A. (ADR)
|
Consumer
Non-Cyclical
|
Beverages
(Non-Alcoholic)
|
-6.8%
|
2.5%
|
-51
|
-51
|
|
NTE
|
05/06/05
|
18.9%
|
Nam Tai
Electronics, Inc.
|
Technology
|
Electronic
Instruments & Controls
|
-4.5%
|
1.7%
|
-22
|
-22
|
|
TM
|
12/13/04
|
23.2%
|
Toyota
Motor Corporation (ADR)
|
Consumer
Cyclical
|
Auto &
Truck Manufacturers
|
-1.7%
|
6.6%
|
-21
|
-21
|
|
PKX
|
04/29/05
|
24.2%
|
POSCO
(ADR)
|
Basic
Materials
|
Iron &
Steel
|
-0.9%
|
4.4%
|
-18
|
-18
|
|
CHL
|
03/18/05
|
45.7%
|
China Mobile (Hong Kong) Limited (ADR)
|
Services
|
Communications
Services
|
-0.9%
|
4.5%
|
-9
|
-9
|
|
TMX
|
06/03/05
|
15.0%
|
Telefonos
de Mexico, S.A. (ADR)
|
Services
|
Communications
Services
|
0.0%
|
7.2%
|
-1
|
-1
|
The filter for Warren
Buffet style stock picking in Table 3F is for the intermediate to long term.
Two requirements were added. One was to include only optionable stocks in
order to find LEAPS opportunities. The other requirement was to include only
those stocks having a PE of 17 or less.
Table 3F
Warren Buffett Value Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
CECO
|
09/30/05
|
0.0%
|
Career
Education Corp.
|
Services
|
Schools
|
0.0%
|
-2.6%
|
-94
|
-94
|
|
FOSL
|
09/16/05
|
-10.0%
|
Fossil,
Inc.
|
Consumer
Cyclical
|
Jewelry
& Silverware
|
-10.0%
|
-2.4%
|
-89
|
-88
|
|
ELBO
|
01/31/05
|
79.1%
|
Electronics
Boutique Holdings Corp.
|
Services
|
Retail
(Technology)
|
-6.1%
|
-2.6%
|
-88
|
-88
|
|
RCII
|
07/29/05
|
-8.4%
|
Rent-A-Center,
Inc
|
Services
|
Rental
& Leasing
|
-8.4%
|
-4.1%
|
-79
|
-79
|
|
LNCR
|
12/27/04
|
-2.4%
|
Lincare
Holdings Inc.
|
Health
Care
|
Healthcare
Facilities
|
-10.6%
|
-0.5%
|
-80
|
-77
|
|
HDI
|
04/15/05
|
5.8%
|
Harley-Davidson,
Inc.
|
Consumer
Cyclical
|
Recreational
Products
|
-10.3%
|
-0.6%
|
-65
|
-65
|
|
RI
|
09/02/05
|
0.7%
|
Ruby
Tuesday, Inc.
|
Services
|
Restaurants
|
-8.0%
|
-1.0%
|
-60
|
-60
|
|
NKE
|
09/23/05
|
0.5%
|
NIKE, Inc.
|
Consumer
Cyclical
|
Footwear
|
0.0%
|
0.5%
|
-52
|
-52
|
|
DHI
|
08/26/05
|
5.3%
|
D.R.
Horton Inc.
|
Capital
Goods
|
Construction
Services
|
-6.1%
|
3.0%
|
-52
|
-52
|
|
NUE
|
04/15/05
|
20.9%
|
Nucor
Corporation
|
Basic
Materials
|
Iron &
Steel
|
-2.1%
|
-0.9%
|
-44
|
-44
|
|
PGR
|
12/27/04
|
24.4%
|
The
Progressive Corp.
|
Financial
|
Insurance
(Property & Casualty)
|
-2.0%
|
-2.0%
|
-24
|
-24
|
|
ACS
|
04/29/05
|
14.5%
|
Affiliated
Computer Services
|
Technology
|
Computer
Services
|
0.0%
|
3.1%
|
-17
|
-17
|
|
THO
|
04/15/05
|
26.3%
|
Thor
Industries, Inc.
|
Capital
Goods
|
Mobile
Homes & RVs
|
-6.0%
|
1.8%
|
-9
|
-9
|
|
ABFS
|
04/29/05
|
10.6%
|
Arkansas
Best Corporation
|
Transportation
|
Trucking
|
-4.0%
|
5.5%
|
-9
|
-9
|
|
DSPG
|
02/07/05
|
2.4%
|
DSP Group,
Inc.
|
Technology
|
Communications
Equipment
|
-3.7%
|
3.4%
|
-11
|
-7
|
|
STLD
|
05/20/05
|
21.3%
|
Steel
Dynamics, Inc.
|
Basic
Materials
|
Iron &
Steel
|
-2.7%
|
2.9%
|
-6
|
-6
|
|
RS
|
04/15/05
|
37.9%
|
Reliance
Steel & Aluminum
|
Basic
Materials
|
Misc.
Fabricated Products
|
0.0%
|
5.5%
|
-6
|
-6
|
|
FNF
|
07/29/05
|
13.0%
|
Fidelity National
Financial
|
Financial
|
Insurance
(Property & Casualty)
|
-0.1%
|
3.2%
|
-4
|
-4
|
|
EASI
|
09/09/05
|
21.9%
|
Engineered
Support System
|
Capital
Goods
|
Misc.
Capital Goods
|
-0.4%
|
-0.4%
|
-3
|
-3
|
Stocks from Benjamin
Graham’s style of utility investing are listed in Table 3G. A requirement was
added to include only those stocks having a PE of 17 or less.
Table 3G
Benjamin Graham Utility Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
ATO
|
04/01/05
|
4.9%
|
Atmos
Energy Corporation
|
Utilities
|
Natural
Gas Utilities
|
-5.1%
|
-0.8%
|
-88
|
-87
|
|
UU
|
06/10/05
|
-3.2%
|
United
Utilities PLC (ADR)
|
Utilities
|
Electric
Utilities
|
-5.3%
|
-1.4%
|
-71
|
-71
|
|
UU
|
09/30/05
|
0.0%
|
United
Utilities PLC (ADR)
|
Utilities
|
Electric
Utilities
|
0.0%
|
-1.4%
|
-71
|
-71
|
|
PNW
|
01/10/05
|
2.3%
|
Pinnacle
West Capital
|
Utilities
|
Electric
Utilities
|
-5.0%
|
0.1%
|
-67
|
-65
|
|
SJI
|
07/01/05
|
-5.4%
|
South
Jersey Industries
|
Utilities
|
Natural
Gas Utilities
|
-8.9%
|
1.1%
|
-51
|
-51
|
|
WPS
|
02/07/05
|
12.5%
|
WPS
Resources Corp
|
Utilities
|
Electric
Utilities
|
-2.7%
|
0.6%
|
-51
|
-49
|
|
WPS
|
09/30/05
|
0.0%
|
WPS
Resources Corp
|
Utilities
|
Electric
Utilities
|
0.0%
|
0.6%
|
-51
|
-49
|
|
OKE
|
04/15/05
|
18.6%
|
ONEOK,
Inc.
|
Utilities
|
Natural
Gas Utilities
|
-4.8%
|
3.0%
|
-46
|
-46
|
|
NFG
|
04/08/05
|
19.7%
|
National
Fuel Gas Co.
|
Utilities
|
Natural
Gas Utilities
|
-0.9%
|
2.0%
|
-34
|
-34
|
|
ATG
|
04/29/05
|
7.3%
|
AGL
Resources Inc.
|
Utilities
|
Natural
Gas Utilities
|
-5.1%
|
2.1%
|
-31
|
-31
|
|
CPK
|
05/06/05
|
34.5%
|
Chesapeake Utilities
|
Utilities
|
Natural
Gas Utilities
|
0.0%
|
4.5%
|
-17
|
-17
|
|
CEG
|
04/29/05
|
17.2%
|
Constellation
Energy Group
|
Utilities
|
Electric
Utilities
|
0.0%
|
4.0%
|
-14
|
-14
|
|
SRE
|
01/10/05
|
30.2%
|
Sempra
Energy
|
Utilities
|
Natural
Gas Utilities
|
0.0%
|
3.4%
|
-13
|
-13
|
|
PGN
|
01/10/05
|
1.6%
|
Progress
Energy, Inc.
|
Utilities
|
Electric
Utilities
|
-2.2%
|
2.9%
|
-13
|
-13
|
|
KEP
|
01/10/05
|
42.4%
|
Korea
Electric Power Corporation (ADR)
|
Utilities
|
Electric
Utilities
|
-4.1%
|
7.8%
|
-4
|
-4
|
Optionable stocks from John Templeton’s style of
investing are listed in Table 3H.
Table 3H
John Templeton Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
JNJ
|
05/27/05
|
-6.2%
|
Johnson
& Johnson
|
Health
Care
|
Major
Drugs
|
-6.2%
|
-1.1%
|
-84
|
-84
|
|
HDI
|
05/27/05
|
-2.9%
|
Harley-Davidson,
Inc.
|
Consumer
Cyclical
|
Recreational
Products
|
-10.3%
|
-0.6%
|
-65
|
-65
|
|
MTB
|
05/27/05
|
2.6%
|
M&T
Bank Corporation
|
Financial
|
Regional
Banks
|
-5.9%
|
0.1%
|
-56
|
-56
|
|
SNV
|
05/27/05
|
-5.2%
|
Synovus
Financial Corp.
|
Financial
|
Regional
Banks
|
-7.4%
|
0.3%
|
-55
|
-54
|
|
NFB
|
07/29/05
|
-6.9%
|
North Fork
Bancorporation, Inc.
|
Financial
|
Regional
Banks
|
-9.1%
|
0.4%
|
-55
|
-50
|
|
DGX
|
08/19/05
|
1.1%
|
Quest
Diagnostics Incorporated
|
Health
Care
|
Healthcare
Facilities
|
-1.9%
|
-0.4%
|
-52
|
-47
|
|
EDMC
|
06/03/05
|
-0.8%
|
Education
Management Corp
|
Services
|
Schools
|
-9.7%
|
4.8%
|
-38
|
-38
|
|
MBT
|
06/17/05
|
24.2%
|
Mobile
TeleSystems OJSC (ADR)
|
Services
|
Communications
Services
|
-1.2%
|
2.2%
|
-37
|
-37
|
|
BBBY
|
06/24/05
|
-2.6%
|
Bed Bath
& Beyond Inc.
|
Services
|
Retail
(Specialty Non-Apparel)
|
-14.2%
|
0.2%
|
-35
|
-35
|
|
AMSG
|
08/12/05
|
-1.4%
|
AmSurg
Corp.
|
Health
Care
|
Healthcare
Facilities
|
-1.9%
|
3.2%
|
-33
|
-33
|
|
WSM
|
09/02/05
|
1.1%
|
Williams-Sonoma,
Inc.
|
Services
|
Retail
(Specialty Non-Apparel)
|
-2.7%
|
3.5%
|
-32
|
-30
|
|
CPS
|
05/27/05
|
7.7%
|
ChoicePoint
Inc.
|
Services
|
Business
Services
|
-1.2%
|
0.6%
|
-28
|
-28
|
|
EASI
|
06/03/05
|
16.9%
|
Engineered
Support System
|
Capital
Goods
|
Misc.
Capital Goods
|
-0.4%
|
-0.4%
|
-3
|
-3
|
|
SFG
|
05/27/05
|
12.3%
|
StanCorp
Financial Group, Inc.
|
Financial
|
Insurance
(Life)
|
-5.3%
|
3.2%
|
-2
|
-2
|
Optionable stocks from
Martin Zweig’s style of investing are listed in Table 3I.
Table 3I
Martin Zweig Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
SFY
|
08/12/05
|
-2.8%
|
Swift
Energy Company
|
Energy
|
Oil &
Gas Operations
|
-6.4%
|
0.0%
|
-85
|
-85
|
|
ZQK
|
05/27/05
|
-7.8%
|
Quiksilver,
Inc.
|
Consumer
Cyclical
|
Apparel/Accessories
|
-13.9%
|
-0.1%
|
-62
|
-58
|
|
KBH
|
09/02/05
|
0.7%
|
KB Home
|
Capital
Goods
|
Construction
Services
|
-5.0%
|
-1.1%
|
-56
|
-56
|
|
TOL
|
08/26/05
|
-4.4%
|
Toll
Brothers, Inc.
|
Capital Goods
|
Construction
Services
|
-8.6%
|
2.9%
|
-48
|
-47
|
|
POOL
|
06/10/05
|
2.1%
|
SCP Pool
Corporation
|
Consumer
Cyclical
|
Recreational
Products
|
-5.4%
|
2.0%
|
-45
|
-41
|
|
APA
|
05/27/05
|
27.3%
|
Apache
Corporation
|
Energy
|
Oil &
Gas Operations
|
-2.6%
|
1.8%
|
-36
|
-37
|
|
AMSG
|
07/29/05
|
-2.3%
|
AmSurg
Corp.
|
Health
Care
|
Healthcare
Facilities
|
-3.9%
|
3.2%
|
-33
|
-33
|
|
PKZ
|
07/01/05
|
43.3%
|
HURRICANE
HYDROCARBONS LTD
|
Energy
|
Oil Well
Services & Equipment
|
-2.0%
|
-0.9%
|
-27
|
-27
|
|
SFCC
|
07/08/05
|
15.0%
|
SFBC
International, Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
-2.1%
|
5.9%
|
-26
|
-26
|
|
MCO
|
07/29/05
|
8.0%
|
Moody's
Corporation
|
Services
|
Business
Services
|
-1.2%
|
3.3%
|
-26
|
-26
|
|
EXP
|
05/27/05
|
33.9%
|
Eagle
Materials, Inc.
|
Capital
Goods
|
Construction
- Raw Materials
|
0.0%
|
5.8%
|
-23
|
-23
|
|
SM
|
08/05/05
|
15.1%
|
St. Mary
Land & Exploration Co.
|
Energy
|
Oil &
Gas Operations
|
-1.5%
|
3.6%
|
-21
|
-21
|
|
CRDN
|
08/19/05
|
20.1%
|
Ceradyne,
Inc.
|
Capital
Goods
|
Aerospace
and Defense
|
-1.4%
|
14.5%
|
-16
|
-16
|
|
CAE
|
06/10/05
|
17.6%
|
Cascade
Corporation
|
Capital
Goods
|
Misc.
Capital Goods
|
0.0%
|
2.5%
|
-11
|
-11
|
|
BR
|
07/29/05
|
26.8%
|
Burlington
Resources Inc.
|
Energy
|
Oil &
Gas Operations
|
-0.5%
|
4.9%
|
-8
|
-8
|
|
CMTL
|
07/01/05
|
25.9%
|
Comtech
Telecomm. Corp.
|
Technology
|
Communications
Equipment
|
0.0%
|
5.9%
|
-7
|
-7
|
|
RESP
|
06/03/05
|
22.9%
|
Respironics,
Inc.
|
Health
Care
|
Medical
Equipment & Supplies
|
0.0%
|
5.4%
|
-6
|
-6
|
|
JUPM
|
08/19/05
|
7.9%
|
Jupitermedia
Corporation
|
Services
|
Advertising
|
-0.2%
|
3.4%
|
-4
|
-4
|
4.0
Trading Results
This section highlights
performance of stocks and options trades. Only a summary is provided here to
save space. Detailed lists of closed trades can be found on the portfolio page of the
website.
Options Trading
|
Options Trading Estimation Model -
Minimum Suggested Initial Capital is $3,000
|
|
Number of trades in 2005 =
|
60
|
60
|
60
|
(1.5 trades per week)
|
|
Number of contracts per trade =
|
1
|
2
|
3
|
|
|
Avg. Premium Cost per trade =
|
$604.80
|
$1,209.60
|
$1,814.40
|
|
|
Total Premiums =
|
$36,288.00
|
$72,576.00
|
$108,864.00
|
|
|
Gross Profit =
|
$4,367.89
|
$8,735.78
|
$13,103.67
|
(12.3%)
|
|
Broker Commission (Etrade) =
|
-$1,348.80
|
-$1,498.80
|
-$1,648.80
|
|
|
Subscription Cost to date =
|
-$600.00
|
-$600.00
|
-$600.00
|
|
|
Net Profit After Expenses =
|
$2,419.09
|
$6,636.98
|
$10,854.87
|
(Avg.
holding period 8.5 days)
|
Stock Trading
|
Stock Trading Model ($10,000
Initial Capital)
|
|
No. of Closed trades in 2005 =
|
55
|
(1.4 Trades per Week)
|
|
Average Trade Size =
|
$1,000.00
|
|
|
Total Share costs =
|
$55,000.00
|
|
|
Gross Profit on Closed Positions=
|
$1,494.28
|
|
|
Gross Profit on Open Positions =
|
$543.79
|
|
|
Broker Commission (Etrade) =
|
-$1,178.82
|
|
|
Subscription Cost to date =
|
-$70.00
|
|
|
Net Profit After Expenses =
|
$789.24
|
(7.9%)
|
5.0 Conclusion
Net Growth of Total Capital in
2005
|
Stock
Advisory (initial capital $10,000)
|
+ 7.9%
|
|
Options
Advisory (trading 2 contracts)
Aggressive, 20% of risk capital per trade
Moderate, 15% of risk capital per trade
Conservative, 10% of risk capital per trade
|
+121.6%
+ 91.2%
+ 60.8%
|
|
Major Indices Year to Date
10/01/05
|
|
DOW
|
-2.0%
|
|
NASDAQ
|
-1.1%
|
|
S&P500
|
+1.4%
|
|
Russell
2000
|
+2.5%
|
Appendix - Investment Conference
Schedule
Below are links to
conference registration sites where you can sign up.
- 10-02-05 Toronto, Ontario "Toronto Resource Investment Conference"
- 10-15-05 Scottsdale, Arizona "Why Do We Invest? The
Financial Planning and Psychological Side Of Investing Money", presented by Ives Machiz,
President, Ives Asset Management, Inc. Location: Scottsdale Civic Center Library Auditorium 480/312-7946, 3839 North Drinkwater Blvd., Scottsdale (call facility for handicap accessibility). At this program you will learn: (1)
A framework to compare financial goals and the investment strategy used to
achieve them, (2) A clear view of the risk levels necessary to achieve a
financial goal and (3) A foundation for understanding why we make the investment
decisions we make.
- 10-30-05 New Orleans, LA "New Orleans Investment Conference"
- 11-10-05 Millbrae, CA "Biotech Investing
Conference" Continuing advances in genomics, proteomics and
enabling technologies makes the Biotech sector a favorite among private
equity investors and venture capitalists. The Biotech Investing Conference
is an industry gathering of the leading private equity investors, venture
capitalists, biotech companies, pharmaceutical companies, corporate
investors and institutional investors.
- 11-27-05 San Francisco, CA "Gold and Precious Metals Conference"
Both
professional and sophisticated private investors meet with the world's
leaders in gold, silver, precious metals, copper and oil and gas
exploration and production. The Natural Resource industry's newest
opportunities are presented, together with educational seminars, executive
panels and investment workshops led by top finance specialists, economic
analysts and newsletter editors. Admission is complimentary with
pre-registration.
- 01-30-06 Miami, Florida "IIR’s 19th Annual
Private Placements Industry Forum" is the pre-eminent gathering for the latest developments in
originating, buying and structuring private debt placements. Join us in
sunny Miami, Florida in January as the industry’s leading decision makers
discuss new market trends, including: project finance, cross border deals
and the impact of pre-designated investor counsel. Plus, enjoy over 6 hours of networking opportunities including our two hour Rooftop Dessert and Cordial Suite. Don’t delay, register for
the Institute for International
Research's 19th Annual Private Placements Industry Forum today!.
- 02-07-06 Cape Town, South Africa "Investing in African
Mining Conference" Africa's most important
mining event and the world's leading gathering of global policy makers and
international finance, the Mining INDABA has raised billions of dollars
and introduced the international investment community to mining interests
throughout Africa. The Mining Indaba has become an institution
throughout Africa, attracting over 2,000 delegates from fifty countries
and hosting over 100 exhibitors.
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