Thursday, April 17, 2008

Selling Low, Buying High In CPST

As I've said before, I enjoy tracking the stocks I've sold, and take great pleasure in watching them fall. So, you can only imagine my daily pain in watching Capstone Turbine (CPST) go from $1.20 on January 22nd to a high of $2.87 this Monday. Yes, I've missed out on a 139% gain in less than three months time. It has progressed from mild irritation, to general disappointment and regret, to "I can't watch this stupid stock go up day, after day, AFTER DAY!! I give up, Capstone! YOU WIN!!!!!"

With that personal capitulation, I bought some CPST this Tuesday at $2.65. It's now at $2.80, but its momentum could break down at any time. This is all very similar to the way I've traded Terra Nitrogen (TNH) - I'll no doubt be DCA'ing my CPST position in the near future.

To fund this, I closed out two of my smallest holdings, Alliance Resource Partners (ARLP) and Nokia (NOK). It was a numbers game, but I have to question selling a coal stock whose lagging perfomance could mean catch-up returns are coming soon, and a world-class designer and manufacturer in the global secular-growth industry of telecom. Both stocks had nice dividends to boot. And, the early returns for ARLP and NOK since I've sold are up 8% and 4% respectively.

But hey, if they go on to double, I can always buy them back again.

Tuesday, April 8, 2008

Stock Of The Month: SID

Everybody that's been following the market knows that steel stocks are en fuego. As is the economy of Brazil, and more broadly, Latin America. And, as I've mentioned before, I'm a sucker for dividend stocks.

With all that in mind, I present to you Companhia Siderurgica Nacional (SID). Of all the steel stocks I've researched, SID had the best combination of high margins; high returns on assets and equity; positive cash flows; and high dividend yield. Yet somehow, it has largely not participated in the recent steel-stock bull run. I believe that it will gain the recognition it deserves soon - and if not, it is a prime takeover candidate in an industry ripe for consolidation.

Here's my current portfolio. As always, I believe in all of these stocks - until I sell them.

Southern Copper (PCU) 12.80%
Dominion Resources Black Warrior Trust (DOM) 12.56%
Fording Canadian Coal (FDG) 10.63%
Goldman Sachs (GS) 7.33%
Google (GOOG) 6.02%
Apple (AAPL) 5.41%
Tidewater (TDW) 5.11%
Apache (APA) 4.87%
American Capital Strategies (ACAS) 4.79%
Terra Nitrogen (TNH) 4.69%
Foster Wheeler (FWLT) 4.32%
MEMC Electronic Materials (WFR) 3.70%
Frontline (FRO) 3.70%
Companhia Siderurgica Nacional (SID) 3.49%
NVIDIA (NVDA) 3.15%
Alliance Resource Partners (ARLP) 2.61%
Ace Limited (ACE) 2.55%
Nokia (NOK) 2.25%