My recent big gainners

Performance

It is a rising market. It should be compared to a market index.

Table 1: Performance Summary.

No.	Avg. Return	Avg. Annualized	Avg. Holding Period
21	50%	111%	211 days

Source

Table 2: Source of the stocks:

Sources	Web & publication	Deeply valued	Acquire candidates	Misc. screens	Short squeezed
No.	4	3	3	10	1
Annualized Return	75%	53%	204%	115%	164%
Stocks	ADM,BSX, C, EMN	CSCO, CSCO, MSFT	CAMP, FFCH, ADES	ACAT,BIIB,CUZ, DGI,NSIT,STRZA, USNA,OMX,DLTR	DECK

The returns are annualized for better comparison.

Web and Publication.

There are four (from a total of 21) stocks are selected from articles off from the web, magazines and newspaper. When I was convinced that there was great appreciation, I bought that stock without further evaluation (not recommended). I was lazy but you should do some evaluation. Need to distinguish whether the authors are pumping-and-dumping the stocks they recommended.

Deeply-valued stocks.

Three of the stocks were quite deeply valued. I placed an order with prices about 5% lower than the market prices betting they are still on its way down a little. About three out of six orders were successfully executed. If I have the time machine, I should place market orders on all six as the market is rising. 

I doubled my normal bet on most of these stocks (CSCO about 4 times) and the stocks with high fundamental metrics. As of 5/2013, these deeply-valued stocks have not realized its potential values and they’re the under-performers in the group. However, the average 53% annualized return is nothing to ignore!

Candidates to be acquired.

There are quite a few candidates that would be acquired by other (usually larger) companies in the early recovery of the market cycle (a phase defined by me). However, with plenty of easy money around due to low interest rates and the high corporate cash reserves, it extends the acquisition craze to 2013. This phase will end when the Fed begins to tighten the money supply. These stocks represent the better return from the group and I should have doubled bet on all of them even they normally are smaller and unknown companies.

The potential candidates to be acquired are usually smaller companies with a technological edge and/or having a valuable customer base.

Miscellaneous screens.

A screen consists of criteria in searching stocks such as P/E < 20. There are 10 stocks from miscellaneous screens (same as searches). The performance of each screen is further analyzed.  It is better to use the screens that had better performances most recently. My screens are different from yours and some require subscription services, so they will not be disclosed here.

Short squeeze.

The short squeeze happens when the stocks that have been over-sold by the shorters (Chapter 69: Fundamental Metrics and Chapter 80: Selling Short). When the stock is over-sold (Chapter 115), those seeking a short position cannot find the extra shares lent to be shorted and sometimes the shorters are forced to cover their shorts due to the high expenses of shorting that stock (interests and dividends).

If the company is not heading towards bankruptcy, any good news would also boost the stock price. This is the typical situation, but it does not work all of the time with TSLA as recent example as of 5/2013. However, I bet TSLA will fall again from its unjustified high price of over $170 per share. Only time can tell.

Increase bets on stocks which have better appreciation potential

The confidence in my predictions for CSCO's future is so secure that I have set aside four times my typical investment, and then 2 times for BSX and STRZA. All scored high in my scoring system described in my other book Scoring Stocks. I would never set aside more money for potential laggards!

Table 3: Score (using the score system in my book Scoring Stocks:

Avg. Score	Foreign Country	Insider Purchase
3.00	0	1

The average score of 9 stocks is 3 and it is the passing grade in my score system. Some of the stocks have not been analyzed and hence they have not been scored as described before. The stocks that have not been scored usually have good appreciation potential, deeply-valued from first impression, and / or recommended by convincing articles. The scoring system is a guide line and we do not have to follow it religiously. The scoring system is based on my book Scoring Stocks (from amazon.com).

--------------------

My e-book Debunk the Myths of Investing could save you a lot of money in investing. The above is one chapter out of 133 and some important chapters will not be included in the blog. Check out my books from amazon.com under the name Tony Pow. 

  http://ebtonypow.blogspot.com/2012/12/special-debunk-myths-of-buffett.html

Sample portfolio for the book.
  http://stockportfolios.blogspot.com/2013/03/welcome.html

(c) 2013 Tony Pow

Disclaimer. I'm not responsible for your actions in your investment. Treat this as educational information and past performance does not guarantee future performance.