Posts Tagged "picking bottoms"

We are always on the lookout for overly beaten down stocks with daily charts resembling rocks falling off a cliff. Sometimes they make prime picks for bottom picking, assuming the only reason they are going down is because a huge fund is just liquidating its stake. An example of this is the stock $RRD (RR Donnelley & Sons). It has been trending down since its February 28th decent earnings release and in-line forward guidance forecast,...

Negative European car rental outlooks yesterday from Avis ($CAR stock) sent rival Hertz Global ($HTZ stock) stock tumbling -15% in 2 days. After an unsuccessful bottom pick yesterday, we decided to give it another try today as we felt Hertz is a value buy based off comparing their eps growth rate and forward p/e ratio. Their eps growth rate is around double their forward p/e ratio making it a fundamental buy. When the tape told us...

China announced new lending rules for China's P2P (peer to peer) industry, which is the main business for $YRD (Yirendai stock). The new regulations provided a severe negative headline for momentum longs to dump $YRD stock as the stock ran up from $6 to $42 in the past 6 months. After doing some due diligence reading $YRD's F-1 filing, we found out that the average loan size $YRD provides its customers was well below the RMB200,000...

Today Monotype Imaging ($TYPE stock) announced a dilutive acquisition of $150M. Stock got slammed late in the day -31% at the intraday lows. We starting bottom picking this name in the $19's. Sellers were being very aggressive and eventually slammed the stock down to $17's in 5 minutes. We took this opportunity to load up and rode the stock back up as we believed the extreme weakness was way overdone. Even an analyst Ladenburg...

We swung a small $BOOT (Boot Barn Holdings) long position coming into today as last Friday's trading activity still told us that the stock was oversold on the JPMorgan downgrade and buyers were still there trying to accumulate shares. When the tape read a buyer showed up with little selling resistance, we started adding small to the position. Again we sold into strength like last Friday and unfortunately should have swung the position...