Nasdaq 100 Watch List: June 2017

Performance Review

On June 21, 2016, we provided downside targets for WD-40 Co. (WDFC) based on the work of Edson Gould.  At the time, we said the following of the stock:

“The assumption by many momentum investors is that WDFC will continue to rise further.  However, prior experience suggests that a parabolic rises usually end in a breakdown in the price.”

Since the 2016 posting, three weeks later, WDFC managed to increased from $114 to $122 on a closing basis.  However, since the July 11, 2016 high, the price of WDFC has meandered as low as $110.  Considering that the stock is putting up so much resistance to decline after a clear parabolic peak, there may be more life in this stock than we thought.

From a standpoint of investment safety, WDFC would be an ideal consideration at or near the $72.49 conservative downside target as indicated in the chart below.

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Bitcoin: Is A Crash Coming?

Let’s do a quick review of the evidence so far.

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July 2010 to November 2011 Bitcoin increases +36,900% and then declines –93.07% within a two year period.

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November 2011 to July 2013 Bitcoin increases +9,771% and falls –70.93% in less than two years.

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April 2013 to October 2014, Bitcoin increases +1,629% and falls –72.21% in less than two years.

Is A Crash Coming?

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We can’t be certain that history will repeat.  However, the evidence suggests that a decline of –70% to –90% is the norm.  Let’s watch.

Insurance Watch List: June 2017

Below is the performance of the May 2016:

symbol name May-16 Jun-17 % chg
SCRYY SCOR SE 3.29 4.06 23.40%
LFC China Life Insurance Co. Ltd. 10.81 15.5 43.39%
NWLI National Western Life Group, Inc. 205.51 320.56 55.98%
AXS AXIS Capital Holdings Limited 54.33 63.61 17.08%
RE Everest Re Group Ltd. 178.01 253.98 42.68%
IPCC Infinity Property and Casualty Corp. 76.55 94.15 22.99%
AAME Atlantic American Corp. 3.45 3.75 8.70%
MURGY Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft 18.86 19.88 5.41%
ESGR Enstar Group Limited 155.17 194.5 25.35%
BWINA Baldwin & Lyons Inc. 23 23.9 3.91%
       

The average change of the entire equal weighted list from May of 2016 was +24.89%.  This is contrasted with the +19.38% gain that was achieved by the iShares Dow Jones US Insurance Index.

U.S. Dividend Watch List: June 23, 2017

Previous Year Performance Review

In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from June 24, 2016 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Symbol Name 2015 Price 2016 Price % change
CAH Cardinal Health 75.23 79.68 5.9%
STBA S&T BanCorp. 24.04 35.36 47.1%
TIF Tiffany & Co. 60.09 91.79 52.8%
GS Goldman Sachs Group 141.86 217.19 53.1%
HFC HollyFrontier Corporation 24.16 27.15 12.4%
      Average 34.2%
         
DJI Dow Jones Industrial 18,011.07 21,394.76 18.8%
SPX S&P 500 2,113.32 2,438.30 15.4%

The performance of the top five companies were exceptional. The best performing stock was Goldman Sachs (GS) which gained 53%. Our take on the financial sector was wrong as we specifically urged readers to hold off on this sector for several months. Shares of Goldman did not fall below $139.50.

Trailing Goldman by a fraction of percentage point is Tiffany & Co. (TIF) whose shares rose 52.8%. Share price closed the week at $91.79 and we said last year that our fair value estimate for this company is around $100. Our assessment for Tiffany have proven to be correct and profitable as we were long Tiffany at the time of writing.

The worse performer was Cardinal Health (CAH) which gained only 5.9%. We thought shares should trade closer to $85 but that was wishful thinking on our part. Despite that, the company continued to provide dividend as income to shareholders.

U.S. Dividend Watch List: June 23, 2017

It was an uneventful week for the market and we're in the waiting mode to see of the S&P can break above 2,450 mark. At the end of the week, there are 36 companies on our dividend watch list. Continue reading

Transaction Alert

The NLO team executed the following transaction(s):

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