Performance Review
Below is the performance of the stocks on our watch list from January 25, 2017.
So far, the analysts haven’t fared well in their estimates. Stocks on the left side of the spectrum were expected to decline while those on the right were expected to do very well. Click on the chart to see what the analyst thought in January 2017. In the same period of time, the Nasdaq 100 has gained +17.26%.
When it comes to financial markets, the trend is your friend. In the case of interest rates, more specifically the 3-month Treasury, the trend is up. Our position is that the free market movement of the 3-month Treasury is the lead for what we can reasonable expected from the Fed Funds Rate which is managed by the Federal Reserve.
Gold and gold stocks are really dragging it out. There may be a recovery on the horizon but you wouldn’t know it from the lackluster performance in the face of Bitcoin going parabolic and daily geopolitical machinations.
What We Got Wrong
On June 15, 2017, we proposed that a prior decline of –14.94% had set expectations of what Bitcoin participants were willing to accept for downside risk. That logic was turned on its head when Bitcoin declined from the high of $3,018.55 and then fell as low as $1,938.94 or –35.76%.
The revision that we’re making is that as each decline grows, participants will accept even larger declines if the expectation is that it will exceed the prior peak. So far, Bitcoin participants accepted a –14.94% decline followed by a –35.76%. In each instance, these declines were followed by new highs in the price of Bitcoin. By our rationale, Bitcoin will now fall as much as –35% and possibly more as participants become inured to the pain of loss in anticipation of new highs.
Where We Got Lucky
We can’t confidently claim to be right about the prior calls that appear to be “correct.” However, we can point out the coincidences that occurred:
It has been an interesting week to say the least. With political unrest occurring while the markets continue to stay at or near the all-time highs. However, the rally was short lived and markets sold off nearly -3% from the high by the end of the week. The market breadth, based on the number of companies on our watch list, is telling a different story. There are 61 names on the list this week which is the most we've had since the start of this year. Continue reading
Performance Review
In the chart below, highlighted in blue, are the analyst’s 2016 estimated percentage changes for what the respective stock was expected to do. In red, we see what the actual outcome was for the stock in the past year.
Overall, we believe that the analysts covering the stocks on our watch list from last year did relatively well. The three stocks expected to underperform were on target. Only two of the ten stocks expected to increase failed to register on the positive side of the column.
“’Run your public company as if it were privately held, and you will be making the right decision for your public stockholders.’ And maybe you won’t be vulnerable to its being taken private at twice the current stock price… (page 23).”
Posted in Quest for Value, Quote of the Day
On August 10, 2017, we executed the following transaction(s):
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 August 5, 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 |
| GCI | Gannett Co Inc | 12.27 | 8.96 | -27.0% |
| NPBC | National Penn Bancshares | 10.72 | 10.72 | 0.0% |
| CCBG | Capital City Bank Group | 13.84 | 21.32 | 54.0% |
| BF-B | Brown-Forman Corp. CL 'B' | 48.75 | 48.52 | -0.5% |
| WFC | Wells Fargo & | 48.68 | 52.84 | 8.5% |
| Average | 7.0% | |||
| DJI | Dow Jones Industrial | 18,543.53 | 22,092.81 | 19.1% |
| SPX | S&P 500 | 2,182.87 | 2,476.83 | 13.5% |
Little was said about the top five companies in prior year. The one actionable item from our commentary was additional purchase of Carbo Ceramic (CRR) which didn't pan out well as oil supply continue to exceed demand. Despite that, the top five companies on our list returned 7% on average. The largest gain came from small regional bank Capital City Bank (CCBG). The biggest decline occurred in Gannett (GCI).
U.S. Dividend Watch List: August 4, 2017
The Dow reached another milestone breaking above 22,000 mark and closed the week at an all-time high. As a student of Dow Theory, it would be interesting to see Dow Jones Transport achieve the same mark. Despite that, we are still a continuation of a bull market. Below are companies on our watch list which we use as a starting point for our investment research. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
Tagged members
On August 3, 2017, Teva Pharmaceutial (TEVA) got slammed after the company reported a loss for the quarter and reduced its 2017 earnings expectations. Below is the updated Coppock Curve for TEVA .
As early as February 2015, when the stock price of Lumber Liquidator (LL) was trading at $50, we had indicated that there was a risk that Lumber Liquidator could decline below $23.47. Since that time, LL had declined as low as $11.
In March 2015, we outlined our own theory of a coincidence indicator that would help investors know when the price of LL should recover. Since that time, LL has fallen in line with our theory and has subsequently increased in price along with our proposed coincidence indicator.
From the low in LL stock price in 2016, we have seen the stock price climb as much as +200%. The actual gain based on our recommended purchase price would be approximately +16% (8% annualized) assuming equal share amounts at/or below the recommended levels.
So what does the coincidence indicator say about LL and the prospects going forward? The chart below is clear on this matter:
On January 15, 2017, we reviewed Helmerich and Payne (HP) after it achieved our July 2, 2016 upside target of $79.16. At the time, we reflected on the following thoughts:
“The only question now is the selling of the stock.”
For all intents and purposes, HP should have been considered for selling the principal or the entire position. Since the January 15, 2017 posting the stock has had the following price action:
Our fear then was, “Can we handle see[ing] the stock fall back to where we bought it?” This thought only comes to mind when or if the stock price substantially exceeds the norm for an individual investment. At the time, HP had annualized gains of more than +60%.
For now, it is back to the drawing board for HP. We’ll have to re-examine the attributes for the stock to determine if investment is warranted or not.
Posted in Helmerich & Payne, HP, Performance Review