Watch List v. DJIA: week 8

Posted on February 22, 2020 by | Leave a comment

On January 6, 2020, we published our U.S. Dividend Watch List.  On that list we broke out the data based on a ranking by fundamentals.  Of the stocks that we highlighted, two categories that we liked are the top three low yield stocks and the top five high P/E stocks. 

The performance of both groups are shown in contrast to the Dow Jones Industrial Average from the close of January 3, 2020 to the close of February 21, 2020.

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So far there is a wide divergence of our watch lists as compared to the DJIA in the period from the January 3, 2020 close to the February 21,2020 close.  We don’t expect this chasm between our lists and the DJIA to persist and will update as we go through the year.

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Virgin Galactic Downside Targets

Posted on February 20, 2020 by | Leave a comment

Below are the downside targets for Virgin Galactic Holdings (SPCE).

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  • $25.54 (conservative target)
  • $19.85 (mid-range target)
  • $14.16 (extreme target)

Virgin Galactic Holdings (SPCE) is creating a scenario where the extreme downside target could easily be achieved while being considered a normal “bounce.” The price would have to rise to above $60 before the above downside targets are no longer valid.

These situations don’t end well but in case the price doubles from the recent peak we provide the following downside targets.

  • $39.71 (conservative target)
  • $34.02 (mid-range target)
  • $28.33 (extreme target)

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Posted in Edson Gould, SPCE, Speed Resistance Lines, SRL

Transaction Alert

Posted on February 19, 2020 by | Leave a comment

The NLO team executed the following transaction(s): Continue reading →

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Transaction Alert

Posted on February 18, 2020 by | Leave a comment

The NLO team executed the following transaction(s): Continue reading →

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U.S. Dividend Watch List: February 14, 2020

Posted on February 15, 2020 by | Leave a comment

Prior Year Watch List Review (February 14, 2019)

The best strategy to adopt was to purchase the top five companies with high P/E. Doing so would yield 23.1% return compare to the market return of 21.8%. Worse performing strategy is to purchase low P/E companies. The largest gain came from Brown-Forman (BF-B) which rose 46%. At the time of trading, P/E for BF-B was 31.6. Below is a recap of various strategy.

February 15, 2019
Strategy High Low
Yield 8.7% 20.8%
P/E 23.1% -1.8%
Payout Ratio 17.9% 7.0%
P/B 14.2% 6.0%
Closest to Low   2.8%
S&P 500   21.8%
Dow Jones Ind   13.6%
Top 5 companies except for Index

U.S. Dividend Watch List February 14, 2020

The market continue to defy gravity and closed the week at another all-time high. Below is a the dividend watch list for this week. Continue reading →

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Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List

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TSX 60 In Review: 2020-7

Posted on February 14, 2020 by | Leave a comment

The following is the breakdown of the Dogs of the TSX (here) in week seven, compared to other fundamental ratios. Continue reading →

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NLO in Review: 2020-7

Posted on February 14, 2020 by | Leave a comment

Below is the year-to-date performance of major indexes compared to any one of the top categories that we created and track from January 3, 2020 to February 14, 2020.

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The following is the breakdown of the Dogs of the NLO based on our January 3, 2020 watch list, compared to other fundamental ratios.  The purpose of this work is to confirm or deny the claims proposed of the Dogs of the Dow theory as outlined by Michael O’Higgins in his book Beating the Dow. Continue reading →

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DJIA in Review: 2020-7

Posted on February 14, 2020 by | Leave a comment

Below is the year-to-date (YTD) performance of various major indexes and from December 31, 2019 to February 14, 2020.

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The following is the breakdown of the Dogs of the Dow (found here) in week seven, compared to other fundamental ratios. Continue reading →

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Favorite Fifty: 1961 OTC

Posted on February 14, 2020 by | Leave a comment

Below is the performance of the Vicker’s Favorite Fifty OTC stocks as published on October 30, 1961 by Barron’s covering data from  September 1, 1961 to September 4, 1962:

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In the period from September 1, 1961 to September 4, 1962, the Dow Jones Industrial Average declined –16.46% compared to the overall change of Favorite Fifty OTC stocks at –43.75%.  It is very important to contrast the Favorite Fifty OTC stocks to the Favorite Fifty NYSE stocks.  The OTC stocks  are small cap companies and favor growth over income which is found in the NYSE list.

The breakdown of the data based on dividend yield, price-to-earnings ratios, and dividend payout ratio.

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The “best” performance was achieved by no group listed here.  With the Dow Jones Industrial Average declining by -16.46%, no single subset of stocks managed to perform better.

Note:

  • Rank is determined by the largest number of holdings by closed-end funds and open-end investment companies for listed Over-The-Counter stocks.  Rank number 1 means the stock is held by the most investment companies on a dollar value basis.
  • Armon, Glenn. “Over-The-Counter Favorites.” Barron's. October 30, 1961. page 9.
  • Aigeltinger & Co.
  • Vickers, Sydney. Guide to Investment Company Portfolios. Vickers & Associates. 1960.

See also:

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Posted in Fabulous Fifty, Favorite Fifty, Nifty Fifty, OTC

Google Trends and the Coronavirus

Posted on February 13, 2020 by | Leave a comment

We recently saw an article In Bloomberg News on the possibility of the CoronaVirus (2019-nCoV) or (COVID-19) being known as early as the last week of December 2019.  We looked at GoogleTrends to see if there was any correlation to this claim and our results are below.

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GoogleTrends: United States SARS last 90 days

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GoogleTrends: Japan SARS last 90 days

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GoogleTrends: China SARS last 90 days

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GoogleTrends: China SARS last 5 years

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January 12, 2020 is the date when the details of genome sequencing triggered a outbreak alert.

We have been able to confirm with GoogleTrends that in China, the December jump in searches was abnormal not only in the last 90-day period but the largest spike in searches in the last five year period.

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Posted in coronavirus, COVID-19, Google Trends

Nifty Fifty: 1961

Posted on February 13, 2020 by | Leave a comment

Below is the performance of the Nifty Fifty as published on June 6, 1960 by Barron’s covering data from  September 1, 1961 to September 4, 1962:

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In the period from September 1, 1961 to September 4, 1962, the Dow Jones Industrial Average declined –16.46% compared to the overall change of –22.04% in the Nifty Fifty.  The breakdown of the data based on dividend yield, price-to-earnings ratios, and dividend payout ratio.

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The best gain was achieved by the top three stocks in the Low P/E category with an increase of +10.79%.

Note:

  • This list is carried over from the 1960 listing of the Favorite Fifty stocks as published in Barron’s.
  • Rank is determined by 58 closed-end funds and over 100 open-end investment companies and their holdings.  Rank number 1 means the stock is held by the most investment companies on a dollar value basis.
  • “The Favorite Fifty: The First Quarter Saw a Good Many Changes in the Line-Up.” Barron's. June 6, 1960. page 9.
  • Aigeltinger & Co.
  • Vickers, Sydney. Guide to Investment Company Portfolios. Vickers & Associates. 1960.

See also:

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Posted in Fabulous Fifty, Favorite Fifty, Nifty Fifty

Market Return After Exceptional Years

Posted on February 9, 2020 by | Leave a comment

2019 was an exceptional year to be long equities. The S&P 500 gained +30.40% which is the 6th time the market put up gain of +30% or more. This peaked our interest in subsequent market returns after an exceptional year. We compiled and analyzed the data for our readers.

Below is the market return after the S&P 500 gained +30% or more. The average return in the subsequent year was +20% with 100% success rate.

Index Year % Change Subsequent Year % Change
S&P 500 1954 44% 24%
S&P 500 1958 37% 8%
S&P 500 1975 31% 19%
S&P 500 1995 34% 20%
S&P 500 1997 31% 27%
S&P 500 2019 30% ?

Reducing the market return for the S&P 500 to +25%, the success rate dropped to 83.30% and the only 2 subsequent down years were 1981 and 1990. The average return under this assumption is +12%.

Index Year % Change Subsequent Year % Change
S&P 500 1954 44.2% 23.8%
S&P 500 1958 36.9% 8.0%
S&P 500 1975 31.4% 19.1%
S&P 500 1980 25.8% -9.7%
S&P 500 1985 26.4% 14.6%
S&P 500 1989 27.3% -6.6%
S&P 500 1991 26.3% 4.5%
S&P 500 1995 34.1% 20.3%
S&P 500 1997 31.0% 26.7%
S&P 500 1998 26.7% 19.5%
S&P 500 2003 26.4% 9.0%
S&P 500 2013 29.6% 11.5%
S&P 500 2019 30.4% ?

Taking this return down to +20% didn’t change the success rate of having a positive return in the subsequent year. The success rate remain at 83.30% but the average return dropped slightly to +11%.

Index Year % Change Subsequent Year % Change
S&P 500 1950 22.6% 14.4%
S&P 500 1954 44.2% 23.8%
S&P 500 1955 23.8% 3.3%
S&P 500 1958 36.9% 8.0%
S&P 500 1961 24.3% -11.8%
S&P 500 1967 20.1% 7.7%
S&P 500 1975 31.4% 19.1%
S&P 500 1980 25.8% -9.7%
S&P 500 1985 26.4% 14.6%
S&P 500 1989 27.3% -6.6%
S&P 500 1991 26.3% 4.5%
S&P 500 1995 34.1% 20.3%
S&P 500 1996 20.3% 31.0%
S&P 500 1997 31.0% 26.7%
S&P 500 1998 26.7% 19.5%
S&P 500 2003 26.4% 9.0%
S&P 500 2009 23.5% 12.6%
S&P 500 2013 29.6% 11.5%
S&P 500 2019 30.4% ?

The last table shows subsequent return when the market rises +15% or more. Under this circumstances, the market rose 70.80% of the time with an average return of +6.90%.

Index Year % Change Subsequent Year % Change
S&P 500 1950 22.6% 14.4%
S&P 500 1954 44.2% 23.8%
S&P 500 1955 23.8% 3.3%
S&P 500 1958 36.9% 8.0%
S&P 500 1961 24.3% -11.8%
S&P 500 1963 18.9% 13.0%
S&P 500 1967 20.1% 7.7%
S&P 500 1972 15.6% -17.4%
S&P 500 1975 31.4% 19.1%
S&P 500 1976 19.1% -11.5%
S&P 500 1980 25.8% -9.7%
S&P 500 1983 17.3% 1.4%
S&P 500 1985 26.4% 14.6%
S&P 500 1989 27.3% -6.6%
S&P 500 1991 26.3% 4.5%
S&P 500 1995 34.1% 20.3%
S&P 500 1996 20.3% 31.0%
S&P 500 1997 31.0% 26.7%
S&P 500 1998 26.7% 19.5%
S&P 500 1999 19.5% -10.1%
S&P 500 2003 26.4% 9.0%
S&P 500 2009 23.5% 12.6%
S&P 500 2013 29.6% 11.5%
S&P 500 2017 18.7% -6.6%
S&P 500 2019 30.4% ?

Updated 1/28/2024 - Market Return After Exceptional Year – 2023

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Posted in Dow Jones Transportation Average, S&P 500

WorkDay Downside Targets

Posted on February 9, 2020 by | Leave a comment

Below are the downside targets for WorkDay Inc. (WDAY).

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  • $140.86 (conservative target)
  • $107.81 (mid-range target)
  • $74.77 (extreme target)

The downside targets are based on the peak price of $224.30.  In our view, WorkDay failed to achieve the minimum downside target of the ascending level at $140.86.  In many respects, this reflects the strength of buyers.  However, this failure would not have allowed us to take advantage of the reversal that has occurred since the $152.29 low. 

With this in mind, we have posted the upside resistance targets based on the October 23, 2019 low.  These target are meant to confirm the strength of the rise and the potential for additional gains/losses going forward.

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Posted in Speed Resistance Lines, SRL, WDAY

WorkDay Upside Resistance Targets

Posted on February 9, 2020 by | Leave a comment

Based on the decline from the peak at $224.30, WorkDay Inc. (WDAY) has the following upside resistance levels:

  • $188.30
  • $200.14
  • $212.42

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Based on the low of $152.29, WorkDay Inc. increased beyond the initial upside resistance target of $188.30 and then broke down below that level.  However, the true test of any momentum is the ability to rise and then fall without going below the prior low, in this case $152.29.

Each of the levels indicated are critical resistance levels that should see a material decline in the stock price.  Exceeding each level lends support to the stock price going to the next level.  For this reason, we expect that the $212.42 price should see some resistance due to the rapid run-up from the December 13, 2019 low. In this case, resistance means a vacillation between the descending $212.42 and $200.34 price levels.

A rise to $224.30 means that a new bull run is in the cards and should be hedged according.

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TSX 60 in Review: 2020-6

Posted on February 8, 2020 by | Leave a comment

The following is the breakdown of the Dogs of the TSX (here) in week six, compared to other fundamental ratios. Continue reading →

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Posted in Dogs of the TSX

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