3 stock market actions on daily basis

Stock market decisions on a daily basis

3 stock market actions on daily basis for all stocks are buy,sell or hold.
Each is different and reflects financial news and opinion about financial markets.Buy is when you are bullish,sell when you are bearish or a stock has reached your target goal and buy if you think a trend will continue.

Also almost every day reports and news come out.Have a strong reason to make any decision and arguments to either buy,sell or hold any stock.Stock market is volatile but as always return comes with risk.

Best Buy Co stock gains almost 19% as strong earnings are reported

Best Buy Co., Inc. (BBY) gains almost 19% today and recent trading is at $38.87 per share.The electronics retailer reported better than expected sales and earnings outlook for third quarter, source Yahoo finance.
It would be nice buying the stock at its close yesterday.But earnings are so unpredictable for the stock market.One good alternative for earnings season is the options straddle strategy if there is volatility as today.This stock market investing is not working always and is not suitable for every investor as risk tolerance needs to be evaluated.

Stock market prediction of falling at a specific level is too dangerous

Stock market prediction

If we could make stock market prediction with great accuracy then we could buy or sell stocks and make money easily.But this is not the case.
We read this article The stage is set for the next 10% plunge in stocks in Yahoo finance.While there are good arguments it is impossible to predict the stock market movement in near term and maybe long term.So be always prudent and skeptical when reading such financial and investing articles about stock investing.

We simply cannot have the luxury of making any prediction for the stock market with accuracy.

Twitter a Stock That Does Not Meet Its Business Expectations

Stock market and Twitter

Will the stock market make a correction?If it does then Twitter may be a good option to sell the stock or buy some put options.

Twitter, TWTR is currently trading at $20.86 per share with 13.73 – 31.87 52 week range. What is wrong with this very promising micro-blogging and business idea? Why does Twitter stock cannot meet its business, marketing and financial expectations?Judging a company by its stock performance is often interesting. Twitter has a very large audience like Facebook but the main problem is that the twitter cannot fully take advantage of its members and make money with it.Net income for the last 3 years is negative, although it has a slight improvement diminishing losses.
Both profit margin and operating margin are negative and so does return on equity. Growth estimates of the company versus the industry are very promising but these are just estimates.

Personally I use and like Twitter a lot for marketing and business reasons. It is a great source of finding news and information, ideas for free. I have also been paid to promote posts. Obviously the company who paid me must have also made a profit. Where is the profit of Twitter?

There is something wrong with numbers. Looking at a 5 year period we can see a nice growth in sales/revenue .The same at gross income. But when all that matters is net income and profitability Twitter is not a good performer. Recently there is a focus on ads revenue from videos. Promising idea but what will be the results?

About the technical analysis the stock is trading above its 50 period daily simple moving average which is bullish, and above the 200 daily simple average at 18.82.A bounce has already been made from the low price of 13.73 but is there momentum in that move? Soon in a few days we will have the quarterly results. Indications are that still EPS will be negative. Any negative EPS tell us one thing that the stock is purely bought from those who buy it based on growth expectations.

The competition from Facebook and other search engines is very intense as online advertising and internet marketing trend is expected to continue spending a lot of capital for promotion of online businesses. How much of the money will Twitter be able to capture?

Social networks also as a trend will most likely persist. But competition from other big players like Instagram and Snapchat is also very intense. When there are so many options for a company to advertise the limitation of 140 characters per tweet seems a restrictive factor.

One main problem, an additional one that twitter has to face is that main US stock indices are now at very high prices. If a correction happens then stocks with not so great yearly performance like Twitter may face more selling pressure than other stocks with a better overall performance. And while a growth stock is expected to have a period of patience to deliver financial results the main question is mainly summarized to when will finally Twitter start having a profitability. Not just a one time event but a sustainable one.

What Twitter really needs is an immediate and radical solution to turn its audience and user base to an attractive advertising and money making business. It has all the potential but numbers at least for now tell another story.

Recently Twitter made a strong rally.But will it last or is it a nice opportunity to sell the stock?

Legal disclaimer : The writer does not have any Twitter stocks long or short and does not plan to trade Twitter for the next days.This is just analysis and not a trade recommendation.

Twitter stock , source finviz.com

Building a Diversified Stock Portfolio to Beat the Market During August

A Diversified Stock Portfolio To Beat The Market During August?

Choosing stocks to beat the market during August and summer. A diversified portfolio made on Investopedia stock simulator. So it is a demo portfolio.What is the relevant benchmark? Not easy to answer but could be defined.

As we are in early August the stock market may take a break from high volatility. The idea to build a well diversified portfolio is not a new one. The challenge to beat the market in one month period is rather interesting. What are the pros and cons of this portfolio made with specific role to beat the stock market during August?

The pros of the portfolio
Not one stock is more than 10% of overall capital to invest, which is $0.5 million.
25 stocks in total represent an adequate number so as to diversify.
Both large cap,small cap stocks are bought.
Various sectors and industries, from technology, shipping, industrials, real estate.
The main focus is not on growth but on value, buying only stocks at attractive levels.

The cons of the portfolio
Only long stocks.
Did not short any stock, which may prove not such a good idea.
Naive sometimes diversification of investing no more than 5% of the total capital to each stock.
Examined mainly the fundamental analysis. Only small weight to technical analysis. This could time entries better.
Not taken into consideration lower possible liquidity during August.
Not taken any analyst opinion, rather than me to build this portfolio.

Here is the complete portfolio with purchase prices.
Stock Portfolio and Legal Disclaimer : This is a demo portfolio made to watch performance during August.Stocks were bought on Investopedia simulator and these are not advice to buy or sell,nor does the author hold for real any of these stocks.

Symbol Description Qty Purchase Price
AAPL APPLE INC. 500 $97.39
TNP TSAKOS ENERGY NAVIGATION LIMITED 2000 $4.91
CMRE COSTAMARE INC. 1000 $9.47
PDLI PDL BIOPHARMA, INC. 10000 $3.58
KEP KOREA ELECTRIC POWER CORPORATION SPONSORED ADR 1000 $26.90
F FORD MOTOR COMPANY 1000 $12.08
TRN TRINITY INDUSTRIES, INC. 1000 $22.66
NE NOBLE CORPORATION PLC 2000 $6.79
CNO CNO FINANCIAL GROUP, INC. 1000 $15.68
AAL AMERICAN AIRLINES GROUP, INC. 500 $33.92
BPT BP PRUDHOE BAY ROYALTY TRUST 1000 $15.71
CALM CAL-MAINE FOODS, INC. 400 $41.26
GBX GREENBRIER COMPANIES, INC. 500 $31.59
GILD GILEAD SCIENCES, INC. 200 $79.82
M MACY’S INC 500 $33.29 $32.85
PRU PRUDENTIAL FINANCIAL, INC. 200 $73.76
EQR EQUITY RESIDENTIAL 300 $65.95
VIAB VIACOM INC. CLASS B 400 $43.98
GPS GAP, INC. 800 $24.27
BBBY BED BATH & BEYOND INC. 500 $43.03
LAZ LAZARD LTD CLASS A 600 $34.32
SKX SKECHERS U.S.A., INC. CLASS A 1000 $23.35
GME GAMESTOP CORP. CLASS A 800 $29.51
NRZ NEW RESIDENTIAL INVESTMENT CORP. 1500 $14.00
AB ALLIANCEBERNSTEIN HOLDING L.P. 1000 $22.19
ORIG Ocean Rig UDW LLC 1900 $1.92

Stock market benchmark to beat

What is also interesting is the relative benchmark to use. How to beat the market is relevant. The idea is simple. On an absolute basis best idea is to set a hurdle rate. this hurdle rate could be 1% more than all 3 major US indices, Dow Jones, S&P and Nasdaq. Again it is perfect. But it is measurable. A performance of 2% for the portfolio while for instance S&P closes at 1% gain during August could mean it performed better.Only August will tell and at the end will have full results. Lets not forget that despite lower liquidity during August, there will stock opportunities for both sides, buy and sell.

An interesting article about stock market performance during the Olympics

Stock market and Olympics

An interesting article about stock market performance during the Olympics.
The main conclusion is that host countries tend to win during the Olympics.It could be just a random effect though.Stock market behaves a lot of times in a random way.But it is worth looking for stocks and sectors that could benefit from such a big sports events,like media,beverages,tourism.

PDL Biopharma stock falls today almost 19%

Not a good day for PDL BioPharma (PDLI).
The stock is falling today to $2.87 although it rebounds now to $3.01 as the company announced yesterday lower than estimates revenue for second quarter,plus the board of directors decided to eliminate its quarterly cash dividend.
Source : Thestreet.com
PDLI stock , source Finviz.

Stock market is often unpredictable.
Especially when it comes to earnings.The stock had a nice dividend yield of 5.75% until yesterday.We think that selling pressure is due to the elimination of the dividend as a major fact.

Sell stocks in August and go for vacations

Stock market in August

Sell stocks in August and go for vacations?As they say sell in May and go away?Well not so simple.We think that August indeed maybe a tough investing month for stock market.The reason is decreased liquidity due to summer vacations.But this does not mean sell all stocks or sell.On the contrary opportunities for buying stocks at good levels will exist.But it makes sense to not invest any money in August or just rebalance your stock portfolio and wait for September.

What to do if your stock is currently a loss of money

Stock market behavioral finance

What to do if your stock is currently a loss of money?.
The answer is not simple.You have the following stock market options :

  • Sell the stock
  • Keep the stock
  • Sell if you think fundamentals are no more any good
  • Keep the stock if you think general conditions of the stock and stock market will get better

Another great reason to sell a stock if it is not profitable is when it reaches your defined stop loss.Any great stock if it loses lets say 30% of the price when was bought will take a lot of time to recover losses.But if it is a long term buy and hold stock pick then even at this loss it could be worth holding it, mainly if it has good fundamental features.

Companies releasing earnings reports today 26/07/2016

Stock market earnings season

Many companies will release their quarterly earnings today 26th July 2016 so stock market could see volatility.
Some of the major companies they will release earnings today are 3M Company (MMM),Akamai Technologies, Inc. (AKAM) ,Allegheny Technologies Incorporated (ATI) and the much anticipated Apple Inc. (AAPL).
Source : http://www.nasdaq.com/earnings/earnings-calendar.aspx

Earnings can either have a dramatic up or down move to stocks prices depending on estimates and surprises.