Wednesday, August 8, 2007

Informal Thoughts: Portfolio moves (August 8, 2007)

I'm going to start a new segment where I casually mention my thoughts regarding making moves in my portfolio(s) without worrying too much about organization.

I'm currently thinking of selling Shanda Interactive (SNDA). While I believe in growth in online gaming in China, I already have The9 Limited (NCTY), which is another Chinese Online Gaming Play. Shanda dropped 7.3% today on a strong up day. I see Shanda up 2.9% in after-hours.

But I'm thinking of rotating into other areas.

Some possibilities:

1. Add more to America Movil (AMX). Emerging Market Telecom has been doing great. I already have an overweight on America Movil and Emerging Market Telecom. Should I continue adding to it?

2. Add more Leucadia (LUK). Leucadia is an excellent company that many people call the mini-Berkshire Hathaway. It has excellent management, and recently jumped 7% on good volume to all-time highs. I've been holding on to this, and this company looks like a very long term holding. I'm not a deep value investor, so I'm giving the reins to the great management of Leucadia. I think this company will do very well.

3. Add more ABB (ABB). This is Swiss Infrastructure play is reasonably valued with respect to growth, near its all time high, and is part of the great Infrastructure Bull Market which is benefitting from great global growth.

4. Buy Finisar (FNSR). This is a speculative $4 stock that had been on a bullish ascending triangle pattern. While it has suffered from possible Nasdaq delisting, this stock may benefit from Cisco's (CSCO) good numbers as Cisco accounted for 22% of Finisar's sales last year. The stock jumped 11.88% today in a strong market and also because of an analyst upgrade. This stock is in the networking/optical networking area.

Running a Screen

In order to find more ideas, I'm also ran a stock screen:
  1. Stocks with Forward PE < 20

  2. Stocks with 5 year growth rate > 20

  3. Stocks over their 200 day moving average

This screen is similar but less restrictive than my Cheap Growth Ready to Breakout Screen.

I saw several oil services stocks like National Oilwell Varco (NOV), but I didn't feel like adding to this because I already had Ensco (ESV), an oil driller.

AMX showed up on the list again, and so did ABB.

Rio Tinto (RTP) showed up on the list, but I already had Freeport McMoran (FCX).

I see Telekomunikasi (TLK), but I already was overweighted in emerging market telecom. I see Vimpel (VIP), a Russian Wireless Telecom company, but do I really want another emerging market telecom?

I see Public Service Enterprise Group (PEG), but I don't feel like getting into the utilities sector (I already have a utility).

I see Cummins (CMI), a company which "engages in the design, manufacture, distribution, and servicing of diesel and natural gas engines, electric power generation systems, and engine-related component products worldwide." That's a possibility.

I see Satyam Computer Services (SAY), which an Indian outsourcing company. But do I want another Indian company? I already have an Indian company. But this may be worth a look.

One company that fascinates me in this list is Harris (HRS). They operate in four segments: "Government Communications Systems, RF Communications, Microwave Communications, and Broadcast Communications." The stock is also near its 52 week highs. This company is less levered to the US Credit Crunch, and its customers include the military and government who need this technology.

There's Gildan Activewear (GIL), which looks to have a great PEG, and BE Aerospace (BEAV), a beneficiary of the boom in aerospace. I also see Transdigm Group (TDG), which I already own and is part of the boom in aerospace.

There are many other companies in the list, but I think I have more than enough choices right now.

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