Looking For Diamonds In The Rough
“The
economic recovery is on the way but it will be weak.” That’s the consensus of the economic
forecasting
establishment, and the markets seem to be finally signaling the end of the bear
market. For now, I’m buying into that
idea — literally.
From a macroplay perspective, my initial focus is on the following sectors and
stocks, with each stock both fundamentally and technically sound.
B2B: Freemarkets
(
FMKT |
Quote |
Chart |
News |
PowerRating) and Concord
(
CEFT |
Quote |
Chart |
News |
PowerRating).
The first is into online auctions. The
second is into transactions services.Â
Internet Security: Websense
(
WBSN |
Quote |
Chart |
News |
PowerRating),
Embarcadero Tech
(
EMBT |
Quote |
Chart |
News |
PowerRating), and Entrust
(
ENTU |
Quote |
Chart |
News |
PowerRating).
Also, Digimarc
(
DMRC |
Quote |
Chart |
News |
PowerRating) may be a play, but watch out for low
liquidity.
DVDs: Cirrus Logic
(
CRUS |
Quote |
Chart |
News |
PowerRating)
Wireless:
Rhythm in Motion
(
RIMM |
Quote |
Chart |
News |
PowerRating)
Banking: Two stocks for lower-risk
diversification are Glacier Bancorp
(
GBCI |
Quote |
Chart |
News |
PowerRating)
and Sovereign Bancorp
(
SOV |
Quote |
Chart |
News |
PowerRating)). One for Internet banking, Digital Insight
(
DGIN |
Quote |
Chart |
News |
PowerRating),
which tanked at the opening today because of a downgrade by Goldman and maybe
because of an announced acquisition — but I’m watching.
Video Games: Activision
(
ATVI |
Quote |
Chart |
News |
PowerRating)
Semiconductors: Cree
(
CREE |
Quote |
Chart |
News |
PowerRating), Numerical
Tech
(
NMTC |
Quote |
Chart |
News |
PowerRating), MKS Instruments
(
MKSI |
Quote |
Chart |
News |
PowerRating). These
are all high-end, highly differentiated companies rather than the big chip
mills.
Storage: I’m trying to like JNIC Corp
(
JNIC |
Quote |
Chart |
News |
PowerRating)
for a storage play, but both technicals and fundamentals a bit worrisome.
Internet Infrastructure: Riverstone Networks
(
RSTN |
Quote |
Chart |
News |
PowerRating).
Note the absence of a lot of household words on this list.
Look for diamonds in the rough.
In future columns, I will discuss further the macroplay logic behind many of
these initial sectors and stocks. For
now, good trading!
And — if you have any insights into any of these on the list, I want to hear
from you.pnavarro@uci.edu
or go directly to my website: https://www.peternavarro.com.