Sunday, September 28, 2008

Three New Stocks

In my automatic portfolio, which is competing (in a nice way) against the Magic Diligence portfolio, I will be adding three new stocks tomorrow. As a remindre, if a stock is on the top 25 list for the 1st time in a year (I check on the weekend) it gets added to the portfolio.

So far the portfolio has held up pretty well, beating the S&P 500 benchmark by 6.1%. Steve's portfolio is leading by 6.97%.

TRA is the first stock. This is Terra Industries, which is in the fertilizer business. I did own them, but actually sold them a week ago when the market spiked. That was a good move (at least so far) as I got $42.50 and they got crushed to $30.42 last week. Of course the big question is whether fertilizer prices will stay at or near their current prices, which are close to an all-time high. I am pretty split on TRA. At $30 it seems a lot of downside is priced in. But I have seen interviews where farmers say they are shifting to other crops with lower fertilizer costs.

SCMP is the second stock. I don't know much about this small pharma company. Their earnings have been a bit uneven. They do have a bunch of cash. Seems like they are at least worth looking at, though these smaller pharmas often have a limited pipeline. That being said, the same comment was true about VPHM, and they're up 50% recently.

DTLK is the third new stock. They have been hanging around the lists for a long time, but never the top 25. This is a small data storage company That is like so many beaten down smaller high tech companies. They have a bunch of cash and are making money, yet stock proce is down. I guess the market is saying their "moat" is short-lived. I have lost my stomach for these sorts of companies.

We'll see how the trio of newbies do, they certainly all seem cheap, but so do many, many, many other stocks. We'll see what happens tomorrow.

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