Le Chart du Jour is not a pretty one today:
| Matrixx Initiatives Inc. (NMS) |  |
I don't know that I have ever seen a stock drop 70% in a day like that before. They had a product that the FDA believes may cause loss of smell (
FDA says Zicam nasal spray can cause loss of smell). Is that worth a 70% decline to $5.76 a share when they have over $4 a share in cash? I don't know. The stock will likely hit my top 30 screen this weekend, so I'll be adding it to my mechanical portfolio... I'll have to take a deep breath before adding to my real portfolio. I know the message board was yammering about lawsuits, I suspect that will depend on how much insurance they buy. MTXX did post this regarding the ruling, which seemed to minimize the ruling (
Home | Zicam).
Anyway, this wake-up call does remind one how a single stock can really tank, especially stocks that are not broad-based, like many of the smaller cap stocks I invest in. I probably need to widen the breadth of my portfolio... I definitely have too much CSKI. It was my second sub=par day in a row, though CDII had some positive news (
China Direct Industries Receives Several Basic Materials Sales Contracts Valued at $30.5 Million) that moved it up sharply early, though the gains were given back.
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3 comments:
I can't wait to unload CSKI. I thought about it when it spiked a couple of weeks ago, but I have it in my taxable account, and bought it last July 28th. So I figured that maybe it might be worth holding onto to try to get it to a year. Then of course it fell into another free fall. I'm sick of the volatility of that stock in particular.
Another one of my annoyances is the MFI stock that has really done well, only to collapse before the year period is up. HANS is a good example. It was up over 80% for me just a month ago, and it too has a 1 year anniversary at the end of May. I was a little concerned about it reaching a little too high, especially after Baron's wrote a bearish piece on it. Since then it's fallen hard, and is only up 25% for me now. My portfolio over the last few years can't afford to take those kinds of missed opportunities.
It reminds me of what Richard Prout pointed out on the Yahoo board, which is that if a stock has really performed better than the average MFI stock is expected to, perhaps one should consider selling it. Maybe I'll post and ask him if he knows what the average gain might be, and what the standard deviations were in his backtest.
HANS has a 1 year anniversary at the end of JULY, not May, as I stated above.
CSKI is a volatile stock, I don't mind holding it but my amount has gotten way disproportionate in size as it was outsized to start and I am up nicely. The hedge funds like to publish scare artiles about every two weeks. If you want to sell, I'd wait until earnings, ot seems to generally pop nicely then.
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