Best September in 71 Years

Today was rough as the Dow was up as much as 113 only to close down 47 but, stocks posted best September in 71 years.  The Dow was up 7.7% for September, best since the start of World War 2 in 1939.  The top performers of September were technology stocks, they also led the pullback today with most top tech down as much as 1%.

Lets take a look back at how my trades have fared.  I like to reflect on past recommendations to not only show my success/failures but to also make my blog more transparent and credible.

 September's Stock of the Month, Balchem (BCPC)

• recommended buying on September 4 at $24.78
• As of the close September 30, BCPC is trading at $30.86
• conclusion: up $6.08 or 19.7%

Citigroup (C)

• recommend buy 9/06 at 3.82
• currently trades at 3.91
• conclusion: up $.09 or 2.3%

Anheuser-Busch InBev (BUD)

• recommended buy 9/11 at $54.55
• currently trades at 58.75
• conclusion: up $4.20 or 7%

Fedex (FDX)

• recommended buy 9/13 at 82.23
• currently: 85.50
• conclusion: up $3.27 or 3.8%

Best Buy (BBY)

• recommended: 9/14 at 33.80
• currently: 40.83
• conclusion: up $7.03 or 17.2%

Nike (NKE)

• recommended: 9/18 at 71.50
• currently: 80.14
• conclusion: up $8.64 or 11%

Recommended within last 5 days: Apple (AAPL)

Not one stock pick was down this month.  The top performing recommendation was our Stock of the Month, Balchem (BCPC) which has been on fire!  I still recommend "buy" for the above stocks.  These stocks are great companies and will continue to outperform. 

Look this weekend for October's Stock of the Month and Book of the Month.  Lets make money together.

Gold and How to Play It

Gold has had a terrific run since 2008 and the financial meltdown.  Prices recently have hit over $1,300 and could be headed higher.  Gold has multiplied since 2000 which makes investors think that Gold still has room to run. Not to mention that it generally holds its value over the long term and overall is considered a safer security than bonds. This creates a bubble when everyone uses Gold as a "safe" security from stocks, bonds, etc.

Gold, recently is losing hold on an important support and could be headed lower.  Now, let me tell you that I am not necessarily a gold bear but rather a cautious trader who has seen disaster strike before.  Most obvious example is the Internet bubble burst of 2000.  Everyone piled into Internet stocks only to lose everything when the bubble burst. 

Ok, so I am cautious...how would I trade gold?
I would stick to the Gold Miners ETF (GDX) which has performed well this year, up 13%.  If you aren't into gold miners and want something that attempts to track the price of gold, I recommend the usual Gold Trust (GLD).  GLD is up 13% this year as well. 

My outlook on gold is lightly bullish.  I like gold but it has had a nice run and will eventually come down.  Now this is probably a longer term deal when gold will burst (3-5 years).  Until then, reap the benefits of gold!

**Keep a look out for October's Stock of the Month

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. These trades and ideas are the opinions of the crew of Invest Chief. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.

Cult Stocks #2-AAPL

The Second installment of my "cult stock" series, where I analyze whether the most popular stocks are worth the hype and I give a recommending trade at the end.  Today we will be analyzing the most loved stock, Apple (AAPL).

Fundamentals:  Apple has some of the best fundamentals I have ever seen.  Apple is very innovative, they know what the consumer wants and they provide it very well.  Apple has a very, very loyal customer system.  Apple has shown consistent success with their flagship products Mac and iPod.  They have added two excellent products: iPad and iPhone.  There is some buzz that the iPhone will be hitting Verizon next year and it should be interesting to see whether people will drop their android phones for an iPhone. 

They have zero debt, a P/E ratio of only 22 and a PEG (future growth) of .99.  From a fundamentals stand point, AAPL is undervalued, imagine that!  Steve Jobs is an excellent CEO that continues to wow consumers, analysts and competitors.  Apple is in a great stop as far as fundamentals go...

Technicals:  The technicals are rough as you can imagine.  The overbought status is evident.  Look at the indicators/oscillators:

• RSI: 80
• MACD: 9.9!
• Williams%R -10
• Stochastics 92.24

On a more positive note for technicals, the Bollinger Bands are showing that Apple is finally moving out of its sideways trading range from the last few months.  This means that the stock could be on a move again.  Many analysts are predicting around $340-360 by the end of next year.  That is a pretty big upside!

Final Trade:  Apple continues to outperform everyone, including markets.  Apple is a great company that innovates well and listens to the consumer.  Management gets the job done above the call of duty.  Apple blows away earnings every quarter and they haven't looked back.  The technicals are a little sour but momentum is on the upside.  Fundamentals are great, no debt, low P/E and PEG.  I am recommending a buy for AAPL or some longer term call options.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. These trades and ideas are the opinions of the crew of Invest Chief. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.

Cult Stock #1-NFLX

 I decided that I will start a little "series" of analyzing cult stocks (popular).  Over the next few weeks I will be analyzing Apple (AAPL), Baidu (BIDU), Salesforce.com (CRM), Intel (INTC), etc. If there is a stock that you would like to be considered for analyzing please use the comment box below to place your tickers.

Today, I will be analyzing Netflix (NFLX).  I have gotten a lot of questions recently about recommended trades for Netflix.  Here is my analysis along with my final trade:

Fundamentals:  Netflix has great fundamentals.  Good management and standing out in an industry bodes very well for Netflix. Blockbuster's bankruptcy is great news for Netflix, not that Blockbuster was anything they were worried about... Very clean balance sheet with only a small amount of debt.  No dividend, which is a bummer.  However, NFLX is up 195% YTD!!


Technicals: This is the rough area for Netflix.  Indicators across the board signal a strong overbought signal.

• RSI=76.22
• MACD=8.025
• Williams%R=-16.63
• Stochastic (slow)=90.25

These indicators and oscillators are the basics to tell the condition of the stock.  All 4 signal strong sell.  After all the stock is up 195% YTD. 

Final Trade:  I love NFLX as a company.  The fundamentals are great and the growth potential is huge.  However, I can't get behind recommending the purchase of NFLX because of the over powering sell signal of the technicals.  I mean this stock is up 195% since January 4, 2010.  That is very impressive but now you must take profits and wait for a major pullback before you hop back on.  Because the NFLX has such great fundamentals however, I can not recommend shorting this stock at the moment because it is a cult stock and investors will not let go of this stock.  This proves to be a dangerous situation that could burn shorts.  If you own NFLX take your profits, you have had a great run.  Hold tight until NFLX has a pullback before you get back in.  I will keep you updated on this trade as opportunities present themselves.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. These trades and ideas are the opinions of the crew of Invest Chief. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.

Nike Posts Profit Increases 9%

I hope you bought Nike (NKE) after I recommended it last Saturday.  Nike reported fiscal 1st quarter earnings after the closing bell today and it was quite good.  Nike reported a profit increase of 9%, revenue was up 7.8%.  Analysts polled said Nike's EPS (earnings per share) would be $1.02.  Nike reported an EPS of $1.14. 

CEO Mark Parker has said that Nike has efficiently cut costs and inventory to deal with the recession.  As we have seen in the last 3 quarters, Nike is regaining its ground and headed to pre-recession levels of business.  NKE was up 5% in after hours trading.  Look for a similar price movement during tomorrow's trading day.

Trade: If you didn't pick up Nike after I recommended it last weekend, don't go chasing anything in tomorrow's trading session.  Unless you have proven your day trading skills, don't buy until Nike has a pull back.  Invest Chief is bullish on shares of Nike.

Update on Silver Weaton Trade---9/22/10

 10:20 ET: Silver Weaton is up this morning about $.48 or 1.91%.  SLW is just rising with the rest of the market and its overwhelming optimism surrounding the stock.  I recommend you get into the trade now at a discounted price.  Again the trade is SLW Oct 26 Puts.  Buy them now at a discount and watch them rise over the next few weeks, making you a nice profit.

Check back for more updates as they occur.

Silver Weaton Corp----Time to Short!

Silver Weaton (SLW) purchases and mines for silver and other precious metals.  Silver Weaton has had a nice run, over 67% YTD gains.  They have reported record quarters and management has certainly been doing a great job.  I like Silver Weaton as a stock and a company...just not at the moment.

SLW is wayyy overbought and should be giving back gains in the very near future.  If you examine the technicals, this stock is ripe for a fall....which it did today but regained with the Fed's announcement.  This is a huge opportunity to purchase SLW Oct 26 Puts. 

Here is why SLW is overvalued:

• RSI is at 71.66--overbought territory
• MACD is at a ridiculous 1.186--huge signal of overbought status
• Williams%R is at -12.65---again way overbought
• Slow Stochastics is at 85.39--overbought
• Lots of recent buying activity

**If you do not understand what these indicators are please go to investopedia.com and look them up or wait until I make a post within the next few days of my most important technical indicators and how they are used.

As you can see, SLW is wayy overvalued and will be headed lower.  I recommend buying SLW Oct 26 Puts.  These will provide you with some very nice gains within the next few weeks when Silver Weaton takes a fall.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. These trades and ideas are the opinions of the crew of Invest Chief. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.

The Recession Is Over!!...But not really

Today a board of economists that decide recessionary cycles, have determined that the recession is over after 18 months! WHAHOO! Dance in the streets, the recession is over!!!!

Wait just a minute....I don't mean to be a Negative Nancy or a Downer Dave but we still have a bunch of problems:

1. Jobs? There are none with 9.7% unemployment
2. Housing- showing signs of a recover but definitely, in no way, recovered.
3. Banks lending- Ya right, nice try.
4. Debt- We as a nation and as a consumer have wayy too much debt, which will cause problems eventually
5. Consumer Confidence- Beginning to show signs of a recovery with the great numbers from Best Buy but still not recovered.

Look should we be happy that the "recession is over", sure.  However, when you get down to the issues, I am not seeing the recovery and the end of a recession.  I am skeptical of this announcement and would be cautious while everyone is partying.  I will say however, that things are a lot better than they were even a month ago and that does deserve some recognition.  All I am saying is, be smart and make educated decisions.

Next Week's Big Events

Next week we have a bunch of big events that could tell us whether this rally will continue or not. 

Monday: President Obama will speak about the condition of the economy.  This blog's topic is not political science but hopefully Obama will have some positive things to say about the economy.

Tuesday: The most important day of next week....FOMC meeting (FED meeting) and they will decide what the course of action is concerning interest rates.  Watch for the announcement around 2:15 ET.

Throughout the week there are continuation of earnings but one in particular that I am interested in is Nike (NKE).  Nike is predicted to report an EPS of 1.00.  This is an interesting earnings announcement because it will further the fact that consumers are buying again.  Best Buy's (BBY) extremely great earning announcement last week made us believe that consumers are beginning to buy again.  Keep a look out for Nike which reports on Thursday.  Invest Chief has a long term bullish outlook on Nike.  We see prices heading to around $87.50 in the next 12 months.

RIM is a Dead Stock

Interesting, I stumbled upon this video that is harping the same things I am telling you about Research in Motion (RIMM).
1. It is losing market share!
2. RIM doesn't listen to what consumers want
3. Competition is way ahead of RIM and is too powerful at this point.

I recommend buying longer term put options because of the lack of competitive edge, as well as the 3 reasons above.

Earnings Update for 9/16/10

Today we say another interesting day of earnings by: Fedex (FDX), Oracle (ORCL), and Research in Motion (RIMM).

First up, Fedex.  FDX missed estimates...the good news: international sales rose 24%...the bad news: 1,700 trucking jobs will be cut.  Fedex may have missed numbers but I am impressed with its growth in the international setting.  Ultimately, I wouldn't buy it nor short it.  Lets wait until we see a more clear picture of a downtrend or uptrend.


Oracle: Reported great numbers, including 20% raise in net income.  Oracle has made some great decisions in last year that have really made Oracle a threat to rivals IBM, Dell, HP.  These are the acquisition of Sun Microsystems and hiring of Mark Hurd.  Larry Ellison has really stepped up his game and the stock's performance shows.  Buy ORCL on a pullback.

Research in Motion: How? How did RIMM post a gain that shocked all the analysts and traders alike?  The blackberry is a dying breed.  The numbers still show RIMM to have lost a lot of market share to the android smartphone system.  RIMM is still not a good stock to own because it is losing market share.  I am bearish on shares of RIMM and would be a seller.

On a side note, Balchem Corp, the Stock of the Month, hit a new 52-week high yesterday. 

Earnings Update: Day Full of Surprises

***"Stock of the Month" update*** Huge 5% movement in the "Stock of the Month", Balchem Corp (BCPC) today.  The company was upgraded by an analyst at Sidoti.  The upgrade was from neutral to buy and the current price target was send from $27 to $33.  If you bought BCPC back when I recommended it as "Stock of the Month" you have made 10% already.  Check back for more updates.

Today we say two very surprising earnings releases by Best Buy (BBY) and Kroger (KR). 

BBY: 2Q net income skyrocketed 60%!  Thanks to their expanding cell phone business.  CEO Brian Dunn says that Best Buy Mobile is "the single biggest driver of profit growth for us this year".  This is huge and the stock rocketed up 6% today.  Analysts are expecting a good Christmas this year especially with the new, highly anticipated 3D gaming additions for the Xbox 360 and Playstation 3 coming out. 

Invest Chief is behind BBY and we do believe that they will have a good Christmas and their cell phone business will continue to grow.  The 3D gaming should help boost profit and growth.  Not to mention, Best Buy has added an additional 110 stores so far in 2010, with the plan to add another 50 before 2011.  I am a buyer of Best Buy and this could be a sign that consumers may be starting to buy again.

KR: reported a net income of $261.6 million, or 41 cents a share.  The stock finished up 1%.  The company was profitable because of "customer loyalty" but when you get down to the numbers it was a tax break and low interest costs. 

Invest Chief is still bearish on Kroger simply because Kroger champions themselves as a "high end" grocery store.  Now with 9.7% unemployment and consumer spending down, it doesn't make Kroger a huge target for growth or huge profits.  Not to mention the rising cost of food will soon take a chunk out of Kroger.  I would stay away from Kroger until conditions improve.  I recommend Nov In-the-money Puts.

Next earnings update will be on Thursday, it should be an interesting day. 

A few people have bought the recommended book of the month: Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market by: Gil Morales, Chris Kacher

Buy it today, it is a good read and you get another trading system that has huge potential to profit.  Buy it in the link I provide below!  Thank you!

Week of 9/13 Earnings Reports and Trades

9/14: Tomorrow is a big earnings day that will shed some more light on the status of retail and food (grocery) sectors.  The most important companies reporting tomorrow are Best Buy (BBY) and Kroger (KR).  Lets start with Best Buy.  BBY will be reporting earnings at 8am ET.  The analyst consensus is $.46 EPS on $11.65B revenue.  Most "experts" believe Best Buy will not meet the estimates and are recommending a short.  Invest Chief believes that BBY will not good blow away earnings but they won't bomb earnings.  We think they will meet somewhere around $.46.

Kroger (KR) is expected to release before the bell tomorrow morning.  Analyst predict a $.36 EPS on $18.7B in revenue.  IC believes KR will miss estimates due to more people doing out and spending less in high end grocery stores such as Kroger and Whole Foods.  Watch for a miss and buy some Oct 21 Puts.

9/16: Thursday is a big day in terms of earning reports.  We have Fedex (FDX), Oracle (ORCL) and Research in Motion (RIMM).

Fedex has been considered a bellwether for the economy in recent years because it shows businesses are spending and expanding.  Fedex is expected to report before the market opens.  Analysts predict a $1.19 EPS on $9.4B in revenue.  Invest Chief does believe Fedex will beat estimates here.  Business has rebounded for FDX and we expect only growth from here.  Invest Chief recommends a buy on shares of FDX.

Oracle will be releasing earnings after the market closes. Analysts are predicting a $.36 EPS on $7.25B in revenue.  This is going to be hugely watched for us at Invest Chief.  We believe the hiring of ex-HP CEO Mark Hurd was a good move and should give Oracle a huge advantage.  However, since HP is suing Hurd, and earnings are being reported, we need to see both situations close in favor of Oracle to get fully behind Oracle.  We do expect them to beat earnings on Thursday.  IC will keep you updated on the Oracle trade.

Research in Motion (RIMM) will be reporting info after the close on Thursday as well.  Analysts are predicting $1.35 EPS on $4.48B in revenue. 
Oh, RIMM, you were once an empire that dominated the smartphone market.  Now you have lost an astronomical amount of market share to the Apple iphone and android smartphones.  Until RIMM takes a look at the competitors and actively tries to compete with the iphone and android, we are sellers of RIMM.  We don't think they are on the correct path and need to get back on track.  Consider RIMM puts.

At the end of the week we will look back at our estimates and fill you in on new trading ideas as we see more answers to our questions.  Feel free to comment your estimates on these company earnings in the comment box below. 

As always don't forget to check out the recommended ebooks on the sidebar, there are some good books that really help out your portfolio.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity. 

A Great Stock for the Second Half of 2010

Before we begin, please take a moment of remembrance of the attacks on 9/11.  Remember the sacrifice of the FDNY and  NYPD who became heroes that day as the worst disaster in US history unfolded.  Lastly, take a moment for all the victims and their families.  Thank you!



I was doing some research this weekend and I found an excellent trade for the second half of 2010.  The trade is Anheuser-Busch InBev (BUD).  BUD is the best beer stock that is poised to outperform this second half for a couple of reasons:

• World beer prices are rising
• BUD has the highest market share that no other beer company comes close to (66% in Argentina, 73% Brazil, etc)
• Football season is here and what is one of the beers you think of when you think of football?  Bud and Bud Light
• People buy beer increasingly into the fall and early winter
• P/E ratio of 19
• No long term debt

These are huge reasons to get behind BUD.  BUD will profit the most from rising prices.  Football season is always a very successful time for BUD.  Then in a fundamentalist view, a low P/E and no debt.  We are trying to promote stocks that have little/no debt because of the rising issues with debt default.  As far as analysts go, 3 are saying "strong buy", 2 "buy" and 2 "hold".  No analysts recommend SELLING the stock.  Analysts are estimating a huge revenue increase from Q3 2010 to Q4 2010.  To be exact, they predict BUD will report an increase of $26.98B in revenue.  Although, this is an estimate and should be looked at with caution.


At the end of the day, BUD is going to outperform the market and its competitors.  Invest Chief recommends a "buy" of BUD.


Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.

Book of the Month: September

This month's book of the month was an easy choice because I really enjoyed and learned a lot from this book. This month's book of the month is: Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market by: Gil Morales, Chris Kacher.

Here is an overview of the book:

How two former traders of William J. O'Neil + Company made mad money using O'Neil's trading strategies, and how you can, too


From the successes and failures of two William O'Neil insiders, Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market in 7 Years is a detailed look at how to trade using William O'Neil's proven strategies and what it was like working side-by-side with Bill O'Neil. Under various market conditions, the authors document their trades, including the set ups, buy, add, and sell points for their winners. Then, they turn the magnifying glass on themselves to analyze their mistakes, including how much they cost them, how they reacted, and what they learned.
•Presents sub-strategies for buying pocket pivots and gap-ups

•Includes a market direction timing model, as well as updated tools for selling stocks short

•Provides an "inside view" of the authors' experiences as proprietary, internal portfolio managers at William O'Neil + Company, Inc. from 1997-2005

Detailing technical information and the trading psychology that has worked so well for them, Trade Like an O'Neil Disciple breaks down what every savvy money manager, trader and investor needs to know to profit enormously in today’s stock market.

If you are interested in purchasing this book, please use the link we will provide you above (click on "buy from Amazon.com")  because it gives Invest Chief a referral bonus that we need to keep the site running (Amazon).  Thank you!!

Citigroup: Time to Buy?

I was checking around financial website on this nice labor day weekend and I stumbled upon an interesting video from thestreet.com.  It was about Citigroup (C) and how analysts aren't very found of it at the moment.  The best example of this nonsense is analyst Michael Mayo. He is  upset with Citigroup because the company has declined to meet with him.  Now Mayo is accusing Citigroup of not meeting with him because he is bearish on the stock.  This is all just ridiculous and a waste of time. 

The important aspect of Citigroup is that a number of hedge funds are reportedly cashing out of Bank of America (BAC) and buying up Citigroup shares.  The reason is Citigroup is currently restructuring its banking services here in the US, as well as expanding their business into China.   Citigroup plans to double its workforce in China over the next couple of years. 

Its this aggressive expansion that has hedge funds buying up the $4 stock.  Its going to take some time for its US business to rebound but in the mean time, its international business is doing very well.  Invest Chief recommends a buy for Citigroup and we expect the stock to double buy the end of 2011.





Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.

Stock of the Month: September

September is off to a great start with three straight days of decent gains.  Although the unemployment rate inched down to 9.6%, the Dow Jones rallied about $130.  I must say this is quite nerve racking because September and October are known as the "crash months" and haven't treated stocks well historically.  On a brighter note, there are bright spots and buying opportunities that you should be going after.  This month's stock has been beaten down but is certainly reliable when it comes to beating estimates each quarter.

The Stock of the Month for September is Balchem Corp (BCPC).
Balchem provides specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally.  Believe it or not, every time you eat cereal, you are using Balchem's products.  As you can see by the graph and my analysis, there are signs of a bullishness. 

On the fundamental side, Balchem is very strong.  As of June 30, 2010, BCPC has $200,339 worth of assets, and only $34,928 in liabilities (including $1,308 in short term debt and $3,815 in long term debt).  Balchem has significantly lowered its debt positions which is a very good sign of stability and a very low, low risk of default.   BCPC's PEG (price/earnings growth) is 1.83.  This is a good sign of growth in the future.  EPS is $1 (very good), P/E is around 25.  BCPC pays a weak dividend of .3%, but the company is well run and managed which shows in its continued success at beating estimates.

Invest Chief's 12 month projection for Balchem is $30.75.  Watch for updated news and earnings.  We will keep keep updating the status of Balchem as updates occur.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.