Anti-Momentum Stocks For 2005

[Jameson]

Alguém acompanha as empresas mencionadas neste artigo da Forbes.com? Agradecia a vossa opinião, e se possivel os gráficos.

Cumps

Anti-Momentum Stocks For 2005
By George Putnam, The Turnaround Letter, 01.27.05, 6:00 PM ET

Many investors invest on the basis of momentum. That is, they look for stocks that have been going up and hope that they continue to go up. We like to take the opposite approach. We look for stocks that have been going down and wait for them to turn around. We're not going to argue about which approach is better. There are many theories that will make you money if you apply them intelligently and consistently. Obviously, we like ours.

Around this time of the year, we often look at the worst-performing industry groups during the year just ended and find some attractive stocks from those groups. Because investors often "rotate" (as the market gurus like to say) in and out of different groups--heaven forbid they just buy good stocks and hold them--last year's laggards can be next year's winners.

While it doesn't always work--no investment theory works 100 percent of the time--this approach has done well for us. Last year's "best-of-the-worst" picks returned a respectable 13 percent, well ahead of the S&P 500. And, the year before, our selections performed more than respectably, gaining nearly 50 percent.

The worst-performing stock groups in 2004 were, in order starting with the worst:

Music and Video Stores;
Generic Drugs;
Semiconductor Equipment and Materials;
Semiconductors--Broadline;
Semiconductors--Integrated Circuits;
Jewelry Stores;
Computer-based Systems; and
Networking and Communications Devices.

We thought this list was a little heavy on semiconductor-related stocks, so we combined them into one group.

In the Music and Video Stores group, Blockbuster (nyse: BBI - news - people ) and Netflix (nasdaq: NFLX - news - people ) are attacking each other from different ends of the video-rental business. Blockbuster has a dominant position in bricks-and-mortar stores, but upstart Netflix tried to outflank them with an e-commerce strategy. Blockbuster retaliated with new pricing schemes. Now, they are both hurting. We think they will eventually learn how to co-exist and will both prosper.

Among the generic drugmakers, we like Mylan Laboratories (nyse: MYL - news - people ) and Watson Pharmaceuticals (nyse: WPI - news - people ). Mylan focuses on hard-to-make formulations as a way to create a competitive advantage in an otherwise commodity-type market. We're not the only ones who like it, either. Savvy financier Carl Icahn recently took a large position. Watson has one of the industry's largest collections of generic offerings as well as a group of branded drugs that help bolster the firm's overall profit margin. Management decided to cut back the branded offerings, which hurt short-term results and the stock price, but the company is well positioned for the long run.

In the Semiconductor space, there are dozens of beaten-up stocks from which to choose. Three names that appeal to us are Analog Devices (nyse: ADI - news - people ), Applied Micro Circuits (nasdaq: AMCC - news - people ) and LSI Logic (nyse: LSI - news - people ). Analog Devices is a strong company, but it has suffered along with the rest of the group. Applied Micro has focused on the telecommunications market, and so it has been particularly volatile in recent years. (The stock traded over 100 in 2000.) LSI has been hurt by reduced demand for video games, but it has a good presence in the DVD, DVR and Voice-Over-Internet markets.

Our only name in the Jewelry Store group is Tiffany & Co. (nyse: TIF - news - people ), but as names go, it's not a bad one to have. After roughly doubling in 2003, Tiffany gave back a good part of those gains in 2004. The franchise is still very strong, however, and we expect the stock to get back on an upward track.

In the Computer-based Systems area, we zeroed in on two venerable names that are presently struggling, Concurrent Computer (nasdaq: CCUR - news - people ) and NEC (nasdaq: NIPNY - news - people ). Both companies are working to build profitable niches, and--if they succeed--their stocks could appreciate dramatically.

In the Networking and Communications segment, Cisco (nasdaq: CSCO - news - people ) and 3Com (nasdaq: COMS - news - people ) are two more former high fliers who have fallen out of favor. Cisco is still the dominant player in most of its markets, and will rebound when the tech sector comes back. 3Com has been a part of some of the great breakthroughs in tech history, such as the Ethernet and the Palm PDA, but it is currently struggling to find the next "big thing." With some good brains and lots of cash, 3Com is an interesting speculation.

[Antunes]

Dessas todas eu sigo apenas a Cisco: poderá reagir nesta zona dos 17.5 mas penso que ainda não será o fundo...

[Waterman]

Ou alguém saiu nitidamente de hibernação?

Meu caro, já não temos uma daquelas divagações telefónicas profundas há algum tempo... Estará na hora?

Eheheheheh, denoto alguma diferença nas expectativas que demonstras, pelo menos em relação à última vez que falámos, ou estou enganado (já foi há algum tempo, portanto longe de mim estar a julgar sequer o que te levou a essa mudança)?

Se tiveres tempo, e voltando à possibilidade de lateralização que há uns dias referiste, tens algo a acrescentar?

Um grande abraço rapaz

[Antunes]

Ou alguém saiu nitidamente de hibernação?

Meu caro, já não temos uma daquelas divagações telefónicas profundas há algum tempo... Estará na hora?

Eheheheheh, denoto alguma diferença nas expectativas que demonstras, pelo menos em relação à última vez que falámos, ou estou enganado (já foi há algum tempo, portanto longe de mim estar a julgar sequer o que te levou a essa mudança)?

Se tiveres tempo, e voltando à possibilidade de lateralização que há uns dias referiste, tens algo a acrescentar?

Um grande abraço rapaz

Well Ma Man,   

Sobre os índices, como sabes estive bull desde Outubro (falhei a maior parte do mov. de Agosto-Setembro) e, se bem te lembras apontei na nossa última conversa telefónica para os 4300 no DAX e 1200 no S&P500 até ao fim do ano. 

Neste momento considero o cenário de lateralização o mais provável porque é quase sempre necessário uma lateralização antes de uma nova tendência surgir (só não acontece em crashes). O limite superior dessa possível laterilização já o sabemos, falta o limite inferior. Já arrisquei um limite inferior para o NDX: 1460. Para o Dax ainda não consegui descortinar muito bem mas será algo entre os 4000 e 4100...