Monday, May 28, 2007

Stock Buy List - 5/28/07 Update Part 2

I base my stock picking system on the Unemotional Investor Growth system from the book The Unemotional Investor by Robert Sheard, with the following modifications. First, I look at the top 20 stocks. In addition, I have found that avoiding the stocks that have a high percentage of shorted shares and investing when the Value Line weekly Rank 1 turnover is low are good additions to his Unemotional Growth criteria.

Interestingly, the last two weeks have had a high turnover of Rank 1 stocks. However, many of the stocks being added are showing up in the top 20 of the list. While I have not seen this phenomenon before, my experience tells me this is a positive sign for the market. In an earlier post, I shared the four buy recommendations from the system. Here are the four stocks that almost made the buy criteria, just barely missing by a narrow margin.

My Wealth Builder "Almost" Buy List
StockPrice 5/25/07Purchase Date Purchase Price
Apple (AAPL)




Coach (COH)




Core Labs (CLB)




Manitowoc (MTW)




While all four picks are good stocks, I think Apple and Coach may be at risk should consumers reduce their spending, due to the higher cost of gas. Core Labs is related to energy, which no longer a fast rising sector. Manitowoc stands to benefit from infrastructure improvements, which I think will be a strong driver in the near future. Here is a brief description for each company, referenced from the Yahoo! Finance profiles.

Apple (AAPL) product lines include the MacIntosh computers, the iPod, the iTunes store, and the upcoming iPhone. This stocks has had a terrific run up since the return of Steven Jobs, who is the creative force behind the company.

Coach, Inc. (COH) engages in the design and marketing of handbags and accessories in North America and internationally.

Core Laboratories N.V. (CLB) provides reservoir description, production enhancement, and management services to the oil and gas industry worldwide. It engages in determining quality and measuring quantity of the fluids, such as natural gas, crude oil, and water and their derived products in the oil and gas fields.

The Manitowoc Company, Inc. (MTW) engages in the manufacture and marketing of cranes and related products, foodservice equipment, and marine products in the United States and internationally. It operates through three segments: Cranes and Related Products (Cranes), Foodservice Equipment (Foodservice), and Marine.

I have owned and sold Apple (AAPL) and Coach (COH) from previous buy and sell signals. Since Both of these stocks are dependent on the US consumer, I am cautious about purchasing these stocks again. At this point, I plan to consider these stocks after making purchases of the four "buy stocks" identified earlier today.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

No comments: