GOOd Gravy

So today GOOG closed at $707. Just one week ago I discussed how the price target was $730 so our trigger to sell (5%) would be about $695. Well, that came and went...but in the meantime the price target had been updated to $740. Now we are even within 5% of that mark. My issue is that this stock continues to pour out great news....great growth...expanding into new markets...etc.

So I really struggle with selling this one. I guess the safe play would be to let it stay in the game but to set a automatic sell at a lower point....say $690. That way we can stay in the game (to wait for the price target to be increased again) with minimal downside risk. Even at $690 we would be cashing out with a 44% gain.......Done.

One that got away...

Last week I was looking at MEMC Electronic Materials (WFR). It was sitting at $60 and with a $78 price target (+22%), a +25% 1 year growth target and a PEG of 0.6. In addition there was a very compelling article in Kiplinger's about what this company specializes in.....providing silicon wafers to the semiconductor industry as well as the solar industry. As you may have seen from the INTC conference call, CPU demand is high (thus silicon too) and the solar industry is red hot with double and triple digit growth rates foretasted over the next 5 years. As such, one would think that WFR is uniquely positioned to supply all that demand....and as such blow past analyst expectations (which are already in great shape).

And then I waited....and on Friday it went up 20% to about $70. Based on the following news:

In a note to clients, UBS said MEMC signed a 10-year deal to sell $7 billion to $8 billion worth of solar wafers to Conergy, and expanded its original 10-year deal with Gintech by another $700 million, for a contract now worth $3 billion to $4 billion.

Embedded in that same Friday message were these two nuggets:

1. UBS estimated that MEMC still has enough polysilicon left to sign one more customer for a 10 year deal worth $2 billion to $3 billion.
2. UBS maintained its "Buy" rating and raised its share price target to $85 from $77

Having seen the new target at $85 (vs. the price of $70) that means that there is still ~21% room left...so I picked up some shares. It rose to about $75 but has settled in about $73 now. We will see where this one will take us....

Two stocks that meet the criteria...

Two stocks which will be getting the green light today are MNST and ROH.

Monster is the parent company of Monster.com and has a price target +23%, 1 yr growth of +31% a PEG Ratio of 1.5 but no Div. I am ok with no div given the fact that this is tech and they have a growth rate greater than 30%.

Rohm Haas is a very interesting story since it is an old school materials company specializing in Coatings, Monomers, Performance Chemicals, Electronic Materials, Salt, and Adhesives and Sealants. It makes the cut because it has a price target at +21%, 1 year growth at +15%, a PEG of 1.17 and a div of 2.8%.

Tracking overall performance to date

Trying to keep a simple sheet so I can keep things straight.

The APG column is simply a quick and dirty way to try and normalize the gains with respect to the time the investment was held. The interesting thing there is that GOOG is only the third best "return" when time the position is held is factored into the equation. But it should be noted that as of today...the Dow is still at the same value as when we bought GOOG...and the Nasdaq has gained only about 10% in the same timeframe. Not bad.

Whoah...how time flies

So it has been about 4 months since I have posted here....shame on me. The worst part is that I have actually taken a few finiancial steps without posting...double shame on me. So here is what has been happening:

First, I still own GOOG. As of this afternoon it is at $675...up 40% from our original entry 5 months ago at $480. I am seriously struggling with this one....should I sell and lock in these impressive gains. In the end I need to follow my sell rules:

1. If there is news representing a fundamental shift to the original assumptions
2. If the price reaches a level within 5% of the 1 year target price

Now, the news for GOOG simply continues to get better as they smash through their earnings reports with AAPL-esque talent...so that is no reason to sell. When we bought GOOG the target was only $600...but when the stock soared through $600 the price target had already been updated to $730! So now the 5% trigger is set at $695...not quite there yet. So I guess we hold.

Second, I still own my Indian friend TTM. Now that stock is at $20...only up 10% in the past 5 months but it did climb out of a 9% hole to get back to where it is today. The news still remains positive for the most part and the target is still way up at $26...so I guess we continue to hold on to this one as well and wait for the breakout.

Third, I finally sold my oil stocks (BP and GSF). Both finally reached my sell limit of reaching 5% of the target price. BP netted +16% and GSF netted +32%.

Fourth, I bought and sold a dry bulk shipping stock called Genco Shipping (GNK). That was a quicker trade that only lasted about 2 months but rose from $52 to $69 for a nice 30% gain. This stock also carried a 4% dividend at the time and I received one payment of about 1%...taking the overall gain to about 31%.

But as you can see...I have sold everything but my GOOG and TTM. So again I am faced with finding another Cavitation value entry-point. While I am finding those next stocks...my money is safely parked in my 5% online savings account ;-)