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Friday, January 4, 2008

Buy/Sell Corner

So the Dow is down to below 13K and the Nasdaq has fallen to about 2.5K. So why would one be buying? Because as always when things go down...you buy...duh! I am now confident that the latest "fears" will drive the fed to move on rates again....so I expect a rally in the next few months. Hopefully we can get in front of the action...maybe a little short term pain but by end of Q1 I think these are all safe plays.

Buys:

  • China Digital (STV) at $26.14. I recently reviewed the reasons for investing in this spec play. Since my money was tied up in a transfer to Zecco.com I was only able to recently get on the buy side. I still really like this one longer term...hold on tight!
  • Gensis Lease (GLS) at $18.11. I also explained my reasons on this one previously. Fundamentals have not changed but the recent pull-back gives me another chance to DCA ($ cost average). Since my last purchase I received a dividend of ~2% (yield is at 10%) so even though the stock has not gone up...I am still on track for 10% on the year ;-)
  • Diana Shipping (DSX) at $30.03. This one is another dry bulk shipper (similar to GNK). They have a very young fleet and have a huge dividend at 7%. PEG is good at 0.9 and they have 33% room to their 1 year price target. I still am a huge believer in the dry bulk shippers and would have put more money into GNK but I figured splitting across the two companies was about the same (sector will move together) and the dividend is higher.
  • Foster Wheeler (FWLT) at $136. Back in mid-November I mentioned that I bought AAPL but forgot to mention that I bought Foster Wheeler....sorry about that one ... it was a late night ;-(. It has subsequently run up to $162 with a target of $180...I like this one long term since it has mega contracts lined up for the next 5 years so in my mind there is little downside risk....the upside is somewhat limited by the high price (PEG of 1.92) now...but back at $136 (during the November market meltdown) it was screaming buy to me.
For the record...selling WFR last week proved to be a very good deal. Selling at $93 and now at $82 and change. I am not in a rush to get back in this one until it falls below $75 again.

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