31 January 2011 Look up in the Sky it’s a Great Stock
It was a pretty good day today in the market. We did not to get much (if ANY) chance to play. When we get a chance we’ll give some of the pin action in the account.
We got a few right and few wrong today. XOM was a beat, ITW was very close, but a miss, we called the miss at APC Andarko, we called the beat on income and spending figures from Commerce, but we really messed up and missed on Bennito’s Birthday. Oh yeah he will come in at 55, he just will be coming in tomorrow and not Wednesday. Happy B day again. We are guessing not much of a move on the IBD S & P 500 rating say a B- or B and a slight move up in the percentage of NYSE companies above their 200 day average.
Question from a reader.
One of our regular readers Megan was sharing with me her portfolio and had a question about a beautiful double on SWKS Skyworks Solutions. It was the age old question of is it time to take money off the table and is a stop appropriate (Sorry Megan I am paraphrasing and it is late.)
Any who we hope you appreciate the reply. I am not providing the IBD visuals because it is subscription based and strongly protected.
Ok let's talk SWKS As you can tell this stock is a beauty as far as IBD is concerned. You're question is whether to sell any or all? Megan, I can tell ya from experience you don't get too many doubles in life. That said, companies like this that continue to show growth and institutional buying. Here is my suggestion, consider stopping your xxx shares at $25.50. That will guarantee an 80% gain. It looks like the stock has some resistance at its 50 day average of 29. If you see a few more positive days with volume above 3.9 million and the price above 30, gather up some more change and pick up a few more shares. Then move your stop up at 20% off any new highs. You might have a thoroughbred on you hands. BTW the P/E you quoted was current P/E. Always try and focus on the forward P/E ratio which is a reasonable (dare I say) cheap PE for a gangbuster stock like this. When you look at EPS, be sure to compare Quarter to Quarter. Actually when you look at third qtr 09 to 10 there was a drop from .33 to .25 (Which was the only read mark from IBD.) Oh yeah always look at diluted EPS as it will take into account all the warrants and employee stock options into consideration. I'd have to do a lot more homework, but the stock is being rewarded for a climb of having a 55 cent loss in 2005 to making 75 cents a share in 2009. Except for a little hiccup in 2009, their EPS Growth is very impressive.
They reported a great quarter on the 21st. Let the market digest it, watch the volume and like I said if it sits about 30 for a few good positive days riding into next quarter’s earnings season.
The March of Millions
Keep an eye to the east tomorrow. Egypt is expecting more than a million protestors in the March of millions demonstrations. While it is no consolation to the 70+ people who have died in the clashes, the Military has said it will not use force to stop the gathering tomorrow, but Mubarak has closed banks cut cell phone coverage and it is getting a little tense. Let us hope for a peaceful demonstration and that the government gets the message, 30 years of even a good thing (not saying this regime is a good thing or not) gets old.