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Buying the best stocks of last year, does it work?

7/9/2014

0 Comments

 
In December of 2013, I looked at the 30 best stocks of the year to see what they had in common. I was pretty curious how they have done since the start of the year, because I am an advocate of momentum investing. The results don't look good, their performance as a group has lagged the index for in 2014:
Ticker         Name                                                                                     Industry                                    Gain in 2013    YTD gain   Mkt cap
AAMC
PTCT
ZHNE
CSIQ
CNIT
GSAT
CRRS
GTN
LCI
IQNT
LBMH
RVLT
MEG
INSY
HIMX
ACAD
NXST
CHTP
SPWR
DL
GENT
CMGE
BCOM
KERX
PBYI
XRM
ROIA
BCRX
ADEP
PSIX
Altisource Asset Management 
PTC Therapeutics, Inc.
Zhone Technologies Inc.
Canadian Solar Inc.
China Information Technology, 
Globalstar Inc.
Corporate Resource Services
Gray Television Inc.
Lannett Company, Inc.
Inteliquent, Inc.
Liberator Medical Holdings
Revolution Lighting Technologies.
Media General, Inc.
INSYS Therapeutics, Inc.
Himax Technologies, Inc.
ACADIA Pharmaceuticals, Inc.
Nexstar Broadcasting Group Inc.
-
SunPower Corporation
China Distance Education Holdings
-
China Mobile Games and Entertainment
B Communications Ltd
Keryx Biopharmaceuticals Inc.
Puma Biotechnology, Inc.
Xerium Technologies Inc.
Radio One Inc.
BioCryst Pharmaceuticals, Inc.
Adept Technology Inc.
Power Solutions International, Inc.
Asset Management
Biotechnology
Communications
Semiconductor
Application Software
Wireless Communications
Staffing & Outsourcing
Broadcasting - TV
Drug Manufacturers
Wireless Communications
Medical Instruments
Diversified Electronics
Broadcasting - TV
Biotechnology
Semiconductor 
Biotechnology
Broadcasting - TV
-
Semiconductor 
Education & Training
-
Software
Communications
Biotechnology
Biotechnology
Diversified Machinery
Broadcasting - Radio
Biotechnology
Diversified Machinery
Diversified Machinery
1162%
1072%
881%
757%
655%
516%
509%
501%
495%
488%
479%
430%
429%
420%
416%
402%
401%
399%
397%
391%
390%
388%
378%
377%
376%
364%
360%
351%
350%
345%

-31%
48%
-46%
-7%
-25%
54%
-4%
-14%
38%
24%
-15%
-24%
-6%
10%
-57%
-14%
-9%
-
24%
-8%
-
-41%4%
16%
-36%
-16%
22%
53%
-43%
-17%
1434
753
93
1525
160
2872
399
731
1621
453
185
217
1880
973
1083
2134
1547
-
4843
599
-
467
541
1376
1985
213
220
835
125
671
If I bought or held the best stocks of 2013 also into 2014, my YTD return would be around -4.3%, which is lower than the S&P 500s 6.7% return. As you can see, 18 of the original 30 stocks went down this year, and 2 were bought out in acquisitions. So far it looks like buying the best stocks of the previous year is not a great idea, will see how they do for the rest of 2014. However, momentum investing (buying stocks at new highs) still works, provided you buy good undervalued growth stocks and use proper risk management.
0 Comments

Best Indian stocks of 2013

12/20/2013

5 Comments

 
I have compiled the list of best Indian stocks of 2013. The minimum criterion was a market cap of 1500 Rs. Cr. (250 mil. USD), I also examined if the companies generated a profit or if the stock was bought by insiders.

Ticker             Name                                                      Industry                                  Market cap                 YTD gain    Profit       Insider
506938
531307
531463
505533
532156
508969
530251
503663
532430
532331
511357
506615
533573
524804
531522
500495
500940
512379
532689
532712
532848
532830
531531
523642
532787
532343
535648
509051
500228
500470
Kappac Pharma Ltd.
SRK Industries Ltd.
Global Infratech & Finance
Westlife Development Ltd.
Vaibhav Global Ltd.
Sulabh Engineers & Services
Risa International Ltd.
Out of City Travel Solutions
BF Utilities Ltd.
Ajanta Pharma Ltd.
Kailash Auto Finance Ltd.
Sunrise Asian Ltd.
Alembic Pharmaceuticals
Aurobindo Pharma Ltd.
Rasoya Proteins Ltd.
Escorts Ltd.
Finolex Industries Ltd.
Cressanda Solutions Ltd.
PVR Ltd.
Reliance Communications
Delta Corp Ltd.
Astral Poly Technik Ltd.
Hatsun Agro Products Ltd.
PI Industries Ltd.
Ess Dee Aluminium Ltd.
TVS Motor Company Ltd.
Just Dial Ltd.
Indian Infotech & Software
JSW Steel Ltd.
Tata Steel Ltd.
Biotechnology
Automotive
Financial services
Restaurants
Internet Retail
Financial Services
Commodity trading
Investments
Utilities
Biotechnology
Finance
ommodity trading
Biotechnology
Biotechnology
Edible oils
Automotive
Plastics
Technology
Specialty retail
Communications
Gaming
Plastics
Packaged Foods
Agrochemicals
Packaging
Automotive
Technology
Technology
Steel
Steel
1814.97 Rs.Cr.
1535.85 Rs.Cr.
2209.44 Rs.Cr.
5989.82 Rs.Cr.
1847.19 Rs.Cr.
2093.42 Rs.Cr.
1918.63 Rs.Cr.
3598 Rs.Cr.
1771.71 Rs.Cr.
3427.81 Rs.Cr.
2186.95 Rs.Cr.
2249.58 Rs.Cr.
3951.9 Rs.Cr.
10998.6 Rs.Cr.
2973.49 Rs.Cr.
1561.04 Rs.Cr.
1994.29 Rs.Cr.
1544.78 Rs.Cr.
2417.33 Rs.Cr.
27090 Rs.Cr.
2251.98 Rs.Cr.
1772.55 Rs.Cr.
2054.38 Rs.Cr.
3460.34 Rs.Cr.
1787.01 Rs.Cr.
2890.98 Rs.Cr.
8875.36 Rs.Cr.
2899.83 Rs.Cr.
23212.87 Rs.Cr.
39905.11 Rs.Cr.
5086%
2891%
1418%
1111%
586%
408%
374%
350%
297%
295%
238%
225%
214%
197%
192%
170%
167%
167%
165%
161%
154%
142%
135%
133%
120%
116%
115%
113%
112%
110%

No
Yes
No
Yes
No
No
No
No
No
Yes
Yes
Yes
No
Yes
No
No
No
No
Yes
No
No
Yes
Yes
No
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Yes
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Yes
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Yes
No
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Yes
No
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Yes
No
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Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
The best stock on the list was Kappac Pharma (506938) with a gain of 5000%, while the worst one, Tata Steel (500470) advanced by 110%, which is still great given the SENSEX index returned just 8%. The most represented sector was Biotechnology (4 stocks), followed by Automotive (3), Financial Services (3) and Technology (3). The summary is below:

- All of these stocks made multiple 52-week highs during their advance
- 83% (25) of the stocks are small caps with the market cap below 1 billion USD. The exceptions are Aurobindo Pharma (524804), Reliance Communications (532712), JustDial (535648), JSW Steel (500228), Tata Steel (500470).
- 80% (24) of the companies show a profit
- 53% (16) do not pay any dividend
- 43% (13) have been bought by insider before they made big gains


The best Indian stocks of 2013 have a bit different characteristics than their US counterparts. The majority make a profit and there are also some large cap winners. What they have in common is that most of the top stocks do not pay a dividend and are generally not bought by insiders prior to their advance.  Check out the best Indian stocks to buy now.
5 Comments

Best UK stocks of 2013

12/17/2013

0 Comments

 
Continuing with my examination of the most profitable stocks of 2013 around the world, find below the UK list:

Ticker             Name                                                 Industry                                    Mkt. cap     YTD gain    Profit      Insider  Breakout
ABTX.L
MAR.L
BLUR.L
OCDO.L
THAL.L
QFI.L
TCG.L
SEE.L
XAR.L
THT.L
SOM.L
HHR.L
TCM.L
BLNX.L
STVG.L
GBO.L
GWP.L
WAND.L
OPAY.L
CLIN.L
KBC.L
TLDH.L
SOLG.L
RNO.L
PRES.L
MTEC.L
PHTM.L
TPT.L
POLR.L
MGR.L
Aqua Bounty Tech.
Mar City
Blur (Group)
Ocado Group
Thalassa Holdings Ltd.
Quadrise Fuels Int.
Thomas Cook Group
Seeing Machines Ltd.
Xaar
Thorntons
Somero Enterprises
Helphire Group
Telit Communications
Blinkx
STV Group
GLOBO
GW Pharmaceuticals
WANdisco
Optimal Pay
Clinigen Group
KBC Advanced Tech.
Top Level Domain Hldgs.
Solgold
Renold
Pressure Technologies
Matchtech Group
Photo-Me International
Topps Tiles
Polar Capital Holdings
Miton Group
Biotechnology
Construction
Computer services
Retail (Catalog)
Oil Services
Oil & Gas
Personal services
Computer services
Computer peripherals
Food processing
Machinery
Rental and Leasing
Communications
Internet media
Motion pictures
Software
Biotechnology
Software
Consumer Finance
Biotechnology
Software
Domain trading
Mining
Engineering
Engineering
Business services
Photography
Construction
Investment services
Investment services
63M
110M
133M
2521M
65M
378M
2378M
53M
844M
95M
57M
85M
174M
791M
120M
220M
292M
304M
493M
468M
68M
106M
50M
116M
51M
139M
539M
239M
403M
80M
585%
506%
500%
441%
417%
384%
375%
369%
285%
233%
233%
209%
205%
204%
202%
197%
197%
194%
183%
177%
174%
173%
166%
158%
147%
145%
143%
142%
141%
137%

No
Yes
No
No
Yes
No
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
No
No
Yes
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
Yes
No
No
Yes
Yes
No
Yes
No
No
Yes
No
Yes
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
No
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
No
No
No
No
No
No
No

The yearly gains of the best UK stocks range from 137% (MGR) to 585% (ABTX), what is less than half of it's US counterparts. This can be attributed to the significant outperformance of US stocks during the last year, which returned around 25% compared to the 8% return of FTSE100. Nevertheless, there were some big gainers, especially among computer and internet stocks - BLUR, SEE, XAR, BLNX, GBO, WAND, KBC. In fact Blinkx (BLNX) is in my portfolio right now, as I still see a lot of upside potential in that stock. Doing the same research as for US stocks, I have come up with these results:

- All of the best stocks had a market cap of 800 million GBP or lower, before their advance
- Every single stock from the list reached new 52-week highs multiple times during the last year
- 70% (21) paid no dividend during the last year
- 66% (20) still have an institutional ownership of 80% or lower right now
- 56% (17) experienced sharp breakouts on significant volume, which started each uptrend 
- 50% (15) were bought by insiders before the biggest moves began
- 40% of companies were not profitable
- Of the best 5 UK stocks of 2013, only two were profitable, one was bought by insiders and all had broken out of their bases on strong volume before scoring large gains

Comparing these results to the US list, we can conclude so far that: 
1. The best stocks are usually small caps, with market cap under 1 billion USD
2. The majority do not pay dividends
3. Institutional ownership is very low
4. More often than not, these stocks experience sharp breakouts to the upside, which start their advance
5. Top 5 stocks are generally profitable and are not bought by insiders

Again the common trait that all these stocks share is the reaching of new highs many times during their advance. It looks as the UK stocks are less speculative, given that 60% of them earned a profit during the past year compared to only 36% in US. Buying into an uptrend works in UK just like in the US, many of these stocks are still trading at or near their 52-week highs now. I will follow up with similar lists for Hong Kong and Indian stocks to see if the same patterns emerge. Meanwhile, check out the best UK stocks to buy now.
0 Comments

Best stocks of 2013 - Congrats to holders

12/16/2013

0 Comments

 
This year is soon behind us, so it's time to take a look at the biggest winners of 2013 until now:

Ticker           Name                                                      Industry                              Mkt. cap    YTD gain      Profit       Insider   Breakout
AAMC
PTCT
ZHNE
CSIQ
CNIT
GSAT
CRRS
GTN
LCI
IQNT
LBMH
RVLT
MEG
INSY
HIMX
ACAD
NXST
CHTP
SPWR
DL
GENT
CMGE
BCOM
KERX
PBYI
XRM
ROIA
BCRX
ADEP
PSIX
Altisource AM Corporation
PTC Therapeutics
Zhone Technologies Inc.
Canadian Solar Inc.
China Information Tech.
Globalstar Inc.
Corporate Resource Serv.
Gray Television Inc.
Lannett Company
Inteliquent
Liberator Medical Holdings
Revolution Lighting Tech.
Media General
INSYS Therapeutics
Himax Technologies
ACADIA Pharmaceuticals
Nexstar Broadcasting Grp
Chelsea Therapeutics 
SunPower Corporation
China Distance Education 
Gentium S.p.A
China Mobile G&E Group 
B Communications Ltd
Keryx Biopharmaceuticals
Puma Biotechnology
Xerium Technologies Inc.
Radio One Inc.
BioCryst Pharmaceuticals
Adept Technology
Power Solutions Int.
Asset Management
Biotechnology
Communications
Solar
Software
Communications
Staffing Services
Broadcasting
Biotechnology
Communications
Medical Supplies
Electronics
Broadcasting
Biotechnology
Semiconductor
Biotechnology
Broadcasting
Biotechnology
Solar
Education Services
Biotechnology
Multimedia
Communications
Biotechnology
Biotechnology
Paper Products
Broadcasting
Biotechnology
Machinery
Machinery
2432M
51M
145M
1381M
185M
584M
429M
763M
873M
373M
201M
258M
631M
862M
2008M
2088M
1563M
254M
3389M
655M
842M
413M
576M
1022M
2557M
217M
157M
365M
118M
670M
1162%
1072%
881%
757%
655%
516%
509%
501%
495%
488%
479%
430%
429%
420%
416%
402%
401%
399%
397%
391%
390%
388%
378%
377%
376%
364%
360%
351%
350%
345%

No
No
Yes
No
No
No
Yes
Yes
Yes
No
Yes
No
No
No
Yes
No
Yes
No
No
Yes
Yes
No
Yes
No
No
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No
No
No
Yes
No
No
No
No
No
Yes
No
Yes
No
No
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Yes
Yes
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No
Yes
No
Yes
No
No
No
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Yes
Yes
No
Yes
No
No
Yes
Yes
Yes
Yes
Yes
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Yes
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Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
No
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
No

Gains for the best stocks of 2013 range from 345% (PSIX) to 1162% (AAMC), AAMC being the only stock I owned during the year, although I sold it too early and didn't realize the full gain. The company is the real estate asset management arm of Altisouce Portfolio Solutions (ASPS), from which it was spun off during 2013. The list of industries is quite diverse, although 9 stocks (30%) come from the biotechnology sector (PTCT, LCI, INSY, ACAD, CHTP, GENT, KERX, PBYI, BCRX) and 8 (26%) from broadcasting and communications services (ZHNE, GSAT, GTN, IQNT, MEG, NXST, BCOM, ROAI). I have checked insider buying, breakouts, profits and market cap of all stocks before their advances, and the results are summarized here:

- All stocks had a market cap lower than 1 billion USD before advancing higher
- Each stock has reached 52-week highs many times during it's uptrend
- 86% (26) of them still have an institutional ownership lower than 80% right now
- 86% (26) of all stocks have a short float of 10% or below right now

- 77% (23) did not pay any dividends during the year
- 70% (21)  experienced a major breakout on significant volume, which started their whole move
- 63% (19) have no earnings and are losing businesses
- only 30% (9) have been bought by insiders before exploding higher
- The best 5 stocks of 2013 all had major breakouts, neither was bought by insiders before it, and only one was showing a profit


Buying the best stocks right now on breakouts or after major news can be very profitable. However, I believe that none of these stocks could be discovered by fundamental or technical analysis alone, you need to combine both approaches to dig deeper and analyze their potential. Most of them are not profitable now and won't be for some years, so any valuation might be very imprecise. On the other hand there are many stocks breaking out on strong volume every day, which means some kind of fundamental analysis is required to weed out future losers and capture the multibaggers. I will soon compile similar lists of the best UK, Hong Kong, and Indian stocks of 2013 and compare the results so stay tuned.
Click here to see the best stocks to buy right now.
0 Comments

    To make money in stocks you must have the "the vision to see them, the courage to buy them and the patience to hold them". And patience is the rarest of the three.  Thomas Phelps

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