Weekly Market Wrap
04/07/2006
Our GameStop option
recommendation has now risen 170.6% in value since its
purchase in November. In two weeks on April 21, the option
will expire. While we are recommending
exercising
the option at that time because we are bullish on the underlying
stock, subscribers who wish to take the profit without
purchasing the stock will want to do so in the next two weeks.
Those who purchase GameStop should hold the stock until it
is removed from our Primary Stock Portfolio.
Today we posted the monthly
update of our Cornerstone
Growth Stock Screen. The following Cornerstone
results are real-time returns (not back-tested returns) and
are updated through Friday's market close.
Cornerstone Stocks
in Positions 1-10
Stocks in the top ten positions
of the screen tend to perform better than the other forty
stocks. Since the stocks are ranked by relative price strength,
the reason for this superior performance is price momentum.
Thus far, buying the stocks in the top 10 positions of each
month's Cornerstone Growth Stock Screen has resulted in an
annualized return of 64.7%. This methodology
assumes a holding period of one year.
Cornerstone Stocks
in Positions 4-10
Stocks in the 1, 2, and 3 positions
have often risen so much that they are bound to cool off.
Therefore we track a strategy that avoids these three stocks.
Buying the stocks in the 4-10 positions and holding for only
a month has resulted in an annualized return of 76.6%.
Cornerstone Stocks
in Positions 4-6
Buying the stocks in the 4,
5, & 6 positions and holding for only a month has resulted
in an annualized return of 102.8%.
Jobs Report
Before the market opened today,
the March employment report was released. Unemployment rates
dropped from 4.8% to 4.7%, while non-farm jobs grew by 211,000.
Analysts gushed that it was the "perfect report"
in that it was strong, but not too strong to increase inflation
fears.
Then the markets opened and
proceeded to fall across the board for the day (S&P 500
-1.03%). It was mildly entertaining to see the pundits back-track
and attempt to explain the seemingly contradictory outcome.
We believe the market was due for some profit-taking. Anytime
equities have a strong surge like they have recently, it's
healthy for the markets to pull back and take a breather.
For investors with a short memory, today was a good reminder
that, while stock indexes may historically average 10% per
year, the climb up the mountain is not without dips and valleys.
While the S&P 500 barely
moved for the week, our stocks maintained their strong performance,
especially the Cornerstone
stocks.
***
Our Top
Gainers This Week:
| USG Corp. (USG) |
+18.72% |
| Franklin Covey Co. (FC) |
+17.22% |
| NewMarket Corp. (NEU) |
+15.09% |
| Andersons Inc. (ANDE) |
+13.73% |
| Optimal Group Inc. (OPMR) |
+12.18% |
| Eagle Materials Inc. (EXP) |
+11.50% |
| Broadwing Corporation (BWNG) |
+10.58% |
| USA Truck Inc. (USAK) |
+9.06% |
| RPM International Inc. (RPM) |
+7.97% |
| Wavecom SA (WVCM) |
+6.21% |
| Seaboard Corp. (SEB) |
+6.10% |
| Companhia Bebidas Americas (ABV) |
+5.56% |
Kaydon Corp. (KDN)
|
+4.78% |
| Lamson & Sessions Co. (LMS) |
+4.60% |
| Chaparral Steel Company (CHAP) |
+4.59% |
| Pantry Inc. (PTRY) |
+4.18% |
| International Game Technology (IGT) |
+4.15% |
| MEMC Electronic Materials Inc. (WFR) |
+4.04% |
| SCPIE Holdings Inc. (SKP) |
+4.02% |
***
Subscribers can find the full weekly update,
including our leading gainers-to-date, here.
|
