Bottom fishing for value by Chris Lau
Bottom fishing large capitalization companies benefited the Bottom Fishing for Value Strategy in the last week. Wal-Mart (WMT), Boeing (BA), and Intel (INTC) had a positive ROI to-date of 12.2 percent, 26.8 percent, and 21.3 percent, respectively. Wal-Mart recouped nearly all of the post-earnings selloff from October 2015, closing at $68. At a modest valuation of 15x, the discount retailer still holds its gains. The dividend yield is 3 percent, the small-format stores are performing better and WMT is building its online presence.
The sharp upward trajectory in energy hurt the sell calls for Kinder Morgan (KMI) and Potash (POT). Energy prices may trend higher but is at risk of falling this year if countries do not curtail oil output.
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Micro-cap value ideas by Chris Lau
The micro-cap value stock strategy, which is limited to stocks having a market cap under $1.5 billion, recouped some of losses. Vivint Solar (VSLR) and Stratasys (SSYS) were top selling ideas. The market’s rebound lifted weak companies. Being bearish on Immersion (IMMR), a haptics supplier for mobile devices and iRobot is not yet paying off. If investors take profit and the indices fall, these two firms may fall too. They are over-priced and have limited upside this year.
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