Mishlove: My Contest Picks For Monday
Hey folks, guest blogger Jeff Mishlove has sent in this picks for today (Monday). Here's his post: By the close of the market on Friday, it was clear that the stocks I had recommended for purchase last Thursday were doing quite well. In particular, Intuitive Surgical , gained 8.71% in one day. Yet again, evidence continues to support my contention that the short squeeze method I have been employing all of these weeks is one of the best available for finding stocks capable of making big moves in a single day.
However, to my chagrin, I see that one of the stocks I had recommended for purchase at Friday’s close had an even larger move on Friday itself. That was NVR, Inc. , that showed a healthy 10.42% gain on Friday, based on its earnings announcement. What happened? I should have recommended this stock a day sooner! But, to be honest, the earnings calendar that I was using showed that the announcement was scheduled for Monday, not for Friday. This type of error occasionally creeps into earnings calendars – particularly those that are available for free on various web sites.
Selecting contest recommendations for Monday has been a particularly difficult task. I sifted through 86 potential candidates, i.e., stocks making earnings announcements, even after I eliminated those with a market cap of over $8 billion. Those that showed no history, during the past year, of single-day price jumps greater than 9.5% were immediately eliminated. Among the 24 stocks that remained, I looked carefully at the short interest data – as well as data concerning institutional investors.
Here are my final four selections for stocks to buy on Monday and sell on Tuesday:
My first choice is the AK Steel Holding Corporation , a company that is obviously benefiting from increased demand for steel. This stock is now trading at its all time high. The forward P/E ratio is only 13.84, making it an attractive buy as a value stock. However, the trailing P/E ratio is about 260. Approximately 16% of the stock float is controlled by short sellers – who will feel a compelling need to bail out (by buying more stock) should the earnings report be positive.
My next choice is Anixter International , an electronics wholesaler. This stock is also experience its all time high; and, presumably for that reason, it has attracted the attention of short sellers who now control over 11% of the stock float. Furthermore, institutions and professional funds own 94% of the stock float.
My third choice is JetBlue Airways . Due to some well-publicized flight cancellations, the stock has lost about 30% of its value in the past few months. Short sellers have been aggressive and control over 28% of the stock float. A strong earnings announcement now could send them flying for cover.
Finally, I am recommending Euronet Worldwide , a company specializing in secure, electronic financial transactions. This stock is down over 37% from its 52 week high. Short sellers control 11% of the stock float. EEFT has recently completed an acquisition making it the third largest, global, money transfer company. It looks poised for a possible rebound. (I already see some potential confusion regarding the earnings announcement, scheduled for Monday, after the market closes – because the company also has a conference call scheduled for Wednesday to discuss these earnings.)
These are my recommendations. Now, let’s wait and see what the market has to say.
Jeffrey Mishlove, PhD, a registered commodity trading advisor, is creator of www.forecastingsystems.com. He is a partner, with his wife, Janelle Barlow, in two consulting firms: TMI US and Branded Customer Service.
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