Posted by: ctraderd | April 21, 2013

Watchlist- Week of 4/22/13 $DXJ $CPSS $SCTY

Last week the Dow Jones Industrial Average lost a staggering –317.55 for –2.14%, the S&P 500 lost –23.90 for –1.51% and QQQ shares closed Friday’s trading session at $68.09, losing –1.56 for –2.24% on the week. I made a big decision last week and that decision was to close my “learning” trade in AMRN in which I took a huge -$2,543.95 loss. I also closed my positions in INTC for gigantic combined loss of -$2,437.73. I also closed my position in VELT for a –$482.42 loss. So last week, as a total, my losses amounted to –$5,464.10. I am now at a loss on the month of –$3,894.58 and –$5,116.81 all time. Check out my profit.ly page to see my trades. My account is currently sitting at $7,883.19 and I am holding no positions. I am shifting my strategy over from short-term/day trades based on technical analysis to an investing/long-term/value strategy based on fundamental analysis. If I choose, I may still decide to make a day trade every now and then, but I will mostly be in for the long haul on most stocks. So without further ado, I shall introduce my new portfolio. Before making any decisions based on this article, read my disclaimer and do your own research!!

1.) WisdomTree Japan Hedged Equity Fund (DXJ)

DXJ continued its uptrend last week, gaining +.92 for +2.00% last week. I might pick up some options next week to grab some of the profits as the Nikkei 225 moves higher, or lower. This one is still my #1 Pick for 2013.

2.) Consumer Portfolio Services, Inc. (CPSS)

Last week, CPSS lost –.3799 for –3.92%. Let’s start with some background on this one.

Consumer Portfolio Services (CPS) is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives. Our headquarters are located in Irvine, California and we have three additional strategically located servicing branches in Virginia, Florida and Illinois.
Since we began operations in 1991 and through December 2011, we have purchased over $9 billion in contracts. We currently service a total managed portfolio of approximately $800 million with approximately 100,000 customers and 525 employees. We maintain dealer relationships in 45 states across the United States. Our common stock is traded on the NASDAQ National Market System under the ticker “CPSS.” (Source: http://ir.consumerportfolio.com/index.cfm)

CPSS has been on fire fundamentally. Fourth quarter net income was barely below the net income of the whole fiscal year of 2012. In the fourth quarter of 2012, CPSS reported $64.83 million in net income. For 2012, CPSS reported just $69.41 million. This means that 93.4% of CPSS’s net income came from the fourth quarter of 2012 alone. CPSS has a market cap of $186.93 million, and a book value/share of just $3.09. The company is earned $.12/diluted share and $.19/basic share in the first quarter of 2013. CPSS reported net income of just $3.8 million, which shows that most of their income comes in the last quarter of the year. However, that $3.8 million is a staggering +742% increase from the first quarter of 2012. As the income keeps increasing, I believe that the stock price will keep increasing as well. For this reason, I will buy 300 shares of CPSS below $9.50/share and I will hold these shares with a price target of $13.00+. I will also set a trailing stop of 10% to protect principle.

3.) SolarCity Corporation (SCTY)

SCTY gained +.67 for +3.40% last week. Since SolarCity’s IPO back in December, the company has gained +8.58 for +72.77%. Let’s start with some background on the company.

SolarCity provides homeowners, businesses and government organizations cleaner, more affordable alternatives to their utility bills-we call this Better Energy. Our long-term relationships with customers allow us to provide them clean distributed energy, as a result of the demand for Better Energy we have installed more solar energy systems than any other company in the United States. SolarCity currently serves thousands of communities in 14 states, and customers include tens of thousands of homeowners, hundreds of schools and universities, leading commercial entities such as Walmart, eBay and Intel, and major government organizations such as the U.S. Military. Approximately 21% of our new residential solar energy system customers in 2011 purchased additional energy products or services from us, and as our customers’ energy needs evolve over time, we believe we are well-positioned to be their distributed energy provider of choice. (Source: http://amda-14lqre.client.shareholder.com/overview.cfm)

SCTY has a market cap of $1.53 billion, a book value per share of $2.93 and a cash value per share of $2.13. The company’s revenue from sales is $128.66 million. In the fourth quarter of 2012, SCTY reported a net income loss of –$3.01 million, however, that figure is up from –$31.05 million in the third quarter of 2012. That is a +90.3% increase in net income in just one quarter. This company has not been on the market long, but the reason I’m looking at it is because the company is owned by Elon Musk, the owner of Tesla Motors, Inc. (TSLA). TSLA has gained +23.94 for +100.21% since its IPO in early September of 2010. I believe that Elon Musk can take this company (SCTY) in the same direction. For that reason, I will likely buy 100 shares of this one under $20.50 on Monday. I will set a 10% trailing stop to protect principle. My price target for this one is $30.00+ in a little over 6 months.

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