|August in Review: Bed Bath & Beyond, Transocean, Verisign...|
By Phil Erlanger SEP 20, 2006 10:35 AM
A strong August...
In the investing game, it's necessary to be introspective, whether it be those writing research, managing portfolios for a living, or personal investors. My firm thinks it is important to review our ideas in the 'Ville and see how the concepts are holding up. Going forward expect to see a monthly review of our prior month’s Buzz and Banter insights.
Marsh & Mclennan Companies
August 2nd: I wrote that MMC could be a short squeeze. The stock closed that day at $26.89 and closed last night at $29.00. The thesis is correct and my firm continues to like the idea.
Bed Bath & Beyond
August 7th: I wrote that BBBY could return to life from the land of underperformance. That day the stock closed at $34.79 and closed last night at $36.90. Earnings are due on Wednesday. The thesis was correct and we continue to like the idea.
August 10th: I wrote about RIG being in a long squeeze and that it was dead money or an interesting short. The stock closed on the 10th at $66.25 and today finished at $71.90. The thesis was incorrect but my firm continues to like this short idea as time is on our side.
August 15th: I wrote that WY call activity was high and could lead to further gains. The stock closed on the 15th at $56.24 and today closed at $60.16. The thesis was correct and we will move to a neutral position here as our technical rank has faded.
Dow Jones Industrial Average
August 18th: I wrote that puts were still excessive in the DJIA names and there was more upside action. That day the Dow closed at 11381.47 and today it closed at 11540.91. The thesis was correct and we will move to a neutral position here as the put activity has dropped and calls are increasing. Is this a sign of a top?
August 24th: I discussed the potential for a short squeeze in the homies. The XHB has moved from $30.63 to $33.10 with today’s close. The thesis is correct and we continue to like this trade. Shorts beware as value buyers are stepping into this trade!
August 29th: I wrote about the lack of shorts in the brokers being a potential problem. The XBD closed that day at $207.26. Tuesday saw the XBD close at $222.11. The thesis is incorrect as the brokers continue to report strong numbers. We will about face on this idea with the next move back to support. Stay tuned.
August 30th: I commented that the calls in VRSN were heavy and liked the upside. We noted the stock closed the night before at $20.26 and finished Tuesday’s action at $21.65. The thesis was correct and we continue to like this name in spite of Yahoo’s miss on Tuesday.