Stock Pick Of The Week

This week's stock: PowerSecure International, Inc. (POWR)

POWR is a provider of Energy and Smart Grid Solutions to electric utilities and their commercial, institutional and industrial customers, and of Energy Services to oil and natural gas producers. Its EPS forecast for the current year is 0.36 and next year is 0.54. According to consensus estimates, its topline is expected to grow 7.84% current year and 16.96% next year. It is trading at a forward P/E of 16.07. Out of 8 analysts covering the company, 7 are positive and have buy recommendations and 1 has a hold rating.

Stock Pick Of The Week

This week's stock: ReneSola Ltd (SOL)


ReneSola is a manufacturer of solar wafers, which are thin sheets of crystalline silicon material primarily used in the production of solar cells. I see this stock as a good hold for the next 3-5 months.


Revenue increased by 136% in 2010. Growth was driven by strong sales of the company's popular solar modules. For the full 2011 year, analysts project revenue will increase 11.3% to $1.3 billion, then another 4.1% to $1.4 billion, by 2012, as shipments and customer orders continue to increase.

Along with high growth outlook, SOL has an equally as bright earnings outlook. And to top it off, the stock has a low trailing price-to-earnings ratio (P/E) under 5.

Stock Pick Of The Week

I've decided to post a stock each week that I feel is in a good position to make a quick return on my investment(s). This stock is not intended to be held for long, so I don't take dividends into account when choosing.

This week's stock: Capstone Turbine Corp. (CPST)

Industrial electrical equipment industry. This stock is currently trading roughly 11% above it's 20-day MA, 27% above it's 50-day MA, and 76% above it's 200-day MA. It is also a short squeeze candidate, with a short float at 13.88%. CPST is exhibiting strong upside momentum. I plan on stick with this for a couple weeks, then keeping a close eye on it for any signs of weakness in momentum before getting out.

Rules for Investing.

After about two and a half months of ravenously researching stocks and picking a few from each sector, I've come up with the stock that will stay with me until retirement. IBM. Right now the market is taking a dive due to the tragic natural disasters that hit Japan, and IBM is about as low of an entry point as I'm going to see for awhile. So, I sold all mutual funds and deposited my tax return, giving me some extra cash to invest (I'll need it to, IBM is roughly 160 a share)

Like a giant robot baby that breaths fire, I'm looking to be an emotionless machine that sticks to a set of predetermined "rules". Also, I may have to have the occasional outburst of pure fire-breathing baby rage when things don't go my way. With that in mind, I have come up with an overall set of rules when investing.

1. OPEN AN ONLINE TRADING ACCOUNT / FORGET THE STOCK BROKER

Broker's are only looking out for themselves. They get paid on commissions when you buy and sell, not on a percentage of your gains. They often try to sell you into a stocks their companies underwrite as they pay higher commissions. Online accounts give you control over the price you pay for a stock and the price you sell the stock at. There are many beneits of an online trading account including tools to help you select investments.

2. PULL YOUR MONEY OUT OF MUTUAL FUNDS

Mutual funds historically have had the lowest rates of returns. Also, company managed 401ks are nearly as bad because many of them invest in mutual funds. Diversify your money into stocks, bonds, exchange traded funds and cash. Diversification is by far the best way to guarantee a good return.

3. RESEARCH AND RESEARCH SOME MORE

Along with the tools provided by your online brokerage house, there is a vast amount of websites and free e-newsletters worth using for ideas, advice, and just to keep up on what is happening in the market. Don't go out and buy Company A because some newletter states they will be the next big thing. Research it. Find other stocks for other companies that do similar things, find the under-valued ones, the ones that haven't caught the attention of the 'pump and dumpers'. Two good sites are: http://www.fool.com and http://www.stockgumshoe.com.

5. BUY/SELL WITH A PLAN, NOT EMOTION

Just as in real life, emotion has no place in trading. Make predetermined points of selling and buying when getting into a stock, such as with stop-losses. Stop-losses are a way to sell a stock if it hits a pre-determined price. You can enter stop-loss' orders on most on-line trading accounts. These will protect you in most instances if a stock price starts to drop and you are not setting at your computer to enter a sell order.

Having a plan for your entire portfolio is also best. Figure out some sort of target asset allocation model. For example, through the help of my online brokerage account, I determined that I wanted to set up an aggressive model. This let me to come up with a simple pie-chart dividing up my investments at: 50% Large Cap, 25% International, 20% Small Cap, and 5% Cash. It's much easier to do than it might sound at first.

Let your winners run and sell your loosers with minimal loss (like no more than 10%-12%). If your winners hit a wall and you notice the stock price hardly moving, move the money into something else.

Take me to the future magic car!

Math blows, but I'm quickly finding out that I need it's super powers in order to find a good time to buy and sell stocks. The more I research, the more I find out that creating and reading charts on stocks is a key factor in making an educated guess on a good stock to invest in, and more importantly the right time to invest.

The most important chart I'm learning is the Moving Average Convergence/Divergence, or MACD for short. The internet is littered with sites and people more than willing to help you understand how to read these charts. This chart/ratio basically lets you get an idea of a stock's tendencies and current trend(s). The MACD is particularly helpful if you are looking at penny stocks. 

This leads me to the next stock I bought, which is essentially a penny stock (bought at 1.14 a share). It's a company called Zap, based out of California, but sells mainly overseas to China. They design, produce and sell electric and other advanced technology vehicles...like alternative energy automobiles, motorcycles, bicycles, scooters, personal watercraft, hovercraft, neighborhood electric vehicles, and commercial vehicles. Basically, they make lots of goofy looking vehicles that American's aren't quite ready to embrace, so they sell overseas.

Aside from the news that ZAP completed it's acquisition of 51% of the capital stock of Zhejiang Jonway Auto Co. Ltd. of Sanmen, Zhejiang, China to manufacture and sell electric SUVs to fleets in China, the MACD chart tells me that it is/was the right time to invest in Zap (ticker symbol: ZAAP). I've basically come up with/learned 4 rules to follow when investing in a penny stock, with the MACD be the most important:

1. Strong Price Movement- Large % price gains w/ heavy volume, a good sign.

2. Return On Equity- Positive ROE means company is turning a profit, which is what you want.

3. Technical Analysis Indicators- Reading the MACD chart for stocks current trend(s).

4. Insider Buying- When company insiders are buying the stock, it's a good sign.

Aside from gambling with a penny stock I also recently invested in General Motors(GM) and Gamestop(GME) for more long term, sound investments. What can I say, I like investing in the letter G. I guess Google and George Forman Entertainment can't be far in my future. But for now, its on to more pennies!!

Billionaires & Turbines

In case you don't know, watching a stock go up and down in real time is a lot more exciting when you have money invested in the stock. That may sound like an obvious statement, but it really is surprising just how much more exciting it is. It's like the difference between licking an ice-cream cone you're holding in your hand and licking yourself if you were a giant ice-cream cone. It just tastes so much better the more you have invested in the process.

Now, the particular stock I've been drooling over is General Electric(GE). After buying GE at 19.98 a share it has been slowly going up (or quickly...what do I know about the pace of stock growth...I'm new at this), currently resting a little short of +1.00 a share since I bought in. Yey! My thinking behind investing in GE was based on two things: rich people and over-populated counties.

For starters, Warren Buffet invested billions in GE. Billions! Granted that was in late 2008, during GE's lowest point of the last decade, but it made a point. That point is "GE is the symbol of American business to the world". Which means, at least to me, that if GE can't succeed, then American business is fucked. And I still believe in American business as a whole.

The second key factor for me was GE's winning of a record $750,000,000 turbine order for Reliance Power Plant in India. The discovery of natural gas in the Krishna-Godavari basin by Reliance in 2002 has helped India boost gas output at the fastest pace in the world.  Considering all that, and the fact that GE's equipment generates about one-third of the world's electricity, I figured they were a good, solid first investment.

I'm now searching for a second investment and beyond, which in turn has me finding myself figuring out how to save more money, so I can invest more money. Don't get the wrong idea, I'm not looking to gamble every last penny that I can scrounge up on the stock market...just enough to invest on the most recent stock burning my eyes every time I look at it's ticker.

It begins...now.

So, I have started a blog for the first time. More importantly, I have started a blog and began playing the stock market for the first time. My knowledge of the stock market is very limited. It goes about as far as the 1990 NES game Wall Street Kid...which I failed at every time I played. Despite these failures I'm still willing to invest real money into the real stock market.

First, let me explain where the money I'm investing came from: my wife. More specifically it's money that had been sitting in one of those online investment site's accounts she set up. You know the sites, the type that you see on tv while watching the Super Bowl. The type that you ignore because you can't relate to the business-minded, middle-aged man talking about saving for retirement while hanging out near his fishing boat. My wife had put $9000 into the account during our first year of marrage, a little over three years ago. She put all but $2000 into three separate funds. The rest was simply in a money market account.

Now, my wife is a very smart and sensible woman, especially when it comes to money. The funds that she had invested in where making decent returns. The initial $9000 investment has grown to $12,800, which is great considering the low point the market hit a couple years ago. The fact that she had $9000 to invest before she was 30 years blew my mind. I only started to think seriously about saving money once we got married. And now that I'm in my thirties I have just begun thinking about saving in a more long term fashion.

Cut to a week ago, January 22nd. While having an adult, husband and wife conversation I mention that investing in GE would have been a good idea, and probably still is. That comment was based entirely on news blurbs I had heard over the past weeks, which for some reason made me think GE was doing well. I get the reply "if you think it's a good idea then let's do it".  I did not expect that response, especially for a comment that was meant more to be in passing than generate a conversation. So, after a little conversation we decided to invest in GE stock using the $2000 that was available in the money market account, which is basically like a savings account from my understanding . We bought 90 shares at $19.98 a share. Thus starting my venture into to stock market.

Since buying the GE stock I have been told to do what ever I feel is best with the money in the online investment account. Should I feel it's best to sell shares from funds or invest in other stock, it doesn't matter. My wife is well aware of my knowledge of the stock market, and finances in general, which makes it hard for me to understand her trust in me with this sort of financial venture. Maybe she is impressed by the amount of research that I have been putting into this. Maybe I have wowed her with all of the thoughts, opinions, and logic I have been constantly spouting off with what to invest in next. Or, maybe she has the same unfounded confidence in me that I have in myself. What ever it is, I'm grateful to have the means, and excited to do this.