Eric, I 'm nibbling at beaten-up high-quality stocks, but not in a heavy way.
The reason for my caution is that tax-loss selling season is only about 5-6 weeks away, and low RS small stocks might fall a lot more at that time.
I did start buying semi-equips Friday, with a little bit of AMAT. In the past I always thought it was too expensive. As you say, it might get cheaper.
You can find some fine companies, with a history of profitability, that are now selling for little more than net current assets. (Net current assets = current assets minus all liabilities -- this is roughly the liquidation value of the company).
Examples are optical test equipment maker NEWP and GaAs semiconductor maker CLTK, both selling at 1.2 X net current assets. Semiconductor distributor NUHC has a similar situation, with a fortress for a balance sheet, and a consistent record of profitability. I bought all three of these stocks at the end of the week.
There are also bargains appearing one day to the next, due to liquidations. I bought DIS Thursday, at a multiple I never would have imagined, when the Bass brothers liquidated due to a margin call.
Friday, I bought an aluminum manufacturer, of all things, when it plummeted inexplicably, in what looked like a margin call. That stock was CENX. |
