Hi to all on the Ted Warren thread.
I've been studying CLX for 8 years now. This last week has become pivotal I believe.
It is a set up for accelerated upward price action. The offsets are very uniquely supportive for a rally that could easily last 30 days.
Additionally the rally seems to be preferring some small and microcaps - which is the best of times for Ted Warren like stocks. It MAY (there is no guarantee) be a market advance where insiders choose to be distributing their long accumulated shares.
In past markets the small priced shares become the percent gainers darlings.
We are a far ways from this final leg, but it is these early breakouts that climb fast and ,make geniuses out of all those who are long.<smile>
IF we get this fast price mark up, it will be time to watch your percent advances from the consolidation bases that were built for years. That kind of distribution takes time and it will be marked with strong advances and strong declines. The volatility will make you numb and yet an adrenalin junky at the same time.
Watch the sentiment indicators. They will go to greed. It will take over 45 percent to become greedy and take 9 to 12 months for the final distribution.
When the top tips over from the weight of expensive stocks it will be too late.
One must temper the greed and scale out lightly, so as not to upset the MM volume and control.
But scale out is the main theme - it really depends on how large a position you have accumulated. It will take many days to scale out AND MORE DAYS TO WAIT FOR TOPS TO OCCUR. KEEP IN MIND THE MARKET MAKER IS SELLING HIS SHARES ALWAYS BEFORE YOURS!
To fight the greed boiling in your blood. Ask yourself when this big bull is over and things are collapsing, DID YOU DO WELL INVESTING AND SCALING OUT such that you insured a wealth creating liquidity event for your family.
In 1999 I sold off $98,000 shares of Cohu. I announced my complete sell off and early removal from watching stocks. I detoxed and quit watching the adrenalin swings of the market. I was completely out by 43 , and Cohu continued to clim to $61.75, Leaving millions on the table.
I never looked back or felt bad about that, I was just elated that I had experienced my first long run and huge wealth creating event for myself and wife. I literally Thanked Ted Warren in my prayers for his sharing of what really can happen with investolating. After taxes were paid, I had funds to buy into two more dealerships and move to a nicer house.
I hope this doesn't sound like bragging. I share this info to confirm it can and does happen. I seldom repeat it. It is only appropriate here on Ted's Thread.
With that set up and story of confirmation regarding Ted's lessons of the market, I'd like to share a small cap stock that fulfills my "Pays a dividend" requirement. It also has record breaking fundamentals and is very stockholder friendly. They do not have options employee plans that dilute an investor's position. As they grow their earnings, they consistently increase the dividend fractionally. Just this week they increased the annual dividend from 12 cents to 13 cents. That has resulted in three new ATH's just this week. ARMANINO FOODS, symbol AMNF.
Ted would say You can buy with confidence upon a break out from a consolidation. I'd point out that the failed breakout which happened during the Covid shut down of restaurants, really hurt AMNF. They reduced the dividend and took those funds to pay off all their debt. Historically unusual debt!, that was the result of a new cooking process for their many items. They pledged a return to the 12 cent dividend with a return of profitability. They were not only good to their word, but they have now increased it a penny and noted they are debt free and the benefits of the new equipment are expected to show the rest of this year.
Full disclosure, I've accumulated a large position in AMNF, and have owned it for some 10 years.
AMNF has had a long consolidation at 2. If Ted's old rule of six times a very long consolidation - a potential of 12 is conservative. If one looks at the 6 year consolidation at 3, it could well be pushing a price of 15, over the very long term.
In between they are paying a dividend of 3.5%, which they seem to try to keep in that range.
Here is the chart, and note its breakout has evolved in just this week:
Chart update : stockcharts.com
Three new highs this week and a close on the top tick.
This little jewel may just get some awareness.
I would not be surprised to see this really pop.
They are just so stockholder friendly.
My bet is they're finding that they have pricing power along with all the other food brands.
A four year consolidation at 2 ish, a breakout to $3.79 that failed with a one year decline back to 2.00 ish. Followed by a dividend increase on record sales and earnings (if you back out the PPP government stimulus).
Ted warren would say this long consolidation should be good for a 6 bagger. Take it to 12.00?
This may well be a wild ride!
Hold on Investolaters!
Bob |
