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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Ron McKinnon who wrote (49718)	11/6/2003 2:11:27 PM
From: DanZ	Read Replies (2) \| Respond to of 53068

I just wanted to thank everyone who provided feedback on the Z Portfolio, especially those of you who had nice things to say about me. I don't always reply to each and every comment here, but please know that I read them and it means a lot to me. It would be nice to get more participation, but it looks like that may not happen. Those who have participated in the Z Portfolio can decide if we want to continue it next year with the expectation that there probably won't be any new participants. I have some comments about that but will wait until later to discuss them. Anybody want to talk about this now, or maybe wait until closer to the end of the year? Please note that the time I spend updating the portfolio has absolutely nothing to do with whether I would recommend continuing it. Regarding my position in TOY, here are some reasons that I have been buying the stock lately. Seasonal trends: The stock has been up in November 15 out of the last 21 years. It was down 5 times and unchanged once. Market trends: The S&P 500 and Retail Index, of which TOY is a constituent are in up trends and have even broken out of short term resistance the last few days. Relative strength: TOY historically tracks the Retail index, but obviously goes through periods of underperformane and overperformance. Whenever it gets too far out of line with the Retail Index, it has corrected by making a move in the other direction to come back in line. Often times it overshoots and goes from underperforming to outperforming. Last Wednesday and Thursday, it looks like one or more funds blew out of the stock and hammered it to the point where it was significantly underperforming the Retail Index. The stock has made up some of that difference, but is still lagging by about 10%. If the Retail Index continues its advance, I believe that TOY will make up that discrepancy by advancing at least 10% from 13. That would put the stock back up to about 14.30 where it has seen stronger short term resistance. Support is at about 12.90 on both the daily and weekly charts. This looks like a good trade considering all factors, but of course I might be wrong. One final note: TOY releases their earnings on Nov 17. The company has beaten the estimate in four of the last five quarters, and met it once. The question for the current quarter is whether any store closures in California (due to the wildfires) will affect sales and earnings in the third quarter. I don't think it will because only a few stores were affected and they weren't closed long enough (a day or two is what I heard). The company hasn't changed their guidance since May and one analyst actually increased their estimate two weeks ago. My guess is that TOY will at least meet the 0.05 loss estimate or beat it by a penny or two.