BB06, by the way, I bought 3000 PCTI in the mid $4.50s near the close today as well. Dividend announcement after the close makes for a nice yield.
Comments by VZ, PLXS and CLS all suggest wireless capX spending was flat to down the 1st Q y/y, but will be up each Q sequentially this year and up y/y for the rest of the year. Now these are big macro numbers and so there is not a direct relationship to PCTI, but does increase the odds that PCTI will see some of that increased CapX spend-hopefully, with new products and services get an increasing share. Since wireless build out is still only in the 4th or 5th inning, 5G testing will start next year, the combination of: antennas, analytics and services should be good businesses to own over the next 1-2 years.
If current mgt doesn't increase sales and earnings, another company or financial buyer will buy out the business, at a higher price, to get higher returns out of those businesses.
Yes, IBD publisher is basically a "momentum" guy. However, on stocks that I have a high conviction on I have "core" shares and "trading" shares. The "core" stay in the portfolio and the "trading" shares go when the RSIs get get over 70.
Since it my view that negative interest rates are a license for fiscal stimulus, whomever wins the White House will increase spending for:
4)In the case of Trump, probably increase tariffs as a negociating tool
Given that stock ownership, as a % of the population, by Americans is at a 19 year low (52%) according to Gallup (2007 it was 65%), the odds of the market melting up in the next 18 months increases as a bullish "consensus" will permeate market psychology when it "understands" that worldwide monetary and fiscal stimulus is going to lead to large S&P 500 earnings increases for 2017 and 2018.
Although I'm cautious for the next few weeks to a couple months-DXY relative strength and the risk of large Chinese Yuan devaluation-S&P 500 2500-3000 is in the cards over the next 18 months.
Sold both my RF (RSI 77) and KEY (RSI 75) for small gains and bought some PCTI near the close. Both RF&KEY have large oil exposure according to a Reuters article out today which helped in making my decision. Commandor doesn't your philosophy of taking gains on high RSI stocks run counter to IBD which believes one should buy strength?
M2 flat last two weeks, DXY double bottom around 93.90 the last few days-looks to be heading back up over 95 to me-which will take stocks and commodities down. Time to take gains on high (greater than 70) RSI stocks.
On a different subject, much has been made recently of China' s improving number/outlook etc. It is my view that the March improvement is:
1)Coming off a very slow FEB when the country was shut down for 10 days of holidays
2)Seasonal bump as real estate suppliers-steel, cement, copper industries-ramping up for their spring/summer building season that is benefiting from government stimulus
What I'm getting at is the sustainability of China's "rebound"-I have doubts. All the while the PBOC has been injecting massive liquidity-which should be sending the currency down but the government is keeping it up to make the shorts cover. Bottom line, I expect the run of "positive" macro-data out of China to disapate by June/July. At that time, PBOCs continuing liquidity injections and soft macro-data should put pressure on China to devalue their currency down to 7.25-7.50/$ vs about 6.50 today.
That would export deflation around the world and shock the current reflation trade into a massive "grab for liquidity" sell off. I'm net/net raising cash-only buying stocks that are absolutely cheap that will benefit from long lasing themes-such as wireless and broadband build outs.
I'm probably a couple months early in my concern, but it suits my notions of reward/risk. Of course, if the FED continues to add liquidity in all the monetary aggregates I look at, I will be inclined to buy more that I would have.
If I'm correct on China, the policy responses will be more central bank easing and fiscal stimulus-putting the reflation trade back in play-but the S&P 500 may start from a level 200 points below from whatever levels it was at just before the "deflation" scare.
DXY got under 94 today-getting close to the 9 month low of 93.63 of 4/12/16. Stocks, commodities getting a bid, while bonds are selling off-all consistent with my view that the FED has to ease. Reinforcing the "ease' view is continuing soft macro-econ data. Today was soft housing starts and permits. Going back last week, retail sales for March were very soft with 9/13 catagories down y/y.
Given the strong run up since 2/11-I think it prudent to take gains on stocks with RSIs over 70.
But could be a buyer on Friday if the monetary aggregates show more FED easing.
Only when buying, at the end of the year, to take advantage of tax-loss selling My "mechanics" are more along the lines of buying RSI's below 30 and taking gains when RSI's get above 70. Given recent strength in gold/silver stocks (RSIs above 70)-I have been taking some gains.
After what are expected to be soft 1st Qs, PCTI and MRVC are my favorites. WSTL has been "bottoming" in the $1.13-$1.15 area for weeks, any positive news sends it back to the $1.40s-where it spiked a few months ago. However, I'm looking to hold all these stocks for the next 12-18 months, in anticipation of 50-200% moves.
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Comments made during ADTN's CC, suggest US broadband buildout is being led by T and VZ. This is good news for:PCTI, WSTL, MRVC, FNSR, LITE, NPTN, OCLR, MIFI to name a few. CAFE spending will not peak this year but will in 2017 or 2018. I'm looking for, at least, a 2 year ramp of wireless and wireline capX spending. Micro-cap tech has alot of companies that have been left for dead-doubles and triples are in the cards for some of them over the next 12-24 months.
Import prices, y/y x-fuel, were down 2.5% in March vs running over 3% most of last year. It has been my view that because the US has been importing deflation of 3% or so most of last year the the real FF rate was 3.25%-3.50%. With import prices less deflationary, the real FF rate has moved down 50 BPS.
As the year progresses, if the DXY continues down and oil prices continue up, the US will not be importing deflation, but inflation. So if interest rates rise less than import prices the real FF rate will go down-better for the economy and better for world GDP growth-which the IMF marked down again today.
This is all part of the "reflation trade" which should should put a bid under: industrials, materials, technology money center and regional banks. Money will come out of: bonds, utilities, consumer non durables.
Picked up some PCTI, the other day at $4.60 or about 2X cashflow for this year. PCTI, along with a number of other micro-cap tech should have very good returns-up 30-50%-starting later this year.
I get a kick out of Trump-just in the face of: political correctness, the press, republican establishment etc. He is the political Harry Callahan "Dirty Harry, Clint Eastwood movies" of our day. Good for him, the status quo needs to be shaken up.
Hi Commandor, Have you started buying any materials, industrials or tech small caps yet? Can we have a few names to start researching. Thanks.
I think interest rates are very close to bottoming-worldwide. Higher interest rates will be good for banks-especially regionals. If the FED continues on the path of adding liquidity, it is OK to raise the FF rate later this year because inflation will be moving higher, inflationary expectations will move higher, commodities will move higher and with increased fiscal spending world and US GDP estimates will start going up vs what will be a very weak 1st Q.
With a lower DXY, I like materials, industrials, tech especially small cap tech, oil, NG, gold, silver the whole reflation trade.
Ultimately, I am expecting, over the next 12-18 months, for the S&P 500 to get to 2500 and if inflation stays below 3% in the US and euro-zone, it will allow central banks to continue to "ease", governments to continue to fiscally stimulate-sending the S&P 500, in a buying panic to get to 3000 in 2018. The justification being earnings expectations of $150 X 20 PE.
Money will come out of bonds, into inflation hedges of which stocks are, until interest rates get to high. In my view, at this time, interest rates will normalize (real interest rates for 10yr bonds of 250-300 BPS) when inflation gets above and sustains above 3% in the US and the Euro-zone.
In in view, it is all on the FED. If they add enough liquidity for a long enough time: stocks, the US and the world economy will all get stronger. It is my view they can keep adding liquidity until there are no more negative interest rate bonds, currently around $7.5 trillion, trading and then have another 3-9 months of "easing" runway.
The FED came through this past week end 4/6. M2 up $69 billion, reverse repo down $101 billion and free bank reserves were up $131 billion. M2 10 week moving average annualized jumped from 7.2% to 9.1%. Although the balance sheet and M1 velocity were flat, if the above trends continue the DXY moves lower, commodities higher and US GDP higher-the reflation trade is "on".
Wow, this show pcti really is in the "leading age" of technology!
Oldsmobile: time to buy more pcti, surely? :-)
PS: worthless press releases go on.... They must have had a fantastic quarter...