June 26, 2013- Identifying Stocks Still Trading At Oversold Levels Despite 5% Index Rally

Note: This is a personal opinion.  Please be guided accordingly.
 
We made an ominous short term bottom at 5,678.73 yesterday.  It’s funny that we really made a stop at 5-6-7-8.  For some odd reason, the gods must be playing dice with us.  
 
So here are the results purely based on price performance alone.  We tabulated 
 
1.) Largest % decliners ever since Mr. Ben Bernanke signalled tapering.  From May 22, 2013 until June 25, 2013, the following stocks proved the most battered while the following most resilient
 
May 22 Closing Price of PSEI – 7,385.07
June 25 Lowest Price of PSEI – 5,678.73
Index Decline of 23.11% 
Most Resilient (There was no hiding place.  When the market tanked 23%, everything fell.  We identified companies whose decline was less than the index.  During these times, the only place to hide was cash where you don’t go down.)
SMC2A, JFC, GLO, TEL proved most resilient (just see the excel file attached) – falling 4%, 11%, 15%,16% during these times.
 
Most Battered (There were plenty – we list the 30% decliners since May 22)
  % Decline after Bernanke’s Hint of Taper (5/22-6/25)
AEV -30%
MBT -31%
PNB -31%
SMPH -31%
RCB -31%
FLI -31%
TA -32%
LTG -32%
PBB -32%
DNL -32%
MEG -32%
SECB -33%
BEL -34%
FGEN -34%
FPH -35%
BLOOM -36%
PX -38%
MCP -43%
COSCO -51%
 
 
From this list, we identified as well the companies that were battered the most these last 5 days (June 20-June 25)
 
Companies such as MPI, MWC, SECB, LTG, MEG were all thrown to the trash bin.  Similarly, we also saw a lot of bouncing action and we show below the company that recovered the most (assigning a recovery spread.) 
Inline image 1
 
 
FPH, MPI, SECB, FLI, AEV, EEI, MWC,JGS,LTG exhibited the strongest bounces, making their recovery spreads lesser.  (Thus follow through moves may be lesser, except for SECB,EEI LTG and MWC which have a further 4-7% bounce to recover from).
  % Bounce from Low Recovery Spread
FPH 17.65% -3.28%
MPI 17.61% 0.94%
SECB 17.19% -7.96%
FLI 15.89% -2.48%
AEV 14.88% -1.09%
EEI 14.59% -6.12%
MWC 13.80% -5.79%
JGS 13.53% -3.14%
LTG 13.33% -4.85%
TA 12.63% -4.04%
COSCO 12.63% -8.17%
DMC 12.36% -2.88%
DNL 12.07% -11.01%
MEG 11.27% -11.48%
SMDC 11.21% -3.95%
RFM 11.16% -4.15%
MER 11.11% -2.66%
RCB 11.11% -4.99%
URC 10.79% 0.27%
EDC 10.53% -6.73%
SMPH 10.49% -1.78%
ALI 10.27% 0.64%
PX 10.23% -15.95%
FGEN 10.19% -4.94%
MBT 10.05% -8.10%
PGOLD 9.91% -3.26%
JFC 9.86% -0.75%
AGI 9.63% -5.82%
SM 9.38% -4.03%
BEL 8.84% -13.10%
 
Kindly check the excel file and filter it as you please.
We noticed that all the casinos like MCP,BEL and BLOOM have fallen to dirt cheap EV/EBITDA levels.  Not only have they fallen the most since May 22 speech, they have also not yet recovered (with recovery spreads of at least 13% respectively.)  We believe they have fallen more than the market particularly as the gaming tax between Pagcor and the licensees spurred the decline.  We don’t believe that the casinos’ EBITDA will decline such that aggressive clients can actually start buying MCP BEL and BLOOM for the trading opportunity presented. 
 
Among the trash list of the market, we believe MEG,VLL and MBT to benefit further as they have recovery spreads of at least 8%.  
DNL and PIP also have high recovery spreads but small cap stocks may not be favored.  
Notice too that we will not recommend PX and SCC despite declining a lot largely because of lower gold and coal prices respectively. 
 
Recovery Spreads since June 20-June 25, 2013
MCP -25.68%
BLOOM -18.65%
PX -15.95%
PBB -14.39%
VLL -14.28%
BEL -13.10%
PIP -12.11%
MEG -11.48%
DNL -11.01%
SCC -8.57%
COSCO -8.17%
MBT -8.10%

Lots of trading opportunities,

-Faceless Trader

(If you’re interested for timely posts, just message me facelesstrader@gmail.com and I’ll be happy to respond.  Thanks.)

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