Markets end Friday higher, marking
the 5th straight week they had done so, but if you’re like your
portfolio has plateaued after the dizzying gains of October. But don’t worry
there is still plenty of opportunity out there.
Last
week I made recommendations on two stocks that I thought had a decent chance of
revitalizing your portfolio, Melco Crown Entertainment and Capital One. Both
stocks ended the week higher but truth be told neither saw the explosive gains
I had hoped.
Melco
Crown is an Asian based casino company whose stock I thought would surge on
Tuesday after the company announced earnings. So I bought the stock on Monday
at 33.72 a share and waited for it to shoot up. 3rd Quarter earnings
were not that bad, revenue for the third quarter of 2013 was $1.252 billion, a
sizeable increase over last years $1.01 billion. Total profit also increased to
$179.4 million, or $0.33 per share, from $104.9 million, or $0.19 per share.
It
was these type of earnings that I hoped would send my stock up yet it didn’t
shares were down .59% on Tuesday, following the news. But the stock jumped
3.37% on Wednesday and just as I was starting to think that my gamble was
paying off when Thursday came around and proved to be the worst day I had ever
had on the Stock market. Melco Crown stock fell 5%, adding on to the massive
losses I took on Qualcomm and Spirit stock that day. The stock recovered
slightly on Friday gaining 2.9%, and I managed to end the week with a slight
gain on Melco Crown stock but these gains were light and insignificant, falling
short of my expectations.
My
recommendation for Melco Crown stock is to avoid it, the company is massively
overvalued, trading at over 51 times earnings and the stock has the volatility
of a penny stock. If you are looking at investing into casino’s there are a
number of better options such as Las Vegas Sands and MGM.
Another
stock I hoped would revitalize my portfolio was Capital One. I bought this
stock at 69.58 a share, and truly this stock has been flat all week rising only
.17%. But this should not discourage you, considering this stock is undervalued
and unlike Melco Crown not prone to volatility. My recommendation for Capital
One stock is to buy and hold, considering that eventually the stock will rise
to fit into the company’s evaluation.
In
the beginning of this post I mentioned that there are still a number of opportunities
out there to make money, and apparently some people saw Twitter as an opportunity.
Twitters
market debut on Thursday was the number one story on the market that day, and
it was a resounding success. Stock was initially offered at $26 a share and
closed 72% higher at above $44 a share. But this market debut gives Twitter an
evaluation of over $22 billion, why does a company that has not made a cent in
the last three years deserve an evaluation of over $20 billion? The answer to
that is simple, it doesn’t.
The
stock is tremendously over valued and the stock sunk 7.2% on Friday, after a
number of analysts on Wall Street downgraded the stock from buy to sell, and
many voiced their concern that the stock was overvalued.
My
recommendation for Twitter is to avoid buying into social media in general, but
if you are set on buying into Twitter stock at least wait a few weeks until the
stocks drops to the mid 30’s, at least at this price you might benefit from a
rally later on.
In
my opinion much better alternative to Twitter is Ford. Unlike Twitter Ford is
undervalued, trading at just under 12 times earnings (less than the market
average of 15). I bought Ford stock on Wednesday at 16.91 a share, which was a
mistake since the stock fell over 2% on Thursday alongside everything else, but
recovered somewhat on Friday, and I’m still currently in the red on this
investment but even so Ford is a recovering company with good numbers and a
cheap evaluation. So my evaluation for this stock is to buy and hold.
I would ask that if you may please
leave comments about how you liked the article and any suggestions you have
about how to make it better. Also if you enjoyed this article I would ask if
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of mouth.
I will be posting an article every
weekend and looking back at the political and economic events of that week,
both personally impacting events and suggestions about my opinions on the
future of the market
