-Executive Summary-

• Higher again!
• See our summary of events and stock ideas below… Federal Reserve, Oracle, Inc., and many others…
• Here’s our SECOND Stock Market Companion Customer Testimony video.  Big “Thank You” to subscriber-friend, “Mike” for his exciting REAL story from the jungle of South America… Don’t miss it!  Special thanks also to video company, OTM Productions.  For those looking for an excellent and diligent video team, Jamie and Matt are the BEST.  Here’s their website – OTM Productions, Inc.
  

– Stock Market Companion – Current Holdings –

If the above “Current Holdings” table is empty it means that we are not holding ANY stocks at this time and that we are therefore 100% in cash.

– Markets “At a Glance” –

(Please scroll down to the end of the report to see your favorite benchmarks – Dollar, Oil, Gold … closing prices and daily direction.)

– Market Trends –

*Summary of terms from Trader Vic II-Principles of Professional Speculation (pg. 140-141)
*_________* Represents a change in trend rating.

– Market Perspectives –

For your added perspective, we’ve included this chart of the broader market (Successful stock investors develop and start with a minds-eye view of the broader market and keep it clear) –

1. SMC SP-500 ETF Daily Chart (Click to open helpful chart in a separate browser window).

– Today’s Highlights –

SHORT TERM values in the stock market are heavily influenced by interest rate PERCEPTIONS and realities.  Today, the Philadelphia Federal Reserve Bank president, Mr. Plosser made comments that made investors nervous –

He proposes that the Federal Reserve steer to a “normalized” monetary policy, which involves raising interest rates and shrinking the Federal Reserve’s balance sheet at the same time.  Click here for the details of his speech, which is an excellent read and a great lesson for those using our work to teach fundamentals of finance – in today’s world.

He is the second Federal Reserve Bank President who we have published about within the last week, ushering in the idea that the end of accommodating monetary policy may be near.

To give you an idea of how difficult the market is today, you do not need to look any further than the market’s reaction to Oracle, Inc.’s earnings.  Here are the details –

1. Oracle reported Q3 earnings of $0.54/share and gave UPSIDE guidance for next quarter for earnings to be between $0.65-0.69/share.   Let’s make an “over the thumb” annual earnings estimate of 4 times 0.58 = $2.32/share earnings for the year (approximately).
2. Take today’s closing price of $32.64 and divide it by $2.32 and you arrive at the Price / Earnings ratio for Orcle of approx. = 14
3. Gross revenues for the company have grown by 36.9% for the year.
4. A P/E of 14 for a company that has grown revenues at 36.9% and that is guiding higher for the next quarter should be a SLAM DUNK good investment.  A significant brokerage company thought so and gave the stock a $38/share target.  That would be a 16% gain on today’s close.
5. BUT the stock opened at $33.74, jumped up above $34 and then SOLD OFF the entire day, down to $32.64.  Anyone buying on the big gap up today to $34/share, based on a brokers recommendation would be wondering what happened.  See our note below on Nexxus Lighting, that’s its best to WAIT AFTER a gap up before buying shares (Which we DIDN’T do with Nexxus Lighting… we fully admit and humble ourselves.)

– Story-Stock Investing –

We have purchased these stocks over the past week or so – AFTER pulling our shares January on the first signs of trouble in Egypt and avoiding the pullback in the market that has taken shares of many excellent companies down hard –

1. Nexxus Lighting – We bought this one based on an upcoming new product line launch of LED lighting at Lowes home improvement stores this June.  Energy costs are high and people can save a lot of money with these products over time.  Nexxus is a tiny company, so we only bought a few shares.  On a stock like this, we buy only a few shares, if the stock stabilizes and builds a nice lateral consolidation and appears to be ready to go higher, we then add to our shares to get some real bang for the buck.  Right now, the stock is behaving like people are still taking their profits from the big gap up on the news of the product launch.  We may get stopped out on this one if the stock doesn’t shape up.  Today we feel like we pushed the buy button too soon on this one.  The stock moved nicely higher in the afternoon after our purchase, but has since pulled back and shown resilience … until today.  Phooey.  This situation reminds us to WAIT after a gap up to buy shares.

2. Dell, Inc. – Michael Dell – CEO and founder bought over a $150 million of the stock at the market price last Wednesday – Friday, at around $14.20/share.  He’s been working hard at turning the company around and as far as we can tell – what he puts his mind to is generally a strong success.  Yesterday’s earnings revelations at Best Buy, Inc. however, tell us that tablet pc’s and smart phones are selling strongly and laptop sales are dropping.  Dell sells PC’s from their website and tablet pc’s and smart phones (not made by Dell).  So the picture is a bit cloudy.  We’ll see if over time the Dell stock can move higher.  Their earnings are great and Mr. Dell’s own purchases are a good catalyst for moving the stock higher.

3. Nvidia, Inc.  – Nvidia makes the micro-processors that power a lot of smart phones + graphic chip sets that make a lot of computer gamers excited and has pulled back -29% from its recent highs at 26.  This is the first MAJOR pullback in the stock following its blistering run up from last September, and it has a great formation coming off its 200 day moving average.  Buying the first major pullback on a very favorable stock in a very favorable market, off it’s 200 day moving average on big volume is normally a rewarding idea.  This should be a nice, middle of the fairway shot that attracts institutional buyers who missed the first move higher.  We’ll see.

4. Silicon Image, Inc. – Makes innovative chips to connect smart phones and tablets to big screens.  We are going to go ahead and say it …  If they can get some traction … the sky is the limit on a stock with 70 million shares outstanding, little to no debt, and earnings and margins improving.  They just landed the business for the Samsung Galaxy smart phone that we see for sale on the Dell website.  Their new MHL chip line is only now reaching the market.  For those of you who haven’t checked out their website, here it is again. Click on the “Experience it” link on the banner picture on the home page to see what they do with their products.  Under the “About Us” drop-down menu, you can see the investors relation link, which has their financial information… they have built up nice cash reserves over the last year on positive earnings growth.  They are also a small-cap company, which can be very exciting if their products meet a real need in the market at the right time and price point.

After such a heavy shopping spree over the last week, we didn’t want to over do it with a purchase of Zagg, Inc. (ZAGG) yesterday at the 200 day moving average.  They jumped up today +16%.  Our math tells us that the stock is selling for 12x earnings … a real discount for a company with innovative products and a strong growth curve.  We’ll see what next week brings.

Please remember – at the Stock Market Companion we do not and cannot give individual investment advice. According to the State of Washington RCW 21.20.005 the Stock Market Companion is not a Registered Financial Advisor and we do not render any advice on the basis of the specific investment situation of a particular individual. This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should our Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  Please seek the council of a broker or other licensed investment professional for accurate pricing and concerning the suitability of all investments that you may be considering. Disclosure : You understand that the Stock Market Companion holds positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.

– Stock Market Companion – Performance –

Please click on this chart to see the Stock Market Companion 15MinuteStocks stock performance versus the SP-500.  It will open in a separate browser window.
* Gains (losses) do not include brokerage fees.   Our returns are very strong … BUT …  WE have to remind everyone just like all other financial sites in America – Past Performance is No Guarantee of Future Returns.  Unlike others however, our objective is to teach you to be able to make these types of strong returns On Your Own.

All of the investments – stocks, entries, and exits are listed on our Stock Market Companion Watchlist at the bottom of the spreadsheet, in the section labelled Former Holdings.

– Benchmarks “At a Glance” –

Data Source : Financial Visualizations Inc.

Signing-Off for Today,

Your -Stock Market Companion

** Stock Market Companion Disclaimer **

The Stock Market Companion (SMC) Market Update and Watchlist are published documents to subscribers that show how we (SMC) are viewing the markets and what we are watching, investing in or selling today.  This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should this Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  You understand that the Stock Market Companion holds positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.

Furthermore, the Stock Market Companion, Inc. is a content provider and publisher and not a registered broker-dealer or licensed investment professional.  Our intent is to publish very accurate market information for an audience of subscribers (1000+ subscribers).  By accessing the Stock Market Companion website and/or using the Stock Market Companion products and services such as this Market Update and accompanying Watchlist, you understand and agree that the material provided in the Stock Market Companion products and services is for informational and educational purposes only, and that no mention of a particular security in a Stock Market Companion product or service constitutes a recommendation to buy, sell, or hold that or any other security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.  To the extent any of the information contained in any Stock Market Companion product or service may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.  Before selling or buying any stock or other investment you should consult with a qualified broker or other financial professional to verify pricing information and to solicit advice as to the appropriateness of a given transaction or investment.