Quick-Hit Earnings Trades: What's Next for Us

June 4, 2009

When to Sell our Stocks

You explicitly told us when to buy, but you haven’t told us when to sell most of our Quick-Hit stocks. What gives?

The reason I haven’t told you to pull the trigger on some of our stocks is because they haven’t hit the sell targets we previously set for them. Our goal is still to lock in double-digit gains in a matter of weeks. Graham (GHM) and Marvel Entertainment (MVL) exploded past that mark right away, but we have to be more patient with the rest of our holdings. But don’t worry—I expect all of our companies will return at least 10% eventually.

For a complete list of sell targets, please refer to Tuesday’s installment of Quick-Hit Earnings Trades. This will tell you exactly what price you should look to exit your shares at.

Energy Sector Heating Up

Louis, I notice oil keeps moving up. Does this mean energy stocks are a good investment right now?

Absolutely! In fact, I think many commodity-related stocks are a good investment right now as the dollar declines. Crude oil is up, but so are precious metals like gold and copper as well as grains like corn and soybeans. That means companies trading in these goods have seen their bottom lines grow in kind.

Because 88% of the world’s commodities are priced in dollars—including crude oil, natural gas, soybeans, steel and gold among others—as the greenback slides, these commodities naturally inflate in price. With runaway spending in Washington and a national deficit that is pushing 15% of GDP, it’s hard to imagine the dollar doing anything but declining for the rest of the year. That makes commodity investments a great play for the next several months.

When peak energy demand hits this summer and the economic recovery in America drives up demand, you can expect oil prices—and energy stocks—to shoot even higher as a result.

Don’t Sell in May This Time

Do you believe in the old adage “sell in May and go away?”

Not normally, and certainly not this year. The seasonal strength of the market is due mostly to profit-taking and institutional money moving around. But the sad reality is that few hedge funds or brokerages have many profits to speak of so far in 2009, since the S&P 500 is up a measly 5% from December 31.

I think many factors are pointing to a bull market resurgence this summer that extends across the later half of this year. That means the people who get fully invested now are going to make the bulk of the profits during the economic recovery and subsequent surge on Wall Street.

I hope you’re one of these savvy traders!

What’s Next for Us?

Remember, keep an eye on the sell targets we set for our Quick-Hit Trades because the next installment of What’s Working on Wall Street Now won’t come out until Thursday, June 11. A stock can move a lot in just a week’s time, so it’s up to you to stay vigilant and exit at the best price.

But just because today is the final installment of Quick-Hits Earnings Trades, that doesn’t mean that I will be out of touch. Don’t forget that you can always get information in my Top Stories, Market Blog and other articles on NavellierGrowth.com. Check in with me often, because there’s always something new to learn. And as a Quantum Growth subscriber, you already have complete access to our Buy List and the latest on our trades.

Let me leave you with this final thought: While I love the pop stocks get during earnings season, I make sure that I work just as hard in between seasons so that I have the right tools and strategy when quarterly reports roll around once again. My innovative changes to Portfolio Grader is a perfect example of how my team of analysts and I work tirelessly to perfect our methods and keep our finger on the pulse of Wall Street. So stay tuned—I will have some exciting new features to share with you next Thursday.

That’s it for this week. Watch the sell targets we set for our Quick-Hit trades, and look to hear from me again on Thursday, June 11.

Until then,

Louis Navellier