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Stock picks, some with decent insider buying

J.W. Cotton
0 Comments| December 18, 2009

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The stock market surprisingly held in last week against the backdrop of the Dubai default possibility. Keep in mind that the Dow has risen 61% since March 9, 2009, when it got down to 6500 (and now it is about 10,500)…without any significant correction. As we have been saying lately, we would be locking in those handsome profits before they go away, which is possible, and moving into stocks that are just beginning to move. On a positive note, we think the solar rally will continue, even as other stocks may start correcting.

Many of our November 16, 2009, solar stock picks are up strongly in just three weeks –First Solar (NASDAQ:FSLR, Stock Forum) up 10%, Canadian Solar (NASDAQ: CSIQ, Stock Forum) up 28%, Yingli Green Energy (NYSE: YGE, Stock Forum) up 14%, LDK Solar (NYSE: LDK, Stock Forum) up 38% and Solarfun (NASDAQ: SOLF, Stock Forum) up 27%. The laggards that we would still be buying are JA Solar (NASDAQ: JASO, Stock Forum) 4.40 and Sunpower (NASDAQ: SPWRA, Stock Forum) 22.31. We have immediate sell ratings on the following stocks with significant heavy insider selling and at the high end of their ranges: Schlumberger (NYSE: SLB, Stock Forum) 65.55 and MercardoLibre (NASDAQ: MELI, Stock Forum) 51.69. We also would be taking profits on stocks like Apple (NASDAQ: AAPL, Stock Forum) 193.32, Priceline (NASDAQ: PCLN, Stock Forum) 220.72, Baidu (NASDAQ: BIDU, Stock Forum) 425.32 and Amazon.com (NASDAQ: AMZN, Stock Forum) 137.58, which have been in a feeding frenzy lately…are real high, volatile, and partly at these levels because of short covering, which leaves a vacuum beneath them if they begin to sell off.

The stock picks below are mostly at low historical prices, and with good charts. CASA, OPTV and CLFC have some decent insider buying. Our normal buying strategy is to buy 40% of a particular stock now and buy 30% more on each 20% decline from our original buy price…for good entry prices.

Our stock picks (As Friday, December 4, 2009 closing prices): Under Armour (US) 27.24; Kimko Realty (KIM) 13.59; Franklin Street Properties (FSP) 12.82; Stanley Furniture (STLY) 8.82; Center Financial (CLFC) 4.61; Tianyin Pharm. * (TPI) 4.30; PMI Group (Again) (PMI) 2.17; Rentech (Again) (RTK) 1.55. This Market Letter was published on December 7, 2009, at 8:20 AM.

* Cotton’s “Stock of the Week”

** We hold a position in the stock or option

GO TO STOCKCHARTS.COM TO VIEW THE ABOVE STOCK PICKS

YOU CAN EASILY LOSE 100% OF YOUR MONEY TRADING OPTIONS



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