The initial group:
NFLX 337.38 -17.31And a couple of "special situations" I started talking about on the following Monday:
TWTR 42.96 -1.09
XBI 132.28 -6.90
FB 57.18 -2.31
P 27.82 -2.03
TSLA 207.52Special because, in Tesla's case the $203.00 support seemed really important and in First Solar's case because, unlike most of the rest of the momo's, the stock had actually gained +25% over the prior month.
FSLR 68.00
Here's last week's performance via Yahoo Finance:
Not too impressive Mr. analyst guy.
Tesla dipped five bucks under support on Friday before rallying to close at $203.78 and remains the most interesting of the bunch. The rate of descent in the biotechs (XBI and IBB) has slowed but they are still dangerous, tradable for the nimble only.
Also, I have to repeat, we are still in a bull market, although you would be excused for believing otherwise based on the performance of the above group of misfits.
Here's today's Barron's cover story:
Flying Too High: LinkedIn, Twitter, NetSuite
The stock market's highfliers are falling from the sky, led by Internet and biotechnology stocks. The New York Stock Exchange Arca Biotech index is off 19% from its high seven weeks ago, while the Nasdaq Internet index is down 17% from its March peak. The air has come out of stocks like Twitter (ticker: TWTR), which is off 43% to $40 from its late 2013 high, and the 3-D printing group, the subject of a bearish Barron's cover story last month, is down sharply (see Follow-Up story).Five months ago, Barron's warned about froth in the tech sector and other pricey pockets in a cover story ("Bubble Trouble?" Nov. 18, 2013), while arguing that much of the rest of the stock market looked fine. We were a little early with the bubble call, but since then, many inflated techs have come down; the group of 11 highfliers that we flagged are off an average of 10.9%. Meanwhile, a group of more value-oriented stocks that Barron's argued looked appealing has gained an average of 4.3%, above the 1.8% rise in the Standard & Poor's 500.
Even with the selloff in the highfliers, most look richly priced because of modest earnings or outright losses (see table). A nicely profitable Facebook (FB) is an exception. Moreover, many techs continue to get valued using a dubious profit measure that ignores often enormous stock-based compensation. Facebook, Twitter, LinkedIn (LNKD), Zillow (Z), and Salesforce.com (CRM) are prime offenders.While there aren't a lot of bargains in the stock market right now -- only a small fraction of the S&P 500 trades for less than 10 times this year's estimated profits -- most sectors still look appealing. "My guess here is that we're having a valuation adjustment in one small part of the market, in the highflying momentum stocks that got ahead of themselves and are now correcting," says Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "I think this is more of a buying opportunity."An optimistic Paulsen cites several factors, including stronger-than-expected U.S. economic reports, resiliency among economically sensitive stocks, and strength in emerging-market equities. Paulsen thinks U.S. real economic growth could average 3.5% this year in spite of a weather-depressed start in the first quarter.Down 1.5% so far this year at 1820, the S&P trades for less than 16 times estimated 2014 operating earnings, not bad in a low-rate environment with a 2.6% yield on the 10-year Treasury. The Dow Jones Industrial Average is faring worse, with a year-to-date decline of 3%. The index's distinctive price-weighted format -- in which the highest priced issues dominate -- has been hurt because the Dow's two biggest percentage losers this year, Visa (V) and Goldman Sachs (GS), are two of the three highest-priced issues. The Dow trades for a more reasonable 13 times estimated 2014 profits with four components, JPMorgan Chase (JPM), Goldman, Travelers (TRV), and IBM (IBM), carrying forward price/earnings ratios of 10 or less....MORE
