Yesterday, I wrote about how the stocks that I chose on the blog did up to the end of the year. Today, I want to write about what to do with those stocks if you still have them (or are thinking of purchasing them).
First the truly easy choices:
Shamir (SHAMIR) made an agreement to sell itself to another company. If you are not already out, there is no point to holding further.
Panera puts were recommended to be purchased before the end of last year. Most likely, it is too late to do that trade. If you bought them, you should look to sell during the first few trading days of 2011.
Lighting Science (LSCG) was recommended only a few weeks ago. Nothing has changed here.
Now for the less clear choices:
Caribou Coffee may have a bright future, but I no longer recommend it. I think that the big rise has already happened.
Jack in the Box (JACK) is the one stock I recommended last year that did not rise. Nevertheless, I think it remains a compelling buy. I owuld hold it.
American Capital (ACAS) is up over 50% from where it was when i recommended it. It is no longer likely to be a home run. Nevertheless, I think that there remains a nice up side to the stock. Still, one needs to be vigillant here. If the stock declines below $7.15, I would take the profits.
Armanino Foods (AMNF.PK) remains one of my favorites. While this stock also has risen over 50% since I first mentioned it, it also remains greatly undervalued. My one year target for the stock is $1.30. In the interim, it pays over a 5% dividend at the current price.
Brandywine Realty Trust (BDN) is another company which I would continue to hold. It pays a nice dividend, and over the next few years, some of its superior projects and holdings should begin generating much bigger profits. It is a long term play, but there should be a nice payoff.
Range Resources (RRC) is another I would continue to hold. The likely continued development of the Marcellus shale will bring big benefits to this company.
Gasfrac Energy Services (GFS:CA or GFS.TO) should come into its own this year. The results of the massive capital investment that has been underway for the last year should become apparent in 2011. Both revenues and profits should soar. Environmentalist pressure on hydraulic fracturing should also help GasFrac immensely.
Entropic Communications -- If you followed my initial advice, you no longer own this stock, having sold at 10 in mid December. Despite this, i still think that Entropic has a nice future, at least for the first half of 2011. This is one stock, however, where owning it should be coupled with the sale of covered calls in order to reduce the risk. it is not a stock for those without courage. Putting it another way, it is a speculative holding.
The last trade i recommended in 2011 was investment in municipal bond CEFs. Right now, it is possible to get over 8% return on your money, tax free. The two main risks of these funds are a rise in short term rates and defaults by municipalities or states. Given what the Fed has said, it is unlikely that we will see any short term interest rate rise in the next six months. Defaults or the threat of defaults are another matter. I do not expect a wholesale meltdown of the muni market which, by the way, would most likely kill every investment in securities. The fear of defaults will keep rising, however. This fear could bring down the value of the funds by forcing the rates on munibonds to rise. For the moment, I would keep the investments here, but watch them very closely.
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