Buffett Buffet

I’m in the midst of doing some backtesting on the garbage stocks that I mentioned in my January 29th blog. I wanted to get these results out sooner, but Dimitri ordered the wrong software (I blame everything on him) and we just got the new software installed last night. I’m hoping to get some results out to you either later day or tomorrow. But just so you don’t suffer any withdrawal symptoms, I’ve taken a few moments off for a mini market update.

Today it was reported that the Oracle of Omaha is snacking on Kraft Foods. A recent SEC filing shows that Mr. Buffett has already gobbled up 8.6% of the company. Consumer non-cyclicals (Kraft’s sector) have been on diet recently but today’s report caused them all to jump 5-6%. Looks like this sector might be turning around. Besides Kraft (KFT), today’s notables are Smuckers (SJM), Heinz (HNZ), and Hormel (HRL). Even Campbells (CPB) is looking mm-mm good. It’s currently leading the pack percentage-wise. Although these aren’t the sexiest stocks on the dinner table, they do pay rather tasty dividends in the range of 2-4%.

Metals and mining stocks are taking a breather from their recent run-ups. Tech is getting trimmed yet again with the semiconductor and software industries suffering the most. These stocks have been going down the toilet for a while, and the charts don’t show any signs of a turnaround. Look at Cisco (CSCO) and Cray (CRAY) and you’ll see what I mean. One of the few bright spots in the sector is Brocade (BRCD) which yesterday reported earnings and guidance in-line with estimates. Analysts deemed it a smashing achievement considering this unsavory economic climate. The stock is up over 12% on the day on heavy volume, handily breaking its $7 resistance level. You might want to check it out.

In other stocks, Cortex Pharmaceuticals (COR), Gastar Exploration (GST), Cell Genesys (CEGE) and Superior Essex (SPSX) all broke out of their bases today, but only COR and CEGE are trading on heavier than normal volumes. CEGE rose 42% due to a positive clinical trial report on one of their prostate cancer vaccines. If you want to jump on the Cell Genesys bandwagon, I’d wait a few days for the buying frenzy to settle down. This stock has been on a steady decline since its all-time high of nearly $62 in 2000. Yesterday it was trading below $2, so I wouldn’t say it’s back on the road to recovery just yet. Maybe when it breaks its 200dma at $3 it will be more appetizing…

Okay. Dimitri’s throwing me some anxious looks. Better get back to the drawing board before he starts mumbling epithets in Russian under his breath. But first, some lunch. All this talk about food has made me hungry!

Posted by Dr. Kris at 12:37pm PST

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