Sunday, March 02, 2008

My thoughts on Georges Yared Stock Picks for 03.02.2008

EDITED TO ADD: CROX IS A SELL ..... see analysis below!!

From Georges Yared email entitled "5 Ways to Stagflation Proof Your Portfolio" -

"Fellow Investor,
The economy’s headed south, everyone agrees. But did you know, your stocks don’t have to go with it?
Fact is, you can make money on the way down, and you can make money on the way back up.
You see, for some companies—and their stake-holders—this is the moment of truth, the breakout point.
The time when innovation and growth pay off.
Let me show you how to protect your portfolio and LOVE the slowdown.
STEP #1Sidestepping Danger: The 75% Rule
The most vulnerable companies right now derive over 75% of their revenues domestically.
The safest at least 45%-50% of their revenues abroad.
Let’s take two excellent companies, Chipotle and Crocs. Chipotle’s overseas sales are nonexistent. It is entirely dependent on the U.S. consumer. It’s a great growth stock, but I don’t expect ANY growth here this year.
Chipotle’s a buy at half today’s price.
Crocs on the other hand sells its products in 13,000 outlets in the U.S.—but 19,000 in 90 other countries.
Crocs is a superb buy here—and its P/E of 10 makes it practically irresistible!
Amazon, Google and eBay are also diversified enough to keep growing through a recession, even a period of stagflation.
Cisco’s growth is only 10% tied to the U.S. Good news.
Caterpillar has guided higher—even though it expects U.S. sales to decline.
Shaw Group—we’ve talked about this nuclear plant management company’s big presence in China before—Shaw Group’s growth is mostly non-U.S.—and locked in for the next 5 years.
In Times Like THIS…
Lucky? A little. But there’s a very precise science to the art of finding GameChangers.
I was one of the first analysts to identify Google, Harley, Starbucks, Broadvision, Medtronic and Ciena. The list is longer than this, but you get the idea: big, big winners—1,000% to 7,000% profits—in companies that changed the game and grabbed huge, sustainable competitive advantages.
I call them GameChangers and…
…You Need Stocks Like THAT!
For more than 30 years, I’ve lived on the cutting edge of business innovation. Now I’m going to show you how to spot Wall Street’s next monster winners. "

Within the admail blurb, he makes the following statement: "Crocs is a superb buy here -- and its P/E of 10 makes it practically irresistible!" Let's see what the charts say. Is CROX really irresistible at this price? Or can it go lower, and lower still?


Monthly chart shows that since its IPO, it has lost 79% of its value in just 4 short months. February's trading activity was dominated by increasing selling pressure with no end in sight.

Weekly chart shows continued weakness, with no buy pattern evident on this timeframe.

Daily chart shows increasing selling pressure evident as bears gapped down the stop twice in the month of February, and the bulls did not have the strength to even make any attempts to try and close them. While Georges Yared thinks that a current P/E ratio of 10 is "irresistible", I say the charts are saying either be flat, or short on CROX. Beware of the value trap.

"Amazon, Google and eBay are also diversified enough to keep growing through a recession, even a period of stagflation."

Is Georges Yared right? Can they keep growing through a recession, even a period of stagflation? And is this a good time to buy these 3 companies? The monthly charts of each of these 3 companies say that the selling has NOT stopped, and that there is more downside to come.


Monthly chart shows increasing selling pressure. We have a 3 wave abc pattern into .886 fib retracement level. Downside target for this particular pattern is at the .786 fib target of $26.38 area.


Monthly chart shows that the market is retracing the whole move up from its IPO debut price. The minimum downside target I am looking for is at the .618 fib retracement level of $347.18 area.


Monthly chart shows continued weakness. Pattern suggests increased weakness, with lower low as downside target.

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