Keep an eye on these stocks during this downturn
My first day back from vacation and the market takes its biggest hit in six years. Some of my high fliers such as Suntech Power (NYSE: STP) and FuelTech (Nasdaq: FTEK) have taken a big time beating. Suntech Power has gotten the worst of it being a Chinese company. What this downturn has done is made some quality stocks cheaper and more attractive. I plan to either buy the following stocks or add to my position in the near future depending on the overall market conditions.
Here’s my list (in no particular order):
- HDFC Bank (NYSE: HDB) and ICICI Bank (NYSE: IBN) are two of India’s largest private banks and have been on a tremendous run for a while now. They have both taken a small hit not only due to the market downturn but also because of the Indian Budget which was just released. After my recent visit to India I am convinced that this is one sector I definitely want to be part of during these booming times. I am planning to write a separate column about my trip and the banking sector. I recommended both of these stocks last May but for some odd reason didn’t but them myself. Trust me, I am still kicking myself for it.
- Suntech Power (NYSE: STP): Suntech Power has taken a major beatdown in the last three days and I am still not convinced if the beating is over. I am still comfortably up in my position and actually bought a call option on Tuesday as well. I don’t see anything fundamentally wrong with the company and expect it to recover once the market settles down.
- FuelTech (Nasdaq: FTEK): My Fuel Tech position has gone from a nice profit to a small loss in the last three days. The company has won some nice contracts from the Chinese government due to their preparation for the Beijing Olympics. I still see tremendous upside for this company. Hoping to see a bounce before Q4 earnings are announced next week on Tuesday.
- Boeing (NYSE: BA): With the troubles at Airbus going from bad to worse it’s time pay close attention to Boeing. After looking at the boom in air travel in India I am convinced that Boeing is the way to go.
- Under Armour (NYSE: UA): Under Armour hasn’t taken as bad of a beating as I would expect from a so-called overvalued stock in the last three days. The stock has hanged in there but it might not survive too long if the market continues to go south. If that is the case I am going to add more Under Armour to my already long position.
- American Superconductor (Nasdaq: AMSC): This company has been on a nice run the last few weeks. Being one of the few pure play Wind Energy stock also helps. I am already up more than 100% on my Jan 08 call options which I am planning to hold for now. One of the few stocks that has been on a uptrend that last three days.
- Infosys Technologies (Nasdaq: INFY): I don’t think Infosys needs any introduction. Another stock that has taken a big hit this week.
- SiRF Technologies (Nasdaq: SIRF): The 5-day chart on this GPS Chipmaker looks pretty ugly. SiRF proved the naysayers (like me) wrong the last earnings release. SiRF’s monopoly in GPS chips is dwindling but the overall market is growing.
* Full Disclosure: I am long STP, FTEK, UA, AMSC. I don’t have positions in BA, HDB, IBN, INFY or SIRF.
Posted on Friday, March 2nd, 2007 at 3:24 am
In Indian Stocks, Tech Stocks, Energy Stocks |
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March 4th, 2007 at 6:51 am
Himanshu: Your comment on Boeing is interesting: “After looking at the boom in air travel in India I am convinced that Boeing is the way to go.” The Airbus A320 family seems to be the preferred choice of the new discount carriers in India: Air Deccan, IndiGo, Go and Kingfisher have all chosen Airbus over Boeing. Spice Jet seems to be the exception. Furthermore, I believe that the profit margins on single-aisle aircrafts are attractive neither at both Boeing and Airbus in comparison to the wide-bodies.
Boeing’s commercial aircraft division contributes 41% of revenues and 27% of operating profits (2005.) The commercial aircraft industry is cyclical; Boeing’s order book is strong enough to facilitate peak deliveries up to 2009-2010. I think the industry has peaked in terms of aircrafts ordered at Boeing and Airbus. Boeing’s current forward-looking PE is about 19.5 and the stock seems to be fairly valued in the context of the state of the industry.
March 4th, 2007 at 8:08 am
How did your short on First Solar pan out? I noticed that they had a major increase after their earnings call. What are your current thoughts on these guys?
March 4th, 2007 at 9:27 am
i got burned on first solar. i plan to write about this in more detail soon. however, i still haven\’t closed my short position and am looking to short it more to recover some of my losses. i should have closed the position before or right after earnings but couldn\’t since i was on vacation. it was too late before i realized. i am waiting for the 6 month lockout period to end and expect to see some downtrend. i believe there\’s still a couple of months to go.
i am writing this from my phone so excuse my spelling and all.
March 4th, 2007 at 4:58 pm
Nagesh,
I think the India factor is just one of the many reasons to invest in Boeing.
- Air India (The Boeing Company [NYSE: BA] and Air India today celebrated the delivery of the first of 18 Next-Generation 737-800s to Air-India Express, a wholly owned subsidiary of Air India. The delivery also marked the first airplane delivered to Air India following the airline’s order for 68 Boeing jetliners, the largest commercial airplane order in India’s civil aviation history. The order was placed in December 2005 and is valued at more than $11 billion at list prices.)
- Jet Airways order (The Boeing Company [NYSE: BA] and Mumbai-based Jet Airways today announced an order for 10 787-8 Dreamliners. The order, placed in December 2006, is valued at more than $1.5 billion at list prices and deliveries are scheduled to begin in 2011.)
- NEW DELHI, Jan. 17, 2007 — In a move to strengthen its in-country presence, Boeing India is announcing the appointment of two senior executives to lead its efforts in India.
- Air Sahara order for 10 Next-Generation 737-800 airplanes.
- Spice Jet order
- There is also the Indian Defense factor - http://www.financialexpress.com/latest_full_story.php?content_id=154045
http://www.freerepublic.com/focus/f-news/1781803/posts
- Boeing expects India to buy nearly $73 billion in new airplanes over the next 20 years.
- Analyst R Spingarn of Credit Suisse maintains his “outperform” rating on Boeing Company (BA.NYS), while raising his estimates for the company. The target price has been raised from $97 to $104
I do think Boeing is decently valued here but if the overall market keeps going lower and takes a quality company like Boeing down with it then its definitely a buy in my opinion.
You obviously know a lot of Boeing and seem to follow the stock. I would love to know at what price you think Boeing is a buy?
Disclosure: I have no holdings in BA