Led by Cisco (CSCO), plus 19 others
The Reward-risk trade-offs between upside near-term price change expectations and actual prior price drawdown extremes following similar earlier forecasts are in Figure 1.
(used with permission)
Stocks with big upside and limited price drawdown experiences approach the green sector. Any above the dotted diagonal have more price risk exposure than upside price gain promise.
The 20 of these stocks with greatest following at Seeking Alpha, like Cisco (CSCO), Nokia (NOK), Qualcomm (QCOM), Blackberry (BBRY), and Corning (GLW) are detailed in Figure 2, where there are other considerations. Like the odds of whether a buy here may be a profitable experience in the next 3 months, and how much quicker it might happen.
A ranking score in column (15) orders the symbols in those terms, based on their experiences following prior forecasts having upside-to-downside prospects like those of today.
Along with the averages of these 20 most-of-interest stocks in the communications equipment sector is an average of the best ranking 20 stocks and ETFs from any part of the over 2,500 issues in our across-the-board population of market-maker price range forecasts.
The most important differences between the population best-20 names and the comm-equipment stocks is in the win odds (for a profitable investment outcome) in column (8).
The best-odds stocks show a better than 80 out of 100, while the sector selected shows only 60 of 100. That results in a net percent gain for all of the 180-200+ sample experiences of 4 times as much simple percent gain for the best-odds stocks as the SA-interest names, +12.6% compared to +3.1% in column (9) blue-row averages.
Even more telling, the best-odds names did their tricks in 40 market days, 8 weeks, compared to the equipments’ 51 days or 10 weeks. Compounding 6 times in a year instead of only 5 times raises the CAGR differences to a 6 to 1 average of +112% vs. 16%.
Among the equipment stocks GLW is far more attractive than SPDR S&P 500 (NYSEARCA:SPY) (a market payoff proxy), but only the small-sample SWIR and IDCC come close to being competitive with the average best-odds 20 stocks. Market-maker intelligence resources make the difference at blockdesk.com.
Additional disclosure: Peter Way and generations of the Way Family are long-term providers of perspective information, earlier helping professional investors and now individual investors, discriminate between wealth-building opportunities in individual stocks and ETFs. We do not manage money for others outside of the family but do provide pro bono consulting for a limited number of not-for-profit organizations.
We firmly believe investors need to maintain skin in their game by actively initiating commitment choices of capital and time investments in their personal portfolios. So our information presents for D-I-Y investor guidance what the arguably best-informed professional investors are thinking. Their insights, revealed through their own self-protective hedging actions, tell what they believe is most likely to happen to the prices of specific issues in coming weeks and months. Evidences of how such prior forecasts have worked out are routinely provided. Our website, blockdesk.com has further information.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.