Short Week Sees Gains Everyday as Confidence Grows
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Markets have been up every day this week, and the surge continued on Thursday after a Federal Reserve report added further indications that the economy is stabilizing. The S&P 500 and Nasdaq both approached their highest levels for the year on news that initial jobless claims declined last week. There were 550,000 initial jobless claims filed in the week ending Sept. 5, down 26,000 from a revised 576,000 the previous week. Gold prices surged past the $1,000-an-ounce mark Tuesday and oil prices posted their biggest gain in almost three weeks as the dollar weakened.
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With the market potentially starting another rally this week, finding good companies to buy at bargain prices is getting hard. So we rolled up our sleaves, did our homework and found a company that has an undeniable growth streak, is run by a smart management team, is not a 52 week high and has a nice cash flow. The company has a nice short and long term outlook and is even under $10 per share right now.
Our Bear pick is in the car rental business. The business travel industry continues to slow as companies look for ways to save money and our Bear pick is right in the middle of it. The stock price has seen a very nice recovery since March based on better than expected profits the last quarter, but the economy is far from recovered. Simply put, this stock is currently overbought and we can't see anything but a pullback coming. |
 SmartBalance (SMBL) - If you've seen them in the supermarket, you may have noticed that they are adding new products to their line of spreads. The surprise is that SmartBalance has been able to continually increase its market share even during a time when everyone is buying the cheaper generic brands. The company outsources most of its manufacturing, so its costs are controllable and it runs lean. SmartBalance may also be buyout target for some of the big boys in the sector, like Heinz or Kraft.
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 Hertz Global (HTZ) - Hertz was one of the most beaten up stocks back in March when everyone was looking to get out of retail and travel related stocks. It's up over 360% since then, it just hit a 52 week high at 11.99 and the outlook for the company doesn't look that good. With the ZipCar business growing by leaps and bounds in urban areas, this company looks like a bad investment to us both short and long term. Hertz's recent run is a classic speculation surge; any investor taking the time to look at the numbers would be hesitant to buy it.
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