PSB Portfolio Update May 2013

| May 16, 2013

May 16, 2013

The Bull Market Rumbles On

Well, any doubts we may have had last month about the markets sustaining their upward momentum have been put to rest for the time being.  As a matter of fact, the S&P 500 is up over 17% so far for the year.

Small caps have held their own as well, also up just under 17% year-to-date.  Basically, investors haven’t been shy about buying stock of all shapes and sizes.

Nevertheless, statistics suggest 50% of Americans are not invested in the stock market at all.  That means this rally may hold for longer than anyone expects.

Not to mention, the economic news has mostly been good.

Retails sales and jobs data have been very good.  As long as consumers are spending money and people are getting jobs, the economy should continue to chug along.

On the other hand, industrial production is down.  Manufacturing isn’t what it used to be in the US, but it would still be nice to see an uptick in this space as well.

In the meantime, there’s enough momentum to expect this market to at least maintain. There are still headwinds of course, but as long as the economy and the Fed keep doing what they’re doing, we should be in good shape for the time being.

On to the position updates…

Position Updates

Please Note:  We don’t necessarily update every open position each month.  We focus on the positions experiencing significant news, notable price movement, or a change in recommendation.  Please refer to the Performance page on our website for our current buy, sell, or hold recommendation for any positions not mentioned in the Update.

. . . . L & L Energy (NASDAQ: LLEN) – Hold

What a jump in LLEN!

The shares have skyrocketed in recent weeks and hit a high of nearly $5.00.  That’s an impressive 132% gain!

Why the huge spike?

The Chinese coal company announced it will be providing 1 million tons of coal to Datang Power.  That’s a lot of coal.  Not to mention, LLEN’s recent acquisition of two mines has dramatically boosted the company’s production capabilities.

China is going to need coal for quite a while to power its growth.  As such, LLEN is in great position to continue its expansion.

Let’s hang on to our shares for even bigger gains.

. . . . Boyd Gaming (NYSE: BYD) – Hold

BYD is another huge winner for us.  The stock recently hit a high of $14.50 per share –good for a 107% gain.

Boyd stands to gain significantly from the legalization of online poker in the US.  Once more states follow the example of New Jersey, companies like BYD, with several regional locations, could be the biggest winners.

More importantly, BYD just paid a large chunk of high interest debt coming due in 2014. Clearly, that’s great news for the company and its shareholders.

With online gambling just gaining steam in the US, we think BYD could continue its impressive climb.  Hang on to your shares for now.

. . . . Iridium Communications (NASDAQ: IRDM) – Hold

IRDM is steadily climbing and is now over a 15% winner for us.  Not a bad return for just over a month.

The company posted earnings earlier this month and missed revenue and earnings expectations.  So why has the stock been climbing?

Part of the reason is the company reaffirmed 2013 outlook.  Plus, they expect the new Aireon product to provide as much as $500 million in revenue opportunities.

Finally, IRDM recently broke above its 200-day moving average – a very important technical level.

With the recent surge, IRDM has moved above our buying range.  We’re moving this position to hold.  Continue holding the shares for bigger profits ahead.

Action To Take

  • Move Iridium Communications (NASDAQ: IRDM) from Buy to Hold


Category: PSB Portfolio Updates

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