Weekly portfolio summary

Summer swoon is in full effect for me, personally.  I've missed a week, and previously missed a summary.  I'm getting a little sloppy and, well, I think my portfolio reflects it some.  I'm behind the S&P on the year and I have too many holdings still.  I'm not sure whether I'm not just making the swift decisions I should make or whether I'm just being too impatient to get where I think I should be.  Either way, I'll have to get myself there.  This week was has politics entering into the fray and creating a sense of uncertainty in the markets - which never bodes well for stocks.  At the same time, M&A (merger and acquisition) activity is starting to run rampant.  Companies aren't seeing earnings grow like they want/need, so they've decided to go on the hunt for companies they can buy.  This is really hot in the food sector with a bidding war over Hillshire Brands after they put up a purchase offer for Pinnacle foods.  However, we've seen similar activity in the drug, biotech, and tech sectors recently too.  It's certainly a theme to be keeping an eye on, but we don't buy the stock of companies only in the hope they are buying, or are bough by, another company.  As for upcoming events, there isn't much.  We're in a period between earnings calls and big information, so it's typically a good time for the market to take a breather - especially when there's enough political uprising to make people fearful.  Have no doubt, these new impacts where Iraqi extremists are quickly taking over cities is no joking matter.  However, there are pockets in the market this has no effect on either.  This is the time where it's important to fully understand what impacts your stocks and whether you should take any sizable gains you might have and sit on cash that you're ready to deploy.

Notes:
Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

Ones:

Twos:
Broadwind Energy (BWEN, 10.88) - The stock has pulled back somewhat significantly over the last few weeks on lower than normal volume.  Since its lowest point in mid-May, the stock has started a slow ascension again.  No other real news has been released.  The pullback has made me a little nervous and as such, I have not bough more, despite being below my previous $11.50 buying point.  I also should raise cash to pay for anything more I'd buy.  The company shows signs of accelerated growth in earnings, revenue, and profit margins right now, but has risks residing in its gearing segment's turn-around abilities as well as the pending PTC legislation that is expected to be voted on after November elections.  This stock should be good as long as the turn-around and growth stories stay intact.  Technical trends also show signs of caution.  Now that we're half way through the year, it's possible that people are looking at the second half into next year.  If that's the case, the PTC legislation becomes all that much more a potential impact on where this stock goes and can be reason to force me to lower the ranking on the stock.  I have a $15 target price on it right now.  BWEN is 4% of my portfolio

Deere & Company (DE, 90.47) - Deere continues to follow it's sometimes frustrating playbook.  They announced yet again another strong quarterly result, but were very downbeat on their guidance.  It is clear that growth in sales is slowing as grain prices have pulled back, but they've always said that the growth we had seen wasn't sustainable either.  The stock is still significantly undervalued compared to its industry and some of its key peers (CAT for example).  There is still more upside potential, with my price target of  $100 or more if priced fairly with industry/peers.  The ceiling to break through remains to be $95 and that has been very difficult.  The post-earnings sell-off has subsided, but after some recovery, it's now under market pressure due to uncertainty.  This is an low value industrial stock - which should fare well in a growing economy.  DE is 11.6% of my portfolio.

Encana Corporation (ECA, 24.42) - Encana seems to have a lot going for it right now.  It's a turn-around stock, it's an energy play, and it's being influenced by rising gas prices - both due to the cold winter and now by the rise in oil prices from the events taking place in Iraq.  The stock struggled to push through and stay above around $23.50 since mid-April, which could be seen as a consolidation period after it's run up from $18.  Stock price is nearing my target.  The energy sector is one of the few pockets doing well right now.  I do know the stock price is nearing my target.  This is something I'll be watching as we move forward.  This stock will need to post results next quarter that indicate things are growing faster than anticipated to keep this pace up and if oil and gas prices keep rising due to Middle-East impacts, that might be a good reason to raise price targets.  Price target is set at $25.  ECA is 12.9% of my portfolio.


Home Depot (HD, 78.07) - This company still has long term prospects.  It's earnings have been accelerating and the economy continues to show signs of strength. It has pulled back to 16 times it's guided 2014 earnings (I'm actually expecting them to earn $4.50 instead of the 4.32 they've guided).  Great management team that knows how to take the competition on.. The stock has been suffering due to a retail sector that has been suffering.  As the stock pulls back, it may get an upgrade to look to buy more, despite it raising my cost basis.  Must keep an eye on housing data, though.  There are signs that people just aren't out there buying homes.. Target price is $86.  HD is 10% of my portfolio.

Honeywell (HON, 93.77) - Another solid quarter posted by this Industrial conglomerate.  Margins continue to improve, they've raised the lower end of their guidance and almost every division appears to be properly aligned to the current economic state of the world.  The analyst community could be starting to get ahead of the company, though, as their fiscal year earnings estimates are right at the top of the guidance range.  If anything goes wrong, this stock could get hit pretty hard and that would be your best buying opportunity.  The stock trades near 17 times earnings which P/E is below its peers while its growth rate appears to be ahead of their peers.  This, too, should provide a little protection.  That all being said, industrials get hit when there's fear in the markets.  All stocks would get taken down regardless of performance and create buying points.  I believe this is especially so for Honeywell as so much of their businesses focus on saving costs when energy prices go up..  My target is $100.  HON is 18.1% of my portfolio.

NPS Pharmaceuticals (NPSP, 34.62) - This is where the biotech buyouts help put this stock in one of the pockets of good in the stock market.  Not only have other companies been trying to buy each other out, but NPS has also been at the heart of buyout rumors.  The company continues to sell product, but last quarter was a little disappointing.  We'll have to see what happens in the next quarter and watch as their application for their new drug goes through the FDA in the third quarter.  Keep an eye on the 40 and 20-week simple moving averages.  If the 20 crosses over the 40, it's time to take your gains and run.  $40 has been and continues to be my price target, but I am not convinced we'll see that price in 2014.  Maybe 2015 instead.  NPSP is 15.6% of my portfolio.

On Semiconductor (ONNN, 9.14) - ONNN beat on Q1 earnings, but missed on revenues.  Forward looking guidance seemed positive and the second quarter revenue estimates are near the lower end of guidance right now.  The stock got crushed, and I believe, unjustly so.  In addition to this, they just announced the purchase of another imaging company - clearly planning to get a stronghold in the use of cameras for Autos with this purchase.  I think this stock is currently providing room for a 10-15% pop while downside is likely in the 5% range.  That being said, it has risen rather significantly since it was beat up, and therefore I only recommend buying on a pullback.  The semiconductor index, as shown by the SOX, is showing a breakout to new highs, but On has been getting left behind.  This is a bit concerning.  This stock has been difficult and should I decide to raise cash, this will likely be one of the first places I go to get it, despite my feeling that this stock is going higher.  My price target remains at 11.50.  On Semiconductor is 5.9% of my portfolio.

Pepsico (PEP, 87.19) -  Pepsi has provided an earning announcement that might be enough to at least subdue the activist pressure on the company.  Additionally, it is smack dab in the middle of the biggest M&A fights - the supermarket aisles.  There's a chance that Pepsi could use this opportunity to buy snacks company that fits into their portfolio, or spin off the snacks business as per activist direction.  Either way, these acquisition prices are certainly showing there's more value in the company than the stock market had been showing in the past.  The fact that it still yields 3% while Treasuries are at 2.6% is an added benefit.  The company beat on both top and bottom line numbers and showed signs that they have started to get some control in the weakening beverages section.  I consider this stock to be something worth buying if it pulls back 5-10%.  It has growth prospects, is returning a lot of cash to shareholders, and the yield on the treasury will make a stock like this a nice dividend alternative for a little while yet.  P/E ratios are a little rich, but in line with the industry despite what appears to be improving growth  PEP is 8.4% of my portfolio and my price target is raised to $90.

Threes:
Citigroup (C, 47.59) - When the facts change, I need to change my mind.  This week Citi was hit with more bad publicity as they battle the government over investigations on how they've packaged mortgaged backed securities in the run-up to the great recession.  Additionally, Citi also lost a request on the credit card side of things.  So legal issues plague the bank.  On top of that, when the Spanish 10 yr yield is less than the US and we see political uprising in the middle east, people are more likely to buy US Treasureies, forcing our 10 yr yield lower.  Put these pieces together and there isn't a strong future right now for the bank.  As such, I've lowered it's ranking until there appears to be more stability in these areas.  Yes, I don't think this stock will get to or go below $45, however, I don't see it popping any time soon either.  This makes the stock a likely option for raising cash.I give C a $51 target, but I expect it'll be some time before it gets there..  Citi is 9.2% of my portfolio.

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