Swing Trading Value Stocks

[burnout]

Hmm, a few points to consider there, I think.

1. I averaged down on APA to make the invested amount equal to ½ of my largest position size (in this case, my USD cash position was the largest one).​

Example to clarify (using fictional amounts of course):​

​

USD cash = $800​

VNDA = $500 invested amount (not the current market value)​

PII = $490 invested​

HRL = $460 invested​

SSRM = $390 invested​

CIVI = $360 invested​

ADM = $280 invested​

APA = $250 invested​

​

½ of the largest position would be $400, so when the market price for either APA or ADM drops to an equivalent level of the most sold-off stock on my list, then I would buy more of it to top-up my invested amount to $400. Which I did – for APA.​

​

New position sizes would then look like this:​

VNDA = $500 invested​

PII = $490 invested​

HRL = $460 invested​

USD cash = $400​

APA = $400 invested​

SSRM = $390 invested​

CIVI = $360 invested​

ADM = $280 invested​

​

No further adjustments needed at the moment as all position sizes are at least ½ the size of my largest holding now. On a side note, my current buy order for a new position in VET would be set to invest $250 in it. (Half the largest position, just to dip my toes in it).​

2. My initial sell target is based off of two parameters. First parameter is X number of months to establish the range between the high and the low price. The second parameter is X% of that range to expect for a price recovery from the recorded Low. (similar to a Fibonacci Retracement - except without using those hocus-pocus preset levels or eyeballed swing moves).​

Fictional example using 3 months and 70% (neither are the parameters which I am presently using):​

APA 3 month High = $40.93​

APA 3 month Low = $29.95​

APA 3 month price range = 40.93-29.95 = $10.98​

APA 70% price recovery parameter = 10.98 x 0.7 = $7.69​

APA profit/exit target = 29.95+7.69 = $37.64​

3. For APA, despite that further sell-off after my initial purchase, I’m currently targeting an exit price that is 13.55% higher than my cost base (which includes that top-up). Not very much, I know, but that new low it made has adjusted down my expectations for it (created a bigger range). However, all bets are off if its book value per share fails to reach $3.52 or higher at the next Earnings Report in a couple of weeks. (I have to see that value growing every quarter, to continue owning it – safety mechanism for me).​

Sorry to be so cryptic about my precise exit targets, but I’m still wary of possibly generating competition for the same prices that I’m trying to get. Especially, if I ever decide to dabble in low volume stocks again. Those 2 parameters I use are really still just a work in progress anyway. A great deal of trial and error is needed to fine tune them…

Thanks for the interest, BTW!

 

[DangerZwn]

Thanks for the thorough response.

For me, when I value a stock, I try to find both a price target and an indication that the stock will move in that direction. In this case and as I mentioned before, I see two potentials for APA. What I'm trying to ask is what metrics are you using, or what calculations are you doing, to suggest to you that APA will indeed rise. In your case, you expect the 13.55% increase but because I am weaker on the financials, I'm asking what financial metrics you are using to come to that conclusion.

For me, I feel like I can look at the technicals all day but I'd really like to learn the financial analysis portion.

 

[burnout]

Oh, okay, I get it! I finally see what you're asking now. Well, I have a very simplistic fundamental evaluation approach that determines a stock's ideal "fair" market price based solely off of either book value or dividend yield. So you're not going to find any "deep dives", as they say, from me...

1. The company has to be a profitable business to start with. (Hence the consistent book value per share increases I look for). If it is not, then it is essentially worthless to my eye - nothing more than a gamble. Long-term, as a profitable business increases in value, so should its stock price.

2. If the profitable company does not pay a dividend then it should, at the very least, be priced in the stock market at its book value per share or higher (its real world estimated liquidation value, that is). Case in point, VNDA closed at $3.63 whereas its book value is $9.14 (most of which is cash). How crazy is that? I mean, you would NEVER see a business for sale priced that low in the private marketplace/classified listings, right? It has a lower sale price right now than the growing cash pile sitting in its bank account. Sheesh.

3. If the company does pays a dividend (like APA does) then I simply compare its yield to all the other dividend paying companies on my watchlist (all of them also being profitable companies - which makes them its peers, IMO). The median yield on this USA list of mine is 2.594% right now. So I figure, in the real world, competition for yield would drive them all to the same percent (or fairly close to the same) - just like what happens with bank GICs (or CDs as Americans call them). After all, for stocks it's the marketplace that sets the yield - not the company. If APA were yielding that middle-of-the-road 2.59%, then that would mean its market price would equate to $38.55 for its $1.00 annualized dividend (which is a 27.48% increase from its last close of $30.24). If I were applying a Buy-and-Hold strategy to this stock, then that would be the price I would sell at. Instead, I'm content to sell at a lower price because it should take less time to get there. Especially, since it was just trading at this lower price target of mine not too long ago, so there *shouldn't* be any extreme resistance from the market to give me that. Actually, APA is probably not the best example to use here since $38.55 would be a reasonable swing trade target to shoot for as well, given its recent price history. Whatever, I'm sure you get my point. CPX.to would be a better example for this. The Canadian market median yield is 3.499% on my list of profitable dividend companies, which would translate CPX.to's annualized $2.46 dividend to a "fair" market price of $70.31. Is that a reasonable target to hit anytime soon? Hell no!!! That stock has never traded anywhere near that price - like, ever. It could possibly take years to hit that market valuation. I fully expect that it will rise that high *eventually*, but the amount of time spent in a trade is important for optimal returns, so my exit target for CPX.to is set far lower than its true value right now - based entirely off of its recent price history.

 

[burnout]

Bought VET @ 9.99

Bought LB.to @ 25.86 (top-up)

Portfolio = 83% stocks, 17% cash
Portfolio = 46% CDN market, 54% USA market
Portfolio Annual Gains (XIRR) = 27.30%
Stock Market Annual Gains over same period of time (^SP500TR) = 15.72%

Buy orders now set for POU.to (top-up) and APD

 

[burnout]

Dumped VNDA this morning. Can't say I understand the enthusiasm today for that lousy ER last night.
Sold VNDA @ 4.04 usd (ER not good enough to continue holding)
-5.99% (incl. exchg. rates, no dividends and 5 top-ups), held for 194 days = -11% annualized loss

Bought SSRM @ 9.42 (top-up)

Portfolio = 76% stocks, 24% cash
Portfolio = 45% CDN market, 55% USA market
Portfolio Annual Gains (XIRR) = 27.64%
Stock Market Annual Gains over same period (^SP500TR) = 15.95%
Updated Cumulative PnL chart (5.14 years, zero leverage):

Open Swing Trade Positions:
VGCX.to, CPX.to, WCP.to, FM.to, POU.to, LB.to
SSRM, HRL, PII, CIVI, APA, ADM, VET

Buys orders set for POU.to (top-up) and ADM (top-up).

 

[burnout]

Sold FM.to @ 11.18 (ER not good enough to continue holding)
-21.13% (incl. 1 top-up and no dividends), held for 93 days = -61% annualized loss

Portfolio = 70% stocks, 30% cash
Portfolio = 46% CDN market, 54% USA market
Portfolio Annual Gains (XIRR) = 24.14%
Stock Market Annual Gains over same period (^SP500TR) = 15.78%
Updated Cumulative PnL chart (5.18 years, zero leverage):

Open Swing Trade Positions:
VGCX.to, CPX.to, WCP.to, POU.to, LB.to
SSRM, HRL, PII, CIVI, APA, ADM, VET

Also, started parking all that idle cash in a couple of those uninsured High Interest Savings Account ETFs for the meantime. (CASH.to and UCSH-U.to).

*** STRATEGY CHANGE. I will no longer be buying any company based off of discount to book value anymore. After much reflection and trial-by-fire, I figure they are simply more trouble than they are worth. Above average dividend yielders ONLY from now on (my tried and true bread and butter trades). At this point, there are only 3 book-value stocks remaining to run-off my portfolio, then I'll be done with them for good (VGCX.to, VET and SSRM). Of course, they still may or may not require a top-up or two - until they're finally gone...

 

[burnout]

Sold POU.to @ 29.18 (reduced target due to lower lows)
+8.79% (incl. 1 top-up and 3 monthly dividends), held for 95 days = +38% annualized gain

Bought VGCX.to @ 5.29 (top-up)

Portfolio = 70% stocks, 30% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (XIRR) = 24.14%
Stock Market Annual Gains over same period (^SP500TR) = 16.23%
Updated Cumulative PnL chart (5.18 years, zero leverage):

Open Swing Trade Positions:
VGCX.to, CPX.to, WCP.to, LB.to
SSRM, HRL, PII, CIVI, APA, ADM, VET

 

[burnout]

Sold SSRM @ 4.53 (ER not good enough to continue holding)
-59.05% (incl. exchg. rates, 1 dividend on 2/3 of those shares and 3 small top-ups), held for 116 days = -94% annualized loss. Thank God I'm diversified these days!
Looking back, I still would have bought this stock from my dividend watchlist - but at a much lower price (after the crash prices) than I had paid using my discount-to-book value list. I'm never initiating new positions again based off of that damn book value list. Lesson learned. This is by far my single worst trade % loss ever. Man, that stings...

Sold CPX.to @ 38.30 (ER not good enough to continue holding)
+7.72% (incl. 1 dividend and no top-ups), held for 127 days = +24% annualized gain

Bought VGCX.to @ 5.20 (top-up)

Bought APA @ 29.82 (top-up)

Portfolio = 63% stocks, 37% cash
Portfolio = 46% CDN market, 54% USA market
Portfolio Annual Gains (XIRR) = 24.28%
Stock Market Annual Gains over same period (^SP500TR) = 16.11%
Updated Cumulative PnL chart (5.20 years, zero leverage):

Open Swing Trade Positions:
VGCX.to, WCP.to, LB.to
HRL, PII, CIVI, APA, ADM, VET

Also, a couple of days ago (on Monday) I switched all my cash holdings over from being temporarily parked in High Interest Savings Account ETFs to being parked in Gov't Treasury Bill ETFs instead (CBIL.to and UBIL-U.to). Just for peace of mind, really. The interest yield is virtually the same (around 5% or so) but I figure there is much less risk of CDN/USA gov'ts defaulting on their debt vs possible bank failures with those uninsured bank deposit ETFs.

 

[blackhaz]

Nice to see fellow value trader swinging on VET. It has been a great journey.

 

[burnout]

Sold HRL @ 34.30 (time & dip reduced target)
+10.94% (incl. exchg. rates, 1 dividend and 1 top-up), held for 94 days = +50% annualized gain

Bought APA @ 30.01 (top-up)

Portfolio = 59% stocks, 41% cash
Portfolio = 46% CDN market, 54% USA market
Portfolio Annual Gains (XIRR) = 24.47%
Stock Market Annual Gains over same period (^SP500TR) = 16.22%
Updated Cumulative PnL chart (5.20 years, zero leverage):

Open Swing Trade Positions:
VGCX.to, WCP.to, LB.to
PII, CIVI, APA, ADM, VET

 

[burnout]

Bought PXT.to @ 20.66

Portfolio = 70% stocks, 30% cash
Portfolio = 46% CDN market, 54% USA market
Portfolio Annual Gains (XIRR) = 24.88%
Stock Market Annual Gains over same period of time (^SP500TR) = 16.10%

 

[burnout]

Sold VGCX.to @ 6.23 (time and dip reduced target)
+5.77% (incl. 2 top-ups and no dividends), held for 189 days = +11% annualized gain

Bought PXT.to @ 20.53 (top-up)

Portfolio = 59% stocks, 41% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (XIRR) = 25.02%
Stock Market Annual Gains over same period (^SP500TR) = 16.21%
Updated Cumulative PnL chart (5.22 years, zero leverage):

Open Swing Trade Positions:
WCP.to, LB.to, PXT.to
PII, CIVI, APA, ADM, VET

 

[burnout]

Sold VET @ an avg price of $11.39 (ER not good enough)
+14.56% (incl. exchg. rates, no dividend and no top-ups), held for 33 days = +350% annualized gain
*** So, this was the last remaining discount-to-book value play to clear off my books. All current and further stocks are only coming from my dividend watchlists from here on out.

Portfolio = 53% stocks, 47% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (XIRR) = 25.00%
Stock Market Annual Gains over same period (^SP500TR) = 16.43%
Updated Cumulative PnL chart (5.22 years, zero leverage):

Open Swing Trade Positions:
WCP.to, LB.to, PXT.to
PII, CIVI, APA, ADM

 

[burnout]

Bought APA @ 30.46 (top-up)

Portfolio = 55% stocks, 45% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (XIRR) = 25.10%
Stock Market Annual Gains over same period of time (^SP500TR) = 16.22%

 

[burnout]

Sold ADM @ an avg price of 57.66 (ER not good enough)
+12.33% (incl. exch. rates, 1 dividend and 2 top-ups), held for 49 days = +138% annualized gain

Portfolio = 51% stocks, 49% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (XIRR) = 25.16%
Stock Market Annual Gains over same period (^SP500TR) = 16.46%
Updated Cumulative PnL chart (5.23 years, zero leverage):

Open Swing Trade Positions:
WCP.to, LB.to, PXT.to
PII, CIVI, APA

 

[burnout]

Bought VLY @ 7.68

Sold LB.to @ 28.84 - which is slightly higher than TOMORROW's time-reduced target price, so I locked it in now near the end of the day instead. End of day price recovery just never materialized like I thought it would though... Damn.
+12.60% (incl. 1 dividend on 2/3 of those shares and 1 top-up), held for 98 days = 56% annualized gain

Portfolio = 56% stocks, 44% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (XIRR) = 25.25%
Stock Market Annual Gains over same period (^SP500TR) = 16.34%
Updated Cumulative PnL chart (5.24 years, zero leverage):

Open Swing Trade Positions:
WCP.to, PXT.to
PII, CIVI, APA, VLY

 

[burnout]

Sold CIVI @ 71.94 (reduced target mainly because of the lower low it made after purchasing it)
+9.58% (incl. exch. rates, 1 dividend and no top-ups), held for 75 days = 56% annualized gain

Sold WCP.to @ 10.04 (reduced target because of lower low made after purchase - almost became a failed trade)
+4.86% (incl. 3 monthly dividends and effectively no top-ups), held for 124 days = 15% annualized gain

Portfolio = 45% stocks, 55% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (excel's XIRR) = 25.27%
Stock Market Annual Gains over same period (^SP500TR) = 16.30%
Updated Cumulative PnL chart (5.25 years, zero leverage):

Open Swing Trade Positions:
PXT.to
PII, APA, VLY

I think now is probably a good time for me to consolidate all of my trading accounts to one stock brokerage house. I'm really disliking that Wealthsimple Trade brokerage more and more. Just too damn clunky and still no real-time quotes on the bid-ask prices. Going to use Desjardins Direct brokerage exclusively from now on (already using them for my Taxable and RRSP accounts - just have to move that TFSA over). So my Canadian Market trades will be non-existent for the next little while during this transfer period.

 

[burnout]

Sold PII @ 93.75 (Ugh. This stock flat-lined on me. Sheesh, plenty of positive news headlines came along for this stock but none of them could ever seem to budge that price. Captured slightly more than TOMORROW's time-reduced target near the end of day today.)
+5.50% (incl. exch. rates, 1 dividend and no top-ups), held for 94 days = 23% annualized gain.

Portfolio = 38% stocks, 62% cash
Portfolio = 46% CDN market, 54% USA market
Portfolio Annual Gains (excel's XIRR) = 25.72%
Stock Market Annual Gains over same period (^SP500TR) = 16.67%
Updated Cumulative PnL chart (5.26 years, zero leverage):

Open Swing Trade Positions:
PXT.to
APA, VLY

So, my TFSA transfer is expected to be completed by April 3rd or so. My Canadian Market trading can't resume until that is complete. Hopefully, the USA markets will shift around a little more so that I can pick up some more of those stocks in the meantime. Man, it's super annoying to be stuck in so much cash right now. Not good for overall returns. Not good at all...

 

[burnout]

Bought VLY @ 7.66 (top-up)

Portfolio = 39% stocks, 61% cash
Portfolio = 47% CDN market, 53% USA market
Portfolio Annual Gains (XIRR) = 25.42%
Stock Market Annual Gains over same period of time (^SP500TR) = 16.46%

 

[burnout]

Bought CWB.to @ 27.82

Portfolio = 59% stocks, 41% cash (not entirely accurate because I have some pretty hefty USD-->CAD journal trades in progress, at the moment)
Portfolio = 49% CDN market, 51% USA market
Portfolio Annual Gains (XIRR) = 25.83%
Stock Market Annual Gains over same period of time (^SP500TR) = 16.37%