Monday, November 10, 2008

Louis navellier and Mechel (MTL)

Original post date: August 6th 2008
Removed copyright content and reposted

The great MTL ride of Louis Navellier begins on October 29 2007 when he and his paying subscribers of Global Growth bought it for an adjusted price of $28.87.

MTL was gaining since 2nd half of 2006 and after Navellier's purchase date it continued to climb.

Between April and June 2008 it traded above $50 (price adjusted for the 3:1 split of May 2008) gaining 70% for Navellier & C.
Here is what Mr. Navellier was telling his paying readers in his $5.000/year Global Growth newsletter (in parenthesis you see the price of that day):
  • 05/27/08 – Top 3 Stocks: MTL is booming. (51$)
  • 06/02/08 – Top 3 Stocks: Mechel rose 17% last week (and 78% for the year so far). (56$) A quick note here: on Dec. 31 MTL was $32.38 and on June 2nd it was $55.93. Now, 55.93 divided by 32.38 minus 1 equals 73% and not 78%. Just for sake of accuracy.
  • 06/09/08 – Top 3 Stocks: Mechel's annual dividend will be about $1.12 per ADR. (53$)
  • 06/16/08 – Top 3 Stocks: MTL still performing well. (51$)
  • 06/23/08 – Top 3 Stocks: Mechel still going strong. (50$)
  • 06/30/08 – Top 3 Stocks: MTL to offer 11.67% of share base in a deal that could raise $2.74 billion. (50$)
  • 07/07/08 – Top 3 Stocks: MTL still a steel powerhouse. (44$)
  • 07/14/08 – Top 3 Stocks: MTL jumps 5% on strong quarterly report. (46$)
  • 07/21/08 – Top 3: MTL is exactly the type of stock we want to own. (40$)
In his Global Growth newsletter issues of 07/28 and 08/04 Mr. Navellier finally decided to close his positions in MTL.
MTL has sunk like a brik in the last weeks. It now has a PE of around 6.
MTL was 57$ at the beginning of June and a serious investor would have set a stop BEFORE losing 60% in 2 months. Yesterday MTL closed at $18.30 (worst since Oct 1st 2007 and much worse than the $28.87 payed for it almost one year ago).

Loss for $5.000/year Global Growth subscribers was 36%

But Mr. Navellier also pushed his $5.000/year Quantum Growth subscribers to buy and sell MTL. In fact he told his $5.000 paying subscribers to buy MTL on Sept 10th 2007 at around $14.77 and sell it on October 8th at around $19.83. I do hope his paying subscribers did not follow his sell advice, because MTL went up close to $30 by end of October 2007.

Missed profit was 50% in a few weeks

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