Wednesday, March 4, 2009

Louis Navellier and COV

Here we are to see in detail the fantastic result Louis Navellier achieved with COV.

You may remember that Mr. Navellier already traded COV last year in his Global Growth service. He bought it on July 21st 2008 at around $49.38 and sold it on December 15th at around $34.60 for some 30% loss.

On February 2nd Mr. Navellier decided to buy COV again at $38.02 (10% higher than previous sell price - we can just do the opposite he does and gain...)

Bermuda's Covidien (COV) is also back for an encore appearance. With about $10 billion in annual sales, Covidien supplies health care providers around the world with everything from generic pharmaceuticals and disposable medical products to diagnostic imaging contrast agents and surgical devices. Overall, the company has operations in nearly 60 countries. The board of Covidien approved a $300 million share buyback last Wednesday.
The company is also in the midst of relocating its headquarters from Bermuda to Ireland. In its latest quarter, Covidien reported that its earnings declined 8% due to higher costs, but it still beat analysts' consensus estimates by 8.6%. During the past four quarters, the company's sales rose 6%, which is excellent during a global slowdown. Health care companies are a great investment in these tough times, since medical spending tends to be recession-proof.
One week, two weeks and three weeks later Mr. Navellier did not spend a word about COV, but only adjusted his random Buy Below Price. You can see in this chart how the Close Price and Navellier's Buy Below moved in these weeks. The algorhitm looks simple: Buy Below for next week = latest Close Price + a few % point.


On March 2nd Navellier finally told his subscribers to sell this piece of junk:

This week, I recommend that you sell Bermuda's Covidien (COV). COV saw buyers disappear last week, resulting in a double-digit decline for this stock. Sell it tomorrow, and let's hope the market gives us a dead-cat bounce. I must also point out that Bermuda's currency is pegged to the dollar, so we will be getting very selective about the stocks in this region. A number of other Bermuda stocks have been moving down the Buy List in recent weeks as well and may be sold soon.

Summary

  • 30% loss in 6 months in 2008
  • 10% missed profit in 6 weeks between December 2008 and February 2009
  • 17% loss (in the best case) in 4 weeks in February 2009

1 comment:

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