February Trading

February started off with a bang. And not the good kind. The first week of February brought heavy losses to my portfolio with some positions losing upwards of 30%. It was clear that my goal of breaking even overall would be a huge struggle and I would have to claw my way to even getting close or halfway there. One of my main problems which I knew would bite me sooner or later if it continued was the heavy investment in the 3D printer sector. I had 75% of my portfolio in 3D printers by the end of January and my exit plan fell apart when the sector corrected. As a result, I decided instead to use February as a time to position myself to minimize my risks while setting myself up for a strong March and April run.

Positions:

DDD: Oh where do I begin here. 3 days into the month and DDD tanks down to $54 off skeptical valuation reports and warning of lowered expectations, dragging with it the rest of the 3D sector. I felt at $54 was a price that was oversold so I decided to throw more money at the problem. Trying not to inject any more capital into my experiment, I decided to cut my losses on XONE (-30%) and ARIA (-17%) to make a play on DDD. My shares of XONE did nothing but go down after I bought it and it would have been a monumental task and time consuming to try to recover. ARIA as I mentioned before was an impulse buy and I felt I had more upside with DDD. So with the sales, I had enough to buy another 100 shares of DDD at $59. Three weeks later I was able to sell the 100 shares at $81 for a nice gain of 37%. I still believed in the long term value of DDD so I held onto the remaining 300 shares at least until the quarterly reports came out. Well the report came out and it was neither good nor bad with numbers within the projected range. The addition of new product lines and expansion of growth in the upcoming months/years warranted holding on to DDD for the time being. But, 300 shares seems like a lot to hold on to so I closed out on 100 shares to see what other ventures I could pursue to diversify my portfolio. All in all, I end February with 200 shares of DDD hoping Stratasys delivers much needed good news on Monday to help life the 3D sector. I’m still going for a PT of $88 to let go of 100 shares.

SSYS: Stratasys didn’t get hit quite as hard as DDD as many experts jumped off the DDD bandwagon and said SSYS was the dominant company. As a result, recovery from a low around $112 was not as difficult as I end February with an overall gain of 5%. I’ve got a PT of $135 hopeful for a decent report.

ZIOP: I saw ZioPharm drop to sub-$4 and decided it was time to jump in on this roller coaster. Strapped for capital I was only able to buy 325 shares at $3.78. I am still maintaining my PT of $5 even though it’s met some resistance getting there on several occasions.

RSOL/RGSE: For whatever reason, Real Goods has not followed the Solar trend led by SolarCity even among news of big contracts across America and new acquisitions. For that reason I feel RGSE is undervalued at $3.81 and still maintain a PT of $5.

CSX: Polar Vortex means a lot of heating and electricity. CSX is a major rail company that services the Northeast so with the increase demand for coal, NatGas, sand and salt along the upper east coast, hopefully this translates to higher profits for the company. I picked up 100 shares at $27 with a PT of $30.

TRN: I had mentioned before about keeping tabs on the development of safer transports and just this month Berkshire announced it would be placing an order for up to 5000 new rail cars. They haven’t specified which manufacturer they will be using, but I think this is just the start of a complete overhaul and expansion of America’s industrial rail cars. Also, with increased production of shale oil and delays on KeystoneXL demand on transports should go up. I chose Trinity over other competitors like Greenbrier and American Railcar as the P/E seems to be below the average. At $69/share I’m setting a PT of $76 following a surge from $60.

COP: Who doesn’t like a good dividend stock? And at 4% yield per share, I’m game. Hopefully, if it can break out of the 200 day ma, I can cash in nicely. But if nothing else the dividend and long term position should be a solid anchor for my portfolio. At $66.7/share I’m looking at a long term PT of $75 but will hold if dividends keep pace.

Watchlist:

TSLA: How high can Tesla Motors go? With Morgan Stanley’s upgrade to $320/share it seems Tesla fever is the talk of the town. If Tesla continues it’s climb at this pace I may consider a short on it.

HALO: I kind of like Halozyme among the fast growing biotech sector. Not ant the current time, but it has shown a fairly stable growth pattern over the past year. Recent volatility however will warrant a closer look as the price has dipped to the 100 day average. With a mixed consensus I think I may consider a play on HALO if it comes down a bit more and holds the 200ma.

BBY: Still keeping an eye on this even though it failed to breach $20, sitting at $26 now makes it a bit more difficult to throw money at it to see where it goes.

AMZN: Amazon seems to have stabilized after a disappointing Q4. With an average PT placed at $430 I might consider the pricey play if it breaks the 100 day average.

The months ahead:

I think I’m going to start looking into option trading to manage some of the risk I’ve been taking in these especially volatile markets. Also, I want to experiment with short selling a bit and see how that goes before I start to get bogged down with other things. With opening up a new office and prospecting another, I think realistically I have about another month where I can devote the time to actually keep up with things, so I am going to continue to move to less volatile markets for most of my portfolio.

Recap:

The first half of February was a kick to the nuts, losing about 20% across my portfolio. Through some gutsy moves I was able to claw myself back to just a 7% loss. In perspective, from my low point on Feb 5, I’ve been able to gain a decent %16.5 in a little over 3 weeks without adding any capital. My portfolio looks a lot healthier with only 47% tied up in the 3D sector as opposed to 75% and looking to cut that number even more. 30% in Energy with 16% in Renewables. 18% in Rail.

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