Catchup, part two: Buys, sells, holds and “I dunno’s”

By Travis Johnson, Stock Gumshoe, January 28, 2011

A couple weeks ago I started my annual navel-gazing exercise of looking back at past “idea of the month” stock (and other investment) suggestions — that first look covered the first year or so of these more formalized ideas for the Stock Gumshoe Irregulars, from 2008 to mid-2009, and now we’ll try to catch up. As I noted when I started this tradition, I do not maintain a model portfolio for you or track sell prices — the tracking I do assumes that you buy each stock I profile and hold it forever, which is obviously not what you’d probably do, so I try in occasional commentaries and in annual-ish surveys like today’s to provide updates on my opinion about the stocks I’ve analyzed for you in order to give some additional perspective, and make sure that I don’t give the impression that the dozens of stocks I’ve written about in this space are all still my bestest friends.

Going in chronological order (which is also how the performance tracking spreadsheet is set up), I covered the ideas from Seadrill to StoneMor Partners in our first iteration … which means that next up is …

Torm (TRMD) — Has grown even more contrarian, the basic argument for the shares still applies but it all depends on a recovery in product tanker rates, buy if you think they’re going up and sell if you think they’ll continue to stagnate.

Torm is a touch call at this point — this is a large operator of a dry bulk and product tanker pool, and owner of a large number of product tankers that ship refined petroleum products worldwide. I thought it was a contrarian play on an improving economic picture back in the Summer of 2009, but it has become doubly so now and the shares are substantially lower. I suggested the stock around $10, and it’s now around $7, which I also noted was probably a reasonable stop loss for the risk averse. Interestingly enough, I also said at the time that I’d be surprised if the shares dipped below $6, due to the value of their underlying assets, and the low for the last year has been $5.98. That’s luck, by the way, not prescience. I also suggested that I thought 2010 would see product tanker rates recover, and product tankers are the key to their operation — that ...

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