Stock Gumshoe

Many of you saw this email last week, the latest in a long string of Mark Skousen’s attempts to predict breakout stock performance on earnings dates. His past history of this is spotty, and I’ve written a few times about earnings pops he has predicted — some good, some bad.

Alas, I didn’t get a chance to look into this particular one until it was too late — I read the email on Friday, which was the day after this “Microsoft of Biotech” released earnings and was expected to stun the world.

And wouldn’t you know it, the one I miss is the one that actually does perform more or less as Skousen predicted …

This “Microsoft of Biotech,” according to Skousen, is China Medical (CMED) — more of a medical device maker than a traditional biotech drug firm, but a long-time Skousen favorite, and one of the few stocks I’m aware of that he has really stuck by over the last couple years. I last wrote about them over a year ago when Skousen was touting them, that time in the mid-$20s.

I’m assuming that he means the Microsoft of 1992, by the way, not the Microsoft of 2002 that has been more or less dead money for six years.

It has been a bouncy year or so for CMED, though on balance a good one (unless you bought in January or February) — they dropped by about $20 on their last earnings announcement, so it took some guts to promote them before this one … the shares spiked as high as $57 or so back in the early part of the year, but fell on the last earnings and generally petered out thanks to indifference about China and growth stocks. Then came the better-than-expected earnings release on Thursday, and the shares boomed back up. Still only about $41, well off the highs, but a nice performance nonetheless.

I wouldn’t necessarily use this evidence of success to suggest that Skousen is going to be any better than 50/50 odds when predicting an earnings blowout, but he has at least been backing this company consistently during a very good year or two of stock market performance. So, credit where it’s due.

CMED is essentially a diagnostics and cancer-fighting medical device company, much of Skousen’s favor came because they treat cancer using targeted ultrasound therapy and seemed to have some success there, and they also provide some other medical devices. They trade at a much lower valuation than the more well-known big medical device maker from China, Mindray Medical (MR), probably largely because Mindray has a broader array of devices that are essentially competitive copies of standard medical machines used worldwide, and doesn’t have to rely on one therapy, the way CMED apparently does with ultrasound, to grow (MR is about 4X the size of CMED, and trades at about twice the PE valuation).

So … CMED is a nice company, it’s not expensive on current earnings, and compared to its peers it’s even cheap on trailing earnings … and the earnings report this week indicated that 2009 looks good for them, too. I’m in no position to verify the success of their machines, but they may have promise — I know a few Gumshoe readers have bought this one in the past, feel free to share if you’ve got an opinion.

I’ve written about various teasers from Mark Skousen’s services several times over the last year or so, and he is, at least, always confident. He has teased several good stocks that have performed well, including Sadia, ABB, and CVRD, and several that have stunk — like Volcano and Centerline Holdings (to be fair, I thought Centerline was interesting when he wrote about it last year, too, but they’re a real estate financing partnership … and that teaser came out before the credit crunch that brought them down like a house of cards — don’t let today’s 8% move up remove the memory of it’s prior 80% fall).

But I thought, since I spent yesterday taking a gander at a short call on the financials, and specifically on Lehman Brothers (which got downgraded by S&P and clobbered again today), that I should give equal time … and Skousen, who would like you to subscribe to his Forecasts and Strategies newsletter, is teasing us with a big financial name that he expects to double and send shockwaves through the market.

I can almost feel them. Or maybe that’s the heebie-jeebies.

He starts out the teaser ad with the following: Read the rest of this entry »

“Last week everything was going down the drain, and now everything’s perfect” — that’s a comment I heard on CNBC this morning, facetious though it was, that goes a long way toward mirroring the movement in gold prices. Last week armageddon was coming and everyone wanted to own gold, today maybe the world financial system will recover so perhaps we don’t all need to buy gold.

But even though the price of an ounce of gold has come down by close to 10% from it’s crazy highs over $1,000 in very rapid fashion, it’s certainly still got everyone’s attention. And Mark Skousen is aware of that.

Which is why his latest “buy this one before earnings” alert is about a company that’s somehow Read the rest of this entry »