Saturday, January 11, 2020

3 Down and Out Stocks



When looking for stocks to trade I never buy stocks approaching or at 52 week highs. Sure they can still go up in price but how high and when do you lock in profits?

My intention here is to document my trading journey and experience. This is nothing new or an earth shattering strategy. I buy and look for beaten down stocks with the intention of selling them at a higher price.

This is not for everyone and I am not guaranteed to not lose money on these stocks. Matter of fact depending on my entry point I will sell at a loss and look for other opportunities. Where exactly is that? Nobody knows where the low or the high for the stock is.

This is where greed takes over. Anyways, here are 3 stocks I recently bought that look like they have a chance to make up some lost ground and are well off their 52 week highs.


TRQ Turquoise Hill Resources

52 week high $2.84
Current price $0.88
Price paid $0.87

This is a play on one of the biggest copper/gold/silver deposits in Mongolia. Lots of risk here. The company holds a 66% interest in the Oyu Tolgoi deposit. I like the risk/reward here. Small position of 5000 shares. Do your own DD this is just what I bought ATM. No dividend.




STLC Stelco Holdings Inc.

52 week high $20.01
Current price $10.46
Price paid $10.71

Is steel dead just like uranium? You would think so looking at the price of Stelco stock. Nobody wants it. Perfect. I'll gladly bide my time waiting for the price to recover. It has a low p/e and a 32% roe which is usually a good sign except for the fact that Stelco is bleeding cash and earnings are falling. Not good. This is a pure gamble and as you can see I didn't get in at the bottom. It's up 20% since hitting a 52 week low. I own 375 shares. Dividend of 3.6%.





WEF Western Forest Products

52 week high $2.20
Current price $1.22
Price paid $1.19


Lumber stocks being chucked out the door and are sincerely unloved. This is a troubled industry in Canada. Mills closing and layoffs are the name of the game. Housing still a strong sector with low interest rates and lack of new homes.

Lots of labour strife here and the stock is down 42% on the year. Company is losing money and who knows may go bankrupt. If you have a weak stomach stay away from WEF and buy WFT if you want to play lumber. I own 3500 shares. Dividend of 7.4%



My Final Take

There you have my latest 3 buying opportunities. Copper, steel and lumber. I'm not in love with any of these stocks. Can they go down further? Sure. I like to ignore stocks trading at market tops and would rather roll the dice on stocks that may turn things around and start to go back up.

I only invest $4K in speculative positions. If you can't afford to lose money stay away from stocks at the bottom.They could fall further. I don't let them fall too far so I keep my losses small. That's usually around 10%.

I also only do this in an open account so I can claim losses against any gains I may have.

How do you pick stocks?

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