In the Precedent-Based model managed by John Ward, the goal is to minimize risks while combining fundamental analysis with market timing strategies that stem from technical analysis. Recently, additional shares of Netflix Inc (NASDAQ: NFLX) were added to the model. NFLX has recently changed its membership options, adding a streaming video only (no DVD delivery) option and increasing its price for individuals who opt to continue DVD delivery. Since the company still has many titles available via DVD only, it maybe a while before the majority of its customers switch plans. After the new plan and pricing structure was introduced on November 22nd, NFLX’s price shot up from a closing price of $173.04 on November 19th to $188.32 on November 22nd.
Another new position added to Precedent-Based was Direxion Daily Small Cap Bear 3X Shares (TZA). TZA’s goal is to deliver results that are equal to 300 percent of the inverse of those of the Russell 2000® Index. On November 29th the fund had the majority of its holdings in Russell 2000® Index swaps and was trading at a discount to NAV.
The Cash Flow model managed by Jose Betancourt focuses on free cash flow and negative net debt when conducting a fundamental analysis to identify possible holdings for the model. Recently, Betancourt added LCA Vision Inc (NASDAQ: LCAV) to the model. LCAV’s shareholder equity has been declining over the past few years. It was $93.6 million in 2007, fell to $83 million in 2008 then dropped to $51 million in 2009. On October 29th, the stock had a closing price of $6.96 but by November 17th it had fallen to a closing price of $4.96 with a low for the day of $4.90. It has since increased in price, closing at $5.17 on November 26th.
*All prices used in this post obtained from Yahoo! Finance.
