Out Fox The $treet

Phoenix Cos (PNX) has launched up 17% today with little rational other then the general market. Possibly some of the new from JPMorgans (JPM) earnings report today is helping the small cap financials as most are rallying big. Though not many to the tune of 17%. In general, PNX continues to be a cheap insurance play. Analysts expect them to earn roughly $.70 this year and next meaning that they are only now trading at 5x expectations. Probably remains a huge value until the $6 range. The stock is about a 1.5% holding of our Growth Portfolio. Its extended today so I wouldn't rush out to buy more. Look for shallow pullbacks on the way up. Todays move of the 20ema crossing the 200ema as likely brought in a lot of short term technical traders.

Not sure what to make of the very weak action in the stock prices of small financials like International Assets (IAAC - old FCSX) and Phoenix Cos (PNX) that Stone Fox Capital holds in the Growth Portfolio . Both were down nearly 8% today. Luckily we sold a good portion of IAAC earlier this week at $17.04. Unfortunately we didn't sell all of it! Both stocks are only 1.2% of our portfolio and we'll look to add to those positions on Monday assuming a lack of negative news. The move down could be related to quadruple witching today. Charts look very weak so buying is risky. IAAC at $14.50 has a natural stop there and PNX at $2.50 to start or all the way down to $2.20. IAAC is a commodity risk management firm that should benefit from a volatile commodity environment and fast growing emerging markets that consume alot more commodities. Unfortunately they make a significant portion of their profits from short term interest on customer account balances. Not so good when rates are histo...

Phoenix Cox (PNX) continues to be one of the cheapest stocks in our universe and a small holding in the Growth Portfolio. Looks like analysts are now coming out with 2010 estimates around $.50 to $.60. That's roughly a PE of 5 with the stock trading around $2.5. PNX also trades substantially below book value. Most estimate the real book value to be around $7-8 with the reported book value at $9.8. PNX has traded very weak throughout the first 2 months of 2010, but today it blasted through the 50EMA. This is a very bullish signal of a potential reversal of the trend. If PNX can close above the 50EMA around $2.57, the next move is likely to the 200EMA at $2.87. Its at the 50EMA support as I write this providing an excellent entry point. Look for confirmation by holding that support and eventually surpassing the 200EMA. If it can't hold and then falls back through the 20EMA at $2.42 that would be an ideal time to exit the trade.

After the SP500 touched just below the 200EMA at 1046, Stone Fox Capital used the roughly 7% cash we had accoummulated from selling US Steel (X) a few weeks back to become fully invested. The portfolio has only $4500 left in cash so we'll likely look to trim a few positions on a solid bounce in the market next week. A huge oversold market (at one point down 4.7% in less then 2 days) creates a great entry point for adding to positions. Added to our positions in some extremely oversold stocks such as Foster Wheeler (FWLT), Terex (TEX), Puda Coal (PUDA), Phoenix Companies (PNX), and to a couple of stocks still in strong positions Local.com (LOCM) and Terremark Worldwide (TMRK). Most of these stocks will likely bounce the hightest, but if they stall at key technical levels on the way up that will trigger selling these purchases. Some charts like FWLT, TEX, and PNX are clearly broken. They all have 14 day RSI sub 30 and CCIs in the -160 range. For example, TEX has been down 14 of the l...

This just further highlights why you have to be careful when following analyst calls. UBS today resumed coverage of the insurance group with Buy ratings on 2 of our Growth Portfolio stocks in Hartford Financial (HIG) and Phoenix Companies (PNX). The HIG call is just mind boggling as the target goes from $13 to $35. Basically by following UBS, investors missed over a 100% gain already. Yikes! And Hartford shares jumped $1.41, or 5.4 percent, to $27.66 as Kligerman raised the insurer to "Buy" from "Neutral" and hiked his price target to $35 from $13. He said the company has the means to "absorb adverse equity markets, higher capital requirements and investment losses." The company has a new chief executive, Liam McGee, who is "coming into a good situation," he said. "We think HIGs near-term roadmap seems clear and extremely positive in terms of top-line life and P&C initiatives, as well as risk mitigation and capital management," the...

Both Phoenix ( PNX ) and Synovus Financial ( SNV ) are small cap financials trading below book value. PNX being a badly beaten down insurance company left for dead and SNV being a regional bank that recently did an offering 10% higher. For SNV we have added to a position began at $2.8. If the economy continues to recover, these 2 financials will be big winners. Edit 11PM: PNX closed above the 20EMA which remains above the 200EMA. If the stock gets follow thru tomorrow, its a must buy with a book value close to $8. Disclosure: Long in client and personal accounts