Out Fox The $treet

Back in July of last year, I did a series of articles about companies with relatively cheap valuations that were expecting the fastest earnings growth in 2012 (See 1, 2, 3, 4). These companies offered the potential for huge stock gains if earnings estimates were met. Unfortunately, just as I wrote those articles the global economy went into a tailspin due to the European debt crisis and stock prices collapsed along with the earnings estimates of the majority of those stocks Now as global stock markets appear ready to head upwards, it seemed like a good time to revisit this list. It is always a good idea to check the outcome of a previous concept. How did the stocks perform? Were earnings estimates met? What about the valuation now? Read full article on Seeking Alpha. Disclosure: Long CRZO, MTW, and TEX. Please review the disclaimer page for more details.

This is the fourth and final article focusing on the stocks with the fastest earnings growth rates for 2012 according to the SteetAuthority report . The first three articles focused on Take Two Interactive ( TTWO ), Patriot Coal ( PCX ), Accuride ( ACW ), and Meritor ( MTOR ). The final article will focus on the better remaining options. All of the companies on the list expect earnings to soar more than 100% from fiscal 2011 to 2012. If the numbers are hit, than any of the picks could provide solid stock returns. The remaining list includes Allstate Corp ( ALL ), with a market cap around $16B, all the way to SMART Modular Tech ( SMOD ), with only $580M in market cap. All of them have relatively low forward PEs considering they expect earnings to expand by triple digits. The key is to determine which stocks have the potential to expand on these earnings beyond 2012. One-off situations such as ALL aren't as appealing. Read the full article at Seeking Alpha. Disclo...

As the market has rallied significantly off the March 2009 lows, it's worth reviewing how sectors have performed over that time period. Some companies such as Caterpillar ( CAT ) have recently reached all time highs. Others like the steel sector have struggled to even approach those levels. This will be the first in a series of articles reviewing sectors that remain significantly below the pre-financial peak. Some sectors might offer huge upside as their sector might join the rally while others might never recover.  Real the full article at Seeking Alpha .  Disclosure: Long X is client and personal accounts. Please review the disclaimer page. 

May was a very rough month for the Opportunistic Levered model. It severely underperformed the market as China specifically and emerging growth stocks in general were hit much harder than the overall market. This trend will likely continue into June, but eventually will provide great upside potential as most of the stocks in these areas remain extremely cheap. Expanded Track Record Recently the track record was expanded back to January 30, 2009 adding a little over a year to the previous record. As one can see, the model can be very volatile, but the end result has been very good for anybody that remains invested. Sometimes an investor has to accept wild price swings in order to make long term gains. It is not uncommon for top stocks to drop more than 25% before eventually rebounding to higher prices. At times it can be worthwhile to cash out to avoid losses such as the recent sell of Limelight Networks (LLNW). The sell limited losses without incurring material capital gains impacts...

March was another volatile month. The month ended on a solid note with the Opportunistic Levered model ending with a 2.3% gain compared to a slight loss for the SP500. Considering this model ended the month with considerable leverage on the long side, its always very positive when it outperforms the market in negative months even if the loss was negligible. As mentioned in the March Investment Report, the market was in need of a selloff and the SP500 got that in the form of a roughly 7% drop to the intra-day low of 1,249 on March 16th. While many experts continue to expect and expected a larger selloff, in our view this was the buying opportunity we were waiting on. Added More Long Exposure Since we expected a drop to around 1,250 to be close to a bottom in the SP500, we added more long exposure around the middle of March. Specifically we added exposure to the oil services and commodity sector to benefit from the rebuilding in Japan and continued emerging market growth. Also our r...

Anybody not under a rock that follows the financial world has heard about the proposed plans in Australia to tax mining profits by 40%. Not but a few weeks old and we've already seen several signs of the unintended consequences of the taxes. First, BHP Biliton CEO discussed the likelihood of putting projects on hold. Second, Peabody Energy (BTU) lowered its bid for MacArthur Coal in Australia. Stone Fox Capital's read: Buy companies with assets outside Australia in particular we've bought Freeport-McMoRan (FCX), Massey Energy (MEE), and US Steel (X). More on them later. Our reasoning is that the tax will limit the supply especially from new projects in Australia with limited impact to demand. It clearly makes assets outside Australia more attractive. In the end, the announcements this weekend could go a long way to pressure the government to ratchet back the tax plans. It clearly places short term risk around projects. BHP CEO Kloppers made it clear over the weekend that th...

U.S. Steel (X) reported a dismal Q today. Revenue handily beat estimates ($3.4B vs $3.1B) yet earnings missed consensus numbers. All while competitors Nucor (NUE) and AK Steel (AKS) both easily beat number and reported profits. If that wasn't discouraging enough, X forecast that Q1 would be similar to Q4 while analysts (us too) expected a much improved number. Evidently input costs such as coking coal have increased much more then prices. This could be partially because of the demand in China. All in all, this tells us to stay with the Alpha Natural Resources (ANR) and the new pick in Puda Coal (PUDA). The coking coal companies seem able to benefit from the rising demand without the rising supply. Key line from the report: "We expect to report an overall first-quarter 2010 operating loss in line with the fourth-quarter 2009 as gradually improving business conditions are not yet fully reflected in our operating results," said Chairman and Chief Executive Officer John Surma...

Just trimmed our position in US Steel (X) in the Growth Portfolio by 400 shares or about 40% of our position. Mainly just a trading move as X has become extended trading at roughly 20% over the 20EMA and the 14 day RSI is at 82. Numbers that usually alert to near term tops. We'll look to add back this position around the 20EMA currently at $49.50.

After what as been a weak last 4-5 days in the materials sector, its interesting to see that U.S. Steel (X) closed at recent highs. Some bullish news from the demand in China helped. Now X did trade at around $50 back in September so that will be the next resistance area before we have a major breakout. Its important to remember that X traded at $180 last year so its still some 60% below that high. X is one of our larger holdings in the Growth Portfolio. 2:07PM U.S. Steel notches a fresh session high of 46.30, hovering slightly under its Dec/two month high at 46.40 ( X ) 46.27 +2.04 : (closed at 46.74)

US Steel (X) has one of the best symbols. Added more shares to the Growth Portfolio today. The dynamics in the steel industry appear to be improving. Talks by Ford (F) of ramping up auto production will be a big boost to steel production. Think I've seen figures around 18% of steel production goes towards autos. Not to mention that some of the stimulus infrastructure spending should begin starting in the US and other countries. MarketWatch.com has an interesting article about the improving demand seen in the steel markets. Its encouraging that a market bottom has been reached and the all but certain increase in auto demand will help boost this weak sector. The ISM data from yesterday also very much supports this sector. Though X has risen nicely this year, its still trading down roughly 80% off its high of $180. Also its worth noting that X made $18 in earnings in 2008 which is a remarkable amount for a stock now trading at $34. Alpha Natural Resources (ANR) is another stock Ston...