Thursday, June 30, 2011

RSY XXXX: Sell 1/2 Total, Buy FNLC

Although, just recently I put my eye on Pulaski Financial Corp. (PULB), I like what I see. One very positive signal to start with is that insider buying is greater than selling with 17 transactions of insiders buying to one selling according to Yahoo Finance (at PULB Insider Transactions), and number of shares is nearly 5 buying to one selling. On forensic accounting scores, PULB scores acceptable with a near "conservative" rating. They did have one issue with a late filing in May 2010, but since that time no major issues have arisen. Sabrient Systems has this to say on the SmartStock Reports:
Sabrient Analysis
PULB is rated a Strong Buy for its outstanding profile as a value stock, combined
with strong growth attributes.
• Value: A Sabrient Value Score of 89.4 indicates that PULB's stock price does not
fully reflect recent and projected earnings results. This implies that the stock holds considerable potential for price gain together with reduced downside risk.
• Growth: A Sabrient Growth Score of 77.8 suggests the stock has good potential as
a growth stock.
Another fine GARP (Growth At a Reasonable Price) stock that should be well suited for long-term value investors. In addition to our all important value score and good growth potentials, PULB also shows outstanding Balance Sheet Score (measure of comapany's liquidity and debt issues) of 92.6 and Fundamental Score (broad measure of a company's financial health) of 90.5 (out of 100 scores).

The next question becomes how many shares will enhance the RSY portfolio for the long-run. This is a good time to look at our portfolio and compare the percentage holdings of each position as well as sectors. The table below shows the current holdings of the RSY and their respective percentages of the total portfolio which includes the cash on hand.

RSY recently added FNLC which is another regional bank like PULB. Since RSY has over 8% in financial sectors, and PULB is a micro-cap stock, RSY recommends a purchase of 400 shares of PULB at a limit price of $7.19. Good-til-close is recommended but if it does not trade by the close of July 5th then close the order as the ex-dividend date is July 6th.

The table also shows a concentration of stocks in energy with over 18% of the portfolio. TOT is still rated a buy by Sabrient. Since the next ex-dividend date is in November and we just got $1.61 per share on June 17th, RSY recommends a sell order of the last lot purchased of TOT for a small gain and hold the other half for now. RSY recommends a sell of 100 shares of TOT at a limit price of $57.51 (GTC).

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