I recently bought Motorola (MOT), Linear Technology (LLTC), Forward Air (FWRD), Sunoco (SUN) again, and Coheen and Steers REIT and & Utility Income Fund Inc (RTU) which is a Closed End Fund selling at a 13% discount.
All the recent stock purchases are bought at least 20% below their 52 week high, paying a dividend and are ranked at least a B+ or better on S&P dividend ranking.
A recent article I read called “Why Stock Stocks are often the worst buy candidate” supports my buying strategy of buying stocks on short term weakness. I buy stocks that have been beaten down recently. Most recover quickly after all the pessimism dissappears and people worry about some other bad news. Recent examples of buying on weakness include my purchase of CVS. I bought CVS after they announced that they would buy Caremark. I bought the stock after it dropped 8 percent in 1 day. Normally, people would stay away from stocks that just dropped that much, but I see it as a good buying opportunity if the company is strong. People just overdiscount the recent bad news and it creates a perfect buying opportunity for me. CVS is now up 14% for me and I put a 3% trailing stop on it.
There are more buying opportunities opening up and I plan to sell some of my winners to buy more attractive beaten up stocks.
