Keep Your Eyes on the Road, and Your Hands Upon the
the Steering Wheel
by Martin Dekom
Just so everyone knows, that doo-dad on the left side
of the steering wheel is the turn signal indicator;
colloquially known as the
By manipulating it vertically, one can actually indicate
to other drivers which way one is turning. This may seem
obvious to you, being reasonably intelligent and fairly
However, my research in the field shows that this
fundamental of collision avoidance has been lost on
the masses of drivers who infest the area between
my office and home.
It's a jungle out there!
My current project is to see if I can apply this principle to
somehow attach a to those equities with changing
prices. Perhaps if I spot an
upward trend soon enough I could put on the left turn
signal to indicate that the graph is moving towards the
top of the page, along with an appropriate sound
This may be the case
with Cohu (NASDAQ: COHU), a maker of high tech gizmos and
other electronic widgets. Who cares what they make if
the turn signal is on?!
Well, before jumping to conclusions, let me recount a
recent Cohu story.
Cohu's price had bottomed in the low 20's
and had crept up towards 25 when they announced their earnings. They are
doing very well, this being reflected in the bottom line, so the stock shot
up to 36; a 40% gain. However, since mid-February the turn
signal was down and
the stock is now in the vicinity of 26-27. The next earnings report is due
I believe this stock is undervalued at current levels, and that by
buying the stock and/or selling the options
(the May 30 calls sell for 1 3/8), one could
reasonably expect a net gain of 6-10% within 6 months.
For those who read the fine print, be apprised that this
is an aid to your due diligence, not a
substitute, and represents only the opinion of Martin Dekom.
Click back to Martin's homepage.