For those of you reading this week’s wrap-up who are not Geoinvesting premium members and not aware of our Buy on Pullback Model portfolios, we are constantly on the search for stock prices of companies we like that fall or have muted reactions to good news. These types of overreactions or under reactions are often the result of market gyrations or the inability of investors to digest the full scope of a particular event. In early 2016 we launched “Buy on Pullback” Model Portfolio 1.0 in order to take advantage of these mispricing scenarios.
We just closed out all the positions in our Buy on Pullback Model Portfolio 8.0 created earlier this year which posted an average return of 85.3% in 5 months. On October 30, 2020 we opened Buy on Pullback Model Portfolio 9.0 to take advantage of falling stock prices during a market selloff. The portfolio is off to a great start:
- 4 out of 5 stocks in the portfolio are up
- There is a cumulative return of 51.22% across 4 stocks
- The average return is 10.24%
The early returns are being buoyed by the performance of Ocean Bio-chem, Inc. (NASDAQ:OBCI), up 23.25%.
On June 19, 2020 we initially disclosed a long position in Ocean Bio-chem, Inc. (NASDAQ:OBCI) at $7.50 as we felt the company would experience short term and long term bump in sales as their products become more attractive in the current and post COVID-19 environment.
OBCI’s products include:
- Boating and RV products (benefitting from surge in demand for boats and RVs during COVID-19)
- Performacide, a commercial sanitization product line (benefitting from combating the spread of COVID-19)
The stock had a runup to $22.55 on August 3rd, 2020 before pulling back sharply.
Then, we added the stock to the Buy on Pullback Model Portfolio 9.0 on Monday, November 9, 2020 after the stock fell ~20% to $12.50 in one day. We surmised that the big one-day pullback was a result of negative investor sentiment that the demand for the company’s products would be dampened by the imminent arrival of Pfizer’s “90% effective” COVID-19 vaccine. We believe the negative investor sentiment was way off the mark.
Instead, we think that OBCI’s product lines will remain strong and maybe get stronger after COVID-19 passes, as stated in last Monday’s tweet:
Following a strong 2020 Q2 financial outing in July, OBCI issued fantastic 3rd quarter numbers during the day last Friday:
In reaction to Q3 numbers, the stock climbed ~13% on Friday to close at $15.24. We anticipate a related press release will be issued tomorrow morning and hope it will shed more light into some of the bullish assumptions we are making.
GeoInvesting Weekly Premium Email and Call To Action Updates (Nov 9 – Nov 13)
Weekly Wrap Up Summary…
On Wednesday, November 11, 2020, we added a new stock to our Buy on Pullback Model Portfolio 9.0. Similar to our OBCI addition, we believe the recent COVID-19 vaccine-related pullback is completely unwarranted and that the momentum created during pandemic created a new level that sill stick around. Furthermore, the stock experienced record rev before the pullback.
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