The Financial Advisor Update

Return to Article

Dykstra: Making MVP Picks

Lenny Dykstra

It seems with Pujols, you can expect certain numbers from him every year. Bank on at least a .325 average, 35 home runs and more than 100 RBIs consistently. Now, while not dismissing his surrounding cast, imagine if he had another masher like himself in that line up? Pujols seems to be almost alone, which makes his season even more remarkable. Throw in his outstanding defense every season, and he is the definition of a complete player.

Looking at his postseason numbers, Prince Albert doesn't break a sweat. They are in line with his regular season stats. It is like he is a machine whose job is to punish pitchers.

My job, as an investor, is similar in that I like to punish the operators on Wall Street each and every day. I also like to look for companies with consistent numbers. However, I am not looking at the stocks that are performing at the top of their games. I'm looking for solid companies that have been beaten down but have what it takes to become MVPs for me and subscribers to my newsletter, Nails on the Numbers.

Many players have clauses in their contracts that trigger bonuses for earning the MVP honor. In my system, I get the "bonus check" of $1,000 for turning stocks into MVPs after they hit my good-till-cancel (GTC) sell price.

When the voters determine who they will cast their MVP votes for, they look at certain numbers across the board. The batting average, on-base percentage, home runs, and runs batted in are all important statistics to analyze.

I have my own numbers that I like to evaluate. When scanning the stock universe, I look for companies with a forward price-to-earnings (P/E) ratio of less than 15. This stat is a measure of investor confidence and anything under 15 tells me that the operators on Wall Street have pushed this stock down too far.

Companies with little or no debt are also great ones to choose. It is important to stick with a stock that has a good amount of free cash after it pays off its bills. This allows them added flexibility to grow their business even when times are tough. I favor companies that have a high amount of institutional support as well.

These statistics are great in determining which stocks will turn out to come through in the clutch for me. I have had a number of recent picks that have turned around for wins already. I picked up a cool $1,000 win with Microsoft(MSFT Quote) on Oct. 13. I was able to ring the register to the tune of a $4,100 win on Nov. 4 with a victory with General Electric(GE Quote). My Archer Daniels Midland(ADM Quote) pick crossed the finish line recently as well, for a profit of $7,650.

Like Pujols, a multiple MVP winner, several stocks have touched home plate many times for me. Halliburton(HAL Quote) has been a big time MVP for me this season. Texas Instruments(TXN Quote) is another one that has helped bring in the wins many times. Wachovia(WB Quote), United Technologies(UTX Quote), Boeing(BA Quote), Parker Hannifin(PH Quote) and Frontier Oil(FTO Quote) are other examples.

Always remember: Life is a journey, enjoy the ride! Lenny Dykstra manages "Nails on the Numbers," a premium options alerts service sold by TheStreet.com. Mr. Dykstra is 83-0 in his options trades this year. For a free trial to "Nails on the Numbers," click here. Mr. Dykstra writes regularly about options trading for TheStreet.com.