After the Fed lowered interest rates on Tuesday, equities seem poised to regain lost ground from the late summer slump. I remain somewhat skeptical as to whether the broader economy will improve. With the dollar at historically weak levels internationally, imports will become increasingly expensive, with the potential to fuel inflation.
Last Wednesday I added to several positions, including
, one of our October deep in-the-money positions. On Thursday, the stock surged and the position closed with a solid win. However, because a new good-till-canceled sell order was not published after the trade, I want to be clear that I would close out any remaining positions today by setting a GTC sell price order at $3. This will lock in a profit of $3,120 that can be taken to the bank.
Today, we are going to take advantage of one of the great technology companies of the world:
. The stock has been completely hammered. It was trading around $60 in March and it is now trading at $44, near its 52-week low.
I had picked Infosys
last month, but if you didn't read that article, here are the facts. Based in India, Infosys is among the pioneers of information and technology outsourcing.
It has a global presence with offices in the U.S., Europe, China, Australia and several other international locales. The first time I wrote about Infosys, I stressed that companies that produce significant foreign revenue are especially attractive in volatile markets. With an array of impressive customers, such as
, they are considered the best in the business.
Last year, Infosys earned more than $3.3 billion in revenue, and the company has a market cap of $28.3 billion. Its balance sheet is exceptional, with $1.6 billion in cash and equivalents and no long-term debt -- Infosys has actually earned a higher credit rating than India's sovereign credit rating. In addition to all the cash, the ROE comes in at almost 40%, while year-over-year revenue growth was a staggering 40.60% in the most recent quarter.
Today, I will buy 10 April 40s, placing a limit order at $8.60 or better.
Game of Life
As baseball enters the final week of the regular season, four of the six divisional races are still up for grabs. The Indians and the Angels can rest their regulars, and set their rotations for the playoffs at this point, as they have won the AL Central and the AL West, respectively. The devout legion of fans in Beantown can rest easy, as their beloved Red Sox have clinched a playoff spot. The potential damage to their collective psyche if the Yankees overtake them and win the AL East, however, remains to be seen. The Yankees, who are 1.5 games back, are virtually assured of a playoff berth as well.
Meanwhile, in the National League, all three divisional races, as well as the wild card, are still very much up for grabs. The Mets have managed to hold the Phillies off in the NL East, as they enjoy a 2.5 game lead. The Phillies, who lead the majors in come-from-behind wins, trail the Padres in the wild-card race by a half game, with the Rockies 1.5 games back. The Cubs have opened up a 3.5-game lead over the Brewers in the NL Central, while the Diamondbacks appear poised to win the NL West, as they enjoy a 2.5-game lead over the Padres.
In the NFL, as expected, Indianapolis and New England are 3-0, although the defending champion Colts have been significantly tested. To the shock of virtually everyone, the Packers, led by the ageless Brett Favre, are 3-0 after defeating the Chargers, who are unexpectedly 1-2. With his three touchdown passes against San Diego, Favre tied Dan Marino's record for career touchdown passes with 420.
On the college gridiron, USC and LSU solidified their rankings as the top two teams in the land. Michigan seemingly has righted the ship, defeating Penn State to even its record at 2-2. On the other hand, Notre Dame lost to Michigan State, to go 0-4, the worst start in Fighting Irish history.
In China, the U.S. women's soccer team defeated England 3-0 to advance to the semifinals of the World Cup on Wednesday, where they will face Brazil for a berth in the finals. In another international competition -- one that has lost a great deal of its luster -- the U.S. Davis Cup tennis team, led by Andy Roddick, defeated Sweden to claim a spot in the finals against Russia.
The Players Club recognizes and appreciates that representing one's country has a special allure for most athletes. The opportunity to don your country's uniform often supersedes other athletic accomplishments. By guaranteeing recurring cash flow through our strategic partner, The Players Club endeavors to allow our members to participate and enjoy life, wearing the uniform of family, which pays dividends that are incalculable.
Always remember: Life is a journey, enjoy the ride!
At the time of publication, Dykstra had no positions in stocks mentioned.
Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."