I have watched Boston Scientific (BSX) for quite some time. Today, I am adding BSX to the IA portfolio with a buy limit of $25.
The BSX insiders have an excellent track record, and their timing on purchases and sells are usually accurate. After my February 16, 2006 post, 釘ig Move in BSX", insiders at BSX have continued to accumulate shares even at current levels. This is the reason I wanted to add BSX to the portfolio now.
To make room for BSX, I am selling United Healthcare (UNH). UNH has rewarded us handsomely since we bought it pre-split in November 2004. After the 2-1 split, our adjusted cost basis is $41, giving us a 17.60 point gain for a return of 43%.
In addition, I am not happy with the price action in Oracle (ORCL). We are also selling ORCL from the IA portfolio.
On the energy front, it looks as if oil prices are beginning to stabilize, and the profit -taking that we have witnessed is coming to an end. USA Today has been bragging about the S&P 500's track record of 15 consecutive quarters of double-digit earnings growth. You and I both know that the majority of those gains were due to record profits in the energy sector.
Down the road, I am convinced that a much larger and deeper correction will hit the energy sector. I want to remain nimble and trade some of our stocks during the next run up.
My best guess is the oil players will try to keep their profits flowing by making voters happier a few months before the mid-term elections in November. The 3 months leading into the election is when I anticipate a pullback in the energy sector. After the election is over, oil will resume its quest to suck profits out of the consumer.
For those who wish to hedge their portfolios, you have had an opportunity to add the Rydex Tempest (RYTPX) for insurance. The first correction we see will probably be somewhat mild, in Q3, the correction could be much more severe.
