W P Stewart (WPL)

Company

"The Stewart Group, which includes W.P. Stewart & Co., Ltd. and its subsidiaries and predecessors, is an asset management organization that has provided research-intensive equity investment management services to clients throughout the world since 1975. Headquartered in Hamilton, Bermuda and with additional operations or affiliates in the United States, Europe and Asia, we currently manage approximately $8.4 billion in assets (as of June 30, 2006). Our clients are primarily high net-worth individuals and trusts, partnerships, private corporations and other entities in which high net-worth individuals have a substantial interest, as well as institutions. Our client base is geographically diverse; as of December 31, 2005, approximately 35% of our assets under management are from non-U.S. clients." (company website)

Buy

27-Sep-06. W P Stewart has been in a downtrend for most of the past year, steepening in recent months (see sidebar). WPL is just showing signs of breaking above the trend line, so this is definitely an "early buy" (like the other buy today, SCUR), but with a stronger chart.

• Price momentum (PPO) — picked up strongly since mid-August
• Trend (ADX) — strengthening, and now crossing the threshhold (20)
• Money flow (CMF) — still flowing out of the stock, but at a slower rate
• Relative strength (RSI) — steady strengthening
• Volume — stronger volume since earnings

Sell

4-Oct-06. The market works in mysterious and unpredictable ways. When the market closed yesterday, WPL was up slightly from my buy price, having traded as high as $12.60 during the day. It was sitting comfortably near the upper Bollinger band. This morning, WPL declared a dividend, and the stock took a tremendous hit, driving it down more than 10% from yesterday's high. This triggered my stop-loss order.

As I read the brief news item that appeared on MarketWatch, the dividend announcement should have been good news:

SAN FRANCISCO (MarketWatch) -- W.P. Stewart & Co. shares fell 8.3% to $11.44 in Wednesday morning trade. Earlier, the Bermuda-based asset management company declared a regular quarterly dividend of 23 cents a share, and added that it expects the dividend level should be sustainable for the next several quarters.