Portfolio deletions : DUSA,LHO,WTT,BRP,SBLK,WTBA,DX,EDR

Today I deleted 8 stocks from the Barchart Van Meerten Speculative portfolio for negative price momentum.   They were Dusa Pharmaceuticals (DUSA), LaSalle Hotel Properties (LHO), Wireless Telecom Group (WTT), Brookfield Residential Properties (BRP), Star Bulk Carriers (SBLK),  West Bancorporation (WTBA), Dynex Capital (DX) and Education Realty Trust (EDR).

Dusa Pharmaceuticals (DUSA)

Barchart technical indicators:

• 64% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 23.56% off its 1 year high
• Relative Strength Index 39.50%

LaSalle Hotel Properties (LHO)

Barchart technical indicators:

• 80% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 16.38% off its 1 year high
• Relative Strength Index 34.53%

Wireless Telecom Group (WTT)

Barchart technical indicators:

• 88% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 24.46% off its 1 year high
• Relative Strength Index 37.93%

Brookfield Residential Properties (BRP)

Barchart technical indicators:

• 56% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 16.67% off its 1 year high
• Relative Strength Index 34.20%

Star Bulk Carriers (SBLK)

Barchart technical indicators:

• 88% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 66.41% off its 1 year high
• Relative Strength Index 33.37%

West Bancorporation (WTBA)

Barchart technical indicators:

• 56% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 11.47% off its 1 year high
• Relative Strength Index 46.93%

Dynex Capital (DX)

Barchart technical indicators:

• 32% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 8.22% off its 1 year high
• Relative Strength Index 40.99%

Education Realty Trust (EDR)

Barchart technical indicators:

• 32% Barchart technical sell signal
• Trend Spotter sell signal
• Below its 20, 50 and 100 day moving averages
• 7.45% off its 1 year high
• Relative Strength Index 37.27%

Dynex Capital - Income from mortgages

This morning I added Dynex Capital (DX) to the Barchart Van Meerten Speculative portfolio for positive price momentum.  The portfolio contains stocks trading under $10 that are hitting the most frequent new highs when screened on Barchart:

Dynex Capital, Inc., (DX) together with its subsidiaries, operates as a mortgage real estate investment trust.. The company primarily invests in mortgage-backed securities issued or guaranteed by a federally chartered corporation, commercial mortgage-backed securities, and non-agency residential mortgage-backed securities, as well as securitized residential and commercial mortgage loans. It finances its investments through a combination of repurchase agreements, securitization financing, and equity capital. The company has elected to be treated as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income tax, provided it distributes at least 90% of its taxable income to its shareholders. The company was founded in 1987 and is based in Glen Allen, Virginia.

Factors to consider:

Barchart technical indicators:

• 96% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 17 new highs and up 14.27% in the last month
• Relative Strength Index 66.68%
• Barchart computes a technical support level at 9.54
• Recently traded at 9.61 woth a 50 day moving average of 8.82

Fundamental factors:

• 7 Wall Street brokerages firms follow this stock and analysts predict income will increase by 5% a year for at least the next 5 years
• Analysts have released 1 strong buy, 4 buy and 2 hold recommendations for their clients
• P/E ratio is only 8.75
• The dividend rate is 11.32% at today's price

General investor interest:

• I use the readers of Motley Fool to gauge individual investor interest and 86 readers are following this stock
• The general reader voted 88% that the stock will beat the market
• The more savvy All Stars also voted 88% for the same result

I think it's informative to compare the price momentum of a stock to it's competition.  While DX is up 20% in the last 50 trading sessions, Capstead Mortgage (CMO) is up 12%, iStar Financial (SFI) down 11% and Redwood Trust (RWT) down 7%:

Summary: Dynex Capital (DX) looks like a good candidate for total return or income portfolios.  With a P/E less than the market's and a dividend rate over 11% this looks like a winner.  I'd play the 14 day turtle channel on this one: