The Right Place for Your Money, Right Now

This summer, Wall Street earnings were as unfashionable as polyester leisure suits. Too many Wall Street folks lost sight of fundamental investing and instead became obsessed with arbitrage investing, which exploits differences in currency markets to turn a quick profit, to give you one example.

When market liquidity evaporates, these trades can become unwound. That explains why there was so much overall volatility in August.

In recent years, fundamentally focused quantitative analysts like myself were overshadowed by younger, slicker arbitrage types who for some reason like to use a surprising amount of hair gel.

Fundamentals Back in Style

According to CNBC, after the arbitrage quants blew up on short-covering in August, Wall Street has rediscovered fundamentals.

It’s about time! Fundamentals are, well, fundamental! They never ever go out of style, despite what the hair-gel fad followers say.

I consider myself a quantitative investor, but I rely heavily on fundamentals when I make my stock-picking decisions. By fundamentals, I mean the performance measures that separate good companies from bad ones:

• Are they selling enough of their products (sales growth)?
• Do they maintain a good revenue stream versus the costs they incur (operating margins)?
• Do they just talk the talk, or do they walk the walk?

When money floods out of the market, it eventually floods right back in, and when it does, stocks with superior fundamentals benefit from the onslaught of buying pressure.

All that money in risky investments is suddenly looking for a home. The best place the strategists on Wall Street are pointing to invest in right now is growth stocks, especially large-cap growth stocks like the stocks on our Blue Chip Growth Buy List.

Because of irrational market dips, we’ve just recommitted to 2 stocks we already realized substantial profits from at Blue Chip Growth.

We sold one at 22 % and the other at 56%. New price dips make them very attractive again.

2 Bounce-Back Stocks

The first stock is, literally, the place to be. We sold this stock back in May for some nice 22% profits—and we’re ready for an encore performance.

The company manufactures digital navigation products that use global positioning system (GPS) technology to deliver geographic location data wirelessly through satellite communications.

In other words, they make products that help people easily get where they need to go—often with just the push of a button. The company’s handheld and portable products incorporate electronic maps and navigational charts.

They also make communications devices, which combine cellular and GPS technology.

 During its second quarter, this company saw a 72% revenue increase to $742.5 million. Earnings came in at 98 cents per share, which was 35% better than analysts expected!

Sales of automotive devices rose 98% to $507 million. The company also increased its guidance to more than $3.15 per share in 2007.

In light of the recent correction, the stock is a bargain-hunter’s paradise. This one belongs in the Moderately Aggressive section of your portfolio. Find out all about it as part of your risk-free trial.

Pumping Out Profits

We sold this oil service sector back in January for 56% gains. It’s time to pull up to the pump again. In fact, I believe it may be time to back up the truck.

Despite low natural gas prices and erratic crude oil prices, the oil serviceindustry continues to boom. After Venezuela nationalized its biggest oil field and companies like ConocoPhillips and ExxonMobil rejected their compensation, the search for new natural gas and crude oil in friendly countries remains relentless.

Which is why I’m excited to return to this company. They specialize in deepwater drilling. It’s not afraid of getting its feet wet with operations in the world’s major offshore oil-producing regions, including Africa, Asia, Brazil, Canada, India, the Middle East, the Gulf of Mexico and the North Sea.

They have a fleet of 82 mobile offshore drilling units, inland barges and support vessels, including semi-submersibles and drill ships, jackup rigs and other rigs. As the premier deep-water driller in the world, the company has a massive order backlog and is still charging very high day rates.

Second-quarter earnings recently soared 145% on record vessel day rates and improved drilling efficiency. The company earned $1.84 cents per share compared with 75 cents per share last year. Sales increased 67% to $1.43 billion. The average day rate for one of their vessels reached an all-time high of $202,400 in the second quarter. Simply put, the oil service industry remains very strong due to the perennial search for more reliable sources of crude oil.

It’s another  Moderately Aggressive play. Explore it, and the Conservative and downright Aggressive stocks on my Blue Chip Growth Buy List. Risk-free!

Discover Louis Navellier’s 2 bounce-back plays in the September issue of Blue Chip Growth Letter. Plus ALL his other picks for post-Labor Day profits!  Navellier’s Blue Chip Growth Letter recommendations have returned more than 188% from 1998 through 2006, according to The Hulbert Financial Digest, an independent tracker of investment newsletters. Get in on the profits now. Click here now try Blue Chip Growth today, risk-free.