Last Week's Russell Boots Are Today's Winners (FNSR, SANM, SIRI, VG, BBI, MNI, FRE, FNM)

Many knew that the huge Russell rebalance stocks was creating huge selling in the names toward the end of last week.  Yet on no news today we are seeing solid gains in many of those same stocks.  Traders are using the end of week major selling as a discount buying opportunity today.  This can be seen explicitly in many of the key low-priced technology stocks and in media names.

In technology stocks and media stocks, this is definitely being seen.  Finisar Corp. (NASDAQ: FNSR) is up 12.5% at $0.54. Sanmina-SCI Corp. (NASDAQ: SANM) is up 8.5% at $0.43.  SIRIUS XM Radio Inc. (NASDAQ: SIRI) is up 20% at $0.44.  Vonage Holdings Corporation (NYSE: VG) is up 14% at $0.388.

Shares of Blockbuster Inc. (NYSE: BBI) are up 11% at $0.69. Even The McClatchy Company (NYSE: MNI) is up almost 11% at $0.51.

Two other huge “stock boots” which saw major selling on Friday and being bought back up today are the two worst GSE’s of our lives:  Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) are up 16% at $0.61 and up 17% at $0.60 respectively.

While the Russell indexes changes are much more powerful than many other index changes, the truth is that the addition or deletion does not change any of the business fundamentals.  So traders are buying was was unloaded on a wholesale basis at the end of last week.

What was on sale all week is being considered a bargain today.

Jon C. Ogg
June 29, 2009