I know The FastCap Strategist has been quiet lately. The earnings surprises over the last few weeks just haven’t had the features I’m looking for in a post-earnings-announcement-drift stock.

Here’s the biggest issue I’m seeing: The stocks that have surprised lately have already had much too high a level of institutional ownership. Our thesis for post earnings drift is that earnings surprises attract the attention of institutions that then start to buy in. But if ownership is already too high, there’s no room for new institutions to join and push up the price.

The sweet spot for ownership is the 70% to 80% range. But lately, there haven’t been many companies surprising on earnings that are less than 90% owned by institutions.

Logically, there’s no correlation between a company surprising on earnings and being owned by institutions. So that means this dry spell is just a statistic anomaly.

In fact, there’s one stock that did fit the bill on almost everything: Sycamore Networks (Nasdaq: SCMR).

We’re not buying Sycamore today, but it’s an exciting prospect. The company develops advanced software that allows telecommunications networks to more intelligently manage their mobile broadband networks. If you didn’t know, between iPhones, iPads, Android phones and the like, mobile networks are extremely overtaxed and companies like Verizon and AT&T are desperate for a solution.

So why aren’t we buying? Shares are too overheated for a short-term trade. Sycamore is on my watch list, and if we see shares dip below $29 or $28 in the next eight days or so, expect to hear from me again.

The other stock that looked good for a trade was Shuffle Master (Nasdaq: SHFL), which we already hold. If we don’t see a good boost in that over the next week, we’ll let it go and move on. Let’s tighten the stop up just a tad to $7.55.

The rest of the portfolio is performing well.

Let’s put stops in place on RINO International (Nasdaq: RINO) at $13.50. And one for Navios Maritime (NYSE: NM) at $5.05.

Let’s also boost our sell stop on GeoEye (Nasdaq: GEOY) to $36.50, and our sell stop on Robbins & Myers (NYSE: RBN) to $22.90.

It won’t be long until I have a new pick. And I want to add positions ahead of what I expect to be a strong market rally, so stay tuned.

Ahead of the tape,

Matthew Weinschenk