Tuesday, December 18, 2007

Getting Some Energy From USU

For over a month, USEC Inc. (USU) has been popping up near the top of my list. I think it's time to mention it in this blog.

USEC, Inc., together with its subsidiaries, supplies low enriched uranium for commercial nuclear power plants worldwide. The company also performs contract work for the U.S. Department of Energy (DOE) and DOE contractors at the Paducah and Portsmouth plants, which includes the maintenance of the Portsmouth gaseous diffusion plant in a state of readiness or cold standby, processing out-of-specification uranium, and provision of infrastructure support services. In addition, USEC provides nuclear energy solutions and services, including design, fabrication, and implementation of spent nuclear fuel technologies; nuclear materials transportation; and nuclear fuel cycle consulting services.

USU's stock (today at 9.21) has formed a base with solid short term support at around 8.00, broke above the 50 day moving average 7 days ago and has, to date, held above that line. Over 4.5 million shares trade per day, short positions amount to about 25% of the floating shares. Low debt, a low P/E of 7 and a good book value raise my interest in this company. Number of funds owning the stock have increased over the past 4 quarters.

This one could be a bargain at this price.

Wednesday, December 12, 2007

Check Out SLXP

Over the last few weeks Salix Pharmaceuticals Ltd. (SLXP) has consistently been showing up in my stock screener. Several days ago, I saw a nice change in its chart pattern, the stock price broke above the 50 day moving average and, up to date, has held steady above it. I like that behavior provided it holds above 11.82 (50 DMA).

Salix Pharmaceuticals, Ltd. engages in acquiring, developing, and commercializing prescription drugs used in the treatment of various gastrointestinal diseases in the United States.

SLXP is trading today at 11.89, 27.4% off its 52 week high, trades an average of just over 780 thousand shares per day. A heavily shorted stock (about 1/3 of its floating shares) could make an investor with contrarian views salivate should a short squeeze occur. If the stock price continues on and uptrend, shorts may head for the exits. It is early to tell if this move can carry through the next 2 months.

I am betting that this one is going to perform well in the future.

Wednesday, November 07, 2007

A Look at PNSN

Another dismal trading session. On a day when most stocks are taking hits, Penson Worldwide, Inc. (PNSN) seems to be holding up well.
Penson Worldwide, Inc., through its subsidiaries, provides a range of securities and futures processing infrastructure products and services to the securities and investment industry.
Although PNSN is thinly traded at around 200,000 shares per day, the chart shows an interesting double bottom at just above 15, trading today at 16.45 (53% below its 52 week high), earnings have increased since '05, P/E is at 14 and the company has a worldwide exposure.
PNSN is now providing access to U.S. markets for costumers of a leading Indian stock brokerage.
All signs indicate that PNSN is worth considering.

Monday, November 05, 2007

A Bit Early on HIMX

Timing is everything; as of late, interesting stocks have lagged and taken some tumbles along with most securities in the U.S. markets. Patience is a virtue that, often gets lost in troubled times.
I'm not giving up on HIMX; picked as a possibility on June 7 of this year at 5.18, retreated since then to the high 3's.
The company is planning to repurchase $40M of its shares, increased earnings estimates for '07 and '08. Trading this morning at 4.39 well above its 50 day moving average which was crossed on Friday with 6 times the average daily volume.
Given the strength and support shown today by Himax Technologies, Inc. on a day of broad weakness in the markets, I would consider increasing my long position.

Tuesday, October 16, 2007

A Look at VPHM

Painful days in the investment world, a reminder of October '87. It might be time to position some funds into out-of-favor stocks.
ViroPharma Inc. (VPHM), selling at 9.57, seems to be holding up well in somewhat sad market conditions.

ViroPharma Incorporated is a bio pharmaceutical company, which engages in the development and commercialization of products that address serious infectious diseases, with a focus on products used by physician specialists or in hospital settings in the United States.

I see some positive characteristics that could signify a favorable move in the stock price, high average daily volume, may close today above its 50 day moving average (9.49), increased fund ownership over the past few weeks, stock at 48% below the 52 week high, low P/E ratio (7) and a reasonable book value of 1.58 have made this company worth looking at.

Thursday, October 11, 2007

Short Squeeze on HW?

Are we going to see a short squeeze on Headwaters Inc. (HW) any time soon? If so, be prepared to experience a nice rebound of this stock.
At this time the price is rising decidedly above its 50 day moving average on news of a feasibility study for a coal liquefaction plant in Assam, India.
If the stock holds today and builds upward momentum, those investors holding short positions on HW could be running to cover in the near future.
Trading at 15.80 today, we are at 22.3% below my original comment of 5/23/07 when it was selling at 20.41 and about even with a second mention on 8/22/07.
I like the chart formation at this time and expect positive results in the weeks ahead.

Wednesday, October 10, 2007

EDS Crosses the Line

Electronic Data Systems (EDS) just crossed above its 50 day moving average, normally that's a bullish sign.

Electronic Data Systems Corporation delivers a portfolio of information technology and business process outsourcing services worldwide. The company offers infrastructure services, such as hosting, workplace (desktop), storage, security and privacy, and communications services.

Today, with the DJIA down 65.30, EDS is up .15 at 22.75, showing strength on a weak market day. Note that between 7/23/07 and 8/9/07 the value of the stock lost about 20% on heavy volume, a CEO change could make a difference in the price behavior. Enough for a reversal?

With an average daily volume of over 3 million shares, a P/E of about 18, today's price at a 24% discount from the 52 week high, and improved earnings over the past 4 years make EDS my choice for "Flavor of the Day"

Thursday, October 04, 2007

Large Banks are on the Move

A few weeks ago, the Fed lowered interest rates making money available and more affordable for banks and lending institutions, many of them under a dark cloud after the "sub-prime" debacle.
The financial sector has been beaten up in the stock markets and several of these companies are poised for a rebound.
A chance to take part on the positive move is buying into a Specialty - Financial ETF such as KBE.
KBE's major holdings include Bank of America (BAC), Bank of NY Mellon (BK), Citigroup (C), J P Morgan Chase (JPM), Wachovia (WB) and Wells Fargo (WFC) to name a few.
KBE is trading today at about 54.00 per share, average volume near 1 million per day, dividend was 5.28% (as of 6/30/07), and has an expense ratio of .36%; its inception date is 11/8/05.
A new investment vehicle for me, I'm willing to give it a try.

About ETF's

"Exchange Traded Funds" more commonly known as ETF's could be the successors of mutual funds. With 100's to choose, they offer a chance to buy into an industry, indices, country or commodity without the cost, management skills and paper work required to purchase individual stocks.
Generally, ETF's have fewer managers, lower costs and cover as many sectors as mutual funds.
iShares, SPDR and ProShares are some of the more popular families of funds, each offering a variety of categories.
Here are a few basic factors to consider when investing in ETF's:
  • Liquidity is important, high trading volume is desireable.
  • Low expense ratio.
  • The family of funds should be run by a reputable firm.

In choosing an individual ETF, think of it as a stock and opt for the sector that you expect will do well in the future.

Monday, August 13, 2007

ACLS Falls Out of Favor

Stock performance for Axcelis Technologies Inc. (ACLS) has been disappointing, thus creating a not so attractive chart pattern.
Mentioned on 8/1/07 at 5.68 as a possible comeback, selling today at 4.76; I am taking this one out of my list and exiting the long position with a 16.2% loss.

Wednesday, August 01, 2007

Bottom Fishing for a Possible Come Back

It is difficult to focus on buying stocks when most of our holdings are taking a beating. On July 11 (as noted in this blog) there were some signs of weakness in the markets, three weeks later we are experiencing wild swings of the indices and no end in sight.
Possibly one big "dive" in stock prices in the near future may cause many investors to panic, willing and unwilling sellers will exit their long positions, and then we could resume a longer term bull market.

Holding at near a 12 month low, Axcelis Technologies Inc. (ACLS), selling today at 5.68, looks like it may start to make a base.
Axcelis Technologies, Inc. designs, manufactures, and services ion implantation, dry strip, thermal processing, and curing equipment used in the fabrication of semiconductor chips in the United States, Europe, and Asia.
ACLS trades an average of 1.3 million shares per day, a projected P/E of about 16, holdings by funds increased in the past weeks, number of funds owning the stock have consistently gone up for the last 4 quarters and a fairly low book value make this company interesting enough for us to take notice.

Wednesday, July 18, 2007

A. O. Smith Soars

A. O. Smith Corp. (AOS) opened this morning at a new 52 week high after reporting better than expected second quarter earnings and raised its '07 outlook.
Trading today at about 48.85 (up 4.96 for the day) makes it a 35.5% gain in a little over 7 months when on 12/7/06 AOS came up in this blog at 36.06.
I think it's time to take profits.

Wednesday, July 11, 2007

Rough Waters Ahead

Those of you who follow the charts realize that there is good reason to be concerned about the near term of the market.
Many stock and indices' graphs have made a definite "head and shoulders" formation. This may indicate a serious downturn in U. S. equities.
Yesterday, the S&P 500 broke below its 50 day moving average of 1513.47 closing at about 1510, if we don't get a significant rebound today, we should see further deterioration of stock prices. If so, brace yourselves for a rough ride.

Friday, June 22, 2007

Good News From CORS

Yesterday, after the markets closed, the company (Corus Bankshares, Inc.) announced a special dividend of $ 1.00 per share, sending the stock price to about 18.25 (up 1.89 from yesterdays close) in pre-market trading.
Good news for those who hold long positions in this stock.

Thursday, June 07, 2007

Surviving the Blows

During the last few days, the markets have been in an ugly mood. It seems like everything in sight is getting pounded. Most of our holdings are giving up some of the gains that we, so patiently, managed to accrue.
My thought is that this is a temporary correction and, in a week or so, stock prices will resume their upward trend.
Amazingly enough, there are a few securities that are holding well under this selling pressure.
Today, Himax Technologies, Inc. (HIMX) appears to be unaffected by the general market behavior.
Himax Technologies, Inc. engages in the design, development, and marketing of semiconductors that are used as components of flat panel displays. The company is based in Taiwan, ADR's are available through the NASDAQ.
HIMX, trading at 5.18 (up .05 for the day), 12 P/E, average daily volume of 481,500; nice base with short term support at around 4.96. Management owns a good percentage of the shares so they have a real interest in the performance of the stock.
I like the resiliency it shows under the existing conditions.

Wednesday, May 23, 2007

Headwaters Inc. May Be Primed

I've been watching Headwaters Inc. (HW) for over 3 weeks. I think it is about to make a move up.

Headwaters Inc., through its subsidiaries, provides products, technologies, and services to the energy and construction materials industries in the United States. It operates in three segments: Construction Materials, Coal Combustion Products, and Alternative Energy.

HW is trading today at about 20.41, 31% below its 52 week high, average volume is 818,000 shares per day, low book value, moderate debt. Number of funds owning the stock has increased over the last 3 quarters. There are large short positions that could help give it a nice upside momentum if they choose to cover.

Monday, April 30, 2007

A Nice Jump by HERO

This morning we woke up to some welcome news on possitive Q1 earnings for Hercules Offshore Inc. (HERO).
On March 13, 2007; just over 6 weeks ago, HERO emerged as a possible bargain at 26.87. Today it is trading at about 32.10, a 19.46% return in a very short period of time.
It may be wise to cash in on some profits at this time.

Monday, April 09, 2007

Patience Ran Out for MHO

On 8/7/06 I chose M I Homes Inc. (MHO) at 35.04... it's obvious that I held it for too long and missed the "dead cat bounce". In early December '06 it reached a price in the high 38's; from that time, it's been on a downward spiral without any significant support and nearing 4 year lows.
Taking a 26.6% loss, I have to bail out of this one at 25.73, don't see too many possitive signs for the immediate future. It may take the housing industry anywhere from 1 to 2 years to recover.

Tuesday, March 20, 2007

Catch the Dividend

Most banks have been battered as of late due to sub-prime loans, bubble burst in the real estate markets and an uncertain future for interest rates.
In the past, bad news have been soon forgotten and sectors have kept on moving in cycles. Catching stocks at near their lows is what I aim to do.
One stock that has been in my "crosshairs" is Corus Bankshares, Inc. (CORS). It operates as the bank holding company for Corus Bank, N.A., which offers consumer and corporate banking products and services in the United States. The bank principally provides commercial real estate lending with primary focus on condominium projects comprising construction of new projects and conversion of existing apartments into condominiums. It also has a portfolio of loans secured by hotels and office buildings. The bank's primary lending market consists of various metropolitan areas in Florida and California, New York City, and the Washington, D.C.
CORS is trading today at 17.99, near a 3 year low and at about 46.7% below its 52 week high, average daily volume is 880,000 shares, leading P/E of about 6, significant fund and management ownership and an unusually large amount of short-selling.
Best of all, it pays a 5.7% dividend, ex-dividend date is 3/26/07 of .25/share.
If we can peg the lows on this stock, we may enjoy a good bounce from these prices and hopefully, squeeze out some of the short positions.

Tuesday, March 13, 2007

On a Bloody Day, Opportunities Arise

Another crushing day at the market. Just two weeks after a major pull-back, we see stock prices tumble again.
At this point, I am tempted to view this action as a healthy correction (between 5% and 10%) from the February 20 record highs.
Provided this sell-off doesn't develop into a downward spiral, we may see some buying opportunities on selective stocks. If the trend continues, buckle your seatbelts, we could be in for a very rough ride.
Today, Hercules Offshore, Inc. (HERO) is down .02 at 26.87, it just broke above the 50 day moving average and is holding well at a time when everything else is bleeding.
Hercules Offshore, Inc. and subsidiaries provide shallow-water drilling and liftboat services to the oil and natural gas exploration and production industry in the U.S. Gulf of Mexico and internationally.
Average daily volume is 573,000; leading P/E is about 6, earnings have increased consistently for at least the last three years with good projections for '07 and '08, made a nice base at 25.
Trading at about 38.5% below it's 52 week high, this may be a bargain worth researching.

Thursday, March 08, 2007

What Took Them So Long?

It feels good to be one step ahead of the "experts".
This is an article I read today about Kemet Corp.:

RESEARCH ALERT-Lehman upgrades Kemet to overweight Thu Mar 8, 2007 9:47 AM ET
March 8 (Reuters) -
Current Prior Rating Overweight Equal weight
Lehman Brothers said the beaten down stock of Kemet represents one of the best values in its coverage universe.
If the company successfully integrates the pending acquisition of Evox Rifa Group , it could post earnings of 70 cents a share or higher a year from now, Lehman said in a research note.
Investors tend to view the maker of passive electronic components as a short-term trading vehicle rather than a buy and hold stock, the brokerage, which has a price target of $11 on Kemet, said.
The shares were up almost 4.5 percent at $8.16 in early morning trade on the New York Stock Exchange. (Reporting by Sreerupa Mitra in Bangalore)

Friday, February 02, 2007

Stock Picks Update

For the past two weeks or so, we have seen very possitive markets. One thing that concerns me as an investor is a run-up in stock prices over a short period of time. Depending on each individual's "comfort level", this may be a good time to take some profits.

Here's a recap of the securities mentioned in this blog and previous emails:

Brigham Exploration Co. (BEXP): On 3/28/06 at 9.20, today at 6.16, down 33.04%. I'm staying with it, too late to cut losses.

M I Homes Inc. (MHO): On 8/7/06 at 35.04, today at 37.21, up 6.19%. Broke above the 50 and 200 day moving averages, looking good at this time.

Simpson Mfg. Co. Inc. (SSD): On 9/20/06 at 27.07, trading today at 35.20, up 1.58. A gain of 30.03% in just over 4 months. Cautiously content with the results, may take some profits.

A S V Inc. (ASVI): On 10/19/06 at 16.60, today at 17.06, up 2.77%. Hanging in there, no action.

Smith A O Corp. (AOS): On 12/7/06 at 36.06, today at 39.03, up 8.24%. Staying with the long position.

Kemet Corp. (KEM): On 1/25/07 at 7.56, today at 7.79, up 3.04%. Still looks good, price at a 3 month high after setting a nice base. May add to the holdings.

It has been a very exciting time for the investment community. As we all know, unforeseen events and profit taking could erase the smiles off our faces and turn them into tears, along with the sudden disappearance of any "paper gains". I don't see anything wrong with cashing in profits when everyone else thinks the markets are on an endless ride up... nothing rises forever.

Thursday, January 25, 2007

Some possibilities for KEM

On a miserable market day with the DJIA -119.21 points (.94%), the S&P 500 -16.23 points(1.13%) and the NASDAQ -32.04 points (1.3%), any stock that holds it's ground is worth a second look. Kemet Corporation (KEM) is one that caught my eye, selling today at 7.56 (up .22) near a 15 month low.

Kemet Corporation, together with its subsidiaries, manufactures tantalum, multilayer ceramic, and solid aluminum capacitors. The company's products are used in various electronic applications and products, including communication systems, data processing equipment, personal computers, cellular phones, automotive electronic systems, military and aerospace systems, and consumer electronics.

KEM just broke above its 50 day moving average with conviction on good volume. Today it reported earnings for Q3 (ending Dec '06), lower than the previous quarter but 31% higher than the same quarter the year before.

Chart shows a price support at around 7, decent book value, low debt, a trailing P/E of 15, good fund ownership, projected increase in earnings thru '08. Average daily volume (50 day) near 846 thousand shares.

I see a chance for a turn around from a 3 month stagnant condition and, over a period of time, continuation of the last 2 day move with some profit taking along the way.