J Stock Report Newsletter for the week of August 11th, 2007
New stock additions:
1. SXE 700 shares @ $20.33 (purchased on 8/6/2007)
The Skinny:
An IT services/solutions company with good government and defense contracts. Earnings earlier this month were excellent and they also increased forward guidance. The chart broke out on the 3rd of August and a weak market allowed for a pullback to our entry on the following trading day. We are using the 50 day moving average around $18.56 as a stop loss target should it move to the downside.
2. ELP 500 shares @ $16.10 (purchased on 8/7/2007)
The Skinny:
A government controlled Brazilian utility company that appears to be too cheap here. Growth in that part of the world remains robust and this is a nice speculative play on that growth. We consciously took a relatively small position and are giving this one some time to rebuild its chart. This, along with other foreign ADR stocks, is a very volatile stock and should only fall into the highly speculative category.
3. RADS 1000 shares @ $14.69 (purchased on 8/8/2007)
The Skinny:
A play on the hotel/hospitality industries with increasing focus on China. The expansion in this high-growth region should sustain growth for the foreseeable future. The 50 day moving average is going to be our decision point on the down side as well, currently around $13.37. Note the short position in this is currently 17% of tradable float.
4. FTWR 2000 shares @ $4.69 (purchased on 8/9/2007)
The Skinny:
A small speculative play on the wireless network expansion in the USA. On August 1st, they entered into an agreement with Sprint Nextel (NYSE: S) to provide backhaul services in seven of the wireless carrier's initial WiMax launch markets. This is extremely volatile and we are taking a small position accordingly. But the future could be very bright if similar contracts catch on in the future. Note the short position in this is currently up to nearly 20% of tradable float.
5. INWK 850 shares @ $14.69 (purchased on 8/9/2007)
The Skinny:
Offers various print procurement services, via software applications/databases. A solid earnings report on the previous evening makes this one attractive to us at these levels. We are using the support level in the low $13.20 area as downside risk for a stop loss. Note the enormous short position is over 43% of the tradable float.
Old Position Action:
1. CRNT 1500 shares@17.56 (sold on 8/8/2007)
The stock ended up being a great partial sale. The stock peaked around 18 and then essentially crashed in the deteriorating market conditions. We still like the company and continue to hold 500 shares.
2. WMGI
We continued to hold this one as it stood apart from market collapse and held its ground. No new developments.
3. SVR
Actually tested the 200 day moving average on Thursday and then bounced off nicely to remain above the desired range.
Some things we are watching for potential entries:
JST, SYNA, CCC, LAYN