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Wednesday, July 30, 2008

Do You Still Belive in Momentum Stocks?

It is funny for me to read at all the heated PDO posts now that argue about it being a long or short. I pounded the table on PDO from $5-$7 (and few wanted to hear about it because it did not move fast) and from that point it hit $46. Insane but fun and financially rewarding. Now people argue about it left and right to my amusement. It just goes to show you that a stock can become a momentum stock when you least expect it and at that it can defy logical arguments for a long time. All you need is the perfect storm and it happens at least 4 unique times per year and sometimes much more by my calculations through the years. I have been quiet so what have I been doing? I have been short scalping financials and playing the SKF like everyone else (Yawn - but steady trades and I hate posting daytrades becasue I like the flexibility to change my mind quickly unlike swing/story stocks for my blog). Yes, scalping is great but lacks the excitement of a PDO APWR EFUT etc., so I am always looking for the next perfect storm and I think we are due for one.

Do you still believe in momentum stocks? I still believe that in the deepest darkest moments of the market, there can still be a momentum stock, if the story makes sense. What kind of press release / story would be an example? In my opinion:

TAYD - earthquake prevention products - low float
NTIC - Plastic Waste to oil Technology in Asia roll out (soon imo) - Bioplastics rollout (board member is a leading expert with his own patents from Michigan State)
ERII - Reduces energy consumption in the procss that converts sea water to drinking water
HEK - Chinese bottled water company
AETI - servicing the Texas wind energy market and oil/gas market
HDSN - government regulation going to drive earnings here

there are many other potentials - all you need is the right story and press release

Even CLWT - if they could put out the right contract on China pollution......it could be THE olympics stock play

There will always be momentum stocks,,,,,the story just needs to be at the right place and right time!

What are your candidates?

Wednesday, July 23, 2008

L.A Bag Ban - Bioplastic Stocks are the Future

Bioplastics and Plastic Waste to Oil Technology - NTIC and MBLX
Great for environment and reduce/produces oil

Los Angeles bans plastic bagging in stores

12 hours ago

LOS ANGELES (AFP) — The city of Los Angeles announced it will ban all plastic bags from retail stores as of July 1, 2010, following similar anti-pollution regulations already enforced in San Francisco.

The second-largest US city behind New York, Los Angeles, with its four million population, will ban plastic bagging in all supermarkets, grocery and retail stores, the Los Angeles City Council said in its new regulation.

After July 1, 2010, all store customers must provide their own bags or purchase bags made of paper or other biogradable material from the store for 25 cents (0.25 dollar), it added.

The goal is to rid the city of some 2.3 billion non-biodegradable plastic bags that are distributed each year and end up polluting waste dumps for a long time.

San Francisco, 600 kilometers (373 miles) north of here, also in California, in 2007 became the first US city to ban plastic bags from its stores.

Both city regulations are intended to pressure state lawmakers who are considering a bill to eliminate plastic bags across the state by 2012.

Several countries around the world have already adopted laws banning plastic bags, which often end up killing animals that swallow or get caught up in them.

Saturday, July 12, 2008

5 Thoughts on Saturday

1) What An Absolutely Insane Week

FNM FRE on the ropes with great drama - Oil surges again Friday afternoon - IMB shut down Friday night

These are amazing times we are witnessing. My guess is that because this Friday is options expiration that we could see a decent bounce at some point this next week to take out some put holders (Barring new devastating financial/oil news). There is plenty of short fuel right now.

2) Check Your Attitude At The Door

In this environment (market tanking), most stock have pulled back quite a bit. Many of my stocks have. So no one is a genius for shorting or saying "what happened to this stock Superman" during this time. Similarly, when the market is a raging bull there is no need to boast too loudly when momentum is in my or any longs favor. Everyone will eat the humble pie at some point or another. It is better not to boast too loudly or bash others when they are down because we will all be humbled at one point or another. In the past i was extremely arrogant and boastful and i see how that turned people off. As a result, I have tried to change because i am far from perfect and at best i pick some decent stocks but i don't always play them correctly.

3) Have To Continue To Be Very Selective On Longs


However, APWR proved my point this week. That point being, if you can find companies with products in demand during these times they can still do well. APWR announced the completion of the largest wind turbine facility in china and the stock moved approximately $6 higher last week. Read More Here

That is why any of these stock could take off in this market with similar news:

TAYD - earthquake protection devices
NTIC - Plastic Waste to Oil tech launch, Bioplastics
HEK - China bottled water
MBLX - Bioplastics
AETI - Texas wind power service company
ERII - water desalination products

the point being have to be selective in this market but there will still be momentum


4) Accounting Lesson - Learning To Dig Deeper

NTIC earnings and sales were great. Here is the why - NTIC makes most of their money from international joint ventures that touch 50 countries. These joint ventures are accounted for by the equity method, which is a GAAP measure to account for joint ventures with this level of control. When you look at the income statement this income shows up as income from joint ventures and holding companies (below North American operating gain/loss) you can see it was $1.2m this quarter vs $760k last quarter (approximately 58% growth). When you look further, the sales from these international ventures were up big - NTIC's international business continues to significantly expand as total net sales of all of NTIC's joint ventures increased 34.8 percent to $79,893,753 during the nine months ended May 31, 2008 compared to $59,265,028 during the nine months ended May 31, 2007. NTIC's income from its corporate joint ventures and holding companies increased 87.1 percent to $3,880,352 for the nine months ended May 31, 2008 compared to $2,073,994 for the nine months ended May 31, 2007. Read More Here

Now you ask what about the top line of the income statement? The sales and North American operating loss is from the North American (smaller) part of the company's overall biz. They announced last year that a North American customer phased out and that would make North American sales comps off for 2008 but that customer did not add much to the bottom line anyway.

In closing, you have to look at the joint venture income because that is what drives growth. Now they are going to push the Bioplastics and Plastic waste to oil technology to these international ventures soon and that is going to add to the current approximately $0.80 EPS for the core corrosion biz. In my opinion, the company should easily do $1.25-$2 EPS with these new technologies kicking in to net income. For an $11 low float company with decent amount of shorts and about to roll out a hot sexy technology it looks to be a great set up.

5) A Decent Bank?

USB - Not a buy recommendation by any means but interesting find that many say that US Bank has the least exposure and is better capitalized than it's peers.

Of the diversified banks, which include Comerica Inc., U.S. Bancorp, Wachovia Corp. and Wells Fargo & Co., U.S. Bancorp is the only bank in the subindustry with a "Buy" rating.

"We believe this bank is the best capitalized and most conservative lender in our coverage universe," Plesser said. Read More Here

Wednesday, July 9, 2008

NTIC - Super Core Results

NTIC reported super core results this morning. The core business is experiencing amazing growth. This Company has many international joint ventures that are accounted for with the equity method so you look at total international venture growth.

NTIC's international business continues to significantly expand as total net sales of all of NTIC's joint ventures increased 34.8 percent to $79,893,753 during the nine months ended May 31, 2008 compared to $59,265,028 during the nine months ended May 31, 2007. NTIC's income from its corporate joint ventures and holding companies increased 87.1 percent to $3,880,352 for the nine months ended May 31, 2008 compared to $2,073,994 for the nine months ended May 31, 2007.

NTIC had .21 EPS and is on an approximate $0.80 EPS run rate on the core business alone. The Plastic Waste to Oil Technology (which I hope will launch very soon as well as the bioplastics division (which I expect will be sold to all international joint ventures and I expect to get major traction going forward) are only going to add to this $0.80 EPS. That is why when they launch the Plastic Waste to Oil technology I expect this to be one of the most exciting stocks of 2008.

Earnings Release

Sunday, July 6, 2008

Back From Vacation - My Top Stocks for the Second Half of 2008

I am back from vacation. What I did learn is that Vegas seems to be hit hard by the economy. Everyone I talked to there said the same thing. It has been much slower due to the economy. It was easy to see. Need to research some Vegas stocks that may have more downside for potential shorts.

The first half of 2008 was an amazing time for me. As most know, I researched and pounded the table on PDO when it was $5-$7. My first buy was $4.47 and the stock ended up gaining 929% from that point to peak at $46. Other strong gainers I researched and selected included SINO 142% NTI 138% GBR 96% and CKX 65% (Gain percentage was measured from my first buy to the stocks peak thereafter. I always take some profit when I am up and use mental stops on the rest if I still believe the stocks will go higher. As you can see I am not a daytrader, but look for quality stocks that can make strong moves in time.

The market as we all know, has been in the tank. Oil is rising, the dollar is weakening, the credit crisis continues, and hopes for a second half economic rebound is on the ropes.

China stocks have also been in the tank, EPS or not.

However, I believe, In every market, there are always certain stocks and sectors that will still do well. It is a matter of being very selective with long positions. The industries must be in demand, even in a slowdown.

My top 3 stocks for the second half of 2008, in my opinion, meet this criteria:

TAYD - Company is a global leader in providing earthquake protection for buildings, bridges, schools, and other structures. This is a $6 stock and it did $0.12 EPS last quarter. I believe this stock is a gem and undervalued based on last quarters EPS alone. As earnings approach, I believe we will see continued strength in EPS and future demand in this business making it a big mover in the next 1 to 12 months. This reminds me of the stock BOOM, which was an obscure stock at a similar price until industry demand put it on the map and the stock moved to over $50 on that demand and EPS. I additionally believe TAYD could be a buyout target for a larger Company wanting to get into this field.

NTIC - Formerly NTI, now trading on the NASDAQ as NTIC. This Company has a very solid core business that provides corrosion protection with a big market reach outside of the United States. They are in the process of expanding this business into the oil and gas sector. As earnings approach, I believe this report will mainly feature this results from this core business, which has had a very respectable EPS run rate of $0.70-$0.80. I am expecting EPS in the $0.15-$0.20 range (my guess only).
That being said, I think NTIC will be the most in demand alternative energy company in second half 2008 and beyond due to two other factors. They have a biodegradable plastic that is already available for sale as well as an exciting Plastic Waste to Oil technology that they have recently placed in India and Thailand. According to SEC filings they have plans to sell the first unit in fiscal 2008 and intends to ramp up its manufacturing and service infrastructure to capitalize on global market opportunities it believes exists for the Plastic Waste to Oil solution. I believe these factors give NTIC the potential to move like the solar , wind, and other hot alternative energy stocks did and with the low float structure the sky is the limit here. When the Company rolls out this technology and announces sales I believe this has the potential to be a $30-$50 stock. Watch Video (Takes a Minute To Load)

HEK - This SPAC purchased a leading Chinese bottled water company and when the deal closes in the fall and we see some reports, I think this stock is a potential double or more. The rising Chinese middle class should be big buyers of bottled water in a country where clean water is scarce.

Other stocks that I believe have big potential in the second half of 2008 include:

MBLX - A leader in bioplastics, plant to open in 2009. Partner is ADM
HDSN - Earnings should be stellar this quarter and beyond due to a huge demand in their refrigeration business. More research to come
AETI - Serves the oil, gas, and wind energy business
GBR - 520k Float - waiting for them to buy something in the oil/gas field
TVOC.OB - I expect blowout earnings this quarter due to higher oil/gas prices
ERII - Recent water IPO , watching for a dip

I will continue to provide my personal research on all of these companies and any new ones I find.

Again, this blog contains my personal thoughts and research for my own investing and is not investment advice. Please see the disclaimer at the bottom of this blog.

Tuesday, July 1, 2008

Vacation This Week

I am on vacation this week but will still be checking in and maybe writing a blog or two. Feel free to email me at superman@super-trades.com

Market is volatile, not good to have too large of a position in anything. It has been an incredible first half of the year for me and I am looking forward to more of the same.

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Welcome to super-trades.com, blog home of Superman. Purpose of this blog is for me to discuss my trades and stock ideas (As well as opinions and rants on stock market related issues). I will mention the date and price I enter. As far as exits, I always try to take half off when I have some profit and if I believe in the stock, let the rest run further. I always also use mental stop limits, at which time I would exit and minimize any losses. I do not like to give price targets unless I can support them by P/E in some way or by comparison to another stock. I just post stock trades and ideas that I believe will go higher (or lower for shorts) and the reason I believe that. Individuals should have their own strategies for managing profits and losses. My stock picks tend to NOT be daytrades at all and many take time to move. I am not an investment advisor and this blog should not be considered or followed as investment advice.