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Monday, July 30, 2012
In NLST - Second Half 2012 Play on new hot tech area - Big Data - Interconnect and Cloud Computing Demand
Great article on the new growth area in tech
Forthcoming DD but this article and last press release says it all :
Read Earnings Press Release
Monday, July 16, 2012
Tuesday, July 10, 2012
Leader in the U.S. reclamation market for the collection, recycling and resale of refrigerants
• Multiple refrigerants are expected to be phased out by the EPA; R‐22 production reduced by 45% in 2012
• R‐22 phase out expected to cause a supply gap to be filled by reclaimed gas; R‐22 price has increased significantly since Jan. 2012, creating economic incentive for contractors to return “dirty gas” for recycling
•Refrigeration equipment is expensive to replace; R‐22 servicing expected to continue for 20+ years
Energy Optimization Services:
• High energy costs and focus on emissions control are creating demand for Hudson’s energy optimization
I will be writing more on HDSN soon. I think this is a unique opportunity for rapid growth and share price appreciation. I am long HDSN in the low $4's.
Monday, July 2, 2012
This person wrote a great article on GENC history and why they have so much cash. Gencor ($GENC) – A Free Business With A Huge Portfolio Read Article
Also the CEO said, "Our strong balance sheet is reflective of sound financial management practices. We believe this will continue to serve us well in the future while we continue to evaluate opportunities for expansion through organic growth and strategic acquisitions."
I believe the reason why the stock has traded so cheap was due to the lack of a new long term highway bill by the government. From the last press release, "However, we continue to remain cautious about the growth of the U.S. economy and in particular the effect upon our industry that the absence of a long term Highway Bill, and adequacy of funding of the Highway Trust Fund may have. Current funding under the ninth SAFETEA-LU extension expires on June 30, 2012. It is uncertain whether a new multiyear bill will be enacted or another short term extension granted." Read Press Release
The great news for GENC is that the new Highway Bill was finally approved last week and now just needs the signature of the President. Read Article
This is huge news for GENC as they stated in their last 10-Q "the Company believes a new multiyear highway program would have the greatest positive impact on the road construction industry and allow its customers to plan and execute longer term projects." 10-Q
In 2008 the Company was firing on all cylinders and the stock hit over $30 per shares as they did $1.59 EPS that year. They did $0.29 EPS last Q with about $0.10 coming from Operations and the rest from investment income. I believe with the passage of the highway bill, GENC could trade in the $10-$15 range in the short term.
Sunday, July 1, 2012
Volkswagen was one of the fiercest short squeezes in stock market history as comfortable shorts were caught in an intense squeeze that drove the value of Volkswagen shares to briefly be the largest by market cap in the world Read about it here.
I see another stock that has the potential for a fierce short squeeze. Skullcandy, Inc. (SKUL) is a Nasdaq stock with a float of 15.1mm shares. A whopping 73% of the float is short. It is the most heavily shorted stock out there. History is littered with smart money losing on short calls. TASR, PCLN, Volkswagen, etc...."Fad" stocks like CROX, SODA etc all had major short squeezes. SKUL is growing, profitable and has confirmed analyst estimates for this year. They are wildly popular and if managment is smart they will kepp innovating new deals and partnerships (Like the recent Dell partnership) . Insiders are buying - To me a major sign they know the shorts are wrong.
There are some great articles out there on why SKUL is ready for a major squeeze:
Heavily Shorted Stocks To Consider Before Earnings Read Article
Skullcandy: A Short Seller's Nightmare Read Article
Skullcandy: Perpetual Squeeze Coming Read Article
Skullcandy: The Facts Behind The Fad, And The Inevitable SqueezeRead Article
Shorts often win. However, history is littered with shorts that lost big on fast, fierce, squeezes. I believe SKUL has the potential to break free from the grip of the shorts as it heads into its next earnings report in August. If and when it does happen, it will be fast and fierce. I am long SKUL in the mid $13's. Volkswagen Me !!!
I have found the next low float stock that I think can rapidly appreciate and it has strong substance to make such a move, stronger substance than LIVE did at the time. Kewaunee Scientific Corp. (KEQU) is a Nasdaq stock with a float of 1.8mm shares, 2.6mm shares outstanding and a book value of $12.27 after this recent quarter See stats. KEQU closed at $11.43 on Friday. It is trading $0.84 below book value yet it has a major catalyst besides that.
KEQU has experienced a major turn around in profitability due to the Company reaping the rewards from "cost savings initiatives commenced earlier in the year". They reported monster EPS of $0.49 per share this quarter vs $0.10 per share in the same quarter last year.
KEQU has record backlog and the CEO is optimistic about this coming year. "The order backlog increased to a record $86.2 million at April 30, 2012, up from $65.7 million at April 30, 2011, with both domestic and international orders contributing to the growth."
"Looking forward to fiscal year 2013, I remain cautiously optimistic," Mr. Shumaker continued. "My optimism is based on a number of factors. On the domestic front, we enter the year with a strengthened and expanded dealer network, which we believe will result in increased sales and earnings. We are also realizing lower operating costs from our cost savings initiatives put in place over the past year. On the international front, we have also strengthened and expanded our dealer network, better positioning us to take advantage of the growing number of laboratory project opportunities in Asia and the Middle East. Furthermore, both domestic and international operations will benefit from our record order backlog Read Press Release.
KEQU has strong sales prospects with a record backlog and the strongest point here is that they have successfully changed their cost structure impacting profitability. When I look at their sales I do not see seasonality in the quarters Quarterly Numbers. Therefore I feel comfortable in annualizing this quarters EPS as the CEO said he is optimistic for the coming year because they are realizing the benefits from cost cutting measures.
That would put KEQU on an EPS run rate of $1.96 if you assume they will not have any sales growth. That assumption seems unlikely to me since the backlog is at a record high and the CEO said they will have increased sales and earnings. The industry they are in has an average P/E of 16.8 See Industry P/E .
If you annualize the EPS this quarter due to the reasons above (even though that is conservatively assuming no sales growth contrary to the CEO's statements) and take it at the industry average P/E, that would result in a KEQU share price of $32.93. KEQU closed at $11.43 on Friday, $0.84 below it's book value.
Recipe For A Low Float Rocket
1) Low Float - 1.8mm
2) Great Current Earnings - $0.49 EPS this Quarter, Trades Below Book Value
3) Great Future Prospects - Record Backlog, Optimistic CEO Comments, Improved Cost Structure
4) Undervalued/Under followed Stock - Annualize Current Quarter EPS at the industry average P/E would give KEQU a value in the $30's.
I am long KEQU with an average near $11.
Low float stocks can be volatile and are not for large positions in my opinion.
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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.