Stock Review: 3 Teenage Stocks Looking To Grow Up Quickly
In order of my favorites:
What, a Chinese stock making new highs? Meet $300 million Yucheng Technologies (YTEC), which provides computer support to the Chinese banking industry, and reminds me very much of Vasco Data (VDSI), a similar kind of banking technology play that took only 7 months to triple from $15 to $45 (back when it was breaking out). Granted, until YTEC closes above $18, it’s just a double top and considering the failure to hold/extend past that key level (October/all-time highs), this is not a confirmed breakout…yet…and that’s why I have no position. But revenues, profits and margins are all growing nicely—think 30-50%—and with its solid earnings on 2/4, the forward PE is only around 18, aka plenty of room for expansion. Not that I trust any Chinese company, so let’s just go back to their badass chart. Lots of Chinese companies—BIDU, CHNR, JRJC, GBT, CHNG, CTRP and EFUT—surged back in October, but only YTEC is even close to its highs, let alone threatening to breakout. And because I like to only buy breakouts that makes YTEC my favorite out of all the China plays out there.
Then there’s the slower growing $260 million medical play that deals with nasty varicose veins, VNUS Medical Technologies (VNUS). It’s more expensive a stock—forward PE of 30+—but margins are also in the 65% range and after boring shareholders to death for the past eight months, hovering between $13 and $16, on Friday it finally broke out after strong earnings.
As much as I like this definitive chart breakout, this company freaks me out because of their product. Can you imagine many fund managers saying “Wow, people are really going to want to deal with their varicose veins, this is one hot company.” OK, it’s possible—in fact, this is one of those weird niche products that might be rewarded with some ridiculous multiple, but it’s simply not my comfort zone. It’s now triple off its lows, so it’s come pretty far pretty fast, if it’s meant to go a lot higher, it should have no problem taking out its all-time high at $20ish—only then will I consider buying.
And last, but certainly least, there’s $680 million water and air purification company, Calgon Carbon (CCC). They’ve got a ton of sales, pathetic single digit growth and the exceedingly boring stock looks like its breaking out the $16 range. Judging by previous breakouts, shareholders can look forward to a 5-10% increase over the next few weeks—at best. From what I can tell, this company is in a hot sector and nothing else. Boring investors unite; this one is for you, definitely not TIM or anybody with a heartbeat.
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- Timothy Sykes - Stock Trader, Author, Entrepreneur » Blog Archive » Why Buying Breakouts Is Never As Easy As It Seems
- Timothy Sykes - Stock Trader, Author, Entrepreneur » Blog Archive » The 1st Annual TimothySykes.com Crap Company Chart Pattern Awards
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| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Sept 4 | COIN | $5.70 | $6.21 | $745 |
| Sept 3 | COIN | $6.49 | $6.30 | $305 |
| Sept 3 | COINW | $2.75 | $2.85 | $180 |
| Sept 2 | TAYD | $7.51 | $8.13 | $545 |
| Aug 18 | FOUR | $2.80 | $2.66 | $342 |
| Aug 14 | APII | $2.66 | $3.30 | $1261 |
| Aug 12 | APII | $3.25 | $3.40 | $285 |
| Aug 7 | NOBL | $5.02 | $5.49 | $680 |
Total: $26,508 (
114%)
1Dave
February 10th, 2008 at 7:02 pm
Thanks Tim! You do a great job finding these stocks… big fan!
2Evan
February 10th, 2008 at 8:31 pm
Hey Tim,
Great idea with the Market Wizard-esque “Share your Stories” post. I hope more will respond! I am waiting patiently on my profit target so I can buy the DVD (that includes the book, right?), but wanted to know your thoughts on TGH and how/if you’d play it. Keep up the freakin’ great work!
3timsykes
February 10th, 2008 at 10:47 pm
Thanks guys, TGH looks good as a potential short but i’d like to see some one last spike–or more–or some sideways price action and fading before shorting such an illiquid stock that has proven it can jump $2 on 40k shares traded
4be-the-ball
February 11th, 2008 at 1:16 am
tim, is OFI a short here after the weak close on friday?
5timsykes
February 11th, 2008 at 1:17 am
nope, OFI is an earnings mover, i prefer shorting fundamentally flawed companies, like IDMI
6be-the-ball
February 11th, 2008 at 9:50 am
tim, suf possible short in coming days?
7timsykes
February 11th, 2008 at 10:00 am
SUF–possibly, but i dont like contract plays or how far down its already fallen
8S Adams
February 11th, 2008 at 10:02 am
I still like CHNR. It’s been trending up nicely even on down market days. It can run 5 points at the drop if a hat. ( goos short after it does). JRJR does not seed to want to go below 15.
9timsykes
February 11th, 2008 at 10:17 am
CHNR, JRJC, there’s no pattern there! Sure they can run, but its not predictable until it happens. Contrary to popular belief CHNR has only had two $5 days int he past few months–hardly the drop of a hat. And since so many people are expecting that kind of run, it’s probly unlikely. YTEC on the other hand is a great chart, its predictable, I just dont now if I can buy anything in this market, I’m so much more comfortable shorting IDMI-type plays
10Dan
February 11th, 2008 at 10:24 am
Actually JRJC can be predictable imo. The key word is dryed up volume.
11timsykes
February 11th, 2008 at 10:33 am
what chart pattern is JRJC exemplifying? The one where it takes out 10-day support? And 3-day support? Smack in the face of a hugely downtrending 1-year chart. That kind of pathetic price action makes it seem more like a short than a long but downside seems so little, aka UNPREDICTABLE
12timsykes
February 11th, 2008 at 10:41 am
Bought 300 YTEC $18.28
13be-the-ball
February 11th, 2008 at 10:46 am
tim, *YTEC, why the buy at that price level?
14timsykes
February 11th, 2008 at 10:50 am
new intraday high with volume…i hate buying late morning but i’m afraid of missing this one. if it fades intot he afternoon i’m gone
15timsykes
February 11th, 2008 at 10:55 am
and that intraday high was a 5day breakout (save for that one spike), which was also an all-time high. one of these days one of these spikes is gonna stick and some of the 130k shorts will cover, causing a real spike over $19
16Eric T
February 11th, 2008 at 10:56 am
What do you all think is the good buy in point for ETFC? I sold out at 5.13 last friday and am looking to get back in again to go long.
17JesseD
February 11th, 2008 at 10:57 am
Im new to this strategy, usually play ETFs. Im looking at SWC. What do you think?
18timsykes
February 11th, 2008 at 10:58 am
ETFC, its gotta break above $6.10 to start to fill the gap to $8. not gonna be easy, i dont like buying into that much overhead resistance
19Al
February 11th, 2008 at 11:06 am
IDMI is up again today. Settiing up for another short.
20timsykes
February 11th, 2008 at 11:07 am
dman 10 min after my post (post #15) and that EXACT scenario happened, quick spike over $19, god i love when it’s PREDICTABLE
21be-the-ball
February 11th, 2008 at 11:08 am
tim, did you sell?
22timsykes
February 11th, 2008 at 11:19 am
yup, took my 50 cents and got out, got 3 meetings and gotta prepare my speech for rutgers tonight, no time to watch this low volume play all day
23td
February 11th, 2008 at 2:02 pm
hey tim what do you think of the news on NYNY ? and the corresponding jump in share price?
will it hold? or will it nosedive?
24timsykes
February 11th, 2008 at 2:07 pm
NYNY–i don’t play news related movers, too unpredictable as everyone interupts the news differently and has different expectations
25eric
February 11th, 2008 at 2:13 pm
Tim….check out POSS. It looks like our next possible target?!?!?
26timsykes
February 11th, 2008 at 2:19 pm
POSS, i like how their ticker is POS Stock, but they just got bought out. means we don’t touch it
27eric
February 11th, 2008 at 2:23 pm
Hahaha Tim i knew you would like the ticker POSS!
28Stan
February 11th, 2008 at 2:42 pm
the low volume on POSS isnt too attractive
29Tony Ellis
February 11th, 2008 at 2:54 pm
SUF needs to be punished!
30be-the-ball
February 11th, 2008 at 3:22 pm
think i disagree with you on NYNY tim. POS stock with a POS news release. WIll short aggressively if it can get close to $3
31td
February 11th, 2008 at 3:30 pm
34000 shrt @2.7????????????????????
32td
February 11th, 2008 at 3:32 pm
pos stock is up 90%%%%%%%%%%%%%%%%
on sh1tty news-gott to be kidding me!!!!!!!!!!!!!!!!!!!!!!!!!!!!11
33timsykes
February 11th, 2008 at 3:45 pm
can’t disagree with someone who says they won’t play NYNY due to news. the news is a fact now, whether u agree with it or not. i’ve never fared well when think the news is a POS, while going against the price action
34Dan
February 11th, 2008 at 3:46 pm
Tim I was referring to JRJC being a predictable short but in the past it has been a predicable long for me at times when my system picks it up.
35timsykes
February 11th, 2008 at 3:46 pm
better off buying ORCT if it can break past resistance at $9.20, nice strong breakout play even if i disagree with it. still not sure if i’ll touch it though
36Sparda
February 11th, 2008 at 3:49 pm
POSS is a new buyout, ie it is up today, target price $19.50
37be-the-ball
February 11th, 2008 at 3:54 pm
sorry tim, bad choice of words. NYNY looks like a short to me at resistance to $3. I respect that you don’t play this type of situation.
38td
February 11th, 2008 at 3:58 pm
how many times have you seen a stock run up 90% and keep its position
(excluding buyouts)??????????
39be-the-ball
February 11th, 2008 at 4:01 pm
couldn’t help myself, shorted some NYNY at 2.60 10 minutes before the close. we will see what happens tomorrow
40timsykes
February 11th, 2008 at 4:06 pm
no matter what u think of the news, 80% runs are nothing. i’m glad u guys made $ on this one, but take it from someone who’s seen a million variations, the risk reward of shorting into a stock covering the gap sucks
41Schleppy
February 11th, 2008 at 4:53 pm
So what is the rule for shorting below $3/sh. Will TOS not let you do it period or is the $2.70-$3.00 range ok? Any other brokerages let you short consistently any lower? I was considering short of NYNY at $2.67. Didn’t know if it would fill……guess I should have shot it through to see.
Tim this may have been answered before, I’m new to your page, but do you still trade in the robe from WSW? The new season has been good so far. I miss the blonde hottie from last year though and of course you Timmay!
42timsykes
February 11th, 2008 at 5:16 pm
not exactly sure with shorting anymore, just pull up the TOS chat window and ask if you can get a borrow and then ask if they can short it for u. i have a new robe
43beanieville
February 12th, 2008 at 1:15 am
3 Solars You Must Own!
44Jeff C
February 12th, 2008 at 1:49 pm
Any minimum funding requirements for TOS to go short? I’m thinking of changing brokers….