GPS maker SiRf Technology (SIRF) is down more than 50% over the past few days—a victim of intense competition and weak forward guidance. Now people are viewing it as a takeover and a dirt cheap technology play–I’m not sure if I agree with those conclusions, but I definitely wouldn’t be shorting this stock anytime soon. I also won’t be buying very quickly either because just as 50% off sushi can sometimes be a great deal, it can also make you very sick. This play can make your account sick. Avoid, with a potential long bias if the stock starts to uptrend.
Armored vehicle maker Force Protection (FRPT) has been slammed down to the single digits on fears that their sole product might be on the way out in government spending. Who knows? The CEO says the company is doing fine, but the downtrending stock price is much more convincing. If the stock price is meant to make up lost ground, it should have no problem breaking out past $6, which it has not been able to do for the past few months. Avoid until the stock shows some strength.
IDM Pharmacueticals (IDMI) has now had a huge runup from under $1 to nearly $4 and a substantial drop to just over $2—all due to some positive drug news that was already known since November 2007 and of course the CEO’s optimism about European approval. Do I believe the CEO? Yeah right! My distrust of CEOs is dwarfed only by my distrust of biotech CEOs! Avoid, with a short bias on any spikes.
When I wrote this article about A-Power Generation Systems (APWR), all the variables were aligned for a great run-up. I wanted to hold, but the volume and share price didn’t live up to my expectations, so I sold quickly. Now, the stock has nearly retraced to its original breakout area around $15, so the risk has gone down, but so has the reward. If you’re a long-term investor, this is a solid choice, but I need it to break its previous highs at $19 to make me a buyer again. Avoid, with a long bias if it breaks out.
Troubled telecom equipment maker, Orkit Communications (ORCT) has recently doubled off its low on rumors of a big contract and today they got it. Very nice—but is it going to be enough to get the stock out of its nasty downtrending? I doubt it. Sure, some short sellers were squeezed, but even today, the stock price couldn’t hold onto its early gains. Avoid, with a short bias if it continues spiking.
Sun Cal Energy (SCEY) is just the latest speculative natural gas penny stock to be pumped, now having tripled over the past few weeks. I’ve been digging and digging but I can’t find anything very special about this company. Yes, I sometimes respect the pump, but not this one. Avoid buying or shorting at all costs—well, maybe short after its first down day.
Local.com (LOCM), a wannabe Google (GOOG) search engine company is great for hypability and spikability, but in no way should this stock ever be considered for a long-term investment. All they seem to know how to do is grow their traffic and lose more money. And then there’s its valuation. My blog had 50,000 unique visitors last month, or 1/232nd of LOCM and if it was valued as highly as this stock, it’d be worth $250,000. Yes, please. What a joke! Don’t believe the hype when it comes to micro-search engines like this and (CNIC), the former Mamma.com. Avoid with a short bias on any substantial spikes.
Disclosure: No positions, just stalking
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