7/31/03 Congratulations to all our premuim subscribers who took some risk and jumped on board Fresh Pick MXT on Monday. We timed the knife-catch perfectly on the battered financial stock, and saw it come out of the gate strong on excellent buy-side volume. MXT hit our short-term 30% target within three days, and is now trading about 35% above our suggested entry. We would not look a gift horse in the mouth here, and would move a trailing stop behind this one as it climbs. There's a pretty good chance of profit-taking after such a strong bounce and we want to lock in at least a 25% profit on this one.
Grocery store pick WIN has traded flat to slightly up this week, and we're looking to hold this one for a bit to see if it can re-gain some momentum.
3/13/03 Congratulations to all our premium subscribers who have been trading the Fresh Picks over the last several weeks. Despite terrible overall market conditions, low volume, re-testing of October 2002 lows and mounting war fears, the picks have shined.
This week the Fresh Picks are up an average of an amazing 26%, with only one, JAKK, below the line by just 1%. Of course the big story has been DZTK, which is now trading a whopping 86% above our recommended Monday entry. Hopefully many of you have taken advantage of this week's spec. play and got in pre-market on Monday. Even if you waited, you have a nice profit. It was our second low-priced spec. pick in as many weeks to tally large gains.
Late today, news that the banking syndicate of DZTK's U.S. credit facility had waived the covenant requiring Daisytek to raise additional capital of at least $20 million by May 15, 2003 pushed the stock over $2 per share in after-hours action. A huge portion of the company's outstanding shares are closely held, so the float is very small, and of that, a large chunk is being shorted. Thus, there is a good possibility of a sizeable squeeze tomorrow early in the trading day. It may be a good opportunity to lock in profits and take a possible 100% gain off the table. Otherwise, be sure to keep a stop in place to protect profits here.
Our other big gainer of the week so far is Circuit City, up 12% from our entry point. If today's big rally is any indication, there's a good chance this one could hit our price target tomorrow for a 16% gain. If so, once again, make sure to use a trailing stop once the target is surpassed.
ESST is also looking good, up 6% so far.
2/19/03 A good start to the week for the Fresh Picks, with the technical reversal on EP continuing on Tuesday to drive the battered stock to our $4.70 price target for a quick 15% gain. BRCD came close as well today, moving to within $0.10 of its target before falling back a bit. Still, BRCD is up 4% on the week.
NVDA is also holding gains established after a hefty gap up last Friday, so far up another 7% this week So far, the only stock in the red for the week is our long-term chemical play, OMG, down just 2%. Overall then, this week's Fresh Picks are up an average 6% each.
Not bad considering the continued radical volatility and extremely low volume of the markets. Of course, all eyes remain on Iraq and spikes and dips remained tied to every latest headline. Hang in there.
2/5/03: One of this week's Fresh Picks, battered grocery play NAFCE, was torn apart today following the release of a grim news headline. Shares lost more than 50% as the food wholesaler said its auditor resigned, and the Securities and Exchange Commission began a formal investigation into the company. As we suggested in the recommendation, "Keep a tight stop in place in case of further bad news, but if the stock is left to trade without the headline hindrance for the short-to-intermediate term, we like the trend here."
At this point, it's difficult to recommend buying shares on the decline, as the fundamentals may no longer be as sound as we had assumed. The days of corporate fraud, despite all attempts by government regulators, are clearly not entirely behind us.
Another of our picks, MXT, started the week off with a wave of profit-taking, presenting an even better entry point than we had envisioned. Following the selling, the stock has moved nicely back into an uptrend accompanied by heavy volume.
One of our two short recommendations of the week, CRAY, is doing exactly as we had thought, tredning lower and again today closing near the lows of the session. We continue to hold that: "...CRAY can be shorted for the intermediate-term until a corrective upside reversal bar emerges on the stock's OHLC chart."
1/16/03: Today after the close, AMD announced earnings, and the numbers were anything but pretty.
Shares were being hit after hours following the release, in which AMD announced much wider losses than anticipated. The company shed $854.7 million, even when excluding $620 million in one-time restructuring charges. They did, however, reiterate that their cost reduction plans are on track and that they expect first-quarter sales to be flat to nominally higher.
For the quarter ended in December, AMD reported it lost $854.7 million, or $2.49 a share, on revenue of $686.4 million. During the same quarter last year, AMD lost $15.8 million, or $0.05 cents a share, on revenue of $951.9 million. Analysts had expected revenue of $691.7 million, on average. For the year, AMD lost $1.3 billion, or $3.81 a share, on revenue of $2.7 billion compared with a loss of $60.6 million, or $0.18 per share, on revenue of $3.89 billion in 2001.
Needless to say, AMD will be under pressure tomorrow and will likely breach our stop trigger. We continue to like AMD in the longer term as their business stabilizes and eventually recovers, and if your outlook is long, we would consider averaging down on weakness.
Seperately, the rest of this week's Fresh Picks continue to be strong, with CWP having hit its 21% target, OMG up 15%, NOR up 3% and MLNM up 2%. Those who stuck with Jan. 5 Fresh Pick GOAM through recent selling were rewarded today as the stock exploded upward 40%. Also, independent oil play KCS (Jan. 5) hit our price target today for an 18% gain following financing news and is now up 40% from our recommended entry price and likely to trend higher.
For the month, then, the Fresh Picks are up an average 5% each (not counting GOAM as it originally hit our stop for a loss).
Also likely to impact stocks tomorrow are disturbing news out of Iraq and a surprise from Microsoft's earnings call. (See MidWeek Update for both stories)
1/14/03: Congratulations to those of you who bought this week's picks. They're off to a great start, with CWP hitting our 21% price target today, OMG up 14% over the week's two sessions, and all six of the picks in the green for the week. MLNM closed the day up 5% and NOR is currently ahead 3%. Collectively, the Fresh Picks are up an average of 7.5% each.
AMD should see some upward movement tomorrow following INTL's better-than-expected results today after the close.
If you're still in CWP, we would consider moving in a trailing stop at this point to ensure good profits, and similarly would thiink about doing the same with OMG although our intermediate-term outlook remains confident.
Note: We all know the importance of earnings and how they can impact a stock in the immediate sense. Beginning this week, we will begin providing you, our Premium Subscribers, with email earnings alerts on the Fresh Picks. The alerts will serve as a reminder that earnings are imminent for the given stock, and will allow you to consider your position if you're currently holding it. It's easy to lose track of who is reporting when, and so we hope that you will find this a helpful addition to your research and trading. As always, make sure to always do your own research before buying or selling any security.
If you would prefer NOT to receive the earnings updates, please send us a message at feedback@talking-points.com and let us know.
1/7/03: Some interesting developments with this week's Fresh Picks...
After a really nice, strong start to the week yesterday from healthcare provider HRC, up 11% Monday, news after the close hurt its performance today and doomed any follow-through. After closing at $4.90 Monday, its intraday high, a key news items emerged, with the revelation that the former CEO would resume his old post... not something shareholders wanted at all. This was illustrated by today's selling that gave back all of yesterday's gains.
Richard Scrushy, who stepped down as chief executive officer in August to head a spinoff company, will resume his CEO duties with HEALTHSOUTH. ``I don't think people are going to be thrilled by this,'' said SG Cowen Securities Corp. analyst Kemp Dolliver.
We continue to like HRC as a January turnaround play, and would consider buying on current weakness. Tomorrow may offer an opportunity to enter or average down the stock at a discount.
Also, today Fresh Pick KCS announced after the close that the maturity date on its bank credit facility has been extended to January 13, 2003 in order to provide additional time necessary to complete the previously announced proposed financing arrangements. More than likely this will help the stock a bit tomorrow as much of today's selling can be attributed to the fact that the original deadline for the credit facility was today.
SKX made a nice run today into the close to finish the session at its intraday high for a nice 2% gain after trading as low as $8.55 earlier in the day.
THQI in our opinion still represents a great value, especially after trading down today. If you are considering entry, look for a buy signal to emerge tomorrow before jumping in. A lower price may be had.
ARQL is still trading flat from our recommended entry price, and GOAM unfortunately did not show any follow-through to Friday's gains.
12/12/02: With the market struggling to overlook a deteriorating geo-political landscape, this week's Fresh Picks are holding strong. Five of the six are in the green, with only ALGX running on the wrong side of the tape. The stock hit our stop-loss right off the bat for a 10% loss, but we're keeping an eye on it for possible re-entry. After bottoming at $0.79 on big volume on Wednesday, it traded a wide intraday range today, from a low of $0.81 to a high of $0.93 on increasing volume. We will continue to watch here. As we stated in Sunday's recommendation on this one, "Heavy resistance is in play overhead at $1.02, so consider using this level as a buy trigger if successfully breached." That $1.02 level has yet to be toppled, so hopefully subscribers have taken our advice and are waiting patiently for this one to move.
Our other five plays this week are looking good, led by the strength of ISIS, up 9.4% after peaking earlier in the week at $7.48, or 21%. One of our short rec's, BCGI, is also looking good, giving us a 6% profit so far, while our other short, AMZN, is ahead a meager 1%. SOI and TWI are both up 4% so far.
12/03/02: With the market momentum turning negative, we are shifting our focus toward shorting opportunities at least until Intel's mid-quarter update on Thursday. Today's sell-off following AOL's warning (see mid-week update in member's area), coupled with after-hours revelations from HP, Disney and Tenet Healthcare point to an ugly day tomorrow, at least early, barring any significant positive a.m. news.
We will be looking at several recent short recommendations tomorrow, including LCI, QLGC, ATRS and SOHU, along with fresh looks at a number of opportunities in stocks that have made ridiculous runs over the last couple months like ATTY.
Don't be afraid to lock in profitable positions here or use trailing stops to protect gains. Nice two-day runs of 12% in two of this week's picks, SWTX and TTIL, should be protected tomorrow. Depending on Thursday's Intel news, re-entry possibilities may exist at lower prices, or averaging-down opportunities may present.
11/20/02: It was a good day for the Fresh Picks, led by ILA and SOHU with 8% moves each. SOHU, our lone short play this week, finally came apart today after setting a string of 52 week highs in recent sessions. The stock lost more than 8% on a day when the Nasdaq was blazing hot, and we expect more selling in coming sessions to bring this high-flyer back to earth. If you were lucky enough to short in the near-$6.00 range, you should be looking good here. Take a look at the recent runup pictured in the chart below and you can get an idea of the downside potential on this momentum runner:
Embattled energy play ILA finally came off its bottom today as well, picking up 8% and positioning itself for a technical upside reversal. If you read Sunday's Talking Points Premium Edition, note our comment on ILA: "If there is further downside at Monday's open, we will be looking for an upside reversal indicator before considering entry". That's exactly what has developed as we watched the selling continue Monday and Tuesday. Today's bump higher led to an even better entry point in the stock.
11/13/02: (From the MidWeek Updates Section): This week's fresh picks have thus far taken a breather from our recent weeks of runaway gains. Our short play on QLGC and our long rec on CNP are the only two in the green at this point, up 5% and 4% respectively. The continued run up on CRAY has left us scratching our heads as it continued to make new 52-week highs despite being priced at more than 7x book value. Tomorrow morning, at 11 AM ET, CRAY is set to release earnings. We are putting a stop in place at just over $7.00 on this one, in case the unexplainable volume turns out to be explainable by blowout numbers. If CRAY disappoints at all, look to average up on the short position as it is balancing precariously at what we have to believe is an overbought peak.
Tuesday's selloff in OMG was followed by a nice reversal today off 52-week lows, with the stock up 9% on the session. We continue to like the stock at these prices, and believe shorts will be forced to cover in coming days providing for a nice run if they got in on the way from $50 to $5.
Our other two picks, STOR and LCI are both fairly flat with both 2% in the red.
11.05.02: Once again, the Fresh Picks are off to a blazing start halfway through the week, with an average gain of 28% as of Wednesday's close, led by the two that quickly hit our targets in SONS, up 96% and ARRS, ahead 31%. We feel good here about our two short choices for the week, ATRS, down 15% (up for us) and STCO, which we're currently off on by 3%. We would look to hold these shorts depending on tomorrow's action in the afternoon. Similarly, we would look to tighten stops on the profitable positions here in anticipation of selling tomorrow and a reentry opportunity at lower prices.
As we've been saying for the last couple weeks, this is a volatile trader's market driven by radical news-driven spikes, earnings news and a changing domestic political and international climate. Stay alert to your positions' movements as events continue to unfold.
11.04.02: The markets went for a wild ride today as we predicted in yesterday's Talking Points. The intraday action suggests to us that much of the buying is attributable to short covering heading into tomorrow's elections and Wednesday's Fed decision on interest rates. The majority of the gains came early on heavy action, with the frenzy quieting down as the markets moved past mid-day.
With that said, we'll take the gains! SONS, which we recommended yesterday, made a huge move early today. By early afternoon, it had blown our target out of the water and was up 76% on the day! As we said in the Fresh Picks from yesterday, however, don't fall in love with this one. We recommended it as a quick in and out trade and maintain that opinion. SONS pulled back into the close to end the day up 43%. Congrats to all the Premium Subscribers who executed this trade for a big gain!
Our other big mover on the day was ARRS, which also eclipsed our target price to close the day up a very healthy 27% on excellent buy-side volume. While we considered SONS a VERY short-term trade, we are a bit more optimistic in the intermediate term on ARRS. Even after today's move, the stock remains undervalued in our opinion and still has room to the upside. The fundamentals here are much better than with SONS. We would still be leary of the overall direction of the market in the next two days, and would keep a stop in place on ARRS accordingly to maintain a nice profit guarantee.
Among the continuing gains from recent Fresh Picks:
Remember, all good things must end... Don't get overly greedy with these substantial gains. Be sure to have an exit strategy in place and be prepared to take profits. Sell dicipline is critical after such gains, so don't take the profits for granted.
10.29.02 : As we said in last week's Talking Points, the rally is moving toward overbought and we look for the trend to turn down over the next couple weeks. We today recommend taking profits on all profitable long Fresh Picks positions.
10.28.02 : A couple of the recent Fresh Picks made headlines today, as Providian Financial (PVN) released earnings and VitalWorks Inc. (VWKS) announced a stock repurchase program.
Congratulations to all those who took advantage of the PVN Fresh Pick from Oct. 20, as after the close today the credit card issuer announced blowout earnings and should see some serious gains tomorrow.
Providian Financial Corp. (PVN) rose as high as $4.89 in after-hours trading. It closed at $4.37 during regular trading and was recommended by Talking Points at $3.73. The credit card issuer said in a statement that it had a third- quarter profit of $0.15 a share. It was expected to earn $0.04, the average forecast of analysts surveyed by First Call.
VitalWorks Inc. announced that its Board of Directors has authorized the repurchase of up to $15 million of the company's common stock from time to time. The timing and amount of any shares repurchased will be determined by the company's management based on its evaluation of market conditions and other factors. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with stock plans and for other corporate purposes. The repurchase program will be funded using the company's existing cash resources. As of September 30, 2002, the company had cash and cash equivalents of approximately $40.7 million. VitalWorks had approximately 44.5 million shares of common stock outstanding as of September 30, 2002.
10.17.02 : If you followed our suggested moves over the last several days, you'll be looking rock solid right about now, as Friday looks to close out the week with a winning cheer. If you took impressive profits on the Fresh Picks on Wednesday at the open and reentered toward the close, look to hold them long for the next couple trading days at least, as MSFT's strong numbers after the bell today all but assure solid gains tomorrow.
10.15.02 : Retail play PLCE hit our target price today of $9.50 for an impressive 19% gain in two trading days. We would look to protect profits here, and if still holding the position would place a trailing stop about 5% off the $9.55 last trade. Tomorrow may offer an opportunity to establish a new position at a lower price. It remains to be seen what impact the INTC warning will have on the overall markets, including the retail sector.
Similarly, EMC, EXTR and NVDA, from the 10/06 Fresh Picks, ALL hit our price targets of $4.75, $3.90 and $9.60 for 24%, 28% and 19% gains respectively. EMC has continued climbing, now up 33% from our recommended entry price. Again, look to set a trailing stop close to today's close on expected weakness tomorrow if you are still in these positions.
All four other Fresh Picks from the 10/13 issue, and four of the five from the 10/06 issue are solidly in the green:
