The Stock Playbook : Growth Stocks

Issue: 7/2/2008

Dave Dispennette — Thu, 03 Jul 2008 02:09:00 GMT

Growth Stocks

AKAM @ $33.80 (Akamai Technologies) provides content and application delivery, application performance and performance management services. Revenues have increased between 34% and 52% during the last four quarters. Earnings have increased between 42% and 52% during the same time frame and are expected to grow 29% this year and another 21% in 2009 to $2.05 a share. We are establishing a position here and will set our stop loss at $31.

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Issue: 6/24/2008

Dave Dispennette — Wed, 25 Jun 2008 02:02:00 GMT

Growth Stocks

SNHY @ $36.15 (Sun Hydraulics) manufactures screw-in hydraulic cartridge valves and manifolds for fluid power systems in construction equipment. Revenues have increased between 15% and 20% during the last four quarters. Earnings are expected to grow 33% this year and another 13% in 2009 to $2.02 a share. We are establishing a position here and will set our stop loss at $33 for aggressive accounts. Passive accounts can establish half a position here and add the remaining half on a pull back to the $31 level. Their stop loss should be set at $29.

Issue: 6/16/2008

Dave Dispennette — Mon, 16 Jun 2008 01:37:00 GMT

Growth Stocks

GEOI @ $20.91 (Georesources) is engaged in the exploration and production of oil and gas in the Southwest, Gulf Coast, Rocky Mountains and Williston Basin. Revenues have averaged triple digit growth over the last few quarters and earnings are expected to increase 261% this year to $1.30 a share. We are establishing half a position here and will add second half on a pull back to $17.50. Our stop loss will be set at $16.

Issue: 6/5/2008

Dave Dispennette — Fri, 06 Jun 2008 01:56:00 GMT

Growth Stocks

FTEK @ $25.63 (Fuel Tech) provides Nitrogen Oxide reduction and fuel chemical process technologies used in air pollution control. Revenues have increased 80% and 26% during the last two quarters, as earnings climbed 250% and 133%. Expectations have earnings increasing 28% this year and another 57% in 2009. We are establishing half a position here and will enter the remaining half on a pull back to the 23.50 level. Our stop loss will be set at $22.

Issue: 6/3/2008

Dave Dispennette — Wed, 04 Jun 2008 01:30:00 GMT

Growth Stocks

ABMD @ $17.28 (Abiomed) develops medical devices designed to assist or replace the pumping function of a failing heart. They've traded almost 5 million shares over the last two days, which is heavy for a stock that averages only 235K shares a day. We are establishing half a position here and will enter the remaining half on a pull back to the $15.50 level. Our stop loss will be set at $14.

Issue: 5/28/2008

Dave Dispennette — Thu, 29 May 2008 14:04:00 GMT

Growth Stocks

HGR @ $12.88 (Hanger Orthopedic Group) provides orthotic and prosthetic services through 618 patient care centers in 45 states. Earnings are expected to increase 19% this year and another 16% in 2009 to 0.88 cents a share. We are establishing half a position here and will add the second half on a pull back to $12. Our stop loss will be set at $11.25.

Issue: 5/20/2008

Dave Dispennette — Wed, 21 May 2008 01:53:00 GMT

Growth Stocks

CYBS @ $18.41 (Cybersource) provides risk management and electronic payment solutions for businesses that process sales transactions online. Revenues have accelerated 40%, 53%, 117% and 141% during the last four quarters. Earnings have also accelerated, climbing 50%, 67% and 100% over the last three quarters. CYBS has been a favorite of ours for some time now, originally featured on 1/31/06 at $8.89 and most recently on 12/17/07 at $15.80. We are buying more after today's pull back at these levels and will add to position on any further weakness that brings the stock down to the $16 level. Our stop loss will be set at $15.50.

Momentum Stocks

MXC climbs another $14.63 or 52% today, in a weak market. This stock has gone parabolic, climbing almost 1,000% in a month. We would be interested in shorting this stocks at these levels, but couldn't find any to borrow. Needless to say, if you bought this on breakout or today, you are crazy if you don't book profits.

Issue: 5/15/2008

Dave Dispennette — Fri, 16 May 2008 02:48:00 GMT

Growth Stocks

FSYS @ $25.26 (Fuel Systems Solutions) produces alternative fuel components used in engines for the industrial, transportation and power generation industries. Revenues have accelerated 15%, 18%, 53% and 73% during the last four quarters. Earnings are expected to grow 34% this year and another 16% next year, but we feel estimates may be low. We are establishing half a position here and will add the second half of position on a pull back to $22.

Foreign Stocks

GSI @ $11.90 (General Steel Holdings) is a Chinese manufacturer of hot-rolled carbon and silicon steel sheets for distributors, service centers and manufacturers. Revenues have increased 82%, 312%, 635% and 531% during the last four quarters. Earnings have increased 100%, 500%, 999% and 750% during the same time frame and are expected to grow 86% this year and another 25% in 2009 to $1.16 a share. GSI came public in October and appears ready to emerge from its first base. We are establishing half a position here and will enter the remaining half on a pull back to the $9.75 level, which could as soon as tomorrow. We saw a few trades in the after market around $9.75, but haven't found an explanation for it.

Issue: 5/5/2008

Dave Dispennette — Tue, 06 May 2008 02:18:00 GMT

The Playbook 100

NGS @ $26.14 (Natural Gas Services) manufactures, fabricates, services and rents natural gas compressors to the natural gas industry in the U.S. Revenues have increased between 9% and 23% during the last four quarters. Earnings increased 29%, 120%, 40% and 58% during the same time frame and are expected to grow 16% this year and another 26% in 2009 to $1.48 a share We are establishing a position here as NGS finds and bounces off support at its 50 day moving average. We will set our stop loss at $23.45.

Growth Stocks

FSIN @ $17.72 (Fushi Copperweld) manufactures copper clad and other bi-metallic composite wire products for cable TV, telecom and electronic markets. Revenues have increased 45%, 42%, 147% and 123% during the last four quarters. Earnings are expected to grow 44% this year and another 39% in 2009 to $2.12 a share. We are establishing half a position here and will enter the remaining half on a pull back to $15.50. Our stop loss will be set at $14.95.

Issue: 4/30/2008

Dave Dispennette — Thu, 01 May 2008 03:07:00 GMT

Growth Stocks

RBA @ $24.95 (Ritchie Brothers Auctioneers) conducts auctions of trucks and equipment via 110 locations, including 33 auction sites in 25 countries around the world. Revenues have increased between 18% and 22% during the last four quarters. Earnings are expected to grow 18% each of the next two years to $1 a share. They just completed a 3 for 1 split and sold off. It appears they found support at their rising 200 day moving average. We will establish a position here with a tight stop set at $24, so you have 0.95 cents downside, compared to $5 to $10 up.

Momentum Stocks

Don't look now, but the hospitals group is heating up and making its way higher for the first time in a couple of years. This doesn't make sense to us during an election year, but we can't fight the tape. Our favorite is:

CYH @ $37.53 (Community Health System) which operates 115 non-urban acute care hospitals geographically diversified across 27 states. Revenues have accelerated 110%, 129% and 136% during the last three quarters. earnings are expected to grow 268% this year and another 26% in 2009 to $2.92 a share. We are establishing a position here and will set our stop loss at $33.50. We also like UHS @ $62.64 (Universal Health), DYII @ $6.01 (Dynacq Healthcare), LPNT @ $30.12 (Lifepoint Hospitals) and THC @ $6.40 (Tenet Healthcare) at these levels.

Issue: 4/21/2008

Dave Dispennette — Tue, 22 Apr 2008 12:56:00 GMT

Growth Stocks

ARD @ $46.87 (Arena Resources) is engaged in the exploration and production of oil and natural gas properties in Oklahoma, Texas, Kansas and New Mexico. Revenues have increased between 47% and 113% during the last four quarters. Earnings are expected to grow 56% this year and another 41% in 2009 to $2.42 a share. A breakout above a triple top has us establishing half a position here and buy the remaining half on a pull back to $42. Our stop loss will be set at $39.75.

IPO's and New Issues

HOO @ $14.30 (Cascal) is a Dutch provider of water and wastewater services to homes and businesses in eight countries. Earnings are expected to grow 63% this year and another 55% in 2009. They came public in January at $12 and recently emerged from its first tradable base with a move above $12.50. We are establishing half a position here and will enter the remaining half on a pull back to $13. Our stop loss will be set at the IPO price of $12.

Issue: 4/8/2008

Dave Dispennette — Tue, 08 Apr 2008 14:00:00 GMT

Growth Stocks

BMI @ $45.12 (Badger Meter) manufactures residential and commercial water meters and automotive fluid meters and systems. The company has only registered single digit revenue growth, but earnings are expected to grow 19% this year and another 12% next year. We are establishing half a position here and will add the remaining half on either a pull back to $42 or a move above $47.50. Our stop loss will be set at $40.

Issue: 4/2/2008

Dave Dispennette — Thu, 03 Apr 2008 14:37:00 GMT

Growth Stocks

LMNX @ $20.80 (Luminex) develops biological testing systems to perform genetic analysis for the development and identification of new drugs and genes. Revenues have increased 28%, 32%, 55% and 51% over the last four quarters. The stock recently cleared the $18 resistance level and volume has steadily increased over the last couple of months. We are establishing a 1/4 position here and will enter the second 1/4 at $19. The remaining half will be bought around $18 or a test of its rising 50 day moving average. Our stop loss will be set at the 200 day moving average.

Stocks Under $10

AEHR @ $8.65 (Aehr Test Systems) manufactures wafer test and burn-in systems used to analyze memory and logic IC's for the semiconductor industry. Revenues have increased 18%, 7%, 55% and 90% over the last four quarters. Earnings have grown 86%, 33%, 90% and 400% over the same time frame and are expected to increase 116% this year and another 44% in 2009 to $1.18 a share. This stock is cheap and not followed by anyone on Wall Street. We are establishing half a position here and will enter the remaining half on a pull back to $7.50. We feel this is at least a $20 stock in a year or two and are treating it accordingly by adding it to the Stock Playbook 100. Just an FYI, we didn't list a stop loss level because we plan to accumulate more if we see the $6 level. Every once in awhile, we break our own rules and fall in love with a stock, which you should never do. We won't consider bailing on this stock until we see a move below $5.25 and we'll re-evaluate there depending on volume.

Options

For the options traders, we feel SLB and MOS are both ready to roll over and have a defined downside.

We like the SDB PT (Schlumberger April $100 Put) with a stop set on a move above $93 by SLB.

We also bought the MTJ PE (Mosaic April $125 Put) with a stop set on a move above $110 by MOS.

Issue: 3/27/2008

Dave Dispennette — Thu, 27 Mar 2008 19:51:00 GMT

The Playbook 100

RSTI @ $40.82 (Rofin-sinar Tech) manufactures CO2, solid-state and diode lasers used to cut, weld, mark and perforate industrial materials. We've made money in this stock in the past and it has been consolidating over the past couple months and looks poised for a sharp move one way or the other. It has traded in a tight range between $38 and $43 since January. We will establish half a position here and will enter the remaining half on either a pull back to $38.50 or a move above $43. Our stop loss will be set at $37.50.

Growth Stocks

CMG @ $112.72 (Chipotle Mexican Grill) operates 640 fast casual fresh Mexican food restaurants in 26 states. Earnings are expected to grow 26% this year and another 27% in 2009 to $3.38 a share. We've been involved with this stock since 6/28/06 when we started our position at $59.95 and have held it for almost two years. Anyone looking to add to position could do so here. If you've missed the first double, now is a good place to get involved to catch the next one. Traders could enter here with a tight stop loss set at $109.

Issue: 3/26/2008

Dave Dispennette — Wed, 26 Mar 2008 19:54:00 GMT

Growth Stocks

MFLX @ $18.88 (Multi Fineline Electronix) manufactures flexible printed circuits and component assemblies used in mobil phones, bar code scanners and PDA's. Revenues have increased 51% and 49% during the last two quarters. Earnings are expected to grow 361% this year to $1.43 a share. We are establishing half a position here and will enter the remaining half on a pull back to $17. Our stop loss will be set at $16.

Stocks Under $10

IG @ $2.01 (I G I) develops cosmetic, skin care and consumer products utilizing its Lipid Vesicle Encapsulation technology. This stock is thinly traded and limit orders need to be used. For those more inclined to take on risk, we would establish half a position on a pull back to $1.90 and enter the remaining half at $1.70. Our stop loss will be set at $1.60.