The Stock Playbook : (V)

Issue: 3/19/2008

Dave Dispennette — Wed, 19 Mar 2008 20:01:00 GMT

The Playbook 100

CELG @ $57.68 (Celgene) develops therapies to treat cancer and immune-inflammatory related diseases. Revenues have increased between 43% and 76% during each of the last four quarters. Earnings have increased between 72% and 136% during the same time frame and are expected to grow 43% this year and another 50% in 2009 to $2.28 a share. We've made money a few times in this company over the last few years and feel a good risk to reward is being offered by establishing a position here with a tight stop at $53. Our option players have a nice option listed below.

IPO's and New Issues

V @ $56.50 (Visa) gapped higher, so we didn't chase it. We will wait for a pull back toward the $45 level for now and until then, feel Mastercard (MA) offers us a better value.

ETF's

FXI @ $123.69 (Ishares Xinhua China) is an exchange traded fund seeking performance corresponding to the FTSE/Xinhua China 25 Index. We will establish a position on continued weakness that allows us an entry at $115 and will place a tight stop at $110.

Options

VCS AF @ $29.90 (Celgene January 2009 $30 Calls) are only costing us $2.22 in time value and could be a huge winner on a Celgene breakout above $60. Otherwise, we risk $4 to the downside for potentially $20 plus to the upside.

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Issue: 3/18/2008

Dave Dispennette — Tue, 18 Mar 2008 20:03:00 GMT

The Playbook 100

BRKR @ $15.42 (Bruker Corp) develops life science tools based on mass Spectrometry and materials research tools based on X-Ray technology. Revenues have accelerated 16%, 21%, 26% and 35% over the last four quarters. Earnings are expected to grow 74% this year and another 31% in 2009. We are establishing half a position here and will add the remaining half on a pull back to $13.50. Our stop loss will be set at $12.

IPO's and New Issues

V @ $44 (Visa) priced above its range of $37-$42 tonight and will raise $17.9 billion, easily eclipsing the previous U.S. record IPO of $10.6 billion set by AT&T Wireless eight years ago. We were a little surprised by the pricing in this market. Many people feel this will be the next Mastercard (MA) but it won't, and I'll tell you why. After the offering, Visa will have a market value of $36 billion, or $8 billion more than Mastercard's current $28 billion value. When Mastercard came out, they priced their deal and only had less than a $6 billion market cap. In other words, Visa is being priced off of Mastercard's current value. Unlike Mastercard, you will not see Visa climb 500% over the next two years. However, we feel you could see a 100% increase over the next two years. We are going to establish half a position under $45. Otherwise, we will exercise patience and wait for it to come in for us. The remaining half will be added on any weakness that brings the stock toward the $40 level, which could easily happen in the current environment. This stock will be added to the Playbook 100.

Shorts

SLB @ $84.37 (Schlumberger) provides technology services, project management and information solutions to the international oil and gas industry. We are bullish on this stock long term but feel a short here with a tight stop at $90 could be rewarded nicely if oil pulls back to $100 a barrel. For the options players, we would play the April $95 Puts (SLB PS) at $11.60 with a stop set at $8. A move to $72 on the downside could net us in excess of 100% return and that is a good risk to reward ratio.

Issue: 3/17/2008

Dave Dispennette — Mon, 17 Mar 2008 20:06:00 GMT

Momentum Stocks

NUS @ $19.55 (Nu Skin Enterprise) is a network marketer of personal care products and nutritional supplements under the Nu Skin and Pharmanex brands. Earnings are expected to grow 38% this year and another 13% in 2009 to $1.36 a share. Institutional sponsorship has steadily increased over the last year and volume has steadily risen over the last month. The stock has closed higher during 15 of the last 18 days, as it's climbed from the $16 level. We will establish half a position here and enter the remaining half on a pull back to $17.50. Our stop loss will be set at $16.50.

IPO's and New Issues

V @ $37-$42 (Visa) which we discussed a couple of weeks ago is going to price their offering tomorrow and begin trading on Wednesday. If they price this offering in between $37 and $42 tomorrow, we will look to get involved with at least half a position on Wednesday at any price under $45 and will then re-evaluate after the initial euphoria subsides. Hopefully, anyone that has had the ability to get involved with the IPO has taken advantage of it.

Foreign Stocks

AUO @ $18.18 (A U Optronics) is a Taiwanese manufacturer of flat panel displays for desktop and notebook computers, LCD TV's and consumer electronics. For our more aggressive traders, we are establishing a position here and will set our stop loss at $17.50. Our investors could establish half a position here and enter the remaining half on a pull back to $16. Our stop loss will be set at a move below $15.20.

HSVLY @ $20.56 (Highveld Steel and Vanadium) is a South African manufacturer of Vanadium for the steel industry with interests in other metals. This stock is thinly traded and limit orders need to be used when purchasing. We will establish 1/4 of a position here and enter the second 1/4 at $19. The remaining half will be bought on our first pull back to its rising 50 day moving average and our stop will be 0.50 cents below that level, currently $16.