TFN eNews 09/24/2009: Will the market bounce back?
Published via e-mail broadcast on September 24, 2009
In today’s TFN eNews:
* This “Proxy Stock” grew its 2009 cash flow by 125%!
* Is the selling over yet?
* Owning solid chunks of daily volume. What now?
Dear TFN eNews reader,
So much for the earnings boost in our Hot Stock Confidential Chinese pharma “proxy” stock Tianyin Pharmaceutical, Inc., (NYSE:TPI)
TPI reported that Q4 2009 revenues increased a whopping 43.2% to $13.3 million, with net income increasing 41.8% to $2.2 million. That pushed
2009 total revenues up by 28.2%, to $42.9 million. Net income increased 32.4% to $7.9 million.
Better even, cash flow from operations increased 124.8% to $8.3 million for the year.
The company reaffirmed its FY 2010 guidance for revenues to exceed $59 million, with a net of at least $10.5 million.
Now, I don’t know about you. But I consider this a darn good company… and a damn good stock!
So how did it do today?
With all this money in the bank, the stock dropped 6%!
That means we’re still up 45% on our remaining second half of our position in TPI. And I’m in no mood to sell now. In fact, I’m sticking to my guns that we’ll be seeing a total gain of 90%-plus within the next 6 months (measured from our original entry price of $2.67.)
Our other proxy stocks are also extremely attractive right now. Why not take a look at what’s ahead for them?
*** If companies reporting substantial growth drop like lead, what’s wrong with this market?
I asked TFN stock guru Andrew Snyder to make this comprehensible:
“After a massive run that moved the S&P 500 ahead by nearly 60% above March’s devastating lows, investors are asking ‘What gives?’ as the equities markets show a bit of red over the past two sessions.
“I’ll tell you what gives!
“After raking in strong gains over the past six months, investors are eager to lock in profits. As one Wall Street trader said this morning, ‘The risk trade is nearing an end.’
“Investors are cashing in the gains they racked up from their high-risk trades and are rolling them into ‘historically secure’ positions, like gold and Uncle Sam’s debt.
“Take a look at the Treasury market over the past five days. Even though the Obama administration continues to pour massive amounts of money into the economy, interest rates have declined. That means investors are willing to pay more for the security of a government-backed guarantee.
“If that expectation of security is justified is another matter. But just because we see a few days of profit taking doesn’t mean the markets are crashing anytime soon. It will take a major economic event to halt the recent market momentum.
“Our Hot Stock Confidential portfolio is filled with high-beta positions that were strategically chosen to take advantage of whatever the market throws our way. With a basket of high-volatility picks, our portfolio magnifies the action of a sudden twitch.
“Once the short-term profit taking comes to an end (which will likely come next week as fund managers polish their portfolios before the end of the quarter), our positions will outshine the markets once again.”
*** HSC Member T.G. wrote in with a question we’d like to address in public because it may have occurred to other readers in similar situations:
“Many of your equities have rather low volume. Is there a rule of thumb as to how deep into the average trading volume one should get on investing in any single equity? For example, I would like to add to my position in stock X. However, I already hold more than 10% of the 10-day average trading volume. Are we expecting a volume increase as we get closer to our goal?”
Low trading volume creates both the upside potential of many penny stocks… but at the same time constitutes much of their inherent risk.
That’s what penny shares are all about: You try to position yourself early, when everyone’s still asleep and volume is low… to profit handsomely when investors wake up and start piling in. That’s what ground-floor opportunities are made of!
Inevitably, the desired increase in share price would be generated by a corresponding increase in demand and trading volume. Triggered by a catalytic event such as breakthrough news.
Sometimes, however, that ground-floor can resemble more of a dungeon… especially when you want to sell and can’t find buyers.
(ADRs occasionally present a bit of a distortion in the actual trading volume of a stock, as they only reflect the partial demand, generated for the particular depositary receipt… not at all the underlying stock trading on a foreign exchange.)
As long as you’re aware of the risks associated with penny shares and low-priced stocks with low daily trading volume , I don’t see much wrong with owning a solid chunk of the daily low-tide volume. Because I’m punting for that to become a miniscule percentage in the daily float as I unload my position when volume and prices soar!
*** “This is scheduled to be the busiest week for IPOs since 2007,” writes Andrew Snyder on TFN today. “At least for A123 (NASDAQ:AONE), the timing couldn’t be any better. The company is going public at the perfect time.
“With the cresting at the top of unsustainable territory and the ‘green revolution’ hype at levels never previously experienced, there’s no better opportunity to take a speculative battery maker into the world of publicly traded securities. Thanks to the current market environment, AONE has the opportunity to maximize the proceeds of every share it puts on the market.
“It’s a good thing they’re making the move now. Because another shot like this may not come around anytime soon.
“The company, a spin-off based on technology devised at the Massachusetts Institute of Technology, boasts Nanophosphate technology. It uses nanoscale materials to produce high-power lithium ion batteries — the kind that may be in high demand as the electric-vehicle industry spreads its roots…”
Want to find out more? Continue reading here… http://www.todaysfinancialnews.com/us-stocks-and-markets/ipo-strategy-perfect-timing-for-a123-10067.html
*** With 63 winning picks open and shut this year, TFN’s Hot Stock Confidential is one of the top performing resources for investors!
“Just want you to know I have tried several stock advice services. None comes close to being dead on target as HSC has.
I have finally found my home for investing.” — HSC Member Theodore G.
Come join the fun: http://www.todaysfinancialnews.com/HSC/PROXY/EHSCK801.html
Quote of the Day:
“Most of our country’s serious problems can be laid at the feet of Congress and the White House and not at capitalism. Take the financial crisis. One-third of the $15 trillion of mortgages in existence in 2008 are owned, or securitized by Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing and the Veterans Administration. Banks didn’t mind making risky loans and Wall Street buyers didn’t mind buying these repackaged loans because they assumed that they would be guaranteed by the federal government: read bailout by taxpayers. Under a capitalist system, financial institutions would not have been intimidated or encouraged into making risky loans and neither would they have been bailed out if they did so.”
– Walter Williams, Creators.com
Recommended Reading:
IPO Strategy: Perfect timing for A123
Is there no end to China’s buying spree?
The 3 Best Chinese Stocks Under $5!
Today’s Top 3 Financial News Stories:
Newsmax.com – U.S. Issues $7 Trillion in Debt “The U.S. government will have issued $7 trillion in bonds by the time the current fiscal year ends next week, but it expects the debt deluge to stabilize by mid 2010, a Treasury official said on Wednesday.”
NPR.org — With Little Clout, Natural Gas Lobby Strikes Out “As Congress moves toward writing a new national energy policy, natural-gas lobbyists have been mostly missing in action.”
Bloomberg.com — Sales of U.S. Existing Homes Unexpectedly Decrease “Sales of existing U.S. homes unexpectedly fell in August for the first time in four months, signaling the housing recovery will be slow to gain speed.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
P. S. Commodity Carry Trade: Beijing ups the ante. As Obama’s spending spree forces China to re-think its strategy, you could lock in gains of 1,389%. Learn more… http://www.todaysfinancialnews.com/TST/china/ETSTK705.html
Next Article: Technical Analysis: OraSure’s big move
Be the first to leave a reply.
Your comments are welcome
Follow TFN via RSS or Twitter |
 |
 |
 |
Advertisement
Latest Headlines
- The Big Picture for Sinobiopharma, Inc. (SNBP)
- Beazer Homes USA, Inc. (BZH) and Hovnanian Enterprises, Inc. (HOV) up despite horrid housing news
- The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works!
- Steepest drop since Feb. 2009: Here we go again!
- Is the silver run over? Coeur d’Alene Mines (CDE), Silver Wheaton (SLW), Alto Group (ALTO), Hecla Mining (HL), Endeavour Silver (EXK) close down