Stock Review: 3 Teenage Stocks Looking To Grow Up Quickly

Posted by timothysykes on Sun 10th of Feb, 2008 04:46:55 PM

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In order of my favorites:

What, a Chinese stock making new highs? Meet $300 million Yucheng Technologies (YTEC), which provides computer support to the Chinese banking industry, and reminds me very much of Vasco Data (VDSI), a similar kind of banking technology play that took only 7 months to triple from $15 to $45 (back when it was breaking out). Granted, until YTEC closes above $18, it’s just a double top and considering the failure to hold/extend past that key level (October/all-time highs), this is not a confirmed breakout…yet…and that’s why I have no position. But revenues, profits and margins are all growing nicely—think 30-50%—and with its solid earnings on 2/4, the forward PE is only around 18, aka plenty of room for expansion. Not that I trust any Chinese company, so let’s just go back to their badass chart. Lots of Chinese companies—BIDU, CHNR, JRJC, GBT, CHNG, CTRP and EFUT—surged back in October, but only YTEC is even close to its highs, let alone threatening to breakout. And because I like to only buy breakouts that makes YTEC my favorite out of all the China plays out there.

ytec Stock Review: 3 Teenage Stocks Looking To Grow Up Quickly

Then there’s the slower growing $260 million medical play that deals with nasty varicose veins, VNUS Medical Technologies (VNUS). It’s more expensive a stock—forward PE of 30+—but margins are also in the 65% range and after boring shareholders to death for the past eight months, hovering between $13 and $16, on Friday it finally broke out after strong earnings.

As much as I like this definitive chart breakout, this company freaks me out because of their product. Can you imagine many fund managers saying “Wow, people are really going to want to deal with their varicose veins, this is one hot company.” OK, it’s possible—in fact, this is one of those weird niche products that might be rewarded with some ridiculous multiple, but it’s simply not my comfort zone. It’s now triple off its lows, so it’s come pretty far pretty fast, if it’s meant to go a lot higher, it should have no problem taking out its all-time high at $20ish—only then will I consider buying.

vnus Stock Review: 3 Teenage Stocks Looking To Grow Up Quickly

And last, but certainly least, there’s $680 million water and air purification company, Calgon Carbon (CCC). They’ve got a ton of sales, pathetic single digit growth and the exceedingly boring stock looks like its breaking out the $16 range. Judging by previous breakouts, shareholders can look forward to a 5-10% increase over the next few weeks—at best. From what I can tell, this company is in a hot sector and nothing else. Boring investors unite; this one is for you, definitely not TIM or anybody with a heartbeat.

ccc Stock Review: 3 Teenage Stocks Looking To Grow Up Quickly

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Dave

Thanks Tim! You do a great job finding these stocks... big fan!

Evan

Hey Tim,

Great idea with the Market Wizard-esque "Share your Stories" post. I hope more will respond! I am waiting patiently on my profit target so I can buy the DVD (that includes the book, right?), but wanted to know your thoughts on TGH and how/if you'd play it. Keep up the freakin' great work!

timsykes

Thanks guys, TGH looks good as a potential short but i'd like to see some one last spike--or more--or some sideways price action and fading before shorting such an illiquid stock that has proven it can jump $2 on 40k shares traded

be-the-ball

tim, is OFI a short here after the weak close on friday?

timsykes

nope, OFI is an earnings mover, i prefer shorting fundamentally flawed companies, like IDMI

be-the-ball

tim, suf possible short in coming days?

timsykes

SUF--possibly, but i dont like contract plays or how far down its already fallen

S Adams

I still like CHNR. It's been trending up nicely even on down market days. It can run 5 points at the drop if a hat. ( goos short after it does). JRJR does not seed to want to go below 15.

timsykes

CHNR, JRJC, there's no pattern there! Sure they can run, but its not predictable until it happens. Contrary to popular belief CHNR has only had two $5 days int he past few months--hardly the drop of a hat. And since so many people are expecting that kind of run, it's probly unlikely. YTEC on the other hand is a great chart, its predictable, I just dont now if I can buy anything in this market, I'm so much more comfortable shorting IDMI-type plays

Dan

Actually JRJC can be predictable imo. The key word is dryed up volume.

timsykes

what chart pattern is JRJC exemplifying? The one where it takes out 10-day support? And 3-day support? Smack in the face of a hugely downtrending 1-year chart. That kind of pathetic price action makes it seem more like a short than a long but downside seems so little, aka UNPREDICTABLE

timsykes

Bought 300 YTEC $18.28

be-the-ball

tim, *YTEC, why the buy at that price level?

timsykes

new intraday high with volume...i hate buying late morning but i'm afraid of missing this one. if it fades intot he afternoon i'm gone

timsykes

and that intraday high was a 5day breakout (save for that one spike), which was also an all-time high. one of these days one of these spikes is gonna stick and some of the 130k shorts will cover, causing a real spike over $19

Eric T

What do you all think is the good buy in point for ETFC? I sold out at 5.13 last friday and am looking to get back in again to go long.

JesseD

Im new to this strategy, usually play ETFs. Im looking at SWC. What do you think?

timsykes

ETFC, its gotta break above $6.10 to start to fill the gap to $8. not gonna be easy, i dont like buying into that much overhead resistance

Al

IDMI is up again today. Settiing up for another short.

timsykes

dman 10 min after my post (post #15) and that EXACT scenario happened, quick spike over $19, god i love when it's PREDICTABLE

be-the-ball

tim, did you sell?

timsykes

yup, took my 50 cents and got out, got 3 meetings and gotta prepare my speech for rutgers tonight, no time to watch this low volume play all day

td

hey tim what do you think of the news on NYNY ? and the corresponding jump in share price?
will it hold? or will it nosedive?

timsykes

NYNY--i don't play news related movers, too unpredictable as everyone interupts the news differently and has different expectations

eric

Tim....check out POSS. It looks like our next possible target?!?!?

timsykes

POSS, i like how their ticker is POS Stock, but they just got bought out. means we don't touch it

eric

Hahaha Tim i knew you would like the ticker POSS!

Stan

the low volume on POSS isnt too attractive

Tony Ellis

SUF needs to be punished!

be-the-ball

think i disagree with you on NYNY tim. POS stock with a POS news release. WIll short aggressively if it can get close to $3

td

34000 shrt @2.7????????????????????

td

pos stock is up 90%%%%%%%%%%%%%%%%
on sh1tty news-gott to be kidding me!!!!!!!!!!!!!!!!!!!!!!!!!!!!11

timsykes

can't disagree with someone who says they won't play NYNY due to news. the news is a fact now, whether u agree with it or not. i've never fared well when think the news is a POS, while going against the price action

Dan

Tim I was referring to JRJC being a predictable short but in the past it has been a predicable long for me at times when my system picks it up.

timsykes

better off buying ORCT if it can break past resistance at $9.20, nice strong breakout play even if i disagree with it. still not sure if i'll touch it though

Sparda

POSS is a new buyout, ie it is up today, target price $19.50

be-the-ball

sorry tim, bad choice of words. NYNY looks like a short to me at resistance to $3. I respect that you don't play this type of situation.

td

how many times have you seen a stock run up 90% and keep its position
(excluding buyouts)??????????

be-the-ball

couldn't help myself, shorted some NYNY at 2.60 10 minutes before the close. we will see what happens tomorrow

timsykes

no matter what u think of the news, 80% runs are nothing. i'm glad u guys made $ on this one, but take it from someone who's seen a million variations, the risk reward of shorting into a stock covering the gap sucks

Schleppy

So what is the rule for shorting below $3/sh. Will TOS not let you do it period or is the $2.70-$3.00 range ok? Any other brokerages let you short consistently any lower? I was considering short of NYNY at $2.67. Didn't know if it would fill......guess I should have shot it through to see.

Tim this may have been answered before, I'm new to your page, but do you still trade in the robe from WSW? The new season has been good so far. I miss the blonde hottie from last year though and of course you Timmay!

timsykes

not exactly sure with shorting anymore, just pull up the TOS chat window and ask if you can get a borrow and then ask if they can short it for u. i have a new robe

beanieville

3 Solars You Must Own!

Jeff C

Any minimum funding requirements for TOS to go short? I'm thinking of changing brokers....

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See Tim's full bio HERE. Tim turned a few thousand dollars into a few million by taking small gains time after time on hundreds of volatile penny stocks, discovering that his trading strategy, while consistently successful, works best for those with smaller accounts.

Determined to teach others this PennyStocking trading strategy (learn more HERE), he went back to his original $12,415 roots (already $58,000+ even though the stock market has crashed) to show everyone how to turn thousands into millions, even while having a life (somewhat) and making plenty of mistakes. Currently he is the #1 ranked trader out of 25,000+ on Covestor)

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Hard work, Determination and Know How.

Hard work to learn how the greatly misunderstood niche of penny stocks provides opportunities every now and then on which you should pounce.

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Long story short, wait for stocks that are extremely volatile - for whatever reason - and then aim to take small profits (between 10 and 50% within a few hours, days or weeks) here and there, either from betting on higher or lower prices (yes, you can make $ betting on lower prices, it's called Shortstocking (learn more HERE).

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Date	Stock	Buy	Sell	Net
Nov 19	AENY	$2.80	$3.02	$1148
Nov 18	NLST	$4.16	$4.40	$947
Nov 18	IMGG	$1.42	$1.64	$2094
Nov 17	NLST	$5.04	$5.59	$2195
Nov 13	VRMLQ	$21.50	$22.97	$2901
Nov 11	EONC	$2.61	$2.80	$687
Nov 10	EONC	$2.74	$3.36	$9784
Nov 6	QXM	$4.31	$4.80	$1936
Nov 4	COT	$8.66	$8.88	$642
Nov 4	QXM	$4.61	$4.89	$822
Oct 30	DDRX	$25.70	$26.53	$812
Oct 29	CTDC	$4.00	$4.42	$781
Oct 26	AWSL	$3.24	$4.10	$2516
Oct 23	RODM	$5.27	$5.23	$301
Oct 22	AMLM	$2.69	$2.97	$820
Oct 22	USEG	$6.12	$6.09	$85
Oct 20	CBOU	$8.93	$9.06	$243
Oct 16	VRMLQ	$16.79	$18.65	$2773
Oct 13	YONG	$11.05	$11.66	$1202
Oct 13	NPHC	$0.59	$0.71	$583
Oct 12	IMGG	$0.60	$0.70	$682
Oct 9	ZAGG	$5.50	$6.10	$2380
Oct 7	GVBP	$0.03	$0.27	$702
Oct 1	NPHC	$0.70	$0.85	$1482

Total: $98,094 (681%)