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Why I Bought The Hottest Coffee Stock Around

Posted by Timothy Sykes on Tue 21st of Apr, 2009 07:45:21 PM
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UPDATE: You have until midnight tonight to take advantage of THIS special TIMalerts offer for a year for $197 instead of $297 and 2 FREE months of daily video watchlists, which normally cost $99/month alone!

This afternoon I bought Diedrich Coffee Inc. (DDRX) and told TIMalert subscribers why:

Bought 3000 DDRX at $4.18ish, I know it sounds crazy to buy a stock up 110% on the day, but its an earnings jumper, meaning it could run for multiple days, just like ZLC, APWR, RT…its held its gains all day rather nicely, even tried breaking out big to $4.58 (didn’t really think that gain would hold, I mean its already up so much on the day today)…goal is to sell into a big gap up or morning spike tomorrow…I will cut losses quickly if I’m wrong, but I think this great earnings report gets noticed overnight due to the price action and shorts and momentum buyers get interested for a few more days…risky, but big potential rewards (goal is to sell above $5)

PS my girlfriend also bought 1000 at $4.19

The reason why it was up 110%–it finished up 120%, giving me a nice paper gain of $800-ish, putting me up nearly $2,000 on the day after successful shorts in NTWK and KIRK (detailed post coming later on those)–was earnings…see the whole earnings PR HERE, but basically quarterly sales surged 70%+ to $20million-ish and they reported a surprise quarterly profit of $1.3 million, or $0.25/share.

Considering the sales were up so much and the company beat its estimate of attaining profitability several months ahead of schedule, and of course how hot the coffee industry has recently become–GMCR is the latest hot “real company” stock, now with a PE of 40 and muuuuch slower growth than DDRX–this one gapped up nicely and held its gains all day ( a great sign of strength for a potential multi-day runup):

ddrx Why I Bought The Hottest Coffee Stock Around

I especially love that it gapped $1.50 higher on less than 100,000 shares this morning at the market open, so now that we have a few shorts on this (some people just don’t get that earnings breakouts stocks are buys NOT short sells), I think there’s a fair chance a MASSIVE morning spike/gap up tomorrow to $5 or even $6+.

After all, look at charts of FEED, APWR and RT to see how they performed days after surging based on earnings. DDRX was up more than any of those, but that’s because their news is overwhelmingly the best out of all of them and, more impressively, it held onto its massive gap higher, trading sideways all day and then breaking out above morning highs late in the day (which caused me to buy).

And of course, with quarterly earnings of 25 cents/share, or a potential $1/share in yearly earnings (yes, simple math, but I need to show how much this thing can surge), this can easily justify double digit stock prices in the next few months…

Potential loss cutting at $4ish, which would be a $600 loss, potential profit of $5 to $6 (no way will I be able to hold very long if I’m up $1.75/share), which would be a $3,000-$5,000ish profit, great risk/reward….check out my PennyStocking instructional DVDs to see the difference between stocks to buy vs. stocks to short based on the variables, even though I’m always looking for stocks up a ton.

PS I dare any shorts to get in on this, if you watched the price action all day today, the few sellers blocks were eaten pretty quickly even though it was up so much already aka this thing could literally surge to $7 or $8 within a few minutes or hours if any shorts get squeezed…I’d be waaaay too scared to short down here (which is why I bought!)

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  • mark
    what's the deal on FRZ? supernova
  • Joe
    Hi, you got a great website here, I check it out a lot. I think you could improve it by being more accurate with you TIM Trades section. In your TIM Trades section you show, put the stock ticker, price bought, price sold, and profit or loss.

    But actually you only buy the stock sometimes a lot of the time you short the stock. So for TIM Trades you should say whether you actually bought the stock or shorted it.
  • Joe, i dont separate shorts from sold shorts and buys from buy to covers, its all the same, goal is to buy low, sell high, no matter the order of the trade. read the attached blog posts for each trade to see which is which
  • Stock is up 15%, the latest Sykes winner! TIMalert testimonials galore....
  • alex
    Very nice find. Ran right out of the gate this am!
  • DDRX now at $6.36, up nearly 50% in the few days since my original TIMalert buy...learnnnnnn how easy it is to predict these moves if u know the variables people:

    http://www.timothysykes.com/store
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Start Here

Who Is Timothy Sykes And Why Should I Care?

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)

How Can I Consistently Make Money In The Stock Market?

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.

Determination to seek those probable profits out and know how in order to actually profit from them.

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).

Why Penny Stocks?

As Tim explains in several ALL-NEW instructional DVDs (see them HERE) and in over 2000+ blog posts, penny stocks are the most hyped and corrupt niche in the entire investment world. These two qualities make them the easiest to profit from (legally) because the vast majority of people who play penny stocks are suckers and all-around ignorant people. If you have any intelligence whatsoever, you have a clear advantage and it's like playing basketball against mental midgets.

Where Do You Find Stocks To Trade?

This is the #1 FAQ (see more HERE) and it is answered in THIS instructional DVD.

Of course, that's just a brief introduction - to receive a full education, there is Tim's book An American Hedge Fund which is the story of his remarkable rise and lessons learned.

To truly increase your odds at profit, Tim has designed an entire set of detailed instructional DVDs, covering all the variables that amount to over 24 hours of instruction (see them all HERE)!

TIM Trades

View All
Date Stock Buy Sell Net
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: $92,304 (644%)