Como se combate o populismo? "Com eleições", responde Fukuyama

[Visitante]

[Visitante]

Wednesday, December 15, 2004 10:50 a.m. EST


Dear Subscriber to TheStreet.com Stocks Under $10,

It has been one week since we put together a basket of low-
dollar stocks that we believed could soar into year-end.
We want to give you readers an update on how those stocks
have performed and what action we would be taking here if
we had added the stocks to our model portfolio. (We
didn't add them to the model portfolio because we had 16
positions at the time.)


Here is how the five stocks have done since we wrote about
them last Wednesday:


Stemcells (STEM:Nasdaq) is essentially flat at $2.98.
Aphton (APHT:Nasdaq) is currently up 8%.
E-Loan (EELN:Nasdaq) has ramped some 40% higher.
Tuts Systems (TUTS:Nasdaq) is up more than 6%.
OpenTV (OPTV:Nasdaq), a model portfolio stock, has moved
5% higher.


If you bought one share of each stock, you would be up 11%
on your investment. As we noted in an alert last Friday
afternoon, we would urge readers to be prudent and take
some gains off the table.


We already suggested moving out of some E-Loan
(EELN:Nasdaq) for a 27% gain, and would take more off the
table into today's strength. Today's 17% gain is being
driven by news that Capital One (COF:NYSE) is making yet
another acquisition in the online mortgage space. As we
said initially, E-Loan is cheap relative to the
recent takeout prices, and the stock could trade closer to
$4.50 a share before this run is over.


While it may seem counterintuitive to sell speculative,
volatile stocks like these into the first round of
strength, look no further than our biotech pick Aphton
(APHT:Nasdaq) for validation of this method. We suggested
trimming positions in this name on Friday when the stock
was closer to $3.90 a share. The stock has pulled back
about 11.5% since then, but the risk to performance was
reduced with the smaller position.


We continue to believe catalysts loom for interactive TV
play OpenTV, digital video enabler Tut Systems, and
regenerative stem cell play StemCells, and we would
continue holding these names because investors still feel
the need to chase small-cap, high-beta stocks.

Regards,


The TSC Investment Team

[Visitante]

TSC Stocks Under $10
Low-Dollar Picks Set to Soar
By Stocks Under Ten Staff
12/8/2004 10:07 AM EST

URL: http://www.thestreet.com/comment/stocks ... 97921.html


Editor's Note: This column was originally sent to subscribers of TheStreet.com Stocks Under 10 on Wednesday, Dec. 8 at 8:05 a.m. EST.



We've noticed lately that an increasing number of the most active stocks in the market each day are of the low-dollar variety. Call it momentum chasing by some overzealous money managers, or maybe an early dose of the January effect -- in which stocks (particularly small-caps) tend to outperform early in a new year -- but we don't think we've seen the last of this action.

We'll bet few people thought twice when CMGI (CMGI:Nasdaq) , which used to be everyone's favorite Internet incubator during the Nasdaq heyday, gained 19% last Friday to $1.88 a share. After digging into the stock ourselves, we could see little reason for the move -- made on 10 times average trading volume -- other than that the company was supposed to report earnings the following Monday.

But what's so interesting about this story isn't CMGI's spike higher last week, but the 43% it's tacked on since, to $2.68 a share. The company did report decent October quarter earnings Monday, with revenue tripling from the previous year and operating income improved 134%, to $2.4 million. (Not that any sell-side analysts follow the stock these days.)

Similar action was seen in Genta (GNTA:NYSE) this week. This is a stock that was trading for $16.65 in April, cratered to $1.18 the day after Thanksgiving, and has since jumped up to $2.14. What was the catalyst? The company (which makes or does what exactly?) presented some positive data on a leukemia product that failed to receive the support of an FDA advisory panel back in May.

Need more evidence? Then consider Sirius Satellite Radio (SIRI:Nasdaq) , which has been the most actively traded stock in the market for every day for the past month. Investors sent the stock from $3 to $4 when the company signed an exclusive deal with Howard Stern, and from $4 to $5 when Sirius attracted media mogul Mel Karmazin as its CEO. But here we are, seemingly three weeks removed from the last significant catalyst, and the stock is trading at $8.81.

Whether these individual moves are sustainable or not, we believe there will be more action like this in coming weeks. To paraphrase RealMoney.com's Jim Cramer, the animal spirits have taken over this market, and investors are actively seeking the next CMGI and the next Genta to bank their next bonanza.

With that in mind, we ran a screen of low single-digit stocks in the particularly volatile tech/Internet and biotech areas. From there we searched for the stocks that seem to have little analyst coverage, but still could realize some outsize gains if some potential catalysts materialize in the near term. (One note: We're presenting these stocks in alphabetical order.)



Aphton (APHT:Nasdaq) , currently trading at $3.22 a share, has lost nearly half its value year to date on a dearth of news flow. The company doesn't currently record any revenue, but management is due to report some phase III trial data on its lead clinical product in the near term.

Aphton is developing a vaccine (Insegia) that attacks a hormone implicated in contributing to gastrointestinal cancer. The company has partnerships in place with GlaxoSmithKline and Aventis Pasteur, and can fund its business into 2006 with $49 million of cash on the balance sheet. The recent move in Genta has shown us that the slightest positive news can quickly send a seemingly sleepy biotech stock higher.

Shares of E-Loan (EELN:Nasdaq) already have gained 30% in the past few weeks to $2.86 Tuesday, and could push even higher after last month's purchase of HFS Group by Capital One Financial (COF:NYSE) boosted industry valuations in the mortgage lending business.

Analysts at Craig-Hallum Capital believe that E-Loan, which conducts its business primarily on the Internet, could be worth $4.50 a share, based on the price that was paid for HFS. Add in the fact that mortgage activity should remain relatively high with long-term interest rates hovering around multidecade lows, and we believe E-Loan could end the year at higher levels.

Interactive software provider and Stocks Under $10 model portfolio member OpenTV (OPTV:Nasdaq) also made our list. The company, which to date has primarily worked with foreign cable providers, is in trials with leading U.S. cable company Comcast, and could possibly announce orders in the coming weeks. Entering the domestic market with an industry leader could quickly boost OpenTV's $3.80 share price.

Stemcells' (STEM:Nasdaq) early-stage research programs on many now incurable diseases came back into the forefront after California voters agreed back in November to provide $3 billion of funding over the next 10 years. Other states could soon follow, with a similar proposal reportedly being floated in Illinois.

At $2.96 a share, the stock has gained 50% for the year, and could build on these gains in the near term. Stemcells looks to begin human trials in 2005, which gives the company a head start on its peers. The company sold $22.5 million of stock in November, and is flush with $1 a share of cash on its balance sheet.

Tut Systems (TUTS:Nasdaq) stands to benefit from Cingular's increased spending on its digital video network. Although the stock has lost 42% for the year to $3.75, we believe management will update the market on recent contract wins in the coming weeks. Tut is trading at a relatively low 2 times expected 2005 revenue, and acknowledgement of the new deals could cause this multiple to expand.


P.S. Remember, stocks priced under $10 have the potential to move quickly. So, you might want to get our current recommendations now with a free trial to TheStreet.com Stocks Under $10.


William Gabrielski is a research associate at TheStreet.com and is accredited with a Series 7 license. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Gabrielski welcomes your feedback and invites you to send your comments to william.gabrielski@thestreet.com.


Interested in more writings from William Gabrielski? Check out Stocks Under $10. For more information, click here.

David Peltier is a research associate at TheStreet.com In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier welcomes your feedback and invites you to send your comments to david.peltier@thestreet.com.