Back from the Dead…. Back in Action! Long GSB, CHCG
Nov 30, 2007 Small Cap Stock Picks
Well i just got back from a 2 week long vacation that consisted of no travels, just hanging out with friends in town and enjoying my young 23 years of youth. It was nice for a while just waking up every morning with no worries about the markets knowing that 96% of my money is cash in the bank safe and sound. But i can only stay away from the ttt community and market for so long before i go crazy 
The market has had quite an exciting past few days posting the largest 2 day gain in some 4 years coming off of support with volume which signifies the possibility of a year end run to re-test all time highs could be in play technically speaking with this momentum. Bernake hinted of rate cuts in his meeting late this afternoon in the upcoming dec 11th meeting which has sparked some bullish sparks back on wall st. I imagine there has been a lot of sideliners like myself who have been waiting to put some money back into the markets and it appears investors have been buying back some cheap stocks over the past few days, myself included.
Although the Us markets i still believe could have some more down side potential i think this dip that we encountered in China was a buying opportunity providing us with some opportunities to buy some dirt cheap stocks. Some of my favorites to mention are CDS, CAGC, CHCG, CHNG, CPHI, CHLN, CNEH, GBT, CHME, CPBY and im sure a few others that im not thinking of off the top of my head.
I went ahead and filled a position in one of my old favorites that i haven’t traded in a while which Chinas Best Buy wanna be CHCG.OB. This stock rallied 24% today on upgraded guidance by the company for 2007 up a couple pennies bringing some positive sentiment back in favor of the chart after such a bashful trend as of late. Todays rally came off of CHCG’s lows where it appears to have formed a solid base around $3/share. I went ahead and filled a position today at 3.50. CHCG re-affirmed their growth with they’re latest 10q showing a 36% growth in revenues and a staggering 104% growth in net income. Analysts are expecting eps of .61 in 08′ giving CHCG a fair future value of around $11/share when compared to the electronic stores P/E ratio of 18x as well as Bestbuys Current PE of 18x earnings. This gives us upside potention of nearly 200%. That always looks attractive to me.
Disclosure: Long CHCG @3.50
Another old favorite of mine that i entered today after a long draw down in price action is GSB. This stock was in a very hot trend that we previously had been a part of here at ttt.net. After a nice gain was posted and we locked in profits price consolidated for a while until they released earnings which missed estimates by just .005 points in the face of the bear which lead to a huge sell-off in price and is now currently sitting right here around major support in the low 4 high 3′s which looks to be quite the premium given the valuation of GSB within its industry. They’re expecting eps of .26 in 2008 which gives us a fair value of $9.10/share which is over 100% gain away from todays closing prices which indicates we should at least be able to pull 20% here on a short term trade. I see price possibly running near $5 in the near term.
Disclosure: Long GSB
Sorry i can’t post charts right now for some reason my software is all fuzzed up but should have it fixes asap.
