Knobias Clip Report (12-5-2007)

Submitted By Knobias ClipReport

Aftermarket News Has 3 Names on the Move

Wednesday’s session saw the indices rally on the back of jobs data which was reported higher than analyst estimates. The job growth displayed numbers which were in stark contrast of any expectation of recession. Even so, fear and anxiety remained with continued subprime talk on the horizon. Headlines were reporting that the Bush administration was proposing a 5 year interest rate freeze on owner occupied subprime mortgages. Large investment firms were also reporting the receipt of subpoenas to testify before congress on the selling of these risky debt securities. The fear and anxiety were still expected to be enough to tip the scales in favor of a cut in the interest rates by the Fed next week.

But the real news came post-market on Bidz.com Inc. (BIDZ), Hoku Scientific (HOKU) and Novastar Financial (NFI).

BIDZ has been battling a negative mention by Citron Research which was published last week. The Company refuted the allegations made by Citron in a conference call that did more harm than good to the share price. Following the report and call, shares were effectively been cut in half.

But it still didn’t dissuade analysts from coming to its defense. Roth, Think Equity, and Craig-Hallum all maintained a Buy rating in their reports and noted the weakness as entry opportunities. Roth even commended the Company in its attempt to address the negative report after shares dropped some $2.50 during the call.

Prior to the Citron report, BIDZ had issued guidance on November 27th of $180 million to $182 million in revenue for the 2007 fiscal year. Fourth quarter revenue was expected at $56 million to $58 million. The reason for the raised guidance was noted as the record Thanksgiving holiday weekend which saw a substantial jump. 2008 revenue guidance was also released which noted expectations for $225 million to $230 million in revenue and 47c to 51c in earnings per share.

In aftermarket action on Wednesday, the Company updated their guidance. In a little more than a week, the Company noted that it now expected revenue for the year to be at the higher end of their $180 million to $182 million view. Pretax income for the year was guided for $18 million to $18.5 million. Pretax income for the fourth quarter was expected to be $5.6 million to $6 million on $56 million to $58 million.

Not much changed except the Company’s expectation of 2007 revenue coming in at the higher end of their range. That and the fact that televisions (one of the questions brought up in the conference call regarding shill bidding) are no longer available on the site. Aftermarket trading saw shares hit highs in the $13.00 range before falling back down to closing levels.

Hoku Scientific, a clean energy technology company, which has been gathering extravagant amounts of prepayment contracts for polysilicon in hopes of gathering enough to construct a plant in Idaho, announced that the Company had signed a non binding term sheet with Merrill Lynch for $185 million in financing to facilitate the cost of construction. Following the announcement, shares jumped to the $10.40 range after closing at $9.80.

Novastar Financial Inc. (NFI) shares, which had been on many trader’s screens following their recent activity, saw another boost following the subprime mortgage lender’s waiver acceptance by Wachovia. At issue was the Company’s adjusted tangible net worth which had fallen below the convent levels. The Company originally broke the covenant on September 30th, but received a waiver until November 30th. The Company now announced that Wachovia has until Dec. 7th, this Friday. The first waiver was for 2 months. The second is now only 7 days which could signify Wachovia is running short on patience. Even so, shares were up some 30% in after market trade.

Wednesday’s aftermarket session saw a plethora of exciting, market affecting news cause some large swings in after hour trading. If the action continues to Thursday’s session, investors would certainly be wise to watch.



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Knobias Clip Report (11-27-2007)

Submitted By Knobias ClipReport

BIDZ: Diamonds Maybe Aren't Forever

Tuesday’s session saw investors cheer for the first time in a while as the market rallied on the heels of a major cash influx for Citigroup from an Abu Dhabi investment firm. The move gave many a warm and fuzzy feeling for investors in the financial group and extended to the overall market. Bears still warned that the largest dollar gainer on the Dow was Altria Group which has long been grouped into the defensive play category. Never the less, Bulls were abound as all three indices gained on the day.

In the small cap space, one name was under increased scrutiny following a report by the internet blog Citron Research. The site, formerly known as StockLemon.com, has been known as having short positions in stocks it highlights and has amassed a fairly accurate and profitable track record.

In its latest post on November 26th, the operator names Bidz.com (BIDZ) as a suspicious company that warrants increased due diligence before investing. The Company is an online auctioneer of jewelry. Bidz offers its products through a live auction format requiring only a $1 minimum opening bid. The auctions are unlike any others on the Web with starting bids at $1 and have an extended auction time that resets if bids are placed during the last 15 seconds.

On Tuesday, the Company reaffirmed its outlook following sales over the Thanksgiving holiday weekend which was noted as being 78% higher compared to last year’s holiday weekend. Guidance for the fourth quarter was projected to be in the $56-$58 million range and expectations were for pre-tax income of $5.6-$6 million. For the year, expectations were for $180-$182 million with gross margins of 27-28% and pre-tax income of $18-$18.5 million. Analysts were expecting revenue for the fourth quarter of $57 million, 2007 revenue of $181 million

2008 full year revenue guidance was to be in the range of $225-$230 million, pre-tax income of approximately $23.5-$25.5 million and gross margin of approximately 27-28%. Earnings per share for the year were expected to be in the 47 cents to 51 cents a share range. Analysts expect a fiscal 2008 profit of 50 cents a share and revenue of $230 million.

In Citron’s report, the appreciation in the stock was due to the sympathy type buying action which caused a name like Medifast to grow in market capitalization because of the growth in Nutrisystems. Citron contended that Blue Nile is the names causing the sympathy players to pile into BIDZ.

Citron also noted that the Company’s inventory numbers are somewhat alarming when comparing to other online liquidators. Cash balances were also something investors should focus on when comparing this name to others such as Overstock.com and Blue Nile. Finally, Citron points to some related party transactions, which in fundamental analysis causes many red flags to appear because of their disingenuous nature. The related party transactions are with a fairly large shareholder who also happens to be BIDZ’s largest creditor and also a convicted felon according to Citron.

Following the report, shares plunged from over $22 on Monday to close at $11.89 on Tuesday, almost cutting the market cap in half. In response, the Company called a conference call after the close to discuss with investors what it labeled as “innuendo and inaccurate information” about the Company.

In the conference call, the Company said that they felt obligated to respond to the report and noted that inventory and cash levels don’t necessarily compare to Blue Nile and Overstock since they have different business models. With inventory, the Company noted that the increase had to happen to increase revenues. On cash, the Company noted a large line of credit to fall back on if cash was needed.

On the CEO’s salary payment, Citron alluded to the Company paying 30,000 shares a month to its top executive. But the Company noted that the selling of the stock was due to a 10b5 trading plan. The Company noted that since that time, it reduced the plan from 30,000 a month to only 10,000 a month.

On Citron’s alluding to the Better Business Bureau’s rating of F due to poor customer service, the Company noted that it was true and that the growth in the business from the early years outgrew their ability to offer quality service. But they noted that since that time, only 7 total complaints were still unresolved.

In the question and answer session, management took a barrage of questions from analysts who questioned everything from the presence of televisions on the site to the ‘shill bidding’ accusations. Overall, management attempted to defend each and every aspect which is commendable, but in reality might have only opened the door even further to scrutiny and speculation as the stock dropped another $2.50 in after hours trade. With Citron Research expecting to release additional information in a follow-up report, the name is certainly loaded with shorts and will certainly be a closely followed name over the coming days. Investors would be wise to watch.



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Market Comments Submitted by Nick at Ambitions as a Stock Trader

Submitted by My Ambitions as a Trader and Investor

Trade Journal for Tuesday October 23, 2007

New Buys: ANET, ANO, AUTH, AZC, CRDC, EDAC, HLCS, WSCI, ZRAN

Added To: ALDN, ALGT, BIDZ, BIOS, CYBS, DDUP, KHD, PGI, RBN, SUSS, UVE

Sold Profit: SYUT (+29.77%)

Sold Loss: HIFN (-10.33%)


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Market Comments Submitted by Nick at Ambitions as a Stock Trader

Submitted by My Ambitions as a Trader and Investor

Trade Journal: Taking Some Profits/Taking Some Losses

Lets face it, yesterday (Friday October 19, 2007) was brutal. The negative action forced me to stop out and cut my losses on many of my positions. In addition, it has also forced me to come to the realization that I have to take profits in order to preserve my gains. Despite the crazy action there are still plenty of stocks that I am holding onto. I will continue to hold onto these decent positions unless I am forced to sell them. True to my strategy I never hold onto a loss if it falls to down 8% from where I bought it (well at least I try to stick to it). This strategy helps me contain my losses to small amounts.



New Buy: SYNP (rebuy)





Add To: BIDZ, LULU



Hold: AATI, ABX, ACCL, AEM, AEY, AIRM, ALLI, ALXN, APPY, ARTW, AXYS, BIDZ, BW, CATS, CF, CFSG, CLDA, CU, CVGW, FALC, FRM, GHM, GOLD, HA, HMSY, IEP, INXI, JASO, JST, KOP LKQX, LGTY, LULU (so far up 116%), MCZ, MVG, NEOG, NG, NUAN, NTCT, OMTR, PMFG, SHEN, SHOR, SLI, SIL, SQNM, SYUT, TLEO, TOD, TRAK, TWTI, VCO, VMW, VSEC, WAT



Sold for Profit: ARCI (sold the rest of my position for a 10.86 gain), ATRO (+4.8%), BCSI (+24.63%), BKR (+6.22%), BOOM (+7.8%), BPHX (38.04%), CMED (+19.6%), DSX (+43.8%), EHTH (+11.27%), EXM (+57.9%), FARO (+39.34%), GME (+9.9%), HEW (+4.16%), ISRG (+36%), ITRI (+5.95%), LDSH (11.11%), MEAS (+11%), OMCL (8.70%), OI (#.6%), PAS (sold the rest of my position: 15.6%), PENX (+41%), QEPC (+19.27%), RBN (+46.56%), RESP (+2.9%), RGLD (+.65%), SIMC (+54%), SNCR (+12.50%), SNDA (+15.20), STRA (+6.87), STRL (7.6%), SYNT (+11.14%), TTES (+6.75%), TWI (+73.68%), VDSI (+47.4%), WRLS (+80.7%)



Sold for Loss: ACM (-6.44%), CREE (-8.20%), CROX (-1.41%), DGIT (-1/05%), FMCN (-2.75%), HLF (-2.62%), GNET (-6.20%), IFSIA (-8.9%), MDCA (-5.30%), ONXX (-4.73%), PRKR (-1.27%), SHMR (-8.7%), SVT (-2.15%), TCN (-7.84%), WLDN (-1.20%)



Sell if: AMAC (sell if it closes below the 50 day MA on above average volume), SILC (so far down 7%. Sell if it closes below the 50 day MA)


* Note: I am not finished posting all the trades. I will try and finish by tomorrow.

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Market Comments Submitted by Nick at Ambitions as a Stock Trader

Submitted by My Ambitions as a Trader and Investor

In Play: BIDZ, BLUD, SGN
BIDZ is an add-on as I already have a position in it. BLUD and SGN are new buys and In Play candidates for today. Whatever you choose to play, keep it small as the markets are rather indecisive today. Now is not the time to pile in a lot of cash into stocks. Keep any new positions small and manageable.


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Market Comments Submitted by Nick at Ambitions as a Stock Trader

Submitted by My Ambitions as a Trader and Investor

Despite Fears of an Imminent Market Correction, Several Bullish Chart Patterns Emerge- Part 2-The Stocks & Charts

Here are several stocks that I like. They are all showing interesting chart patterns and displaying technical strength


Stocks: AEY, HA, MCZ, NEOG, NG

AEY


Although I suffered a loss on AEY the last time I traded it, I still believe that the stock can make a good trade at the current price level. This is mostly due to the strong bounce off of the 50 day MA on robust volume. A small position is key at first. If it continues to improve, add more.


HA

HA has recently reclaimed its 50 day MA on huge surges of volume. This is signaling some institutional interest in the stock and may hint towards future upward moves.


MCZ

MCZ has successfully bounced off its 200 day MA on higher volume. The current price level provides a low-risk entry right above the 50 day MA.


NEOG

NEOG is a thinly traded stock that is experiencing increased volume during the last few trading sessions. The stock has recently announced strong Q1 earnings which is mostly likely the reason for the renewed interest in this NEOG.


NG


With gold stocks beginning to move into positive territory, it is a no-brainer for me to include a gold stock. NG is currently one of my favorite gold/silver setups. It has recently reclaimed its 50 day MA and has no strayed far from it, allowing one a low-risk entry into the stock.


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Stocks to Add to:
Add to- APPY, BIDZ, CLDA, JST, POSH, SIMC, SQNM




I will try to post some more picks for tomorrow. In addition, I will try to mention some of the current stocks that one should add more to. Later.




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Market Comments Submitted by Nick at Ambitions as a Stock Trader

Submitted by My Ambitions as a Trader and Investor

What's Hot and What's Not...
Today was a rather hit or miss type of day. There were several stocks that did quite well and there were others that I wish I never bought or mentioned. But that's how the market is. It's all about getting rid of the poor performing stocks as soon as possible and buying the ones that continue to show improvement.
So, lets take a look and see which stocks were hot and which ones flopped..

Hot Stock: ANW, APPY, BIDZ, CLDA, JST, SIMC, SQNM

Flopped: FSIN, PAET, BLOG, HURC, LNOP, OMTR, TSL, YGE

Sells: BLOG, LNOP, PAET, TSL, YGE

Slightly redeemed themselves: AERO, JASO, REDF




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Market Comments Submitted by Nick at Ambitions as a Stock Trader

Submitted by My Ambitions as a Trader and Investor

Trade Journal
New Buys: BIDZ, CPSL, DSX, EXM, JASO

Added To: YGE

My Ambitions as a Trader and Investor is not a registered investment advisor. Please read the complete Small Cap Stocks Blog Disclaimer


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