Stocks Watch List - REDE, MTEX, CALD, LTON
(May 18, 2004)
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Valuation looks attractive here. Approximately
three dollars per share in cash and short-term investments with no debt.
Company continues to grow and it looks like it has solved its execution
problems (they had no execution problems during the period immediately before
Valentine's Day) dating back to Christmas. Insiders currently own 34.29% of
the company while institutions own 17.38% - a very good ratio in terms of
long-term success and potential capital appreciation
Moreover, insiders have also started buying back the stock,
purchasing a total of 5,500 shares of the stock so far on May 14, 2004:
Technicals still not suggesting this is a good time to buy
but insider buying and the lack of insider selling (hopefully) should be a good
support of the stock in the near term.
The growth in this business and in the wellness
and nutrition industry continues to grow strongly. In the last fiscal quarter,
sales and net income increased 44.3% and 118.8%, respectively:
Technicals also look okay here, as the stock continues to
consolidate at its 40-week moving average. There has also been some insider
buying - the tune of 17,000 shares over the last two months.
A recent IPO which just debuted in November of
last year. Hugely oversold stock here per the technicals:
First insider buying occurred on April 29, as the CEO of the
company bought 3,100 shares at prices ranging from $7.15 to $7.19 a share.
Cash levels of over $3 per share; and a first quarter miss in earnings may only
prove to be a temporary problem:
Valuations, insider buying, and a huge oversold condition
makes this stock a compelling buy.
After a positive reaction to its latest earnings
report, the enthusiasm over Linktone has calmed down a bit:
After debuting on the NASDAQ in early March at $19.50, this
Chinese pure-play wireless company (a provider of Chinese mobile games) traded
as low as $7.37 last Monday before it released its blockbuster report the day
As the Bank of China decides to slow down growth in the
country, both Chinese equities and the Chinese IPO market has substantially
deflated. The recent downdraft of companies like LTON reflects a growing
negative sentiment not just about the Chinese market but about the general
emerging markets overall. There could be more consolidation here but the
valuation in this stock looks compelling here.