Good morning
Here in Europe it is "good afternoon" and today I'm going to a cocktail party sponsored by Banqueé Priveé Rothschild (Rothschild Private Banking), so unfortunately I won't be here covering stocks with you.
I remain fully confident in the
3 Stocks on Fire Portfolio current holdings, which are CPNE.OB, ETLT.OB and PFSW.
- For CPNE.OB, the chart remains quite bullish and fundamentals don't seem to stop improving, as you can read on the latest press releases out of the company. I expect the best ever quarter when they report Q4 numbers in the latter part of February and I'm planning to hold for that long here in the
3 Stocks on Fire Portfolio. Over the
Main Portfolio I plan to hold for a lot longer, if the recent fundamental trends persist. Just using the already reported Q3 as reference and its $0.07 EPS number, multiplying that by four I get a full year EPS of $0.28. I think a company with 86% gross margin and 40% net profit margin like CPNE.OB should deserve an earnings multiple north of 30, so you do the math. Also, check the updated chart:
- As for ETLT.OB, the stock is trading at a three year high, so without a doubt the trend is bullish. It is still trading at below cash levels. The trailing earnings multiple is just 7.7 and the company's new division, E-Sea Biomedical (a company acquired in October 2004) is starting to show nice revenue growth and expanding the overall business's net profit margin.
I consider net profit margin expansion one of the strongest catalysts to move a stock higher. Below is the updated chart for ETLT.OB. I think it can have a small correction (or not), but medium term technicals & fundamentals tell me this penny stock will probably double in the next 2 months or so, so I'll keep holding for that.
- Considering PFSW, I think the very low revenue multiple of 0.11 puts a floor on the share price. I believe all bad news relative to ecost.com losses are priced in, and the recent news out show PFSW actually expanding its capacity to respond to growing demand in its traditional business.
www.ecost.com still has many problems, but PFSW is too cheap now. Any hint of a business turnaround will make the stock sky rocket.
Technically it broke out of a descending trendline with volume above average, after touching the 50 days and 200 days moving averages support. It may very well run towards $1.5 over the short term, and probably it will surpass that over the medium term.
Therefore I'm not planning to sell any of these 3 holdings soon, I'm going to the party with a relaxed mind.
I wish you great trades and I'll be back in full power tomorrow
