The Stock Playbook » Issue: 1/02/2008

Issue: 1/02/2008  

The Stock Playbook
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Posted Jan 02 2008, 09:52 AM
by Dave Dispennette



Market Summary: 

The market skidded lower today after a weaker-than-expected reading on the manufacturing sector and a spike in oil prices to $100 a barrel triggered concerns of a further slowdown in the overall economy. Light, sweet crude closed up $3.64 to $99.62 per barrel on the New York Mercantile Exchange after earlier hitting $100 for the first time. The rise follows violence in the oil-producing nation of Nigeria, concerns about weather-related production halts in Mexico and speculation that inventory figures will show drops in levels of U.S. supplies. The economic reading and rising oil prices were unwelcome for investors wading into the first trading session of 2008 and indicated the concerns that weighed on stocks in the second half of 2007 will for now persist. The Dow fell 220.86, or 1.67 percent, to 13,043.96. The blue chips briefly fell below 13,000 for the first time since November. The S&P 500 slid 21.20, or 1.44 percent, to 1,447.16, and the Nasdaq fell 42.65, or 1.61 percent, to 2,609.63.  

Growth Stocks:

ATVI @ $28.43 (Activision) publishes interactive entertainment software games for consoles, hand-held devices and PC's. Revenues have increased between 66%, 163% and 69% during the last three quarters. Earnings have increased 320% and 125% during the last two quarters and are expected to grow 188% in 2008 to 0.95 cents a share. We are establishing half a position here and will enter the remaining half on a pull back to $26. Our stop loss will be set at $25. 
(INSERT CHART HERE)

Stocks Under $10:

ACPW @ $2.35 (Active Power) manufactures flywheel energy storage systems used to replace lead-acid batteries in commercial and industrial markets. Revenues have increased between 44% and 68% during three of the last four quarters. This company is still a couple of years away from turning their first profit, but they have seen a steady increase in upside volume over the last couple of months. For those who like to take on a little more risk, we would establish half a position here and would buy the remaining half on a pull back to $2. Our stop loss will be set at $1.80.

(INSERT CHART HERE)


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