LMNX @ $20.80 (Luminex) develops biological testing systems to perform genetic analysis for the development and identification of new drugs and genes. Revenues have increased 28%, 32%, 55% and 51% over the last four quarters. The stock recently cleared the $18 resistance level and volume has steadily increased over the last couple of months. We are establishing a 1/4 position here and will enter the second 1/4 at $19. The remaining half will be bought around $18 or a test of its rising 50 day moving average. Our stop loss will be set at the 200 day moving average.
Stocks Under $10
AEHR @ $8.65 (Aehr Test Systems) manufactures wafer test and burn-in systems used to analyze memory and logic IC's for the semiconductor industry. Revenues have increased 18%, 7%, 55% and 90% over the last four quarters. Earnings have grown 86%, 33%, 90% and 400% over the same time frame and are expected to increase 116% this year and another 44% in 2009 to $1.18 a share. This stock is cheap and not followed by anyone on Wall Street. We are establishing half a position here and will enter the remaining half on a pull back to $7.50. We feel this is at least a $20 stock in a year or two and are treating it accordingly by adding it to the Stock Playbook 100. Just an FYI, we didn't list a stop loss level because we plan to accumulate more if we see the $6 level. Every once in awhile, we break our own rules and fall in love with a stock, which you should never do. We won't consider bailing on this stock until we see a move below $5.25 and we'll re-evaluate there depending on volume.
For the options traders, we feel SLB and MOS are both ready to roll over and have a defined downside.
We like the SDB PT (Schlumberger April $100 Put) with a stop set on a move above $93 by SLB.
We also bought the MTJ PE (Mosaic April $125 Put) with a stop set on a move above $110 by MOS.
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04-03-2008 9:37 AM