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Top 5 Stocks for September 2008
Things change quickly in the market.
What looked attractive last month, now looks overvalued, or further due diligence has proven it to contain some warts.
Such is the case with stocks that enter and exit my Top 5 as constant fluctuations in both price, market conditions, and business fundamentals constantly alter the investment thesis.
Today I wanted to give you a heads up on some of the stocks that I was watching for possible inclusion into the PeakStocks.com portfolio, specifically ones that are high on my list, and most likely to be added as formal recommendations in the weeks to come as they reach desirable price points, and present wonderful opportunities for long term investors.
Please note that my Top 5 Stocks for September aren’t yet formal recommendations.
I have more due diligence that I have to perform on them, but they are compelling enough with the research that I have done to be at the absolute top of my list.
Why Does My Stock Have a High Short Interest? Look at the Debt
Oftentimes, we hear from analysts, writers or other pundits about a certain stock’s high short interest, and how that can signal bad times ahead for a stock.
So what exactly does a high short interest mean, and does it always signal that a stock is about to fall because people are betting against it?
In this post, I’m going to go over all the ins and outs of what shorting a stock means, and more importantly for us, how sometimes this high short count is not caused by those necessarily betting against a stock, but rather from the financial institutions that have lent the company money and have received convertible bonds or warrants in return.
Why would a financial institution that is lending money bet AGAINST the stock of the company that they just lent money to?
Good question!
This is one of those small little nuances on Wall Street that often confused me, and left me scratching my head wondering why a seemingly “great” stock had so many people betting against it.
uWink Q2/2008 Earnings: It’s a Good Thing uWink Isn’t a Restaurant Company
After taking a look at the latest quarterly results from uWink (NASDAQ: UWKI.OB), parsing the numbers, and talking to management, it struck me that it’s a good thing that uWink isn’t a restaurant company because it was not a pretty picture…and then I caught myself.
You see, right now, uWink is indeed a restaurant company until they start selling and licensing their proprietary gaming and point of sale (POS) software on a large scale, which is the whole basis of my original investing thesis for buying shares of uWink.
In the end, I don’t really care about the success of their restaurants, and neither should you, but rather the continued success of that software and licensing business.
But, and this is a big but, until that happens, uWink is on borrowed time, and is indeed solely a restaurant company, that HOPES to license its software to really increase revenue, and ultimately, stay in business.
uWink is not like other companies that I follow for many reasons.
For one thing, the company never hosts analyst conference calls when they release earnings, and never puts out a press release announcing earnings.
In fact, we are lucky to even get a 10-Q to look at.
I guess I should also explain that uWink is a penny stock trading on the pink sheets/bulletin board exchanges, and therefore, isn’t even followed by hardly anyone on Wall Street, so odds are, if uWink did host a conference call, it would probably fall on deaf ears.
So, as a result of this lack of information, I thought it was prudent to take a look at uWink’s latest quarterly results, and update you on the company and what’s going on.
The stock has taken quite a hit lately, but such are the vagaries of dealing with companies this small with such a thin trading volume.
However, that being said, there are very good reasons why uWink’s stock is lower, and some serious issues that I think you should know about and that I’ll be addressing in this post.
GeoEye-1 Launch Date Set…Probably
OK, I think this REALLY is the final postponement of the launch of GeoEye’s latest and greatest satellite, GeoEye-1!
GeoEye, Inc. (NASDAQ: GEOY), a provider of space-based and aerial imagery and geospatial information, confirmed on Friday August 15, 2008 that they have received the go-ahead from the government to finally launch GeoEye-1, which will be the most advanced commercial imagery satellite available today.
The launch has been confirmed for September 4th, 2008, which was slightly delayed from August 22nd, 2008, which was delayed from March, 2008, which was delayed…well, you get the picture.
GeoEye Q2/2008 Earnings: Slight Problems but Otherwise Looking Good
GeoEye, Inc. (NASDAQ: GEOY) a provider of space-based and aerial imagery, and geospatial information, reported its fiscal 2nd quarter 2008 earnings on Tuesday after the market closed, and updated the launch status of GeoEye-1, which has been delayed once again, this time for about another 2 weeks.
While I wrote previously that I did not expect the Q2 earnings to be anything special (they weren’t), GeoEye surprised me with a further delay in the launch of GeoEye-1, albeit only slightly, and also had some accounting problems that I will detail in full.
What follows is a summary of GeoEye’s earnings announcement and conference call, a discussion about the delayed launch of GeoEye-1, along with my explanation of the numbers and outlook, and what you need to know to fully understand the GeoEye story.
GeoEye: It’s Make or Break Time, Literally
Like one of its satellites racing overhead for some amazing and spectacular shots of the Earth, GeoEye (NASDAQ: GEOY) is getting ready to ramp up its own news stream with a flurry of activity over the next 10 days or so.
Not only is the company going to announce its 2nd quarter 2008 earnings on Wednesday morning, but more importantly, on August 22nd, GeoEye will be launching the most advanced commercial imaging satellite currently available.
The launch of GeoEye-1, which took four years in the making, represents a seminal moment for the PeakStocks.com portfolio recommendation.
The company will either push through to new heights, literally, or fail miserably if the launch proves unsuccessful for any reason whatsoever.
In this post I’ll go over the important aspects that we need to be aware of before GeoEye announces earnings and before the launch of GeoEye-1 and then break them down into the following parameters:
- What went right in the quarter: What were some of the positive developments that occurred within the company in the last 3 months.
- What went wrong in the quarter: What were some of the negative developments that occurred within the company in the last 3 months.
- What I want to see: All things considered, what I realistically want to see from the company as it relates to their business.
- What we need to see: At the minimum, what we need to see for our investing thesis to still hold and an investment in this company to be prudent.
- What we’ll probably see: After weighing what’s been going on for the last 3 months, what we can realistically expect when they do announce their earnings.
- Bottom Line: What it all means, and what you should do.
SoundBite Communications: It’s Time To Sell
That’s it, we’re done.
It’s time to liquidate your entire position in SoundBite Communications (NASDAQ: SDBT), a leading provider of on-demand customer contact solutions.
What I heard on today’s conference call, coupled with the Q2 results and forward guidance leave me little choice but to cut-bait and put our money to work in a better company, with better prospects, better management, and better fundamentals.
What follows is a summary of SoundBite’s earnings announcement, conference call highlights, and my reasons for selling my shares in the company.
SoundBite Communications: Back on Track, or Continued Disappointment?
Next on the docket of companies that I cover set to report earnings is SoundBite Communications (NASDAQ: SDBT), which reports Wednesday August 6th after the market closes.
Last quarter SoundBite severely disappointed not only me, but judging from the precipitous stock price decline, a bunch of other folks on Wall Street as well.
It’s put up or shut up time for SoundBite.
What’s it gonna be this time around?
Improvement in the business trends and fundamentals, or continued disappointment and a diminished outlook?
Either way, it’s decision time on Soundbite.
In this post I’ll go over the important aspects that we need to be aware of before SoundBite announces earnings and then break them down into the following parameters:
- What went right in the quarter: What were some of the positive developments that occurred within the company in the last 3 months.
- What went wrong in the quarter: What were some of the negative developments that occurred within the company in the last 3 months.
- What I want to see: All things considered, what I realistically want to see from the company as it relates to their business.
- What we need to see: At the minimum, what we need to see for our investing thesis to still hold and an investment in this company to be prudent.
- What we’ll probably see: After weighing what’s been going on for the last 3 months, what we can realistically expect when they do announce their earnings.
- Bottom Line: What it all means, and what you should do.
BUY ALERT: AuthenTec (Nasdaq: AUTH) BUY 1/4 Position 8/4/08 Around $7.50
The market didn’t take to kindly to PeakStocks.com portfolio recommendation AuthenTec’s (Nasdaq: AUTH) latest earnings release, sending shares precipitously lower in the days following what were largely stellar earnings from a rapidly expanding up-and-coming company.
The good news for us, is that this presents us an excellent opportunity to add shares of AuthenTec at discounted prices and further cost average our total position.
If you haven’t already, it’s time to put some money to work in shares of AuthenTec.
I don’t know when shares will stop their recent slide to new all-time lows, but one thing I am certain of: AuthenTec is a cutting edge company that continues to execute in an otherwise wickedly negative marketplace and in the face of continued consumer doldrums.
Very briefly, AuthenTec is the world’s leading provider of fingerprint sensors and solutions to the wireless, PC and Access Control markets.
I am initiating the Fifth (5) BUY recommendation of AuthenTec at or around $7.50 per share.
Here’s Why:
