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25 Nov

3 Small Caps I’m Looking To Swing

by

The portfolio is green across the board +5% $1,150 on SIMG, +8% +$1,640 on CADC, +3% +$440 on CDTI and +5% +$700 on MY into Tuesday’s session. My was the only addition Tuesday so here’s more details on why I like this swing.

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MY – The only new addition to the portfolio Monday after the company announced rockstar earnings. Locked +6% +$700 profit on it Monday and have 5,000 shares swing into Tuesday’s session. My manufactures wind turbine in China where there is growing interest in alternative energy as the country looks to reduce its dependence on coal. A study form United Nations Environment published last year noted that the country is making significant progress in developing renewable energy technologies, which includes wind energy. However, China is still the largest emitter of greenhouse gases and therefore a lot needs to be done in changing its energy mix from coal to more cleaner sources such as wind and solar. Therefore, MY finds itself in a growing market. The UNE report last year noted that China’s wind capacity at more than 60 GW is the largest in the world. MY, the report noted, is one of the top ten wind manufacturers in China. While MY’s long-term outlook is quite bullish, the recent surge in shares can be attributed to anticipation ahead of the company’s third-quarter results, which were reported on Monday. The company reported nearly an 80% year-over-year increase in third-quarter revenue. Importantly, the company had an order backlog of 3.73 GW as of September 30, 2014. This means that revenue growth will be robust in coming quarters. MY also has a solid financial position with $273.5 million in cash on its balance sheet.

my

 

Here’s Tuesday’s swing scan.

JRJC – Oversold bottom bounce came back on October 14 after the company announced it updated its mobile software systems and mobile handsets. Since then it’s been building in a continuation pattern breaking topside of the symmetrical triangle this week. Earlier this month, on November 11, the company also announced the signing of an agreement with Great Wall Securities to integrate Great Wall’s backend systems with its web-based trading platform.  The partnership will enable China Finance Online’s customers to open online accounts and trade real-time. The partnership agreement comes at a time when policymakers in China are looking to open the country’s capital markets. Favorable regulatory changes will help China Finance’s operations in the longer-term, which is why the stock has been seeing a surge lately. Recently, the Street Quant Ratings also upgraded the stock from a Sell to a Hold rating. The upgrade was prompted by the company’s robust revenue growth and relatively solid financial position. The partnership with Great Wall could further boost the company’s revenue growth. In terms of balance sheet, the company is in a relatively healthy position, with cash & equivalents totaling $32.10 million at the end of the March quarter. The company also did not have any long-term debt at the end of the March quarter. Let’s look for entry around $7, just above trendline support and swing for $8, maybe $9 if the pattern of good news stays consistent.

jrjc

BDR –  I scored a healthy +21% +$3,300 profit on this one last week and am looking to do it again. One of the biggest movers this month, gaining more than 96%. The Old Bridge, New Jersey-based company delivers television signal encoding, transcoding, digital transport and broadband product solutions for a range of applications. BDR has been surging since November 14 when the company announced its financial results for the third quarter ended September 30, 2014. The results showed nearly a 27% year-over-year increase in revenue, driven primarily by an increase in sales of digital video headend products and analog video headend products. This increase was somewhat offset by a drop in sales of contract manufactured products. Blonder Tongue also turned to a profit in the third quarter of 2014, posting earnings of $584,000, or $0.09 per share as compared to a net loss of $688,000 or $0.11 per share reported in the same period last year. Importantly, the company is on track with the planned releases of new products, which will further boost revenue going forward. The stock is now trading close to its 52-week high of $2.43, but given a price to sales ratio of just 0.46, it is significantly undervalued. In addition, the stock is trading below its book value at the end of the September quarter.  Not surprisingly, given the growth potential and valuation, investors are pouring money into BDR right now. Finally, the potential deal with DirecTV is a huge catalyst that could drive momentum to this stock once again. Over the past few days I’d been looking to enter off of $2 support but missed my bid. Now it’s gearing for a trendline breakout which I might buy. If I do enter in the $2.20’s, I’ll be watching to see if the low $2.40’s break, because that could really propel shares quickly if a new high is made.

bdr

CDTI – Another solid renewable stock is Clean Diesel Technologies which is a California-based company, engaged in the manufacture and distribution of heavy duty diesels and light duty vehicle emissions control systems and products to automakers and retrofitters. Shares have been up more than 44% in the past month. The rally in late October was initially sparked after the company unveiled its breakthrough clean air technology. The company announced in late October that it has been granted two new patents by the U.S. PTO. The patent covers technology that replaces costly platinum and rare earth group metals in catalytic converters. The company’s technology certainly has potential, especially given the high price of platinum group of metals and supply uncertainty due to strikes in South Africa, a major supplier of platinum. Rare earth metals market is dominated by China, which supplies more than 90% of rare earths globally. However, China has been accused of manipulating rare earth prices to benefit local manufacturers and this year it also lost a case in the WTO. Given how unreliable China has been with its rare earth mineral suppliers, there has been an urgent need for developing rare earths outside China as well as develop alternatives to the material, which is used in defense applications, consumer electronics among other things. CDTI’s technology therefore has significant potential, especially if it can replace rare earths in a range of industries. CDTI has also been in news lately after the company announced that it will raise around $4.4 million in gross proceeds from an offering of shares and warrants to a single institutional investor. CDTI also reported its third-quarter results this month, which were in fact lower than expected. However, the company is taking steps to achieve sustainable revenue growth and profitability. One such step was the amendment of loan agreements with long-time investor to extend maturity date, a move which will improve the company’s cash flows. Technically this is one of my favorite patterns rounding out with huge range to the topside before resistance. Entry above $2.20’s is desirable with range to $3 looking for +10% profit on the way up.

cdti

 

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3 Comments

  1. GARY P

    THANKS FOR WHAT???

    Reply
    • Jason Bond

      Sorry Gary I don’t follow you?

      Reply
  2. Courtney

    I’ve been following you for months now. Looking forward to subscribing in a few months when I will receive a good, long awaited amount to start trading with. I just have to say that so far everything has been professional and somewhat humble EXCEPT for the pics of half naked women on your blog posts. It’s extremely distasteful. Especially from a married man… A man of integrity would respect his wife by making a different choice in picture just for a blog post that supposed to be professional. By the choices that we outwardly make shows what is really inward in our heart.

    Reply

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