Adman's "Slackers"

[Adman]

I have decided to start a separate thread to compliment my Outlook thread.
The main difference between the two will primarily be the time frame.
Last week, I was reviewing my Outlook thread, and I noticed that I had short, mid and long-term picks in there.
I will use this thread to post the “dogs” if you will. The stocks I feature in this thread will be ones that either under preformed, been beaten up or have a longer horizon to hit what I think should be their fair value. In most cases, under normal market conditions, that time horizon will be beyond 4 months. This is where you will find picks that will be buy and holds (to wait for the appreciation), and in many cases, price volatility.

This thread will not receive as many posts as my Outlook from me, and the posts here will usually be a list of stocks to pour over, more than recommendations. I am sure that many of the stocks that I will list here will be contrary to what the street would pick.
For those of you that play on margin, I would ask you to weigh carefully your situation, and ask yourself if you can afford to carry one of these on margin for an extended period (eating up valuable margin capital that might be deployed elsewhere) and the opportunity cost. Remember: Opportunity cost is opportunity lost.

As always, please do your own research, and make sure when you buy a pick you read about, whether here or another thread, it will fit your trading model and portfolio.

[Adman]

The first list of “dogs”:
Have fun; I am off to the golf course.

Vitesse Semiconductor: VTSS. This $2.50 stock should be a $4 stock, but will take a while, they need to get their financials in order first.

Sirius, SIRI, that’s right. At $4.80, this is a pure $6 stock, and it’s been there before. If management can get it right, there is no reason why you shouldn’t see them at $10 plus in a year or so.

Agree, AGR, someday this $15 75 stock will get back to $25, but may take a year to do so.

Cell Therapeutics, CTIC, this one at a buck eighty, might be the diamond in the rough of this list. I am looking for this thing to double by year-end. I really believe this one will get close to $4 over the next 7 months or so.

Morton’s, MRT. Here we have a stock at $17.25, which I believe is undervalued by at least 12%. I think Morton’s, with the current business model and expansion plans, belongs above $19.

Mindspeed, MSPD. This is truly an anomaly. I can’t understand, at all, why they are not above the $5 mark.

Nanogen, NGEN. Here is one at $2.60 that has the potential to be at $3.75+, but the street has just given up on.

Rite Aid Drugs, RAD. At $4.50, don’t look at this as a retail drug store, look at it as a real estate play, Walgreen’s, Eckert’s, CVS have all run past RAD in the last couple of years, but at some point, RAD will go into play, and you should expect to see a 20-25% increase here, putting the stock in the $5.40 range. For those of you that can remember, RAD used to be a steady Eddie at 8 bucks, for a long time.

With the above, don’t look for the 20% runs, many only have 10-12% in them, but money is money. Do your own time value analysis to determine if they are worth it for you.

DISCLOSURE: I am long in CTIC.

[Adman]

The first list of “dogs”:
Have fun; I am off to the golf course.

Vitesse Semiconductor: VTSS. This $2.50 stock should be a $4 stock, but will take a while, they need to get their financials in order first.

Sirius, SIRI, that’s right. At $4.80, this is a pure $6 stock, and it’s been there before. If management can get it right, there is no reason why you shouldn’t see them at $10 plus in a year or so.

Agree, AGR, someday this $15 75 stock will get back to $25, but may take a year to do so.

Cell Therapeutics, CTIC, this one at a buck eighty, might be the diamond in the rough of this list. I am looking for this thing to double by year-end. I really believe this one will get close to $4 over the next 7 months or so.

Morton’s, MRT. Here we have a stock at $17.25, which I believe is undervalued by at least 12%. I think Morton’s, with the current business model and expansion plans, belongs above $19.

Mindspeed, MSPD. This is truly an anomaly. I can’t understand, at all, why they are not above the $5 mark.

Nanogen, NGEN. Here is one at $2.60 that has the potential to be at $3.75+, but the street has just given up on.

Rite Aid Drugs, RAD. At $4.50, don’t look at this as a retail drug store, look at it as a real estate play, Walgreen’s, Eckert’s, CVS have all run past RAD in the last couple of years, but at some point, RAD will go into play, and you should expect to see a 20-25% increase here, putting the stock in the $5.40 range. For those of you that can remember, RAD used to be a steady Eddie at 8 bucks, for a long time.

With the above, don’t look for the 20% runs, many only have 10-12% in them, but money is money. Do your own time value analysis to determine if they are worth it for you.

DISCLOSURE: I am long in CTIC.

Well, you can see why I call this the slacker list. VTSS, as I mentioned above, needs to get their financials in order. I refered to it as a $2.50 stock that should be a $4 stock.
I still stand by that, but now, it is a $1.85 stock that should be a four dollar stock. I did not expect the word of their restatement and unreliability of last 3 years numbers to whack it 30% today. That means 2 things to me: At $1.80-1.85, it could be a buying opportunity, with them being marked down 25% and, it will take longer to get to $4, but it will happen.
A week or so ago, VTSS was hit for a 10% loss, which it made up the next day. Now the circumstances in this hit are much different, but the company, in my opinion, remains viable.
For now, VTSS should be viewed as a high risk, speculative investment. Truely, a long termer if you go in.