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Jeff Mishlove: His Contest Picks for Friday

Hey everyone. Guest blogger Jeff Mishlove promised to give his contest stock picks for the whole week--and he's delivered. Here are his thoughts and his list of selections for Friday:

The strategy of finding eligible stocks, below $8 billion in market cap, that have earning reports due out, has been relatively successful. On Thursday, two of the stocks on my recommended list for Wednesday purchases, did very well: APOG and FAST. ESIO, recommended earlier for a Tuesday purchase, did quite well on Wednesday.

For Friday purchases, the following stocks are on my list because they meet the criteria listed in the previous paragraph: Amlyn Pharmaceuticals,New Oriental Education and Technology Group, S & T Bancorp,Student Loan Corp and W.W. Grainger.

Of these, I am quite skeptical about STU because of recent news stories concerning unethical practices in the student loan industry. I am also skeptical about GWW, as it shows little history of large, positive, single-day price movements. So, my top recommendations for Friday purchases, are the following three stocks. (Let’s see if they jump on to the “most popular” list.)

AMLN has the best short-squeeze potential, as almost 15% of the stock float is controlled by short sellers. Ideally, however, one would like to see a short squeeze candidate breaking out to new highs – and this is not the case here.

EDU, on the other hand, is very close to its 52 week high. There is nice upside potential; but not enough short sellers to create the sort of price pop associated with a squeeze. But, the stock does have a history of nice (i.e., 8%) single-day movements. If the earnings reports is good, this is a very promising stock. Lately, volatility has been low. This can actually be a good sign for a large spike.

STBA has short squeeze potential. At the present average sales volume, it would take 21 days for all of the short sellers to close their positions. The stock has dropped about 10% in the last month, due to concerns in the lending and banking industries in general. So, positive earnings here could mean a big spike before Monday’s close.

Remember, my strategy is to hold these stocks only until the close on Monday.

Jeffrey Mishlove is creator of www.forecastingsystems.com. He is a registered commodity trading advisor. He is also a director of Branded Customer Service, Inc. He lives in Las Vegas, Nevada.

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