Hey there. Here's guest blogger Timothy Sykes is back with his contest picks for the week. As he says, these are his early week picks--and will have more on Wednesday. Here he is:
I don’t know about anybody else, but I look forward to Mondays. This will all change over the next few years when trading becomes 24/7, but for now Mondays are my favorite day of the week.
On our last “How to Win” show, I picked 10 stocks with the help of some controversial models. Some of these stocks were priced in the $100 range so many people wouldn’t even consider playing them. Instead, contestants seemingly love to play horrifically managed companies like REV. Boooooooring!!! Sure, the price might jump on any given day and you’ll be rewarded, but the chances of predicting exactly when the large move will occur are slim and more importantly, tens of thousands, if not hundreds of thousands of other people, are playing the exact same stocks. There’s no way to get ahead!
In this competition, the price of the stock and the size of the company make no difference; stock price volatility is the only thing that matters. When I picked ISRG, a $125 stock, the legendary Dr. Ari Kiev (another guest on "How To Win") wasn’t convinced it was a good pick. I definitely didn’t convince him, but the subsequent price action certainly did since it jumped 10% after reporting great earnings to make a new all-time high. That’s a big move, and it was predictable.
Let’s get to this week’s picks. I’m still not going to give you all the necessary information to play these stocks, namely the exact date on which these companies report earnings, but since there are so many earnings plays this week, I’ve divided them into “Early Week Picks”, listed below, and “Late Week Picks”, which I intend to post on Wednesday.
ESRX is an $89 stock, but could near or break all-time highs in the low $90s when it reports earnings, which could be niiiiiiice, judging by its steadily increasing earnings estimates. Of course, the stock was at $70 at the beginning of the year, so their earnings and guidance better be good….or else.
ANAD is also near its recent highs and should breakout on any great earnings. The stock is lower priced so the price gain could be substantial.
I picked TUP a few weeks ago at $25 as a possible 9 year chart breakout play. It broke out to $26, but now its upcoming earnings report could really solidify this so far pathetic breakout. Analysts’ estimates have been steadily coming down, so it will likely disappoint, but if it doesn’t watch out above.
IPS is yet another higher priced earnings play trading at $155. You want risk, here it is. The stock has risen from $100 less than one month ago on takeover speculation so the shorts have loaded up and any earnings surprise could fuel this sucker even more. Of course, any takeover news is also a welcome possibility. Again, for this competition, I don’t care if the earnings stink and the stock tanks by $10, $20, or even $30; you’ve still lost so the size of the loss doesn’t matter! Enjoy this benefit while you can because real life doesn’t work this way.
My last “Early Week Pick” is another pick from a few weeks ago, SPIL. Their chart was uptrending perfectly in the $11 range until some brokers downgraded it, probably in an attempt to pick up some shares at discount prices in the $9.50 area. Either the brokers are smart (what are the chances of that happening! LOL) or the earnings will cause the stock to jump right back to its highs or even break out to new highs.
If I had to pick one, I’d pick SPIL, just because I know how incredibly corrupt the brokerage rating system can be.
Timothy Sykes is a hedge fund manager and star of the reality show Wall Street Warriors. He can be reached at www.timothysykes.com.
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