Hi everyone. Timothy Sykes is back with a blog post and a couple of specific stock picks for the contest. (reminder--this is ONLY for the contest, not your personal portfolio.). This is time sensitive if the stocks interest you. Timothy's got a pretty good track record!! Here's his post:
I hope everybody had a great holiday weekend. As much as I look forward to the holidays, I’m addicted to trading so I don’t know what to do with myself when the markets are closed on a weekday. On top of that, the holiday cancelled our weekly Friday night show, which has become one of the highlights of my life. Luckily, CNBC allowed me to give two picks for the upcoming week during my brief appearance last Thursday night.
You know I love chart plays…oh how I love them… but buying earnings plays the day before they report is the best way to win this competition. It may be a simple strategy, but simplicity is beautiful as Willie Garson recently learned with RBN. (I have to rub it in when I’m right…or lucky…or right and lucky).
So, my first pick this week is RIMM . Everyone knows what they do and their recent product launches have all been successful, at least according to several analysts. Now I don’t know if they will definitely beat earnings estimates, but I like that the consensus has been moving steadily higher during the past few weeks. So, I like my chances here.
I’ll try not going into too much detail about their chart, but it’s a spectacle to behold. If there was a magazine showcasing beautiful stock charts, I’d be a subscriber and RIMM would be a centerfold. The stock is breaking out of a 5 month base in the $140 range, not to mention hitting all-time highs. The company is growing 40% per year and its only trading at 31x next year’s steadily increasing earnings estimates!! That big lawsuit is in their past so I think they deserve to trade at their growth rate, if not a premium valuation. But valuation is a long term story and mostly immaterial for this competition.
Bottom line: with any solid guidance, I wouldn’t be surprised to see the stock trade in the $165-$175 range. Anything less then that and it doesn’t matter how much the stock drops because I’m wrong and you won’t win this week. Buy it Wednesday and we’ll see if I’m right by the after-hours session.
My second pick for the upcoming week is ACGY. This is an earnings play that engineers and constructs things for the offshore oil and gas industry worldwide. What do they engineer and construct? I’ve put a good seven minutes into trying to figure it out, but their website bored me to death so I turned to my trusty analyst estimates. One analyst covers the company, but whoever he or she is, they’ve been gradually raising their estimates during the past few weeks. They’re not growing nearly as fast as RIMM, but that might have something to do with why they’re only trading at 12x next year’s steadily increasing earnings estimates. The company itself even believes their shares are cheap because they love having daily PRs every time they buyback their own stock. I lost count after 10 buyback PRs in the last month.
Of course their stock chart is another rare beauty, breaking out of all kinds of bases (5 month) and hitting all-time highs near $22 per share. Once again, there’s no way to tell if they will definitely squash earnings estimates, but the chances look good, so I’m guessing $23-$25 after they report earnings. ****IMPORTANT: Buy this stock on Tuesday as an earnings play because these foreign companies prefer to stick to their own time zone and earnings will be announced on Wednesday during market hours.
Get ready for a very special CNBC “How to Win” program this Friday night from 7-8 PM EST. I’m planning something to spice the show up a little. I’m surprised the producers are even allowing it, but more power to them…you might laugh out loud…you might better understand stock charts…you might truly learn something…or you might be offended…you might hate me...but you will be entertained…oh yes…you will be entertained.
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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