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Ken's Mail Bag 12/12/09 - Comments on CANSLIM.net Featured Stocks
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
CANSLIM.net


 
Subscriber Questions:

December 10, 2009

Ken,

Today in IBD, In the past couple of months, about two dozen breakouts have occurred among leaders.  I don't think I've seen you feature that many stocks in your after market update.  Then they name several: SBUX, ABX, WCRX, GG, ARST, DLTR, LFT, HEAT, CGA, CAAS, JST, TRIT, CAGC, AAPL, BIDU.  I've seen very few, maybe none of these in your after market update.  Can you please explain the variance?

Sincerely,

Dylan

 
Ken's Response:

  December 11, 2009

Dear Dylan,

Thanks for your feedback on the website and on the analysis we provide, and thanks for the great question concerning the coverage on high-ranked leaders provided to active members.  CANSLIM.net's reports are specifically designed to help members narrow down the list and pinpoint the best and most action-worthy buy candidates which match up favorably with the investment system guidelines. 
 
Of the 15 symbols you listed, 5 of them are currently Featured Stocks appearing in the daily CANSLIM.net After-Market Update:
 
Arcsight Inc (ARST) - featured since 9/01/09 and traded up +36.11%
Baidu Inc Ads (BIDU) - featured since 9/08/09 and traded up +25%
Smartheat Inc (HEAT) - featured since 11/17/09 and traded up +37.5%
Longtop Financl Tech Ads (LFT) - featured 11/17/09 and traded up +18.9%
China Automotive Systems Inc (CAAS) - featured since 11/30/09 and traded up +19.3%

You mentioned not seeing them in the After Market Update we publish, but in fact 8 of the remaining companies have indeed received some very recent coverage in CANSLIM.net's Mid-Day BreakOuts Reports.  Below I will include the latest notes we published, which you may see frequently pointing out certain shortcomings that any serious practitioners of the investment system would be concerned about. 
 
Starbucks Corp. (SBUX), noted in 12/10/09 mid-day "Hitting a new 52-week high today, it held its ground stubbornly since last noted on 11/06/09 as it gapped up and rose above its 50 DMA line. With sales revenues on the decline in each of the past 4 quarterly comparisons, its fundamentals are below the guidelines of the investment system. "
 
Warner Chilcott Plc (WCRX), noted in 12/10/09 mid-day "Earnings and sales revenues growth has been sub par. Rallying for a new all-time high today, it has been trending higher and found support near its 50 DMA line since its big gap up on news it was buying Procter & Gamble Co's prescription drug business in a deal first announced 8/24/09."

China Agritech Inc (CAGC), noted 12/08/09 mid-day "Today marks its 5th considerable gain on heavy volume in the past 6 sessions. Previously noted in the 12/01/09 and 12/02/09 mid-day report appearances as it blasted from a 7-week base resembling a short cup-with-handle pattern. This Chinese small-cap has rallied 8-fold already from its March 2009 lows near $3, so chasing it extended from a sound base may not prove wise. It showed solid sales revenues and earnings increases in the 2 latest quarterly comparisons, however its annual earnings (A criteria) history showed a downturn in 2008 and needs additional review. "

Jinpan International Ltd (JST), noted 12/02/09 mid-day "Hit a new all-time high earlier today before reversing. This week it rallied above its 2008 highs following a recent streak of gains on above average volume that helped it rally above its July-August highs. Fundamentally, flat sales revenues in recent quarterly comparisons are a concern, meanwhile its earnings increases have remained very strong on a quarterly and annual basis. Weak technical action prompted its removal from the Featured Stocks list on 7/14/08 (when it closed at $28+). It rebounded impressively from March '09 lows in the $11 range, having gone through a very deep correction. It previously traded up as much as +64% after it was featured in the March 2008 CANSLIM.net News."

Tri-Tech Holding Inc (TRIT), noted 12/09/09 mid-day "This Chinese micro-cap has only 2.31 million shares (S criteria) in the public float, which can contribute to great volatility. Posting a solid gain today for a new all-time high, the stock is not near any sound base and up more than 3-fold from its 9/10/09 IPO price of $7 per share. As previously noted, the latest quarter showed acceleration and stronger sales revenues and earnings increases, yet quarterly revenues were still under the $5 million threshold - minuscule revenues for a publicly traded firm."

Goldcorp (GG), noted 11/12/09 mid-day "Latest quarter ended September 30, 2009 showed better sales and earnings but its historical performance has been below guidelines. As of 5/18/06 this stock was dropped from the CANSLIM.net Featured Stocks list."

Apple Inc. (AAPL), noted 10/27/09 mid-day "Consolidating this week after three consecutive gains on heavy volume for new all-time highs including a big gap up on 10/20/09 when reporting stronger earnings and sales revenues. Comparisons have shown impressive acceleration after having been under the +25% guideline in the three prior quarters. Fundamentals have improved, but this candidate still falls short of the examples which set the standard for the C criteria of the investment system, while it has a great annual earnings history (the A criteria). Its 896 million shares outstanding is a huge supply (S criteria), whereas the market's biggest winners typically had only 30 million shares outstanding or less. Based on weak technical action AAPL was dropped from the Featured Stocks list on 6/27/08, shortly after being featured in the June 2008 issue of CANSLIM.net News. It subsequently fell from $170 to $79 in about 5 months, and its fundamentals later turned south. "

China Green Agriculture (CGA), noted 8/13/09 mid-day "Recent quarters showed acceleration in earnings and sales revenues increases percentage-wise, yet this China-based chemical firm has revenues under $10 million per quarter. Its annual history is not good and there appears to be little substance, while its small supply of shares (the S criteria) could allow for more drastic and volatile price action. This stock is extended from any sound base after a many-fold advance, having risen from the $3 area in April.

The 2 others that escaped any coverage: Barrick Gold Corp (ABX), made no appearance and has no +25% earnings increase in the past 4 quarterly comparisons. Dollar Tree Inc (DLTR), made no appearance and currently has a Relative Strength rank of 28.  

The best way investors can stack the odds in their favor under the investment system rules is to make disciplined entries and exists on stocks matching the characteristics of the winning models. 
 
If you have any other questions or concerns related to CANSLIM.net services please do not hesitate to write in using the inquiry form again
.

Sincerely,

Kenneth J. Gruneisen
Founder & Contributing Writer for CANSLIM.net
www.canslim.net

 

About Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net :
Kenneth J. Gruneisen has successfully completed the CAN SLIM® Certification Program.  Mr. Gruneisen became a Registered Representative in 1987 and his career includes experience offering personalized assistance to investors with more than a decade of experience as a Registered Principal managing a branch office.

The recommendations made by CAN SLIM® certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.


Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.

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