The Stock Market Round Table

I have decided to enhance my blog to give it a wider appeal for investors with earnings growth and valuation based stock selection criteria, as well as keeping an ear to the ground for fast moving stocks. I am adding to the format to include stock picks and stock watches in four different categories:

High Earnings and Revenue Growth – stocks with fantastic growth that are positioned to move higher.
Channeling or Trending With Options Support – stock that are in a defined trend which have the additional relative safety and benefit of a large option open interest position.
Top Oversold Conditions – stocks that are extremely oversold for bounce plays and counter trend trading.
Top Value Stock of the Day – stocks which are trading at a discount to their peers or at historically low valuations.

I'd be interested to hear from you if you have stocks that fit any of these categories that you would like profiled.  Finally, I plan on ending with general stock updates and/or a topic for the day.  As with the featured stocks, I welcome any input for the subject matter.  If you have a topic you'd like discussed, let me know and I'll post it here.  I hope you enjoy this new format, and thanks for reading!  

The Stock Market Round Table
December 13th, 2007

High Earnings and Revenue Growth -  Astronics Corporation (NASDAQ: ATRO - Snapshot Report) is a high-tech growth company which designs and manufactures lighting systems, in-flight control, and power generation systems for the aerospace industry.  The company has solid year-over-year earnings growth of 150.4% and has a long term growth rate of 25%.  They are currently trading with a forward P/E of 20.98 times 2008 expected earnings of 186.33 million or $2.21 per share. 

The shares are trading right at their 50 day moving average of $46.04 per share.  I am putting this company on watch for a possible reversal.  The shares need to hold that 50 DMA and show significant signs of strength before I would buy.  I'm looking for a move back up to the $54.00 level, and I am looking for the stock to continue its previous bullish trend. 

Here is an excerpt from a Barron's Article about Astronics: "ATRO makes aerospace systems. We believe it provides a compelling long-term investment opportunity [owing to]...1) a focus on niche markets such as lighting, in-flight power and entertainment systems; 2) growing backlog of $90 million/revenue visibility...into FY08; 3) initiative to become a systems provider versus component manufacturer; 4) increasing institutional ownership; 5) recent share-price appreciation...[which could help] the balance sheet and better capitalize ATRO....Market cap: $436 million."

Channeling or Trending With Options Support –   Cisco Systems (NASDAQ: CSCO - Analyst Report) is showing the most strength of the three trending plays with large options support that I have previously profiled.  CSCO has a large open interest position on the April 2008 $30.00 calls, which gives us a long time to trend trade this great stock.  For more in-depth analysis on CSCO, see my previous blog article.  The other two I have profiled in this category are ORCL and BMY.
  

Top Oversold Conditions – Myer Industries Inc. (NYSE: MYE - Snapshot Report) came crashing down four days ago after the news was released that GS Capital Partners, Goldman's private-equity arm, pushed back the closing of its $794 million acquisition to April 30 from Dec. 15. To get the extension, Goldman agreed to make a nonrefundable $35 million payout to Myers (the same amount as the reverse breakup fee) and allowed Myers to solicit offers from other companies without being required to pay a termination fee. The reason given for the extension was that Goldman wanted to examine conditions in certain industries in which Myers operates, but it acknowledged there had been no material adverse changes to Myers's businesses.

The company is trading at a forward P/E of 9.8 and is expected to have revenues of $1.07 billion in 2008. They have a long-term growth rate of 25.1%, and they just increased their dividend. The shares are trading at a 30% discount from last Friday's closing price. 

Top Value Stock of the Day – CompuCredit Corporation (NASDAQ: CCRT - Snapshot Report) provides credit and related financial services and products to underserved and un-banked consumers. CCRT trades at an extremely low PEG ratio of 0.46 with a share price of $9.92, a long-term growth rate of 12%, and earning for 2008 expected to be $919.70 million or $2.77 per share.

I am putting CCRT on watch also.  The stock is experiencing relative weakness short-term due to the market's disappointment of the Fed rate cut.  I believe there will be a bottom here some where, but I think we need a stronger economic catalyst to make it a buy.

Finally, for the topic of the day, last Tuesday on CNBC's "Stop Trading" segment, Mad Money's Jim Cramer came on to voice his complete and utter displeasure with the Fed's decision to cut rates by only one quarter of a percent, and his dissatisfaction with the Fed's overall handling of monetary policy.  Do you agree with Cramer that the Fed is absolutely clueless and incompetent in their handling of the economy and this mortgage mess, or are they doing ANYTHING right?

Let us know what you think.  Trade well and thanks for reading!

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