ARDI, the next play
Alright, so I went to work shortly after posting this afternoon on the AXYX completion to stumble upon ARDI (At Road Inc). I found it through one of my old "gapping down" searches that I had done through Dailygraphs.com sometime last week. For memories sake the search finds companies that meet the following criteria:
- Current Price between $0 and $30 a share
- Current 50-day Average volume 100,000 shares +
- Current Price % Below 50-day Moving Average 30%+ (meaning the stock is trading 30% or more below its 50-day Moving Average)
The stock closed today at $2.54 (it was at $3.42 literally last Thursday) and it today claimed new 52 week lows. The stock got hammered last week as earnings got posted and the company "didn't meet analyst expectations". The stock also got downgraded by three different firms which didn't help the cause either. (Note that these facts and all the information going forward is literally all from yahoo finance).
Why does this kind of company catch my eye? Well, in my opinion I think it overreacted to the news. Two of the three analysts simply downgraded the stock down to "hold" from "buy" which is understandable, and one of them put a $3.50 target price on it from $6. The financial loss was mostly due to the fact that the company had bought out Vidus Limited. Revenues rose to $20 million from $17.9 million while revenue was expected to be $20.6 million. As well, the company's cent per share loss was greater than the $.01 per share loss expected by analysts.
So where does this leave us? Well the company has no debt which is a big plus, and it is trading around 400,000 shares a day (makes it easier for me to get in and out). The volume also shows a sign of bottoming out since it has gotten lower since Friday. It's Enterprise value is 28.73 Million versus a market cap of 139.31 Million. The possible down side is that the company has a short % of 6.48% as of April 8th. This number has increased since March as well but what I am hoping is that whoever was shorting basically predicted the downfall since on April 8th the stock closed at $3.85; it is down 34% since then.
My goal is to take a 3,000 to 4,000 share position (basically my whole portfolio) early tomorrow at any price because I think that it will go on an upswing. My target price is $3 a share which is where the stock opened up at on Friday morning when it gapped down on the news ($3 was the high of that day). This is most likely going to be a resistance point technically speaking for the stock (just a guess, I can't really back that with any facts to be honest). If the stock moves to $3 a share this would give me about a 20% move which would be a big gain for the 10k portfolio. The time span I am looking for on this is by the end of next week (or 8 trading days). To protect my downside I am going to watch the stock as closely as I can to hopefully catch any downsings early on. I may put a stop loss on the position but as long as I am at my computer I should be (should be, haha) for the most part ok. The reason I will not immediately put a stop loss is that I do not want to risk getting taken out of my position on a 2 minutes downswing (remember the AXYX close call?). So with that being said, this is the play and we will see what happens tomorrow. Have a great night,
- Current Price between $0 and $30 a share
- Current 50-day Average volume 100,000 shares +
- Current Price % Below 50-day Moving Average 30%+ (meaning the stock is trading 30% or more below its 50-day Moving Average)
The stock closed today at $2.54 (it was at $3.42 literally last Thursday) and it today claimed new 52 week lows. The stock got hammered last week as earnings got posted and the company "didn't meet analyst expectations". The stock also got downgraded by three different firms which didn't help the cause either. (Note that these facts and all the information going forward is literally all from yahoo finance).
Why does this kind of company catch my eye? Well, in my opinion I think it overreacted to the news. Two of the three analysts simply downgraded the stock down to "hold" from "buy" which is understandable, and one of them put a $3.50 target price on it from $6. The financial loss was mostly due to the fact that the company had bought out Vidus Limited. Revenues rose to $20 million from $17.9 million while revenue was expected to be $20.6 million. As well, the company's cent per share loss was greater than the $.01 per share loss expected by analysts.
So where does this leave us? Well the company has no debt which is a big plus, and it is trading around 400,000 shares a day (makes it easier for me to get in and out). The volume also shows a sign of bottoming out since it has gotten lower since Friday. It's Enterprise value is 28.73 Million versus a market cap of 139.31 Million. The possible down side is that the company has a short % of 6.48% as of April 8th. This number has increased since March as well but what I am hoping is that whoever was shorting basically predicted the downfall since on April 8th the stock closed at $3.85; it is down 34% since then.
My goal is to take a 3,000 to 4,000 share position (basically my whole portfolio) early tomorrow at any price because I think that it will go on an upswing. My target price is $3 a share which is where the stock opened up at on Friday morning when it gapped down on the news ($3 was the high of that day). This is most likely going to be a resistance point technically speaking for the stock (just a guess, I can't really back that with any facts to be honest). If the stock moves to $3 a share this would give me about a 20% move which would be a big gain for the 10k portfolio. The time span I am looking for on this is by the end of next week (or 8 trading days). To protect my downside I am going to watch the stock as closely as I can to hopefully catch any downsings early on. I may put a stop loss on the position but as long as I am at my computer I should be (should be, haha) for the most part ok. The reason I will not immediately put a stop loss is that I do not want to risk getting taken out of my position on a 2 minutes downswing (remember the AXYX close call?). So with that being said, this is the play and we will see what happens tomorrow. Have a great night,
posted by Blain Reinkensmeyer at
11:31 PM
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