هذا موضوع يتكلم عن الأسهم الرخيصة للأسف ليوجد لدي وقت لترجمته
Days of heaven for small stocks
Broken companies benefiting from speculators
SAN FRANCISCO (CBS.MW) -- Sensing a holiday mood, small investors are chasing once-broken Internet and other stocks, hoping for a quick, speculative return.
Ken Calhoun, who heads Day Trading University in Hawaii, sees a technical reason for the small-stock euphoria. The Securities & Exchange Commission's $25,000 margin rule, effective in late September, "locked out the small day-trader and the market roars," says Calhoun. The rule put higher cash requirements on so-called pattern day-traders, those who regularly buy and sell an individual stock in a single trading period. A $25,000 minimum required balance in some day-traders' brokerage accounts has robbed liquidity from many Nasdaq stocks, he contends.
"We saw nice 3-4 point intraday moves in core trading stocks like Verisign and QLogic and others," says Calhoun, who has been laying out this theory since May. "The best day-trading opportunities in the last 18 months are occurring here in October and November." With fewer small investors able to speculate, Nasdaq market makers increased their bid-ask spreads on the small stocks, even with the conversion to decimals from fractions, says Calhoun, who has written about swing trading, two-minute breakouts and other investment techniques for Active Trader Magazine.
Calhoun forecasts a juicy stock market for the rest of this year, with the Nasdaq Composite reaching 2,200 or higher at the end of December from its current 1,870. "Fund managers need to look good," he says about mutual fund managers, some 90 percent of them with negative returns this year.
As Yoda says, there is another. Another reason, that is, for the giddy market for small and mid-sized Nasdaq stocks.
Many ordinary folks are watching 100 percent and greater gains in Blue Martini Software (BLUE: news, chart, profile), Marimba (MRBA: news, chart, profile), Digital River (DRIV: news, chart, profile) and the mother of all broken stocks, Silicon Graphics (SGI: news, chart, profile). The small-fry investors are licking their chops, looking for a home run of their own after a year-and-a-half of devastating losses in their personal accounts.
"Words of wisdom from Warren Buffett," paraphrases Joseph Danzi, a New York City retail broker. "This is the time to get rich."
So much for the science, or art, of placing fair values on companies' equities.
If the expensive U.S. stock market throws on the double mantle of holiday cheer and military success, the January effect of rising small-stock prices may come early. Editor Yale Hirsch and his son and publisher, Jeffrey A. Hirsch, have for years been pointing out the early timing of the January effect in their "Stock Trader's Almanac."
Using Ned Davis Research, the father-son team points to a compressed graph with 20 years of daily data from the Russell 2000 Index. The Hirsches demonstrate a seasonal pattern by combining 20 years of the small-stock index into one year. "Suddenly in mid-December the smaller fry take over and take off," they explain.
To be sure, some of these small companies deserve their day in the sun. Digital River has been coordinating, hosting and powering electronic-commerce services for thousands of clients since 1994. In the past three months, the Minneapolis company's grounded stock has gone into orbit, boosted by the likelihood of steady profits and growing market share.
There is little doubt that aggressive investors and hedge funds, the small ones with less than $50 million under management, have the most to benefit from small-stock mania. An examination of trading patterns for many companies with market capitalizations below $300 million shows heavy buying in early October.
Ok, everybody dance
The accumulation of shares holds especially true for software-support companies that have been public for five or fewer years. Take Marimba, whose shares earlier in the autumn were worth less than the $40 million or so of the company's yearly sales.
The low point for the company, a maker of software that helps manage corporate networks and the delivery of applications to desktops, may have been two days after the hard-hit shares descended to $1.15, an all-time low. On Oct. 9, 750,000 shares of the company changed hands, largest one-day volume in more than a year. Shares of the California company now sell for about $2.75 each.
Whether Marimba's higher-priced stock is a signal the misfiring company will soon deliver consistent profits and an expanding customer base is a speculator's guess. Still, scores of companies, at least in the eyes of daring investors, have the potential to fulfill promises made at investment road shows in downtown hotel ballrooms or in hopeful electronic press releases.
These wanna-bes include Intraware (ITRA: news, chart, profile), a California company that has seen two days of thick trading for its neglected penny stock this month. Intraware's products assist in the delivery of enterprise software applications to large customers. CEO Peter Jackson says he will deliver revised revenue and profit forecasts for the company in coming weeks.
Somewhat less neglected, and also in the enterprise-support business, is Versant Corp. (VSNT: news, chart, profile). The company's licensing revenues for the most recent reported quarter rose 71 percent. While shares of the company have tripled since an April low of $1, they give the California company a market worth of $38 million, or only 20 percent more than yearly sales.
London Pacific Group (LDP: news, chart, profile), a venture investor and financial services company, may offer brave investors the largest pop for their dollars. The company's shares, listed on the New York and London exchanges, usually trade at a discount to its Nasdaq portfolio, built up via a crafty California venture arm.
That discount may be greater than ever. At $3 a share, London Pacific shares sell for about 20 percent above their low and have yet to see the benefits of the October-November Nasdaq rally. Meanwhile, some of the company's holdings, such as New Focus (NUFO: news, chart, profile) and Saba Software (SABA: news, chart, profile), have doubled and tripled in value since their late-September lows.
London Pacific's tech-stock portfolio is marked to the market at the end of the quarter, which came Sept. 30. At the time, London Pacific's book value was $5.25 a share. Depressing the stock is the shadow cast over the venture capital industry, which has been hit hard by declining private-company valuations and an initial public offering market that essentially is closed to technology start-ups.
Thom Calandra is Editor-in-Chief of CBS MarketWatch.