3SOF

Stock Picking Contest (6th Edition - From 10/Jul/2006 to 14/Aug/2006)

To Submit your Stock Pick, reply to this Topic following the Standard Layout:

1)   Stock Pick
(Ticker & Name of the Company)

2)   Reason behind this pick
(a Text with at least 50 words, featuring the reasons of your stock pick)

3)   Stock Chart
(Click in additional options, browse for your chart file GIF/JPG/PNG and add it to your post, if you don't have a Charting software, we suggest you copy a chart from www.stockcharts.com)

Before you post your Pick: Read the Contest Rules --> HERE
(No penny stocks allowed among other restrictions)

Important: Do not use this thread to another purpose rather than submitting your stock pick. For organizational purposes, any reply that is not a stock pick will be deleted.

Looks like I'll be the first.  Lets go with  Interstate hotels and restaurants (IHR) looks overextended because it just broke  a new 52 week high but this move had serious volume behind it.  IHR  is packing a powerful punch right now and every week it seems like they are scooping up more hotels.  This may even be a good pick for FIRE.  I think IHR  may give me another 50% here, so much momentum.  Lets roll. 

I think I can be allowed to block my entry for the contest. I am in hotel which has a very crappy wireless connection.

CGR Claude Resources Inc. (CGR)

I'll update the profile, stock chart, reason for pick when I reach home tonite.

Company profile:

Claude Resources, Inc. operates as a gold mining, and oil and gas company in Canada. The company engages in the acquisition, exploration, and development of precious metal properties; and production and marketing of minerals primarily in northern Saskatchewan, northern Manitoba, and northwestern Ontario. It owns Seabee gold mine located in northern Saskatchewan and Madsen gold mine in northwestern Ontario. The company acquires and develops oil and natural gas properties principally in Alberta, with property interests in southeastern Saskatchewan. As of December 31, 2005, the company had proved and probable reserves of 1,099,000 barrels of crude oil and natural gas liquids, and 8,852 MMcf of natural gas. Claude Resources was incorporated in 1980 and is headquartered in Saskatoon, Canada.

The company is in everything from OIL to Gold which makes it hot. Also, I think Institutional accumulation is happening during recent downturn in gold and stability of oil.

REASON BEHIND PICK:
INDUSTRY:
OIL and GOLD make it my pick for this contest. Both the sectors have got bullish in some time. GOLD is starting the climb again after FED rate increase and subsequent countries interest rates hike. Oil has started the climb again as the demand has started climbing.
GOLD today @ $624 and OIL today @ $72.

They have online more canadian gold fields coming online.

Technical:
As the peer group for gold stocks such as AUY, GG, AZK, etc have risen in last week, CGR has lagged the climb. So the climb will resume at accelerated pace and making it break new highs after $1.72.

- Dhiraj

My pick: IHR

Reason: ever since 3 sof was shaken out of this one its been on a steady climb. The chart looks really nice and its going higher imo. They.ve been very busy lately with aqcuisitions. They have plenty of cash, low debt, low float, all that adds up and sounds pretty good to me.

Chart:

reserving VPHM again 

The reason for the pick:

1) From last CC:
- YTD '06 Prescriptions up 30% vs YTD '05.
- May '06 Prescriptions up 10% over April '06
- Expect '06 sales much higher than '05
- Scientific data report out before June 30, 06
- Gross Margin in 2005 = 86-87%. Expect GM for the 1st half to be a bit lower due to $4.5M payment to Lilly for additional inventory
- Cost of Good for Vancocin manufactured in the new facility in NY for 2nd half of 06 and forward will be half of the current COG
- Marib Phase III stem cell to start very soon (3rd quarter) & Phase III solid transplant before the end of 2006. Consider huge markets not only transplants
- Hepatitis drug: 50-50% in the US with Wyeth, and 15% for VPHM outside the US. Wyeth paying most of the expenses. Expect more details on results of Phase I on the 3rd quarter and start of Phase II before the end of 3rd quarter
- Main barriers for generics will be two: 1. Manufacturing process took 20 months for Lilly to transfer process from IL to NY (Complex). 2. FDA approval of these manufacturing processes in order to meet the safety and results requirement for the agency

2)
Added to the Russell 3000 Index & NASDAQ Global Select Market

3)
ViroPharma Announces Preclinical Data Supporting Utility of Non-Toxigenic Clostridium Difficile Against Epidemic Strain
Link:
http://biz.yahoo.com/prnews/060627/phtu025.html?.v=58

4)
Monthly sales from wholesalers to pharmacies for the month of May totaled $15,676,630, another new record for average weekly sales. April sales totaled $15,482,228. We have 2 very strong monthly sales numbers. It appears that the 2nd quarter is going to establish a new record Vancocin sales for VPHM.

5)
ViroPharma Submits Scientific Arguments in Supplement to Vancocin Petition for Stay of Action
Friday , June 30, 2006 18:21 ET
EXTON, Pa., June 30, 2006 /PRNewswire-FirstCall via COMTEX/ -- ViroPharma Incorporated (Nasdaq: VPHM) today submitted a supplement to its Petition for Stay of Action with the FDA regarding the bioequivalence requirements for abbreviated new drug applications (ANDAs) that seek to copy Vancocin capsules. The document sets forth scientific arguments supporting ViroPharma's strong belief that the decision of the FDA's Office of Generic Drugs (OGD) to modify the bioequivalence standards for generic copies of Vancocin capsules is scientifically flawed. The submission made by ViroPharma will be available in its entirety later today on ViroPharma's corporate website, at http://www.viropharma.com/OGDpetition. The document will also be furnished with the SEC as an exhibit to a Current Report on Form 8-K, and will be available on the EDGAR section of the SEC website as well as the SEC filings page of the 'investing' section of the ViroPharma website. The company also expects that the document will become available on the docket management section of the FDA website within approximately two weeks. The Company believes that its latest submission demonstrates that the OGD's proposal for demonstrating bioequivalence of a generic version of Vancocin capsules using only in vitro dissolution testing instead of human clinical trials is not justifiable, and presents an unacceptably high risk of approving a bioinequivalent product. Because Vancocin treats two potentially life-threatening diseases, Clostridium difficile-associated disease (CDAD) and enterocolitis caused by Staphylococcus aureus, anything less than an in vivo demonstration of bioequivalence in those with CDAD may expose patients to unnecessary risk and raise significant clinical and public health concerns.

6)
short & chart update:

1)   Stock Pick
ILE Name of firm: Isolagen Inc.

Isolagen, Inc. engages in the development and commercialization of autologous cellular therapies for soft tissue regeneration in the United States and the United Kingdom. It develops its products for the cosmetic dermatology, cosmetic surgery, periodontal disease, reconstructive dentistry, and other health-related markets. The company's lead product candidate, which is in phase III clinical development, is used for the correction and reduction of the normal effects of aging, such as wrinkles, creases, and nasolabial folds. Isolagen also completed a phase I clinical trial for its second product candidate for the treatment of periodontal disease. The company was founded in 1995 and is headquartered in Exton, Pennsylvania.

2)  Institutional Ownership up the last month
     Big Volume increase last month

1) CBJ

2) First off, technically, it's looking good. Hit the 2.39 bottom, broke the 20 day EMA, and the positive MACD crossover. It may also have broken a small ascending triangle. Next major resistance is around 3.28. It is primarily a gold miner, which is good with gold up. 5 million shares were purchased by institutions last quarter. Positive cash flow and earnings. I'll take it 

My Pick is ABLE Energy Inc,

Profile: Able Energy, Inc., through its subsidiaries, engages in the distribution and marketing of home heating oil, propane gas and equipment, and diesel fuels. The company offers heating, ventilation, air conditioning, installation, and repair services

Technical:
it's very very Strong. Hit the $7.70, a break out form two huge Resistances point at $6.95 and $7.51. Broke the 15day MA, and the positive MACD crossover. Next major resistance is around $9.0. With some good news and institutional buying AbLE could go back to $18.

1)  Aastrom Biosciences ---  ASTM

2) With the senate soon to debate the long awaited stem cell bill, this could result in the same run that we had early last year.  Not to mention the fundamentals of the company.

What to look for...Aastrom's targeted milestones:

• Initiate osteonecrosis clinical trial
• Complete Proof of Concept spine fusion clinical trial
• Complete and report additional interim patient data from multi-center U.S. fracture clinical trial
• Complete diabetic limb ischemia treatments
• Complete plan for registration trial for bone regeneration

1) Wolverine Tube Inc. (WLV)

2) 2005 was not a good year for Wolverine but their first quarter revenue and profits were in turnaround. They've got a new chairman and secured more funds, so things are happening a bit. Looking for a breakout above $4, hopefully after monday. Wolerine has had a nice little run of late so maybe it will get noticed and volume will pick up.
3)

ERS is gonna kick butt this month!

Sorry I am too dumb to figure out how to post a chart and I do the quantative analysis in my head.

The company sells aluminum and has taken a dive from the mid 60's to 15 in June when everything else dove for no reason.  Demand for the metal is increasing from China and India and the sales and backlog have been increasing.

http://finance.yahoo.com/q?s=ers

http://finance.yahoo.com/q/bc?s=ERS&t=1y

Empire Resources, Inc. engages in the purchase, sale, and distribution of aluminum semifinished products in the United States, Canada, Europe, Australia, and New Zealand. The company's semifinished products include aluminum sheet, plate and foil, rod, bar and wire, extruded and cast products. It serves various industries, including transportation, automobile, housing, appliances, and packaging. The company sells its products through its own sales personnel and independent sales agents. Empire Resources is headquartered in Fort Lee, New Jersey.

low pe.  low float.  has explosive potential!

HOM - Home Solutions of America

Home Solutions of America, Inc. offers recovery, restoration, rebuilding/remodeling, and specialty interior services to commercial and residential properties in the United States. The company operates through two segments, Recovery/Restoration and Rebuilding/Remodeling. The Recovery/Restoration segment includes clean up and removal of debris, drying and dehumidification, and preparing affected areas for the next stage of restoration and rebuilding. It also offers water and fire restoration services; air decontamination; removal of mold, asbestos, and lead paint; cleaning, drying, and deodorization of carpet and furniture; and moving and storage services. The Rebuilding/Remodeling segment involves in the production and installation of custom kitchen cabinets and countertops; and the installation of custom marble and granite countertops.  They have worked on hurricane cleanup and rebuilding and recently expanded a contract with Home Depot to fabricate and install kitchen and bath countertops.

On June 2nd, HOM came under attack by stocklemon.com resulting in an approximately 57% decline in share price and the threat of lawsuits has ensued.  Management reiterated guidance, called the suits frivolous and the one analyst (with ties to HOM) confirmed their targe price of $15.50 and said it would be reached within 6 months instead of 12.  All and all not a good time to be an investor in HOM.

So why pick this stock?

1.  Let the numbers speak for themselves (Yahoo numbers).  Over the past 2 fiscal years, HOM has increased revenues 122% and 119% respectively and increased gross profit 108% and 107% during the same periods.  YOY Net Income went from negative to positive and then to an increase of 180% over the past fiscal year.  Trailing PE is 23.62 while forward PE is 8.25 (quite the bargain).  During their last quarterly report (May 15), management increased 2006 earnings projections to 56-60 cents/share from a previous projection of 42-46 cents/share an increase of 22-42%.  This raised projection was based on increased demand for their services because of hurricane related damage.  The raised guidance was reiterated during the stocklemon fiasco.  So, unless management is lying and their previous earnings reports are false, just the numbers make this really an incredible investment.

2.  A couple of catalysts are presenting themselves during the 3SOF contest.

a.  Hurricane season has started and this year is expected to be almost as bad as last year.  Much of HOM's work involves cleanup and rebuilding activity because of hurricane damage.  Management is still expecting an increase in their workload from last year's hurricanes (hence raised guidance) so the current hurricane season should add even more work.

b.  Earnings should be reported around the middle of August about the time the contest ends.  Short percentage is approximately 25-27% currently.  If revenue forecasts don't change and the quarterly earnings report is on time, the run up to earnings date should see shorts begin to cover and longs begin to buy.  A pre-announcement of earnings should start this process even earlier.

c.  The NASDAQ listing that was to take place a couple of weeks ago was delayed and a request for more information from HOM was made.  A NASDAQ listing, in the next couple of weeks, would certainly be a catalyst to move the stock higher short term and would allay some of the fears currently surrounding the stock and it's trade.

Now some charts.  The 6 month chart shows the rapid ascent and decline of HOM.  Management sold some shares near the top but the stock was already in decline before the stocklemon report.  What goes up must come down.    As you can see, there is a strong area of support above $6.00 that began with a breakout and retest in March.  Disregarding the freakish selloff day down to $4.79, real support is in the $6.11 to $6.19 range and the stock has done a good job of at least closing within or above this area.  The RSI is slowly strengthening and the MACD has had a bullish divergence for a month now with the signal lines finally crossing this past week.



The shorter term chart shows a descending triangle with the support zone as the demand line.  It is interesting to note that the last 3 trading days resulted in something of a tweazer bottom with lows of $6.30 each day.



The weekly chart is my fav (and not because of the finger ).  This past week resulted in an inverted hammer and was the first up week in the past 7.  And that support zone outlined in the daily charts above?  It also contains the 61.8% fib retracement level as well as an intersection with an ascending trendline.  Can you say support?  I thought you could.   I would like to see the MACD start to flatten but at least the STOs have already done so.  The uptick in the RSI is nice but more follow through is needed.  It's time for some good news to get this going!



I already have my own position in HOM but for anyone looking to start one, I would recommend either buying in the support zone or on a breakout of the descending triangle.  If the events outlined above take place, this one could be a rocket pretty quickly.

1. My Pick:  ** (PESI) Perma-Fix Environmental Services Inc. ** 

2. Reason:   PESI's income statement is consistently increasing year over year, The Company's balance sheet also improving since 2002. And this first quarter of 2006 Perma-Fix Environmental Services Inc. has reported its best first quarter in company history.

The technicals looks also very good, as you can see we got BIG white candle for Friday's session I hope for pullback to the middle of white marubozu on Monday opening for better entry price for the contest.

The first chart we got an Ascending Triangle breakout & the second chart is looks to be a 2.5 years Symmetrical Triangle pattern. & last but not the least one of my favorite, I also considered this as a sign of fast uptrend "The Three Magic" (50sma, 200sma, 200ema clustering together – weekly & daily scale) in other words all the moving average for PESI are below the price so there is not much pressure there, First it needs to break the resistance below $3 before facing the major resistance around $3.75 ... time will tell



P.S.  I will pick up PESI just above the support area @ 2.20 if it goes down there, around 2.20 - 2.40 should be a good entry point for the pullback.











3. Chart:

1) My pick CMED (China Medical Technologies Inc.)

2) Looking at fragile state the stock market in the U.S. is, China seems like a safer bet espically after the major correction in the foriegn stock markets a month or so ago there seems to be less downside risk. CMED has been beated down to a pulp and it looks like it has turned around and rebounded. CMED has had excellent fundamentals and the growth speaks for its self...

4th quater profits soared up 75%.
http://biz.yahoo.com/ap/060616/earns_china_medical.html?.v=1

With a P/E much lower then the industrial average and above average growth puts CMED in good standing. Today CMED went up 5.55% in a big down day for the stock market. Showing strength into the weakness shows  high buyers intrest in CMED. Short % of float is on the low side at 5.69% but might give way to a slight short squeeze in the short term. CMED looks good to take off in the short to mid term, however the 50DMA might show some resistance as it has in the past but there is a good chance blasting upward this time around. If resistance doesnt hold in the 22s-23s it looks good for take off.

Techincals look good for recovery; MACD is postive and going up, RSI is at 51 and looks like it will continue heading up, volume looks like its picking up as well, 5 DMA is crossing above 20 DMA. Im looking for a price target between 25 and 35.

3) Here is a chart of CMED

MY PICK:   TGC (Tengasco Inc.)

FUNDAMENTAL REASONS: 

1.) Well, higher crude prices for one. This company is an oil & gas drilling and exploration company

2.) The energy sector in general, I believe, is gonna be bullish for the rest of the summer. Of course, volatility is to be expected in such a low priced stock, but considering tht the contest runs for a month, I figure that's enough time for TGC to run atleast 50% from current levels.

3.) A nice recent development with this company is that it recently closed a $50 mil. credit line with Citibank, as well as reported record Kansa oil production. Here's the news link released this past Wednesday: http://biz.yahoo.com/bw/060705/20060705005807.html?.v=1

Here's what the company CEO had to say (long term focus of course): "Establishing a working relationship with an energy lender with Citibank's national presence in oil and gas lending is the last piece in our cleanup of the Company's finances and in laying a foundation for our continued growth

TECHNICAL REASONS:

1.) Well, the chart seems to have broken through downward trend line. Of course, it;s gotta convincingly close and stay above the $1.40'ish mark for a confirmation, but again, I'm taking my chances with the 1 month timeline we have for the contest! 

2.) the chart is also flirting around with the $1.40 mark which happens to be the 50 DMA; I believe it's just a matter of time before the cross-over is complete and the ensuing move to test 52 week high at $2.08

3.) Volume has shown sign of returning the last 3 days, after a couple of weeks of no interest from market.

Happy trading everybody!