VSR

[David Randolph]

Profile: Versar, Inc.(VSR). The Group's principal activities are to provide professional services. It operates in three segments: Environmental Services, Architecture and Engineering services and Defense systems. Environmental Services includes environmental compliance management, environmental restoration in the private and federal sectors and environmental conservation. Defense Systems including homeland security programs and Department of Defense projects. Architecture and Engineering Services provides support for industrial, commercial and government design/build infrastructure projects.

The part that is of most interest at this moment is «Defense Systems including homeland security programs and Department of Defense projects». Read more about the companies activities in homeland defense services: www.homelanddefense.com

No need to say this is an extremely hot sector after the terrorist attacks in NY, Madrid, Istanbul and recently London. Governments from the developed world will spend whatever they can in this area, I believe.

Long term chart:



Nothing of particular interest in the long term chart, we just acknowledged the company has been around since 1986.

Short term chart:



Uau, we got a 68% jump on Friday's session, with volume 2043% above the 50 day average (in fact, VSR was the stock with the highest relative volume on my exploration).

Why such a big jump? We've had these news: Versar Awarded 10 Year Contract to Support the Air National Guard

The highlight I want to make from the news is this: «The contract is an indefinite delivery/indefinite quantity contract with an estimated capacity of $598 million over a ten year period.»

Well, VSR has a market cap of just $43 million, so you can see these news changes the company's value.

Considering the technicals and fundamentals I think VSR is a stock to watch (and possibly buy) on Monday's session.

This is important: Considering your feedback

This analysis was part of the Top 10 stocks for Monday. At the end of the thread I concluded to buy 5% of capital in VSR. Now I've started this new thread to update my analysis on VSR everyday until I sell the stock.

[David Randolph]

Ouch, VSR had a big fall after my purchase at the open which incidentally was the high of the day 

But a speculator must be prepared for all possible outcomes, even the delisting of a stock right after he buys it (that's why diversification is so important, even if someday I have a stock that is delisted overnight I will only lose only 6.66% of total speculative capital).

So, buying a stock and then see it fall 15% right after can't make a man  , not if he is a speculator. A speculator coldly analyzes the situation. Is this just profit taking? Or is it more serious and a big fall is coming? The best thing to answer these questions is the market itself.

The magnitude of the pullback usually tells the nature of it ... if you have a 50% retrace from a prior move the technical signal is intact. But if the stock closes below the 61.8% retracement then you know the prior rise was not fundamentally backed or the fundamentals have suddenly changed.

VSR's 50% retracement level from the big push day is sitting at $4.39. I don't want to see VSR closing below that level or I'll have to take my loss, pay for the lesson and move on to another speculative venture.

[David Randolph]

VSR can't close below $4.39 or I will sell it, regardless of winning or losing. I'm always afraid my losses will grow more and always hopefull my profits will grow more too. This mental attitude helps me to make a simple but hard thing to do: cut the losses and let the profits run.

[David Randolph]

Well, on the day VSR closed below $4.39 I wasn't around to see it, and didn't update analysis. I still hold the stock, but not very pleased with the behavior. Very low volume on VSR, what a strange thing, after such a bullish news.

Well, with another close below $4.39 I'll take my loss and pay the lesson ... but after Friday's white candle there's some possibility the stock will have a short term advance phase now, I don't know, not my kind of stock VSR.

[stocky]

The kind of volume is anemic. Certainly I too think that its not the 'on fire' type stock. Though I have held such stocks in the past but its difficult to get out of them

Long VSR

[David Randolph]

Even VSR behaved well yesterday, on a down day in the general market, with a 7% plus gain on a bit higher (but still anemic) volume.

I'm keeping the stock.

[David Randolph]

Nothing new on VSR, be it technical or fundamental, I'll keep the plan of holding the stock, unless it closes below $4.39.

[David Randolph]

VSR is dangerously approaching my sell zone. If the stock closes below $4.39 I'll have to take my loss and move on.

[David Randolph]

The stock price held the $4.39 on close, so I'll continue to hold VSR.

[freimuch]

david  volume is so anemic it seems like by appointment only trading. we just need one above avg. volu. day to get this turd moving again the funny thing is it could happen at any moment take care  and thanks for all your hard work

[David Randolph]

Indeed freimuch, very low volume on VSR. Not exactly the kind of stock to be on the 3 Stocks on Fire portfolio.

Anyway, I feel a bit encouraged that VSR didn't break down more at this time, and it is holding the 50% retracement level on close. Probably you're right, just a breeze of volume would take VSR higher.

I would like to give the stock a bit more room to work this correction phase out, but I'm already losing 16% on this position, and instead of hopping losses will disappear I prefer to fear they will grow more. So I'll keep the initial plan of selling VSR if it closes below $4.39.

[David Randolph]

With just 18,000 shares traded but VSR managed not to close below $4.39, so I'll keep the stock.

[David Randolph]

It looks like someone is manipulating VSR for me not to sell  The stock closed for the second time at $4.39. I don't know if that's the case (it could be, since volume is so low), but I welcome the effort 

I'll keep the plan and keep the stock for today's session.

[David Randolph]

Unfortunately I had to take a 20% punch and sell VSR, because the stock was poised to close below the $4.39 threshold I've set on my trading plan.

The lesson I must take is not to trust single enormous white candles made out of news, specially when they have no prior technical signals and average volume is very low.

[Tirebldr]

Recent Insider Trading Activity: Versar Inc.
Date   Name   Transaction   Num Shares   Price(s)   Value
07/25/05   MARKELS MICHAEL JR   Sold   1,000   $4.39   4,390.00
07/18/05   MARKELS MICHAEL JR   Sold   3,000   $4.43   13,290.00
07/11/05   MARKELS MICHAEL JR   Sold   1,000   $4.80   4,800.00
07/08/05   MARKELS MICHAEL JR   Sold   1,500   $5.45   8,175.00
07/07/05   MARKELS MICHAEL JR   Sold   1,000   $3.29   3,290.00
07/05/05   MARKELS MICHAEL JR   Sold   2,000   $3.16   6,320.00
06/20/05   MARKELS MICHAEL JR   Sold   2,000   $3.00   6,000.00
06/20/05   MARKELS MICHAEL JR   Sold   900   $3.15   2,835.00
06/14/05   MARKELS MICHAEL JR   Sold   2,000   $3.05   6,100.00
06/07/05   MARKELS MICHAEL JR   Sold   1,200   $3.11   3,732.00
***********************************************************
Planned Insider Trading Activity: Versar Inc.
Latest Filing   Name   12 Mo. Total Quantity   12 Mo. Total
09/02/05   ELIZABETH & MICHAEL JR MARKELS   29,000   $61,400
*********************************************************
Price Ratios          Company     Industry   S&P 500
Current P/E Ratio     25.8             218.6               20.3
P/E Ratio 5-Year High                     83.6                 64.8
P/E Ratio 5-Year Low                     12.3                17.4
Price/Sales Ratio       0.49       0.70                  1.50
Price/Book Value     3.11             2.36                 2.89
Price/Cash Flow Ratio    16.30           38.40              12.70