EVST

[David Randolph]

On November, 2005, the Chairman and CEO of EVST (EverLast, you probably know the trademark) died and the stock is rising with fury ever since - the stock market is a devil's game.

His son took over the company and is now the CEO. He made some impressive changes and outstanding results are starting to appear.

The most important change for shareholders was that the company redeemed all its preferred shares, that were eating common shareholder's net income. Not anymore.

Sales and profits from continuing operations are growing fast now:

«For the fourth quarter of fiscal 2005, net revenues advanced 34.8% to a record $14.1 million as compared to net revenues of $10.5 million in 2004. The increase was derived from record sporting goods sales of $11 million, which achieved a 31% increase over the 2004 period, along with a 49% increase in record net licensing revenues. The Company achieved a 349% increase in operating income from continuing operations to $1.7 million, while earnings from continuing operations, and before interest, taxes, depreciation and amortization ("EBITDA"), increased to $2.2 million compared with ($0.3) million reported in the 2004 comparable period. The increase in operating income and EBITDA was largely a result of our increased net revenues and resulting gross margin dollars along with a reduction in our operating expense ratio of 27.8% compared with 33.3% in the 2004 comparable period.»

The company has just about $55M in market cap.

I would like to buy it at the open, but it looks like there was an article on Real Money about it last night so the stock was trading between 6 and 15% up on after hours. Probably there's going to be a big gap up at the open ...

So here's my plan: I'll buy it around $15.50 (yesterday's white candle midpoint) or not at all, 6.66% of the Stocks on Fire Portfolio as always.

[David Randolph]

There was no gap up and I wasn't able to buy around $15.5, as the low of the day was $15.81.

Yesterday I was concerned that a gap up could derail EVST's short term advance phase. Now I feel more confident about the stock, as fundamentals are very attractive (I've seen they also sell energy drinks on their website, with the EverLast trademark).

Ok, I'll go with it and buy the stock around today's open for the Stocks on Fire Portfolio, it will break $17.40 on the upside anyway.

[David Randolph]

I'll continue waiting for a breakout of $17.40 to get more enthusiastic on this stock and make a more profound review of its fundamentals.

I'll continue holding EVST.

[eliteG]

Just wanted to make sure we get an upate on this awesome pick!

EVST higest volume since the big bang in Novemeber on a huge move to a new 52-week high!  Love the consistent volume growth as the price rises.  20 is a critical psychological level.. lets see what EVST can do 

[berloga]

Hi ElitG,

Good update, thank you! A question here: would you consider EVST as a decent entry point now or should I wait for a retreat to the 20-day EMA or at least see how the $20 mark holds?

Cheers
Berloga

[eliteG]

Hi ElitG,

Good update, thank you! A question here: would you consider EVST as a decent entry point now or should I wait for a retreat to the 20-day EMA or at least see how the $20 mark holds?

Cheers
Berloga

Thx Berloga, I would say that EVST needs to consolidate before becomng a good entry, especially after these 3 nice candles.  Yes that 20$ mark could slow things down so to improve the risk/reward ratio I would hold for a retrace to 17.40 support zone.. or a nice consolidation 

[eliteG]

update EVST:

Nice 3-day consolidation flag after the big volume move up.  Perhaps EVST is preparing its assault on 20?  Just in-case we need to place a stop 

We will sell EVST if it is set to close below 17.30 or hits our stop @ 16.97.

[eliteG]

update EVST:

Since last update EVST broke its flag but on low volume.  A stock should be breaking out with high volume or you cannot confirm the move and usually it must retrace.  That is exactly what EVST has done.  We just closed above our sell point and we are at a key support zone so I am happy with the stop placement.  EVST must bounce to stay in the portfolio. 

We will sell EVST if it is set to close below 17.30 or hits our stop @ 16.97.

[eliteG]

update EVST:

EVST put in a doji today around the $20 level.  This doji here indicates a battle between bulls and bears.  Who will win?  We are betting EVST.

We will hold EVST unless it closes below 17.30.

[eliteG]

update EVST:

EVST approaches our sell area.. without a bounce soon we must sell.

[eliteG]

update EVST:

EVST managed to bounce from the support zone again but with weak volume.  The upward trend line I was using was broken and now has become resistance.  We feel that EVST is becoming weaker and would most likely want to consolidate in this zone.  So time to bring home the bacon on this very nice trade!   We shall keep an eye on this one for entry later on. 

We will sell EVST in the morning.

[shawFund]

I don't know how many people bought this stock.

The average daily volume for this stock is 130K and the normal spread for ask-bid is $0.20.

If say only 200 followed the instruction and bought it and all placed sell tomorrow morning.

and each has 1k shares, the 200 sell order will crash this stock (>200k shares sell order).

If our portfolio service is going to provide recommendations for few thousand people, we should consider volume!!!

[eliteG]

Agreed Shawfund 

------------------

We sold EVST @ 19.45

[shawFund]

Sold it at open $19.45 (I saw a 4.5k buyer and placed a market sell order immediately). I have 1k share.

Will never buy a low volume stock if it is recommended in the portfolio.

[422fwhp]

Good short?