This phrase seems to define the stocks that are produced from my technical screens these days. As you may recall, Rule 1 that we defined here at Urbanomics is to have a strategy and stick with it. I guess I have to give props to my Purdue Univ business program that made me a quantitative investor by nature. I believe there are hidden indicators behind the numbers. I have taken a interesting approach as I attempt to document my every move so that we can both learn and prosper together.
Although my quantitative approach is great, I don't have enough money to invest in every stock that meets my screening. So I have to ALSO take a qualitative approach and try to find the BEST of my already BEST screen. To do this you must keep your ear da streets...that is pay attention to the markets around you. This is what I attempt to do as often as I can to make "general" assumptions. Now I am no economic genius, even though I play one on TV, but I can put the basics together when I assume that the mortgage and financial markets are in turmoil. I can also reason that oil at $97 a barrel can't be the best thing for you and me. Finally I can also guess that when enough well paid analyst are saying the same thing, they are either right or will influence the markets in a way to become right. Now that is another subject for another day so lets finish what we started. Remeber, when I was telling you that the market was whispering that there is a "Flight to Technology". You should do a search on my blog if you can't remember the post where I spoke on this subject. Then my investing began to shift in that direction, let's quickly recap:
Adaptec - telecommunications
Zhone Tech - can't remember what they do, but hey they have Tech in their name
Advent Software - financial software firm that increased 50% in only a few months
Radisys - Semiconductor company that was up %50 this year for us
Emcore - Semiconductor company that was a quick 10% gainer in 1 month, and can be traded in frequently
So my URBANOMICS November Play is another technology winner: ONLINE RESOURCES
(NASDAQ: ORCC)
This company provides technology services for financial companies. And I love this business line because I actually know something about it. Do you know how many times I get an offer from a company to "Pay My Bills" online! You'll love the fact that I make all my payments through my bank, via Internet Banking online. That is the service this company provides.
Here is yet another stock that I am beginning my evaluation after it has recently reached its 52 week low. Most investors are a little gun shy about approaching a stock at these levels and so am I. However, I also realize the BIG REWARDS can be made by a stock that hits bounces off of its lows and produces great returns for us. This can be a difficult science sometimes, don't believe me...see Rite Aid and how it keeps falling through my price points. Online Resources went into a deep free fall after its earning release and dropped around 29%. The next trading day it dropped even further and reached levels that hadn't been seen in over two years. Now I won't jump into this stock on blind faith. I have a little backing from the chairman and chief executive officer, Matthew Lawlor who in an open letter stated that ORCC "is a better investment than ever before" and his intention is to begin the stock as of November 1. Even better I have an idiot analyst who has downgraded the stock to $12 a share, but still rates it as a Market Outperform do the the potential for high growth. This is music to my ears, talk about hedging your stance. At these levels I will gladly buy this stock and take an exit point at 12 and if they "just so happen" to outperform...I get the extra $$.
ONLINE RESOURCES (NASDAQ:ORCC) BUY @ 8.93 (This is the price the CEO bought his shares...good enough for me). Take your time and accumulate the stock at 9.17 or lower with the price listed above as an optimal entry point.
I would SUPERMAN this stock at $8.75 but I need more time to see if this is a CRANK IT UP price.
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