Who bought SEB when I told everyone too when it was at $1,290? Anyone? Anyone? Bueller? Bueller? Didn't think so....biggest crickets.
I initially suggested that SEB would hit $1,500 by the end of the year...I lied. It did it Friday, Nov. 3. Today, SEB closed at $1,540 per share...up 19.3% from my mention. Well, too bad for me I bought some when I announced it :-). Anyway, solid company and reported solid financials, again. Nothing spectacular in terms of growth, but SEB is just producing a lot of cash and appears to be grossly undervalued trading at less than 7 times earnings. This really is a $3,000+ per share stock. It will take patience though - maybe 2-3 years. I hope I can buy some more.
ASTE has been relatively flat and has been somewhat soft since it's huge run up to $33.99 intraday. It has trickled down, but after a so-so trading day, it closed strong at $31.69 (up $0.18). Right now, we are seeing a natural breather following the very aggressive run up and probably some profit taking on valuation and just stock timing. 2 items to consider with ASTE: (1) the cup and handle; (2) trade shows and Don Brock's retirement.
1. CUP AND HANDLE
A pattern on bar charts resembling a cup with a handle. The cup is in the shape of a "U" and the handle has a slight downward drift. The right-hand side of the pattern has lowtrading volume. It can be as short as seven weeks and as long as 65 weeks. As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for four days to four weeks... then it takes off. The chart on ASTE is showing just that formation. I think we will see another strong upward move in the next 6-10 weeks and it might take it closer to $37-$38, my personal price target for it. Unfortunately, it is not a perfect U shape - the closer it is to the U shape the better, but the technicals are lining up that way. No promises.
2. ASTE INVESTOR SHOWS & DON BROCK
ASTE was founded by Dr. Don Brock, 67, who remains the company's CEO today. He is also a significant shareholder with 11% of the company. ASTE recently announced their attendance at an investor show. I would not be surprised to see ASTE pursuing suitors in light of his possible retirement. This is pure speculation, but he may be ready to diversify and have an exit strategy for his estate and 'golden' years. A fair purchase price for ASTE would probably be in the $38-$48 range; probably closer to the lower end of the spectrum. It appears that ASTE may be on the path to considering offers.
Inforte (NASDAQ: INFT) has not moved much. In fact, it has actually come down some, but there appears to be a lot of buyers ready in the $3.92-$4.02 range. I took the opportunity of INFT falling to $3.90 today and purchased a little more. I hope it makes me look like I made a good decision.
NBG, which I raised my buy everything you can price limit to $9.50 almost crossed that threshold this week by touching $9.40. NBG closed today at $9.23. It is still a good buy under $9.50 and I believe we will see $11 by the spring of 2007.
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