Chester, when I looked at the filings for HEC, I saw the convertibles. They are longer term than the kind of toxic converts that you and I normally look at, and the company actually redeemed a previous series before they converted.
The link you provided was interesting to me primarily because it showed SI has a thread with >4000 posts on this small company. That's an indication of intense interest by small investors, and in particular by small investors who might have a short time horizon in their holdings. That is a favorable indication, I would guess, for a possible January effect stock, albeit a lousy indication for a stock to hold long-term.
Like a lot of beaten-down stocks, HEC is not the best company. In picking January stocks, you have a choice, I suppose, of holding your nose, and being indiscriminate and picking anything small that is beaten down and owned primarily by small investors, or OTOH of applying some minimal standard of quality. I'm actually not sure if it makes any difference, during the limited time frame we are talking about. I've seen plenty of miserable tiny POS stocks zoom in January. Just the same, I couldn't bring myself to buying a POS stock to play the effect.
HEC looks like a less-than optimal quality stock for a long-term holding. I would never buy it for such a purpose. I would consider it, however, as a 6-week play on the January effect. So far I haven't bought any.
The only January plays I have bought so far are SVM (ServiceMaster) and the Vanguard REIT index fund. REITs have really been hit hard this year, and they are sufficiently high quality that I wouldn't mind holding them for a couple of years. |
