Enough. With GERN hot and congress voting RE: funding stem cell research, there was cause to go looking for other stem cell plays. And with the way the garbage has popped of late, no stock was out of bounds. . . however, such Rat Dogs are always best played buying and holding when nobody wants them. . .at their support level, then selling on the pops. STEM popped.
Now I do encourage each person here to speak their mind with regard to what about a stock they like or dislike. But there is no place for emotion in the stock market. You are both fine traders. . .and I know you know this. . .but indulge me. . .
Get excited about your kids when they get on base or make a great drawing. . .. . . cheer on your favorite football team or scream on your favorite roller-coaster. But trade stocks with a poker face. . . . . . weighing both sides, calculating risk, reading the indicators, fundamentals, momentum, etc. and evaluating whether or not to play.
Quick Evaluation:
On the plus side, STEM has momentum in a highly volatile market. . .chart shows that the company ran to $15 in March of 00. It is a play on a recently hot area, stem cells, which is slated to get gov't funding . . . and IBD is pumping them for accumulation [which I believe is a paid advertisement].
On the downside, the company's pulse is barely beating. . .as a quick glance at their profile reveals: biz.yahoo.com
Zero income past 6 months. . net loss increased 38%. . and their primary gains seem to come from selling their stock. Book value is $1.33 and they have 5.53 million in cash or 0.28 cash per share. . .with an EBITDA of $-14.7 million due to R&D costs. . . So it is true that the company is in an extreme financial condition and are dependent upon whatever means they can for financing. . .whether that be selling more stock, cutting offshore arrangements or waiting on goverment funding to kick in.
Bottom line. . .it is a very risky play in either direction. . . and should be handled with extreme care. I see no compelling play on either the short or the long side on STEM and therefore will be staying out altogether.
Best wishes,
Rande Is |
