ASDS - here is an article written by Dan Dorfman that was out a few days back - thought I would share it with those that are long ASDS:
?Dan, congratulations on your wonderful stock pick last month. On your recommendation, I bought 1,200 shares of MarketCentral.net (MKTS) between 2 3/4 and 3 and I just sold out between 9 and 9 5/8. You probably guessed why I am writing you. Could you please recommend another stock, preferably one that involves the Internet and sells under $25? If we ever meet, by the way, the champagne is on me.?
Norman, thanks for the kind offer, but you should save the champagne for investment advisor Rick Eakle of Eakle Associates of Fair Haven, N.J., since he?s the one who picked the stock, not me.
He made that selection in my Dec. 6 report "Hot Hand, up 206% in 1999, Sees Big January Drop".
In that report, Eakle chose his five best stock ideas for the new year. So far, all five are up, with MarketCentral.net leading the way. The stock at the time of the report was 2 3/4, and Eakle projected a hefty rise to 25-30 over the next 12 months.
Whether it gets there or not is anybody?s guess, but the stock, since the report, has been a dazzler, more than tripling to 10 1/8.
It?s currently trading at 8 1/8, down 1 5/8.
Meanwhile, Eakle, who also manages a modest amount of private money (under $50 million), was 1999?s Superman, Batman and Lenox Lewis all wrapped up into one as he wound up the year, he tells me, with a 301% gain.
Getting back to Norman?s question, I asked Eakle if there was another Internet stock under 25 he liked, one that he felt could also generate a sharp rise over the ensuing 12 months.
His pick was ASD Systems (ASDS) 17 13/16, an Internet software and services company. In brief, it focuses on providing services to Internet retailers, such as billing, order processing, call center networks and e-commerce integration.
The company, incidentally, went public Nov. 11 at $8 a share. So it has already more than doubled its offering price.
Affiliates of Staubach Co., a firm headed by former Dallas Cowboys quarterback Roger Staubach, own 14% of the company?s stock.
Citing brisk customer need for the kind of software that ASD provides, Eakle sees strong growth ahead for the company, which had sales of $8 million over the past 12 months. Like many Internet companies, ASD is unprofitable, but Eakle expects it to break into the black in the next 12 to 18 months.
As for the stock, he sees it expanding to 30-35 over the next 12 months.
But given his negative view of the market for now, Eakle says he wouldn?t rush into buying the stock. He feels the 16-16 1/2 range is a good entry point.
A big plus for ASD, Eakle observes, is that it?s still an undiscovered, unexploited stock.
Though a bull on the 2000 market?he sees the Dow rising 25%-30% this year?Eakle is not enthusiastic about the near term.
A better-than-average market forecaster and once director of technical research at Morgan Stanley before it merged with Dean Witter, he feels excess speculation, coupled with mania-type buying, will lead to a 10%-15% selloff this month. And that selloff, he says, may well have kicked off yesterday.
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