To: robert miller who wrote (2172 ) 1/16/1999 3:52:00 AM From: michael r potter Read Replies (1) | Respond to
Bob, You were right on that bottom formation, I'll go with you on this one too. After advancing 48% in 10 trading days, SFE was/is, a bit overbought short term [that is going out on a limb!]. In general, SFE has been in a long trading range from $17 to $45 [mostly $25 to $35] for 2yrs. 8mo. as it consolidated its 3+ year move from $3 to $45. During that time, it had to contend with the culmination of a bear market in its main drivers, small stocks, that had been unfolding for some time and ended Oct. 8, 1998. They are probably now in a new bull market. Meanwhile, SFE has been building value invisibly with their expanded number and individually growing stable of private investments. At some point the deferred rights offerings will begin again and the longer it is put off, the larger and more valuable those companies will be.[it doesn't hurt that many are internet related and that area has been gaining some recognition]. The way SFE stock has acted, with the explosive run and volume coming off the Oct. low, and the volume and price action during this second leg up, it looks like it is hell bent on taking out the old high and breaking through what will have been an almost three year consolidation. If it breaks through $46 on convincing volume, further price gains could be substantial. Right now, I'd consider buying more around $32 1/2. If it doesn't make it back that far, I'd then consider around $37 or $47 [with a stop], if either breakout occurred with volume. The reason for the stop is that at $47 SFE would probably have a $27 NAV and a $20 premium [74%], which would be a vastly different risk/reward profile than it was at $25 with a mere 25% or $5 premium. Some would argue, SFE already has a vastly different R/R profile. I would agree, and stops on new buys seems like good insurance.
