The Trading Almanac

A diary of investments in my IRA, a daily look at my stock watch list, and additional commentary/discussions on individual stocks, the overall market, economics, technology, etc.

Location: United States

Wednesday, February 15, 2006

Hindsight Prelude: HANS, WMS, PENN, PSYS, and DVA

I feel like sharing some of my thoughts on a few stocks that are moving well today:

HANS Hansen Natural--Growth here is being driven by energy drink sales. Are energy drinks a fad? Can the company keep up its growth? Is it rediculously overvalued? Are their accounting practices questionable? Some like Hank Greenberg (sign up for his now FREE newsletter!), have consistently panned HANS, but the stock just keeps going up. It is down 18% from its all time high of $104, but looks to be in a good buying area. You would want to be ready for some volatility and should set a hard stop.

WMS Insdustries--This manufacturer of slot machines, other gaming devices, and gaming software is on fire! Anecdotally, (mind you, I would never trade off of only anecdotal info...) a personal acquaintence of mine works for WMS in Chicago and he is VERY busy and claims that they are busier than ever. Beyond that, the company was just upgraded and gaming is on an exponential growth curve to the upside and in a demographic sweetspot (baby boomers). The stock had a big breakout today, stopping at its 200 day moving average. If it goes up throught the average tomorrow, this looks like a nice place to try it out.

Penn National Gaming--The second half of my gaming stocks tandem for today, Penn just announced a more than doubling of the 4th quarter earnings. The stock responded with a big move today. Penn owns and operates casino properties and horse tracks throughout the US (important as they do have property in Louisiana, but are geographically diverse, limiting the risk of hurricanes, etc). Before today's exciting, high-volume move to the upside, the stock was already making a nice bounce off of a low set in late January. This is a good gamble above its breakout of $34/share.

Psychiatric Solutions--This company manages inpatient mental health facilities throughout the US. Again, anecdotal evidence would give lots of reason to believe that this company has unlimited upside, why, just drive on your local freeway during rush hour or hang out at a downtown bus station to see...Seriously, the stock is making frequent contact with its 5o day moving average, giving one many opportunities to pick it up with a reasonable risk/reward scenario.

DVA Davita--My last stock for today is Davita, a provider of dialysis services, through its own clinics and by providing dialysis material to hospitals and clinics. This company is another example of how powerful the baby boomer phenomena will be. While the stock is a little high after today's big move, it is one to watch and maybe pick up on future weakness.

Please add your comments about these stocks if you have any.

The Hindsight Report STORY

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