Two New CANSLIM Long Positions, One New Speculative CANSLIM Long Position, And Two New Speculative Long Positions

September 20, 2007

new CANSLIM long positions: SF GLNG

SF is bouncing off the 50 day moving average, on very strong volume. This has been a great stock since 1990 as it has been in a steady uptrend the entire way full of a lot of accumulation. However, all we need to focus on is this year. SF’s powerful breakout in January on extremely large volume with BOP going green leading it to max green started the most recent we want to analyze. Since then, this stock has moved higher on clear heavy accumulation with low volume pullbacks. Along the way, BOP managed to stay green to max green most of the way, showing the constant systematic buying of the stock. After a huge show of support at the beginning of August, the stock pulled back on very quiet volume. The bounce the last two days has come with BOP moving back to the green area, helping make this a nice chart. The fundamentals are strong and getting stronger, with EPS growing from 9% to 118% the past five quarters, sales growing from 15% to 106% the past eight quarters, a ROE of 20%, a cash flow of $4.54 a share, 32% debt, a 45% EPS growth rate, an SMR rating of A, and EPS rating of 96, and YOY earnings estimates for 2007 and 2008 for gains of 50% and 14% respectively. Fund ownership has grown from 37 to 45 funds the past four quarters, showing that more institutional investors are gaining interest in this company’s story. Cut your first loss with a close below the 50 day moving average and your final loss with a close below the 200 day moving average.

GLNG is breaking out of a cup with long handle pattern and bouncing off the 50 day moving average, on very strong volume. This has been an excellent chart since mid/late April when the stock had a breakout gap on very strong volume with BOP hitting the max green level. During the entire uptrend, the stock was accumulated, with one heavy day in June and a strong week at the beginning of July. What was really nice on this chart was that BOP went max green during the accumulation phase from mid June to about the third week in July and then BOP went back to green after going red in August from the selloff. Even though the handle is long compared to the cup portion of the base, the handle was very flat and created on very quiet volume. The breakout today on very strong volume and with BOP jumping to near max green is confirmation of the strength of the base. the fundamentals are strong but do have some flaws, with EPS growing between 65% and 471% the past six quarters (minus one quarter), sales growing 6% this quarter from -6% last quarter, a ROE of 15%, a cash flow of $1.98 a share, 358% debt, an EPS growth rate of 24%, an SMR rating of A, an EPS rating of 94, and YOY earnings estimates for 2007 and 2008 for a loss of 42% and a gain of 32% respectively. Management owns 48% of the stock so obviously they have an interest in this stock moving higher. And it also pays a 9.3% dividend. Heck, if this could be a good long, that extra dividend would be nice. However, I would not load up on this stock as it is a bit risky with the inherent natural risk with a pullback to the 50 day moving average. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative CANSLIM (one to three quarters away from being an official CANSLIM) long position: TLEO FRM

TLEO is bouncing off the 50 day moving average, on strong volume. This has been a very pretty chart since November, as the stock has been in a steady uptrend finding support constantly at the 50 day moving average, on extremely large accumulation, with very low volume pullbacks, and with green to max green BOP all over the chart. This appears to be a safe place to get in on a ride that hopefully has a lot longer to play out. The bounce today was nice as BOP moved up a notch and is green. Overall, this is a very pretty chart. The fundamentals are very strong and getting much stronger, with EPS growing from 17% to 999% the past three quarters, sales growing between 22% and 39% the past eight quarters, a ROE of 4%, a cash flow of $0.32 a share, 0% debt, an SMR rating of C, and EPS rating of 75, and YOY earnings etimates for 2007 and 2008 for gains of 223% and 40% respectively. Fund ownership has grown from 20 funds to 50 funds the past four quarters, showing heavy interest from institutional investors. Management also owns 27% of the shares outstanding which means that they have a vested self interest in this stock moving higher. Cut your loss with a close below the 21.90 level, if the stock does not move higher immediately.

FRM is breaking out of a cup with high handle, on the strongest volume in over one and a half years. This stock has been beautiful since the beginning of 2006 as the stock has climbed higher the whole way finding support at the 50 and 200 day moving average the entire way, climbed higher on very strong accumulation, pulled back on low volume, and during most of the way higher the BOP was green to max green. More recently the stock had a breakout gap in May on huge volume with BOP going from green to max green. That move started a rally on very strong volume that led to the cup base. The cup base had a lot of volume in it but i happened at the bottom, indicating support. The move higher in late August was on very strong volume and green BOP and BOP even stayed green during the handle. The breakout today on huge volume and with BOP jumping to near max green seals the deal that this is a very nice chart. The fundamentals are OK but getting better, with EPS growing 500% and 450% the past two quarters, sales growth between 16% and 92% the past six quarters, a cash flow of $0.01 a share, an SMR rating of D, and EPS rating of 75, and YOY earnings estimates for 2008 for a gain of 59%. Fund ownership has been a bit volatile but is in the right trend again, going from 13 to 22 funds owning the stock the past two quarters. This stock is a bit risky for new traders. Limit orders are recommended on this one. Cut your first loss with a close below the 8.14 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative long positions: APPY SGU

APPY is bouncing off the 50 day moving average and closing right near its HOD, on above average volume. This has been a very beautiful chart since February as the stock has a lot of days of huge accumulation in it and the BOP is green to max green almost the whole way from February to now. The most recent flat base has been created with max green BOP since the strong accumulation day on 9/6. This is a fantastically beautiful chart, however, that is all it is as the fundamentals are of very poor quality. EPS has been negative since every quarter since 2002, sales growth has grown between 25% and 387% the past four quarters, the SMR rating is a D, the EPS is 26, and the company has 77% debt to shareholder equity. Obviously, it is not a pretty story. This stock should be avoided by almost everybody as I am only going long a little based on the very pretty chart. Even then, it is a limit order only stock. Cut your loss with a close below the 5.50 level, if the stock does not move higher immediately.

SGU is breaking out of a cup with high handle, on very strong volume. I have been long this stock since January 12th after making a strong move near support with BOP being max green. Since then the stock has been in a steady uptrend with a lot of accumulation, low volume pullbacks, and some strong areas of green to max green BOP. The strong support that the stock found at its 200 day moving average in August was also impressive. The move at the end of the right side of the cup, during the handle, and on the breakout was very nice with the strong accumulation, green BOP, and very quiet volume in the handle. This is a nice chart but, unfortunately, nothing else. The fundamentals are very bad, with EPS turning negative again, sales growing 7% and 16% the past two quarters, a negative cash flow of $-0.25, 100% debt to shareholder equity, an SMR rating of E, an EPS rating of 26, but YOY earnings estimates for 2008 is for a gain of .46 a share. This is not a good long to go long at all, for most investors. I do like the chart but am only taking very small positions. It is best, probably, to avoid this one. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.