With the easy money considered over, traders should remain a little more nimble and cautious this we...
Perry's "Gone Public" Pick
06/16/2006 12:00 am EST
"I do believe that we are close, to a bottom but where the market will turn remains a mystery," says Bryan Perry. "We'll have to exhibit some patience to recover from the recent body blows." Meanwhile, the trading expert is still finding opportunity.
"Trying to buy into a washout is very
difficult because the volatility is so high and fear is rampant. However,
looking at some of the most recent IPOs that soared when they came out of the
gate, I'm attracted to one particular recently ‘gone public’ name that, even
during a period of economic slowing, should only see its business accelerate.
"I recommend buying Liquidity Services (LQDT NASDAQ). The company enables buyers and sellers to transact in an efficient, automated online auction environment. Its marketplaces provide professional buyers access to a global, organized supply of wholesale, surplus and salvage assets presented with digital images and other relevant product information.
"LQDT also enables its corporate and government sellers to enhance their financial return on excess assets by providing a liquid marketplace and value-added services that are integrated into a single offering. The company organizes its products into categories across major industry verticals such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware and scrap metals.
"The company posted earnings in May that were through the roof. Adjusted EBITDA came in at $3.8 million, representing a growth rate of approximately 134% when compared to the prior year's comparable period. Net income in Q2 2006 was a record $1.9 million, or 8 cents per diluted share. The company also reported record revenue of $37.1 million, representing a growth rate of approximately 65% when compared to the prior year's comparable period.
"The stock was priced at $10 per share back in late February and rocketed to $20 by the end of May, when everything else was melting down. Now that selling pressure has reached even the best momentum stocks with stellar earnings, I feel good about picking up this name at its current price of $15.50 per share."
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