During our Strategy Workshop (Oct. 12) we laid out rationale supporting any Equity Market Bounce thi...
12/30/2005 12:00 am EST
MAGNET Investing is an exciting new service from Jordan Kimmel that uses a proprietary quantitative system, blending growth, value, and momentum strategies. Here are highlights from a special report discussing some of his recent favorite stock ideas.
"MAGNET is an acronym that represents the criteria I use to evaluate companies and the strength of their stock at a given point in time. The criteria are as follows: Management team is outstanding; Acceleration in sales, operating margins, and earnings; Growth rates exceeding current market valuation levels; New products or innovations being offered in the marketplace; Emerging industry or business; Timing is right, stocks technically poised for price appreciation. I rank all companies based on various fundamental and technical proprietary indicators, attempting to identify those offering the greatest upside at any moment.
"American Science & Engineering (ASEI NASDAQ) makes X-ray inspection and other inspection solutions for the homeland security and other defense applications. It is a leader in a critical and growing industry of X-ray inspection and bomb detection. One can only guess that there are more opportunities for this company while Homeland Security remains so critical in this country. The company is generating nice cash flow and showing dynamic revenue growth. While there are many companies that want to talk about being in this industry, ASEI has already established itself as a market leader.
"Click Commerce (CKCM NASDAQ) is in the business of enabling other companies to become more effective and efficient through the use of technology. We have clearly entered an economy where ‘just in time’ inventories and improvements in logistics helped to create productivity and enhanced profit margins. This relatively small company is beginning to attract institutional interest and is still below the radar screen of most investors. Look for this company to continue to develop new products to meet the growing needs of the changing corporate world. A company like this highlights the "N" in MAGNET.
"VASCO Data Security Int’l (VDSI NASDAQ) designs open standards-based hardware and software security systems that manage and secure access to information assets worldwide. VDSI is rapidly becoming a leader in the business of authentification in the online banking world. The need for this kind of product is rapidly growing and VDSI is profitably filling the need. This is still a very small company that shows a high return on equity with high insider ownership. Institutions have clearly found this stock, but with a small market cap the company is still below the radars of the largest asset managers--for now.
"Essex Corp. (KEYW NASDAQ) provides signal, image, and information processing solutions primarily for the US Government intelligence and defense customers. Essex is on the cutting edge of Radar Optical Recognition and Communication within various military applications. All of their subsidiaries are profitable and in growth modes. It is producing excellent free cash flow and top line revenue growth. Management is experienced and holds a significant portion of the outstanding shares. The stock is under institutional accumulation but continues to trade at a discount to its growth rate.
"Powerwave Technologies (PWAV NASDAQ) supplies wireless solutions for wireless communications networks worldwide. The growth in Powerwave’s revenues, margins, and cash flow are proving that wireless technology is not dead. So many have discounted the growth of this industry inaccurately. The company is rebounding strongly from a ‘Tech & Communication Meltdown’ where investors threw away everything in the sector. Now institutions are accumulating and brokerage firms are upgrading their coverage in this profitable wireless communications leader."
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