Great traders and true value investors know that it’s not only the return function that dictat...
Marketocracy’s Best Like Two Small Caps
03/12/2007 12:00 am EST
Ken Kam, portfolio manager of Marketocracy's Masters 100 fund and editor of the Marketscope newsletter, presents two stock ideas from some of Marketocracy's best-performing investors, culled from its database of tens of thousands of contributors.
Astec Industries (NASDAQ: ASTE ) is a small-cap, Tennessee-based industrial machinery company, [which] designs, creates and markets products in four business segments: asphalt, aggregate and mining, mobile asphalt paving and underground. In the asphalt segment they create portable asphalt plants and components, thermal fluid heaters, process heaters and equipment, and a variety of industrial heaters.
In the aggregate and mining segment they create crushers, washers, mills, tanks, screens, utility vehicles, compactors, and demolition equipment. In the mobile asphalt paving segment, they create asphalt pavers, milling machines, soil stabilizers and material transfer machines.
In the underground segment they create trenchers, drills, and boring machines for underground construction operations. Astec Industries' primary customers are asphalt paving contractors, asphalt producers, mine operations and government agencies.
In January 2004, Marketocracy's Best Investors increased their holdings of Astec in the $12-$13 range, and the stock rose about 200% to a high of $42.25 on April 21, 2006. After the stock had a 50% drop from April to August 2006, they increased their holdings once again, and many held their stock as the shares [rebounded] 70%. That created a profit-taking opportunity [last November] and some sold their shares, but in the past two weeks the Best Investors have increased their holdings once again in ASTE.
Technitrol (NYSE: TNL ) is a small-cap, Pennsylvania-based electronic equipment company [that] has two business segments. The electronic component segment (Pulse) designs and creates chokes, inductors, filters, transformers, antennas and coils for broadband access, military guidance systems, [consumer electronics] and the automotive industry. The electrical contact products segment creates metal electrical contact devices for power substations, computer equipment, wiring, sensors, switches, relays, circuit breakers, and [many other electrical devices]. Technitrol's primary customers include international original equipment manufacturers (OEMs), contract manufacturers, and distributors.
In July 2005, [Marketocracy's] Best Investors started purchasing Technitrol (TNL) in the $14-$15 range, and they enjoyed the momentum as the stock rose 50% [until] Apr 2006. [At that time], they increased their holdings and held TNL as the stock fluctuated between $19 and $32. Some unloaded shares in October 2006 at $30-$32, but a few others were caught as the stock dropped 31% from [then until] March 2007. In the past two weeks, the Best Investors have increased their holdings once again in TNL.
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