The 3.7-to-1 risk to reward ratio that was highlighted in Young Guns Taking Off was met yesterday as the stock is now 40% higher than my original entry point (only 11 trading days back). Now is the time to guarantee at least a 30% gain by placing a hard physical stop at $31.89 or near $32. The stock still has long term potential based on its recent price explosion and institutional sponsorship but a hard stop is my idea of comfort while sleeping. Our target was met and my goal was reached so I can’t be greedy! Remember this post: Don’t Be Greedy

Below is an insert from the June 20th Case Study:
Potential Trade Set-up:
The Ideal setup was last Wednesday at the moving average when I started coverage!

Ideal Entry area: $23 – $25 ($24.55)
Risk a maximum of 1% of portfolio (half of 1% would be better for this speculative play)
Set a stop loss above $22.00 (7-10% from entry – must be below 50-d moving average)
Target of $34+ based on recent swing action (stock is young for ideal target)
Risk to reward has a potential of 3.7-to-1 based on exact entry ($24.55) and stop of $22.

This was the original blog post that highlighted JASO at $24.55:
Fresh IPO Ideas

JASO – JA Solar Holdings, Co. Ltd. – $24.55
Earnings Analysis:
$0.41 – Last Year Primary EPS
$1.00 – Current Year Mean Primary Estimate
$1.41 – Mean Primary Estimate — Next Year
30.00% 5-YEAR GROWTH MEAN EPS

Institutional Analysis:
Total Held by Institutions: 87
Money Market: 68
Mutual Fund: 18
Other: 1
Shares Held: 15.16 mil
Shares Held Previous Period: 1.85 mil
Shares Bought: 13.51 mil
Shares Sold: 0.19 mil
Value of Shares Bought: $314.6 mil
Value of Shares Sold: $4.58 mil

Shares bought versus shares sold is what really caught my attention! That is institutional sponsorship at its best. The risk-to-reward was excellent and quickly achieved by the powerful smart-money support.

I posted a thread titled, Fresh IPO Ideas, last Wednesday (one week ago today) and have already witnessed some excellent results.

The blog entry included five trending IPO’s that look poised to make a further upwards advance over the next several months.

They included the five names below at these initial prices:
JASO – JA Solar Holdings, Co. Ltd. – $24.55
SMOD – SMART Modular Technologies Inc. – $14.31
SNCR – Synchronoss Technologies, Inc. – $27.88
GTLS – Chart Industries Inc. – $23.05
DVR – Cal Dive Intl., Inc. – $15.52

They closed Tuesday night at these levels:
JASO – $29.28, a 19.2% Gain
SMOD – $15.07, a 5.3% gain
SNCR – $28.78, a 3.2% gain
GTLS – $24.73, a 7.2% gain
DVR – $17.54, a 13.0% gain

I didn’t perform a full case study for any of the stocks but I will provide some additional information for JA Solar Holdings, Co. Ltd. I will start with last week’s data about the company’s institutional analysis. Notice the number of shares bought versus the number of shares sold (the stock is young so this is normal but I like the early support). I can’t argue with $300 million pouring into the stock.

JASO – JA Solar Holdings, Co. Ltd. – $29.28
Earnings Analysis:
$0.41 – Last Year Primary EPS
$1.00 – Current Year Mean Primary Estimate
$1.41 – Mean Primary Estimate — Next Year
30.00% 5-YEAR GROWTH MEAN EPS

Next Earnings: 8/14/07

Institutional Analysis:
Total Held by Institutions: 8%
Money Market: 68
Mutual Fund: 18
Other: 1
Shares Held: 15.16 mil
Shares Held Previous Period: 1.85 mil
Shares Bought: 13.51 mil
Shares Sold: 0.19 mil
Value of Shares Bought: $314.6 mil
Value of Shares Sold: $4.58 mil

Potential Trade Set-up:
The Ideal setup was last Wednesday at the moving average when I started coverage!
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