Gain 59%, 50% and 34% in three months or less trading IPOs.
Does this sound too good to be true? Well, if I was writing a headline to some bogus guru seminar, this is what I would start with. It probably caught someone’s attention!

The gains above are real for the small group of IPOs I have been covering heavily since June 13, 2006, starting with Fresh IPO Ideas.

I am not an investing guru but I do provide high quality equity research and stock education that offers everyone a chance to develop trading skills and the confidence to make money. The stock group below has given us an 80% success rate with the average gain above 38% in a few short months. More importantly, take a look at the changes in their institutional sponsorship over the past three months and you will see a direct correlation between that and their share prices.

Three Month Results:

• JASO, 59.63% gain
• SNCR, 50.65% gain
• GTLS, 34.75% gain
• DVR, 9.15% gain
• SMOD, 49.41% loss

Aside from SMOD, the other IPOs have performed phenomenally over the past three months with JASO and SNCR leading the way. Below is a comparison of the institutional numbers reported in June and what is showing on my screen today.

JASO – JA Solar Holdings, Co. Ltd. – $39.19 from $24.55
Institutional Analysis:
Total Held by Institutions: 125 from 87
Money Market: 75 from 68
Mutual Fund: 49 from 18
Other: 1 from 1
Shares Held: 15.90 mil from 15.16 mil
Shares Bought: 5.56 mil from 13.51 mil
Shares Sold: 4.87 mil from 0.19 mil
Value of Shares Bought: $180.79 mil from $314.6 mil
Value of Shares Sold: $156 mil from $4.58 mil

**JASO has gained more than 59% while institutional sponsorship has increased 44%. The number of shares held has only increased by 5% with institutions buying less than one million shares more than they were selling. I would prefer to see more institutional sponsorship as the price of the stock moves higher. JASO must penetrate the levels from July and go on to set new all-time highs.

SNCR – Synchronoss Technologies, Inc. – $42.00 from $27.88
Institutional Analysis:
Total Held by Institutions: 202 from 156
Money Market: 86 from 70
Mutual Fund: 111 from 82
Other: 5 from 4
Shares Held: 26.59 mil from 16.86 mil
Shares Bought: 14.20 mil from 8.94 mil
Shares Sold: 4.28 mil from 5.56 mil
Value of Shares Bought: $531.25 mil from $220.27 mil
Value of Shares Sold: $160.3 mil from $136.99 mil

**SNCR has gained more than 50% while institutional sponsorship has increased 29%. Even better, the number of shares held has increased by 58% with institutions buying 10 million more shares than they were selling (3.5-to-1 ratio). It all makes complete sense as the stock has soared to new highs. This will stay on my list long term.

GTLS – Chart Industries Inc. – $31.06 from $23.05
Institutional Analysis:
Total Held by Institutions: 187 from 121
Money Market: 97 from 59
Mutual Fund: 85 from 59
Other: 5 from 3
Shares Held: 31.8mil from 15.73 mil
Shares Bought: 18.75mil from 2.72 mil
Shares Sold: 2.51 mil from 2.53 mil
Value of Shares Bought: $486.9 mil from $59.52 mil
Value of Shares Sold: $65.2 mil from $55.31 mil

**GTLS has gained almost 35% while institutional sponsorship has increased 55%. The most attractive number of the group is the jump in shares held for GTLS which increased by 102%. Institutions bought 16 million more shares than they were selling for an 8-to-1 ratio. The value of shares bought closed just shy of $500 million while the value of shares sold was only $65 million. The stock looks good long term.

[Read more…]

Stock of the Day
Chart industries (GTLS)
Friday’s Opening Price: GTLS – $29.49

Sector: Industrial Goods
Industry: Metal Fabrication
52-week Price: $31.37 – $11.16

Chart Industries (GTLS) was first featured on June 13, 2007 at $23.05 as a Fresh IPO Idea. The stock had 121 institutional supporters at the time, a number that has increased 54% to 187 with a large influx of cash. Almost $500 million of shares have been purchased in the most recent quarter while only $65 million shares were sold, a sure sign of institutional accumulation. The number of shares held has doubled from 15.73 million in June to 31.82 million today.

This is the type of activity that I like to see in a young growth stock that is currently building a cup shaped base after a prior uptrend. It has been making recent daily screens and is currently on the top of my potential buy list. I don’t own shares as I write this analysis but I will be looking for a handle formation to jump into a position. The ideal trade setup is located below with proper position sizing and risk-to-reward margins based on a moving average (swing) trade (not a cup with handle because a handle hasn’t formed).

GTLS was Featured in these posts in June 2007:
6/13/07: Fresh IPO Ideas, GTLS – Chart Industries Inc. – $23.05
6/20/07: Young Guns Taking Off, GTLS – $24.73

Institutional Analysis:
Total Institutions: 187
Money Market: 97
Mutual Fund: 85
Other: 5

New Positions: 86
Positions Sold: 13
Shares Held: 31.82 mil
Shares Held Previous Period: 15.59 mil

Shares Bought: 18.75 mil
Shares Sold: 2.51 mil
Value of Shares Bought: $486.9 mil
Value of Shares Sold: 65.2 mil

Top Institutional holders; Shares Held:
Capital Research and Management Company; 2,266,400
Gendell, Jeffrey L.; 1,686,400
Delta Partners LLC; 1,629,840
Smallcap World Fund; 1,613,500
Neuberger Berman, LLC; 1,318,500

Potential Trade Set-up (moving average setup – not cup w/ handle):
Ideal Entry: $28.00
Risk is set at 1.0% maximum of total portfolio or $1,000 of $100k
Stop Loss is % or $25.76
Number of Shares: 446
Position Size is $12,500
Risk is $2.24
Target is $38
Risk-to-Reward is 4.46-to-1

*The target is an educational guess based on the depth of the cup shaped pattern*
[Read more…]

The stocks below show you why jumping on a young growth stock during an up-trend will give you great odds of success regardless of your system or beliefs. As long as you position size correctly and locate your stops, things will work out. Four of the five stocks have made double digit gains over the past three weeks while one (SMOD) has dropped 5% but may be setting up the ideal risk-to-reward opportunity near the moving average.

JASO (up over 50%) was also among the young stocks covered in early June in this post: Fresh IPO Ideas

SNCR – Synchronoss Technologies, Inc. – $34.25 (up 25%)
Earnings Analysis:
$0.35 – Last Year Primary EPS
$0.56 – Current Year Mean Primary Estimate
$0.72 – Mean Primary Estimate — Next Year
28.75% 5-YEAR GROWTH MEAN EPS

Institutional Analysis:
Total Held by Institutions: 156
Money Market: 70
Mutual Fund: 82
Other: 4
Shares Held: 16.86 mil
Shares Held Previous Period: 13.48 mil
Shares Bought: 8.94 mil
Shares Sold: 5.56 mil
Value of Shares Bought: $220.27 mil
Value of Shares Sold: $136.99 mil

GTLS – Chart Industries Inc. – $30.07 (up 30%)
Earnings Analysis:
$1.04 – Last Year Primary EPS
$1.60 – Current Year Mean Primary Estimate
$2.09 – Mean Primary Estimate — Next Year

Institutional Analysis:
Total Held by Institutions: 121
Money Market: 59
Mutual Fund: 59
Other: 3
Shares Held: 15.73 mil
Shares Held Previous Period: 15.54 mil
Shares Bought: 2.72 mil
Shares Sold: 2.53 mil
Value of Shares Bought: $59.52 mil
Value of Shares Sold: $55.31 mil

DVR – Cal Dive Intl., Inc. – $17.80 (up 15%)
Earnings Analysis:
$1.91 – Last Year Primary EPS
$0.61 – Previous Year EPS
$1.53 – Current Year Mean Primary Estimate
$1.70 – Mean Primary Estimate — Next Year
20.00% 5-YEAR GROWTH MEAN EPS

Institutional Analysis:
Total Held by Institutions: 110
Money Market: 59
Mutual Fund: 46
Other: 5
Shares Held: 25.59 mil
Shares Held Previous Period: 16.88 mil
Shares Bought: 12.89 mil
Shares Sold: 4.17 mil
Value of Shares Bought: $195.31 mil
Value of Shares Sold: $63.25 mil

SMOD – SMART Modular Technologies Inc. – $13.62 (Down 5%)
Earnings Analysis:
$0.68 – Last Year Primary EPS
$0.50 – Previous Year EPS
$0.91 – Current Year Mean Primary Estimate
$1.06 – Mean Primary Estimate — Next Year
17.50% 5-YEAR GROWTH MEAN EPS

Institutional Analysis:
Total Held by Institutions: 149
Money Market: 82
Mutual Fund: 62
Other: 5
Shares Held: 42.33 mil
Shares Held Previous Period: 25.68 mil
Shares Bought: 18.82 mil
Shares Sold: 2.17 mil
Value of Shares Bought: $269.36 mil
Value of Shares Sold: $31.08 mil

Blackstone was all the hype last week as the IPO priced at $31, shot up above $37 and then quickly tumbled to close below $30 the past couple of days.

What does this mean?

Well, the stock is new and many amateur investors probably got slammed the first couple of days with 20% paper losses but that shouldn’t scare longer term investors.

Take a page out of the lesson book of Google (GOOG) and study how that stock also dropped quickly in the days after the IPO debut. The stock reached a height of $113.48 before dropping back below $98 eight trading days later.

Volume dried up as the stock retreated prior to the first major up-trend which blasted the stock above $140 within a month. History can tell the rest of the story as the stock now trades above $525 per share but that is not the point.

I am not saying that BX will be the next GOOG but it can give you some comfort that GOOG did drop and pause prior to making a run.

Volume has been drying during the recent drop in BX so only time will tell if the stock can start its first true up-trend.

FYI: Keep an eye on the new legislation proposed by congress as it may affect the stock (BX) in the coming weeks and months.

I don’t have a true trend-trading rating on Blackstone but I would lean towards “Buy” over the longer term!