To the board at large:
Right now the Security industry sector is the hottest thing in the market.(Can you say 'sizzle'.) Practically everything is going up.
Currently my security portofolio is:
MAGS, VISG and DHB
I'm finding it difficult to locate Co's that are making money in this industry that have not jumped siginificantly in the past 2 weeks or so.
I'm looking at BTHS, DVS, ASE, IMX and ARTX among others right now. I passed up many including CDCY because of technicals.
Concerning ARTX I'm curious if anyone knows whether this has been pumped in any journals, magazines or newsletters to your knowledge? This stock reminds of other pump and dumps I've seen, nano-tech comes to mind.
Specifically, who was the front runner on the security stocks? Who had the message first?
TIA, Harry N
Is this what you want?
ARTX next MAGS.. a big security company with Israel defense and homeland security deals. Headed to 15 to 20 bucks.
Arotech Corporation 2003 Revenues Nearly Triple Those of 2002
Tuesday March 9, 4:05 pm ET
Revenues Expected to More Than Double in 2004; Backlog for First Two Months of 2004 Already Exceeds Revenues for All of 2003
Arotech MDT Armoring Subsidiary Awarded $1.1 Million Armored Vehicle Contract for Iraq
[BRIEFING.COM -- Robert J. Reid] With security stocks running this week, we searched for secondary plays in the sector, flying below the radar screen. Arotech is a small cap defense company that has repositioned itself as a defense and security company with strong growth rates and is on the verge of being cash flow positive.
Email Us: If you have any questions, stock ideas or comments, email email@example.com.
Arotech (ARTX 2.24 +0.06) is a defense and security products company, engaged in three business areas: 1) interactive simulation for military, law enforcement and commercial markets; 2) batteries and charging systems for the military; and 3) high-level armoring for military, paramilitary and commercial vehicles.
New Focus: Last year, the co repositioned itself as a strong defense and security company, with products in growing markets.
Turnaround: The year 2003 was a turn-around year for Arotech. Just two months into 2004, the co already had a backlog of $17.6 mln, which is more than its revenues were for all of 2003 - and its revenues in 2003 were the highest in its history. The co believes that 2004 will be a year of increased revenue, EBITDA profitability and positive cash flow.
Strong Sales Growth: Revenues for 2003 increased to $17.3 mln vs just $6.4 mln in 2002, an increase of 170%. Although much of this is due to an acquisition. For 2004, Arotech anticipates revs in excess of $37-$42 mln. Revenues are projected to be stronger in the second half than in the first half, with revenues by quarter growing throughout the year.
Cash Flow Positive: Adjusted EBITDA improved in 2003 to a $(2.2) million loss vs $(3.5) mln for 2002. However, the co anticipates being cash-flow positive for the full year of 2004, with adjusted EBITDA profits beginning in the second half.
Bottom Line: Security stocks are receiving a lot of attention lately with increased security fears providing opportunities for traders to buy overlooked small cap names. We like how ARTX is trading, approaching a 2+ year high on increasing volume. The stock is very liquid with nearly 2 mln in average daily volume with a 6% short interest. The co is expected to double sales and be cash flow positive this year.
Note: Small Cap Trading Alerts is a new service where we will periodically present near term trading ideas. We caution readers that these ideas are generally more speculative and short term in nature, not appropriate for longer term investors.
Actually, AXYS is in a different but related industry than MAGS. If you look at some of the stocks in that industry you'll see that their valuations are much higher than the S&P 500. This suggests that the industry could experience selling to rotate out at some point. Right now the market is rotating into security Co's. Even the security industry has higher than average price ratios and could see rotation at some point before the end of the year. JMO
That is the question indeed, what is about to breakout?
I might suggest ABTL. They are primed for a breakout IMO. The Co reports earnings in a couple weeks. If they beat estimates they're headed higher IMO. ABTL is the kind of stock I screen for. I'll pretty much be running queries this weekend to find stocks like them.
The security industry looks like it is pretty much discovered right now.
Briefing.com did a "Small Cap Focus" on it last week. Premium pay viewers can access this each Wednesday, and ARTX was the subject of that last week. In fact, it got 3 mentions that day on "INPLAY." They've got loads of potential and their growth right now is really phenomenal. They recently became more of a security company, but they also do a lot of training software for cities, government, companies, and police departments. They are also the exclusive trainers for TASR, which is about the hottest stock in the world right now.
Just out of curiousity, which style gives you the best net results? I try to concentrate on making good picks and then timing for the breakout price, i.e. the pivot. It does appear to have potential above 3, to 10 I'm not sure about.
Namkcats, like you I'm primarily short term too, but my outlook for a positon is 2-6 mo, not weeks or days. In my experience jumping in and out can only get you out of position and cost you profit.
P.S. My approach:Make good picks and pick your entry point carefully, then hold onto your winners.
P.P.S. I forgot to recommend the #1 on IBD 100, ESMC, right now. They look primed for a breakout soon IMO.
A 12% return only?? ESMC has a pretty good potential for a breakout soon. All the sign are in place. JMHO You'll kick yourself hard if it starts to run and doubles in the next couple months, or sooner. I think the people interested in them are simply waiting for the market to finish correcting. When enough people think the outlook for the next year is promising, a lot of small caps will see some pops IMO.