Luna Innovations (LUNA) and Dataram (DRAM) Up On High Volume

• Ian Wyatt
• On 4:00 pm EDT, Friday September 25, 2009

There are some strange goings-on on the Top Gainers List today. There are some impressive moves, like the +150% that Luna Innovations (NasdaqGM:LUNA - News) achieved on 10X average daily volume.

 

But when we put them to the test of my Top Gainer criteria, I can't see why Luna is moving higher. According to a press release on the corporate website, "…the company has been selected 13 U.S. small businesses to enter into negotiations for an award in the Photovoltaic (PV) Technology Pre-Incubator program of the U.S. Department of Energy's National Renewable Energy Laboratory (NREL)."

 

Read carefully. Luna has not been awarded anything. It's simply been invited to negotiate for an award. That doesn't sound like good reason for a 153% gain.

 

Then there's ~50% move by Dataram Corp (Nasdaq:DRAM). After today's move, it will trade at approximately 2X revenue while it loses money. Trailing 12 month earnings are -$5 million. With just $7 million in cash, that's a scary burn rate. But the stock is trading 90 times average volume. That is a huge jump. It suggests something is going on, but what? There's not likely to be much premium left for a buyout offer to make you any money. And that's a steep run for some kind of new financing deal.

 

After yesterday's successful IPO of car battery maker A123 Systems (Nasdaq: AONE), a couple Chinese battery makers made the Top Gainers list. China BAK Battery (NasdaqGM:CBAK - News) jumped 15% on 10X average volume. But China BAK looks richly valued to me, with a forward P/E of 35, $230 million in debt and no debt.

 

At least Hong Kong Highpower (AMEX:HPJ - News) has earnings to justify its +30% move. It trades at a decent discount to sales and an attractive forward P/E of 11. But on an earnings per share basis, I'll take the Chinese battery stock I've recommended to my SmallCapInvestor PRO readers. Advanced Battery Technologies (NasdaqCM:ABAT - News) has $0.35 in eps, compared to Hong Kong Highpower's $0.14 eps. Gotta admit though, Hong Kong Highpower is a catchy name.

 

Finally, a couple familiar names are back on the Top Gainers list. Maguire Properties (NYSE:MPG - News) jumped 12% after its loss yesterday. I first profiled Maguire on Wednesday, September 15 around $1.30 a share. At current prices around $2.30 (and a recent high at $3) it's done pretty well.

 

And fellow REIT Strategic Properties (NYSE:BEE - News) made it 15% higher.

 

For short- to medium-term investing, I still like the prospects for these beaten down REITs. They have assets, and it seems likely to me that the government will find a way to help them refinance their crushing debt loads.

 

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*****Finally, here's Jason Cimpl with some video analysis of natural gas stocks. He thinks they've made a long term bottom and are set for some substantial gains. To view the video CLICK HERE.

Buzz up!