A Catastrophe Plan

Discussion in 'Trading' started by Trader5287, May 24, 2002.

  1. Sell them into the ground.
     
    #11     May 25, 2002
  2. Vishnu

    Vishnu

    I think the best strategy is one which makes money in either a disaster or a "normal" environment but one which anticipates disaster (such as the environment we are in). Also, as opposed to going short, I prefer to find strategies which can potentially triple my money, regardless of if a disaster occurs.

    Here are some picks:

    a. INVN: makes bomb detection equipment for airports. Currently trading at $24. $3.00 EPS is the estimate for '02. Huge backlog of orders. $122M ($7.50/share) in cash and zero debt. Great growth. Stock recently fell from $37 to 20s because of concern about TSA funding. Funding bill was passed on Friday by Congress.

    b. DHB: makes bullet resistant material that can be used in bullet proof vests, armor, etc. Huge growth, stock tanked on profit taking and looks like it has bottomed. P/E of 14. US military is main client and has continued increasing orders.

    c. CACI: provides IT services to Dept. of Defense. Great growth, cash in bank, zero debt. Mkt cap 880M and just signed a new $500M deal with DoD. Stock tanked when analysts incorrectly calculated # shares outstanding when looking at earnings. Seems to have bottomed and is making comeback.

    All of these stocks went up on Sep 17. All of these stocks have irrationally tanked in the past month. All have great balance sheets, low debt, great growth, and great underlying technicals (oversold conditions, heavy short positions, after great momentum breakouts).

    Sorry to advertise. But I live right next to ground zero, got hurt bad after Sep 17, and have spent the past six months obsessively creating a portfolio that is "attack resistant" and I've made money in the meantime. Any other comments or stock suggestions are greatly appreciated.
     
    #12     May 25, 2002