Look at these stocks

Discussion in 'Strategy Development' started by timmyz, Dec 8, 2005.

  1. timmyz


    These are a few examples of stocks that have returned several hundred percent in the past 2-3 years. What could you have seen at the beginning of their moves? What could you have said about these high performers that you can't say about the hundreds of other "fast growth" and "undervalued" situations out there.

    Notice only 2 of them are internet stocks, the other two are in boring industries. I purposely wanted to balance them out so people won't say those are just internet flyers.

  2. Nothing. Survivorship bias.

  3. timmyz


    come on, really step back and think for a minute. what could you have seen?

    lets just look at the popular google for a minute. in the beginning, the bulls and bears said the same things about this company that they say about a bunch of other companies. but why was this one different?

    i think what was different here is that people forgot the power that a brand name can give a company. google's brand gave it a realistic chance of entering into any market (so people think, consciously and unconsciously). everytime google says it will do this and that, people get excited and think it will do well, so the stock goes up and up. other companies don't have the brand, so their announcements don't have the same impact and perceived success rate. that's what i think was differerent with google at that time that you can't say with the hundreds of other fast growth situations out there.

    of course google kept delivering on sales and earnings too, but plenty of other companies do that as well.

    that's what i think was different. what do you think?
  4. its more really the law of probabilities out of 1000's of stocks a mere few are going to consistenly beat the market and deliver constant earnings growth quarter by quarter 10,20,30 times in a row and thats reflected in a 45degree upward-trending price. earnings expectations and actual earnings growth is what drives up the value in any asset. the best chance you have of giving yourself opportunity for these issues is by combining good fundamental & technical analysis.
  5. Those stocks you mentioned have little shares outstanding as compared to others in their industry. TZOO for instance has 1/10th the shares outstanding as others in the industry like CNET or TSG.... At TZOO's height it was trading between 2 to 4 million shares a day...that was 12 to 25% of the total shares outstanding! Imagine what would happen if a stock like GE traded 25% of its shares outstanding. GE has 10 billion shares outstanding so 2.5 billion shares traded everday in that one stock would sure see some price movement. I think TZOO still has the potential to comeback....good financials/growth. Insiders are holding 78.5% of the stock thats gotta tell you something right there...if the owners dont want to sell why should you! :) It wouldnt surprise me if TZOO went back to 80 or so in the next year. But thats just my opinion and im not a certified financial analyst or anything like that so i could be wrong....but the numbers do seem to speak for themselves.
  6. timmyz


    no tzoo pumping. i specifically listed non internet stocks that don't have the short squeeze and high % of float traded characteristics that tzoo had.

    besides, plenty of stocks have large short interest or small float. so if short squeeze and small float is your reason, then what made tzoo different than the other situations out there?

    that's what i'm trying to get at. what was different?
  7. Look at TZOO earning growth rate during its moon shot rally. It was growing at 200% plus rate. Many times explosives EPS growth plus small float is a good recipe for runaway move.
    Same with GOOG EPS growth rate.