SWIM question

Discussion in 'Stocks' started by stonedinvestor, Mar 18, 2008.

  1. What up with investools? Seminars and software anybody have a feeling for this company? Timothy Sykes liked it at $17.83, it's chart has been getting a little interesting lately at $10.... For whatever reason this subsector attracts weird types, you have to be careful, there was a stock on the American that burned me.... Here is the Sykes write up. ~stoney

    INVESTools: Another holiday gift for you

    Posted Dec 21st 2007 8:06PM by Timothy Sykes
    Filed under: Charles Schwab Corp (SCHW), TD AmeriTrade Holding (AMTD), Options, Stocks to Buy
    It's not easy to top a present like TheStreet.com, Inc. (Nasdaq: TSCM), but my next holiday stock pick does just that. I give you investor education cum brokerage firm INVESTools Inc. (Nasdaq: SWIM). It's a pretty cool business model that aims to teach people to invest via seminars, getting some juicy upfront fees and reaping the rewards over time through commissions and fees, if they are successful in their teachings.

    Besides having a booming stock – which, after a nasty 50% mid-year drop, this week is breaking out to new all-time highs – an incredible trading platform that I use for my own trading and big time investors known for discovering undervalued smallcap stocks, this company has some serious growth. In fact, you'd be hard pressed to find another company in the finance arena with numbers that are even in the same ballpark.

    Their November 2007 metrics show new accounts up 71%, total funded accounts up 171% to 55,000, retail DARTs (daily average revenue trades) up 321% to 45,100 and client assets up 154% to $2.62 billion – and compare favorably to their main competitor OptionsXpress Holdings, Inc. (Nasdaq: OXPS), a company that has quintuple the accounts, double the marketcap and juicier profit margins, but whose growth is much lower.

    While the growth is definitely there, there's also value. At $17.83, this stock trades with a forward PE of 19 and analysts earnings estimates have been rising gradually. I love it, but we must remember that this is a very competitive field. And, just like TheStreet.com, INVESTools' success is dependent on stock market performance, so that's a huge risk.

    But, most importantly, and as anyone who's seen me on CNBC can attest to, I love stock charts. If you look at this stock's historical breakouts, in February and October 2006, you'll see the stock ran up 30%+ within one month, both times. Third time's the charm? That's the main reason why I'm not only a client, I'm also a shareholder. (oops)

    Timothy Sykes author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.