Friday, September 14, 2007

Weekly Wrapup: September 10-14

It was a great week for the market; the major indexes all enjoyed gains of at least one percent. Here are weekly charts, courtesy of

Dow Chart 9/10-9/14

NASDAQ Chart 9/10-9/14

S&P 500 9/14-9/14

As the charts show, each index posted gains for the week... and if measured from the bottom of the lows on Monday, the weekly increases are even more impressive.

Moving on:

A few interesting things happened with the stocks I own or watch this week. Syntax-Brillian (BRLC), which I had a small speculative position in, first delayed earnings, then disappointed the street by revising its future outlook downward. It fell from almost $7 on Monday to $4 this Friday.

Obviously, the company should be a little cheaper, because it did revise its future estimates. However, I do not believe that this stock deserved the downfall, or will trade at this price forever. Along with the quarterly results, BRLC reported yearlong earnings of $.48/share. At the current share price, BRLC is an 8 P/E stock, which is utterly unheard-of for such a small, high-growth company. Revenue and income continues to grow quickly (just not as quickly as expected), with demand out pacing the company's ability to supply.

I doubled my tiny position around $4 a share, and I believe that this stock will trade much higher than it does today. Unless there is some massive scandal or other major unforeseen problem, based on the current numbers and market conditions, I feel as though BRLC is beaten-up and undervalued in the long term. I don't know if it's going to "pop" anytime in the near-term, but in a year, I would not be surprised if it was at $8 or $10 per share.

Another interesting happening:
I purchased a tiny position (500 shares at $.56) of an even smaller TV maker, Soyo (SOYO.OB). Other than some news about a very small stock purchase by the CEO, information about sponsorship of a fighting candidate, and a reiteration of earnings guidence (of 7+ cents/share for the year), there wasn't much news; however, the stock shot up to $.92 on Friday, before closing in the 70-cent range.

Generally, I don't invest in "penny" stocks because it's unpredictable and more like gambling than investing. However, whenever I discovered Soyo, I researched it and really liked the company - it started as a company making specialty motherboards for gaming computers, and eventually got into the LCD TV market. Now, they produce a 24" TV that has 50% market share at that size, and signed a long-term contract to distribute products under the widely-respected Honeywell brand name, starting with portable USB drives this year and including big-screen HD LCD TVs next year. I like this little company in the long run; I could care less about the daily volatility and short term gains, becuase if this work out well, this company could be worth much more in the long run.

Along with the rest of the market, most of my other positions were up, including Marathon Oil (MRO), Electronic Arts (ERTS), and Sun Microsystems (JAVA).

For the upcoming week, markets will be focused on the Fed meeting on Tuesday. The decisions concerning interest rates will surely set the tone for the week. One of my positions, Hovnanian (HOV), will definitely be effected; I'm going to have a full-article writeup about it posted later tonight or tomorrow.

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