detroitigerz (< 20)

My first big (virtual) mistake

April 01, 2010 – Comments (5) | RELATED TICKERS: SPPR , NOVA , XLNX

With me being new to investing and halfway thru my first book (Intelligent Invester) I decided to open a virtualstockexchange.com game with a couple of my friends and start trading. We started the game about a month ago and quickly I've already learned more in that game than I have anywhere else so far. (excluding Benjmain Graham of course). I thought I made some pretty sound investments and planned on just leaving them alone once I bought them. As it turns out my first big mistake was that I got too caught up in the thought of making money that I made wayyyy to many transactions. Our game has been going on for approximately 30-40 days and I've already made over 80 transactions! With 9.95 commision that already has knocked me down into the hole almost 20% of my portfolio (started with 5000$ each). I've made a few pretty solid picks I believe, and most of them are in the green or close to the green thus far. However there are a few that I really wasn't sure about going into (sooo probably shouldn't have picked them I know) and am wondering if they still may be good picks.

SPPR

Soo, I picked up SPPR at 1.87 fully thinking they would be posting big revenue yesterday. Now it's down to 1.56!? Apparently they had net loss of 10% as of Dec 2009. It's hard for me to evaluate this company with my usual tactics because I'm having a hard time finding information on it. Couple of questions, 1st Does anyone see this company hitting anticitrades mark of 8.00 in year still with this big loss in revenue? And second, I use yahoo finance and have an roth ira account open with vanguard (which I'm hoping to expand into stocks at some point soon) but I'm wondering is there any website that anyone out there uses that is really up to date with statements and such? 

NOVA

I looked at the income statement over the last 10 years and I thought it looked reasonable, from 2006-2009 they posted fairly large gains in revenue every year. Gross profit rose for that period also with the exception of 2009 where there "COGS" more than doubled and knocked their profit down lower than the previous year by quite a bit. My valuation of the company is excellent, P/E of 10.6 with a 5 year average over 20.6. Price to book of 0.9! and price/sales of 0.5! So overall I guess I think this is going to be a pretty good stock to own?

XLNX 

This one, I reall have no idea why I purchased and that's pretty sad if I do say so myself. I was watching Mad Money one night and Kramer told me it was a good one so I looked at the financial sheet and decided it was a good purchase in some way. I believe I saw that it's gross profit increased every year for the last 10 years and thought that was great so I picked up 10 shares at 26.42. For my overall valuation I didn't like it but I figured Cramer might have known something that I didn't, I'm sure he probably does considering I'm only 22 and have never taken a financial class in my four years of college or high school. So I went with him on it and am weary of this stock the most. 

Bottom line, I think I need to start thinking for myself a little more on picking undervalued stocks instead of relying so heavily on other peoples, or websites opinions. If I could just find a few companies in this economy that I feel are really good investments I know I could invest in them and become a more "defensive," invester as Graham would put it, but I don't really feel as though I've found one solidly undervalued company to invest in.

P.S.-I recently created a free account with morningstar.com and think there website is fantastic. 

detroitigerz