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Revisiting 3 Picks for 300%



June 30, 2011 – Comments (5) | RELATED TICKERS: ENG , LBIX , PKT.DL

So it has been six months since I chose EnGlobal, Procera Networks and Leading Brands as my speculative three stocks for 300% in 2011 - let's take a closer look at how they're doing.

EnGlobal (ENG) - EnGlobal shot out of the gate like a bat out of hell but has since cooled off. I'm not really surprised that EnGlobal's business has cooled off considering the Japanese earthquake overhang on the energy sector. Still, looking at 2012, EnGlobal is trading at less than 6 times forward earnings and insiders are buying. Sure I'd love for the company to meet or beat estimates for the first time in more than a year, but I'm still very bullish on the company's future prospects. As of right now the company is down 18.5% this year.

Procera Networks (PKT) - Always on the edge of profitability, this may be the year that Procera finally shakes off the moniker of flatliner and boosts forward. Procera isn't a cheap company but the growth is there. Trading at 50 times forward earnings might seem aggressive until you take into account that growth rates over the next 10 quarters should average north of 40%. The company has a strong cash position and based on the price action so far this year, investors seem to like the direction the company is headed. As of right now, Procera is up 73.1% this year.

Leading Brands (LBIX) - Up until today I would have had to claim a relatively flat performance for the maker of TrueBlue, but based on today's quarterly report, gross margins remain stronger than ever. Although revenues continue to stagnate as expected, the company's profits continue to motor higher because of solid cost-cutting initiatives and multiple share buybacks. Do you like CEO's who buy their own shares? Well then you'll love Ralph McRae, CEO of Leading Brands who increased his stake in the company to more than 12%. Another great thing about Ralph, and I know this as as a former shareholder, he actually responds to personal emails. LBIX is probably trading at less than 10 times 2011 estimates I figure, so even with today's pop it has plenty of room to go. As of right now, Leading Brands is up 34.8% this year.

I can't be too disappointed with the results so far, but clearly I'd like to see these stocks break out even higher. As for Artificial Life.... POW... to da moon!


5 Comments – Post Your Own

#1) On July 02, 2011 at 1:35 AM, DorminABC (99.83) wrote:

Care to elaborate on your views on Artificial Life? They are now more than seven months late on their earnings report and hope seems all but lost for most investors. Clearly the management is incompetant, but are the auditors to?

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#2) On July 02, 2011 at 1:49 AM, TMFUltraLong (99.25) wrote:

I think the auditors are legit, but the way Artificial Life keeps their books is complicated. Figuring out what's booked and what was actually paid for is proving tickier than first anticipated. Eventually ALIF is going to report, I anticipate they'll take a one-time charge and we'll move on - of course at what cost is the question now.


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#3) On July 04, 2011 at 12:14 PM, GenericInvestor (69.83) wrote:

Yeah, at this point I'm sitting on a 70% loss so I'm holding for the long term now. I think it's a legit company but the management needs to go.

The only plus here is that the CEO is such a large shareholder that his holdings are hurting now too. 

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#4) On July 08, 2011 at 4:30 AM, dandles2020 (63.04) wrote:

Looking at the Artificial Life website, it seems like they are developing new products and are a legitimate company.  And one would think that the market for Iphone, Ipad, Android and Facebook games is only going to continue to grow a tremendous degree in the next several years.

Maybe all the need to do is come up with an app to keep their books in order. 

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#5) On November 29, 2011 at 1:33 PM, NEMnyWtch (< 20) wrote:

OK Ultra - You have 33 days left on ENG, care to reset your time horizon?? 

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