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Surprising Winners

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December 06, 2006 – Comments (0)

Over the past couple days, two of my CAPS picks have been on just a crazy tear. Unfortunate fact: neither are in my real-money portfolio. Interesting fact: they're both stocks that I didn't expect a whole lot from. One of the great things about CAPS is that I can test out some unlikely stocks and not worry about losing milk money (plus it's in a much more exciting format than the standard "test portfolio").

In any case, the two stocks are Force Protection (FRPT.OB) and Amrep Corp (AXR). Force Protection was definitely an unlikely pick given that my preference is puking on OTC stocks (excluding foreign stocks traded on the OTC). After digging into Force, though, it looked like there is an actual business there and some good backlog. They're even making profits! Imagine that... Now the whole deal is pretty risky given that the customer base is pretty much Uncle Sam and, well, Uncle Sam, and if the government's approach to Iraq changes drastically it could mean very bad things - but there are a lot of defense related stocks out there that have similar risk. As an OTC stock, I'm sure it's going to see some more volatility (today I think it's down like 7%), but I can't complain about what it's done for me.

The other stock on a run is Amrep. Amrep is a wierd little company whose businesses include magazine distribution and real estate operations in Rio Rancho. Though the company doesn't have mainstream Wall Street coverage, it has been rated a strong buy by Matrix Research (and a Matrix pick in CAPS for over 100 points). A friend of mine mentioned the company to me (no idea how he found it) and I ran it through my DCF and figured it had 25% in it. 48 points later it's my best CAPS pick.

Now all I need is a few more picks like these (preferably among the stocks that I actually own!) and I'll break that All Star barrier.

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