Taking a Second Look
I have been busy this month so have not spent much time in CAPS or in looking at buying opportunities for 2010, but am spending what free time I have reviewing my current holdings to see about making some adjustments.
I am closing out my position in IO, not because I am particularly down on them, but since I have made a good profit on them, have decided to "bank it". They have had a very good run up since I bought them, and there have been a lot of changes in their business model, so I am going to watch a while to see if I can get a better handle on where they are going from here.
I am also going to take a position in HERO again. I sold it after buying it at $1.74 in April, and had a profit of 166%. Again, I wasn't down on them, but there were some changes going on within the company, the reasons for which were not quite clear, and being a FOOL and not a fool, decided that 166% was a good profit for less than a year of holding. They have gone up between 20% and 25% since I sold, so I had an opportunity loss, but that's ok. That's the kind I prefer to have.
I think HERO could be a sleeper. They have been a good company in the past, and as drilling increases in the coming "recovery", will be again. They are a potential 4 to 8 "bagger" from where they are now. When I look at down side compared to upside, it looks like a good "bet". I see the downside from here at no more than 10% to 20%, and the upside at 400% to 800%. An investment of as little as $500 for a hundred shares could get you a return of $4,000 in the next couple of years.I like those odds.
Will probably go in with about 1/4 of what I eventually expect to hold, and will watch for develoments and buying opportunities.
Will post more thoughts on other stocks as I continue to review my current and closed picks.
Not really a stock for short or intermediate term trading, but a good longer term hold.
JMO and worth exactly what I am charging for it.