How to Make $100,000 by 11am Just another reason to always use limit orders.
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Right now at about 12:30 the Nasdaq is down about 1.5% and AEHR is up about 5% on the day. I just put a limit order in so I may or may not own the stock here. I figure it will come down a bit today and will continue to get loved like it has been by the market for the next few months. Their business is cyclical so I'm not going to try and predict their earnings or cash flows over the coming years. Here is their story.




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Hansen sells a variety of drinks from juices, iced teas to energy drinks. They are up against some beverage giants like Coca-Cola KO and Pepsi PEP and have found a niche in the large market. The current energy drink market is highly fragmented and their Monster Energy drink has done well. The stock has been getting hammered since late 2007.

Show Me the Cash
Cash is king. Earnings are easily manipulated. Hansen generated $131 million in free cash flow in '07. They aren't going to have any trouble paying their bills any time soon boasting a very impressive current ratio of 3.96 as of last quarter. A ratio of 1 is ok here. Current ratio is current assets divided by current liabilities. As of last quarter they were sitting on $51 million in cash and equivalents.

Peter Lynch used to use a graph very similar to the one below of Hansen Natural HANS. The concept behind it is the stock will follow earnings over time.

Wall Street estimates are for Hansen to bring in $1.94 for 2008. The company has been missing and lowering lately. Last quarter Lava drinks hurt margins as they sold more. Lava has lower margins than their signature Monster Energy. I want to wait and watch HANS for another quarter at least. It might be good to jump in later when the analysts get more pessimistic and any good results will seem great.



full disclosure: no position in HANS


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I haven't gotten a chance to look at what is going on yet with Livedeal LIVE. Check out the news. I'm going to look really hard at AEHR over the coming days and get a rough value of what I think the stock is worth.

no position in AEHR or LIVE
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AEHR is up on gigantic volume. The multiple this stock trades for looks way out of sync with how fast they are growing. AEHR AEHR looked really good to me when I found it not long ago. I think there may still be some big upside. The company seems very under-followed and has a very small market cap and big growth. It looks like just about the epitome of that perfect small-cap.

full disclosure: no position in Aehr Test Systems
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They recently bought a German company Inlog and the Red Cross just started using their SafeTrace software for their blood banks. Global Medical Tech does business all over the world. The stock is up big these past couple months, though, it is only a $42 million company and very volatile. The company has strong fundamentals. I like their profit margins, nice cash flow and balance sheet. I took a small position in GLOB back in late September of last year. I barely managed to hold through about a 70% drop in the stock price and just sold after this big run to break even. Here are my thoughts on Global Medical back in 2007.

Though, there is a lot I like about the company, there are some things I don't like. I don't like the share dilution and acquisition business model. I don't know this company well enough to hold the stock. Growth from acquisition can be great but it can also destroy a company if not done correctly. I feel much better about my small cap holdings in LJ International JADE and Eternal Technologies ETLT.




full disclosure: no position in Global Medical Technologies GLOB, long JADE ETLT


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