Singular Research List Reports Best Month Yet in 2005, up 6.59%
Sell in May and Go Away? That old saw certainly did not apply to our research list this past month. Investors who sold the stocks on our research list (or covered shorts) would be sorry indeed. June was another extraordinarily good month for our research list companies. We had eight stocks increase by double digit percentages, with only one declining by a similar amount. So let's get right to it.
The biggest winner this month was our Sell rated NVEC which dropped 22%. This is especially gratifying in light of last's month's big increase. Our analyst, however, held to his guns maintaining that the May run up was based solely on hype and rumor and was unjustified by the fundamentals. June seems to have borne that out and NVEC is now within 10% of his target price. Since we launched with a "Sell" rating on NVEC last October, it has declined over 50%.
PLPC was up just over 20% for June on the heels of strong earnings for Q1:05. Sales were up 28%, and EPS was up an impressive 151%. AXR also had a good month moving up 18.6% and was recently included in Fortune Magazine's list of America's 100 Fastest Growing Small Companies (in fact, four of our companies made this prestigious list). MXWL, which we just initiated on earlier in the month, is already up 15.8%. We knew this was a turnaround story and were pleasantly surprised to see the market agree with our opinion so quickly.
Other notable movers included ATRI up 14.3% in June. The company beat our analyst's expectations for Q1:05 and he raised both his estimates and price target. Earnings are growing at almost 80%. HANS put in yet another great month, up 13.7%. Since we launched on HANS last October, the stock is up 239%, but our price target implies another 18% upside. Impressive as this rise in the stock price is, it is still less than earnings which are growing at 286%. ACU rose another 10.8% in June bring its total return from initiation to 112%. EPS was up 55% in the most recent quarter. PARL rounds out the list of double digit advancers for June up 10.8%. But will the company's newest fragrance from tennis phenom Sharapova suffer due to her semi-final loss at Wimbledon? Only time will tell.
HDNG was the sole double digit decliner dropping 11.2%, perhaps as a result of the CFO leaving to join another firm. But with EPS growing at greater than 30%, the company priced at just 10.7x our FY:05 EPS estimate, and 42% upside implied by our price target, we doubt it will stay down for long.
One last note. During the month, we downgraded AE from BUY to HOLD and dropped the stock from our research list at month end. Our analyst felt that the stock was both fully valued and that the outlook for the future was diminished with 2H:05 results likely to disappoint. Since we launched last year with a BUY rating until we downgraded, AE was up 22% handily beating any equity index benchmark.
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