I made a good call last Thursday. A really good one. I'm proud of it. I wonder if I can do it again....
It seemed pretty obvious to me that Priceline.com was gonna report some great earnings, for all the reasons I outlined in last Thursday's post. But there is always that little bit of hesitation that makes me wonder if I'm reading things right. Maybe there was a piece of information I was lacking, or maybe the information I had wasn't entirely correct. Such is the nature of the beast.
Today, I'm more focusing on another stock I think is likely to make up to 20% in the next few weeks. It's Titan Machinery (TITN), in which I bought a mini-position yesterday.
Titan went public in December '07, so it's only been on the exchange for about six months. Since then, it's done very well, growing nearly 290% to it's recent high of 24.50. The 50-day moving average has remained a significant support (since it's had a 50-day moving average, anyway), closing below only a few times in the last couple months. There seems to be some resistance around 22, but it's broken through that at least once recently, and very possibly could do so again.
But this is not a long term value play on my part. I'm banking that in the next couple weeks, TITN will continue it's relatively volatile trend. Since its inception, TITN has consistently traversed a wave-pattern as much as 20-25% from peak to trough. If the 50 DMA continues to be a key support, which I think it will, then there's reason to believe that TITN will continue the pattern and peak in a couple weeks with a 20% or so gain.
Even better, there's a chance that it could make a new high. In its relatively short lifespan, there are more new-high peaks than middling peaks. The trend could easily change, and if it does then the upside could be quite a bit less than expected.
Two events in favor of a new high are the recent acquisition of Quad County Implement Inc. and the agreement to acquire Mid-Land Equipment Co.. Last year's combined revenue from the acquired companies was a little over $63 million – about 7% of Titan's annual revenue in FY 2007. That's a decent increase, and if Titan can improve margins through consolidation, then they will be sitting pretty to see some significant stock action.
Nothing in this post should be construed as a recommendation to buy. Titan looks like a good company with great prospects, but you need to do your own research before you purchase any shares.
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