Thursday, June 25, 2009

CLFD - Obama's Broadband Play

Clearfield Inc (CFLD) manufactures and sells telecommunications equipment and products in the United States. Its products include fiber distribution systems, optical components, outside plant cabinets, and fiber and copper cable assemblies.

Analysis - I started to look at CFLD as a pure breakout play expecting to cross $2 in the near term but after discussing with one of my buddies and going into details of this company it looks like it could benefit from from Obama's $7.2 Billion stimulus plan to expand broadband internet access to "underserved" and rural areas Based on its recent earnings, PR about their new clients, IBD composite ratings of 96, tiny float/market cap (which we all like) and the last but not least, the Obamas stimulus factor, I think I can comfortably say that it could double from here. All it needs is some exposure to market participants and once it happens, this stock could easily double. CFLD closed at $1.68 on 06/25 with very light volume. I would take a small position at this levels and average it if it goes down.

Please do not expect this stock to take off like MTMC and Crash at the same speed (well that's a happy ending for some lucky fast and furious trades and its a sad story for late comers!!). I would compare the momentum and price action of CFLD with MRGE.

Other Telecom breakout play is VOCL -VocalTec Communications (NasdaqCM:VOCL) is a global provider of carrier-class multimedia and voice-over-IP solutions for communication service providers.

Analysis - Frankly their 1st quarter is not that great but the outlook seems to be pretty strong as per their CEO, "Mr. Gur, “As we approach the half-way point in 2009, I feel more comfortable reiterating my expectations that our revenues in 2009 will be greater than those of 2008, especially as the recent changes made by the new management team come to fruition. We have a highly motivated management team, as well as a very strong and more than adequate cash position, exceeding $12 million with which to execute on our strategic plan.”

Positives are they have a ton of cash with no debt, tiny float (6.9 million shares), Newly added clients, technical breakouts, volumes have been increasing. Once it crosses a buck, it will be fair to say that it will have more breakouts in the future and will eventually end up doubling from here.

Negatives are - 1st quarter was not great but I think that is because of overall slowdown and they are taking some good measures to contain the costs.

Disclaimer - I do not own the shares of CFLD or VOCL as of closing 06-25-09

My previous recommendations/alerts -
  1. MRGE - My first favorite play - Strong and Steady at $4 - Buy recommendation was sent on 06/09 when it was at $3. I suggested to sell it $4.40 and add buy back at $3.75 or so..some guys did follow and made some incredible money!!
  2. IFON alerted at $1.00 on 06/19 - It closed at $1.50 on 06/25
  3. UTA - My favorite stock - Up 10% today. It gave many chances to exit $12.50
  4. PLGC alerted at $.55 on 06/19 and it closed at .99 today
  5. SKBO recommended at $14 and it touched $16.50 and came back to the recommended price
  6. VPS is down and I am bit disappointed but still holding onto those shares
  7. MTMC - This was just an alert (not a buy or sell recommendation)...eveyone knew what happened!!
  8. I am still in SMCGW. Waiting for the big day and I think we are going to see that day soon!!
A general Caution and Advise-As I always advise in my posts, Do not chase stocks. please keep in mind that I am not a Stock Market Analyst or an Investment Adviser to count on my recommendations/alerts. As always please do your DD before investing or speculating, start with a small position, always keep your stop losses in place and emotions out. Finally thank me for your profits but do not blame me for your losses because you are the one who pulled the trigger!!!

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Who is Mr.Incredible?

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New Jersey, United States
Mr.Incredible is a Momentum/Technical Breakout player who trades small/micro cap plays and who saw a 600% Growth since 2006, Yes even in this down market. I am going to post my real trades (including profits/losses) soon...As a general caution and advice Please start with a small position and always keep your stop losses in place just in case....As usual Do your DD before investing. Thank me for your profits and don't blame me for your losses because you are the one who pulled the trigger!!!