Wednesday, April 11, 2007

A stock you should look at for your IRA?

DFNS sold off some yesterday on big volume. Those that weren't able to get in on Monday got some good prices yesterday and today to jump in.

It has done over 750,000 volume in the last 3 days. (And not due to my coverage) Which is WAY higher than normal.

Its about a month prior to their Q1 report will come out. (by May 15th) We should see some big revenue increases and hopefully a penny or two for net earnings. If that happens we will be looking very good. If they aren't able to earn a profit with all this added revenue then this stock may not go anywhere.

Maybe over the next month prior to the news release they will announce additional orders. We will have to wait and see.

I have 2 different accounts a Roth IRA for retirement and an individual account which is what I use for the StockDoubling project. I own 8000 shares of DFNS for the project and 1500 shares in my Roth. I also own other stocks in my Roth and look for longer term gains in my Roth.

One stock I would suggest looking at if you are looking for a stock over the next couple of years is HIHO. (It was my 3rd stock pick for the project. It is back down to the prices where I originally bought.)

I don't feel it will be a double in 12 months otherwise I would have picked it again. I do think though over the next 24+ months you could see a double from current prices. I think they can grow at 30% over the next couple of years. The stock price usually tends to come down a bit in the spring ahead of their Annual report which comes out in late June. And they usually announce a dividend in early July.
I do own this stock in my Roth and plan on buying some more if it comes down to the $4 area over the next month or two. They have a book value of $3.50 a share so the downside is really about $1 and the upside is $3-4 over current prices the next couple of years. So the risk/reward is very good. Plus if you reinvest the dividends they pay you, (Assuming they will continue to pay dividends) your return would even be greater.
I think it is a very good low risk/high reward stock for an IRA.


Have a great trading day.

Steve Hoven

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