The recent market volatility has continued into the first
few days of September, which has been a notoriously
negative month for investors in the past few decades. As
a reminder, U.S. financial markets will be closed on
Monday for the Labor Day holiday. That said, market
watchers will still be paying close attention to China,
where the stock markets have been closed since Wednesday.
We sold Vantage Drilling (VTG:NYSE) from the model
portfolio on Wednesday, which gives us room to add
another new name. We have been focusing our efforts to
identify potential new investment candidates for when the
market offers another buying opportunity.
In the meantime, next week will be relatively quiet on
the economic front. Pacific Sunwear (PSUN:Nasdaq) is
scheduled to report quarterly results after the close of
trading on Tuesday.
As a reminder:
-- A Game Breaker is going to change the landscape of an
industry, as Intel (INTC:Nasdaq), Microsoft (MSFT:Nasdaq)
and Wal-Mart (WMT:NYSE) did in their sectors. Investors
can make big money in these stocks by getting in before
-- Inflection-Point stocks have a broken business model
that's on the mend, but have yet to be recognized by the
market. Investors who recognize a turnaround early can
pocket strong returns.
-- Stealth Stocks are often names unknown to the general
public, but can be hugely profitable investments,
especially when they have catalysts to boost their share
Also, Ones are stocks we would buy at their current
quotes. Twos are stocks that we would buy on a pullback
and Threes are names that we would sell into strength.
Active Power (ACPW:Nasdaq; $1.92; 3,700 shares;
4.22% of the model portfolio; Game Breaker; $4.75 price
target): Active Power's flywheel energy technology keeps
its customers' mission-critical processes up and running.
Its hardware uses half as much space as that of existing
technologies, but it generates twice as much power. The
shares added 5% this week, as Rodman & Renshaw started
coverage of the company on Monday with a Buy rating.
Active Power has a lot of operating momentum and we
believe the stock has 20%-plus upside potential by the
end of the year.
Ballantyne Strong (BTN:NYSE; $4.74; 2,850 shares;
Stock; $6.25 price target): The company distributes
digital movie projectors and manufactures screens and
lighting equipment for theaters. The stock bounced back
more than 5% this week. We believe management can
continue to unlock shareholder value in the coming
Pacific Sunwear (PSUN:Nasdaq; $0.63; 7,800 shares;
2.92%; Inflection Point; $4 price target): This specialty
retailer operates more than 500 stores in the U.S.,
selling surf- and skating-style apparel to teens and
young adults. The shares digested recent gains this week
and fell 8%. The company will post quarterly results on
Tuesday and we will provide a full preview earlier in the
Sonus Networks (SONS:Nasdaq; $6.47; 860 shares;
3.31%; Inflection Point; $26.25 price target): The
company makes communications equipment, including session
border controllers and diameter signal controllers. The
stock dropped 6% this week on little news. That said, we
believe management can continue to restructure the
business in the coming quarters.
Standard Pacific (SPF:NYSE; $8.34; 750 shares;
3.72%; Inflection Point; $11 price target): This
homebuilder generates the majority of its revenue in
California. It was a quiet week for the shares, which
moved fractionally lower. The company has strong pricing
power and we believe the stock can trade into the double
digits in the coming quarters.
Yamana Gold (AUY:NYSE; $1.72; 2,300 shares; 2.35%;
Inflection Point; $12.50 price target): This gold-and-
copper exploration company operates seven mines and
several ongoing development projects in Brazil, Argentina
and Chile. The stock fell 12% this week, as Yamana was
downgraded at Scotiabank on Monday to Sector Perform.
Even so, we believe management can boost production and
cut costs in the coming quarters.
Atmel (ATML:Nasdaq; $7.77; 1,000 shares; 4.62%,
Inflection Point; $12 price target): The company makes
microcontrollers used in electronics. The shares dropped
5% this week on little news. That said, we believe
management can continue to expand margins in the coming
Builders FirstSource (BLDR:Nasdaq; $15.32; 475
shares; 4.32%; Inflection Point; $17 price target): The
company distributes materials to homebuilders in the
southern U.S. The stock bounced back more than 5% this
week. We maintain the pending ProBuild acquisition will
add materially to future earnings.
Huntington Bancshares (HBAN:Nasdaq; $10.55; 450
shares; 2.82%; Inflection Point; $13 price target): This
Ohio-based bank operates more than 600 branches across
six states. The shares lost 3% this week. Even so, we
believe management can gain market shares and the stock
also sports an attractive 2.3% dividend yield.
McDermott (MDR:NYSE; $4.69; 1,100 shares; 3.06%;
Inflection Point; $11.50 price target): This engineering
and construction company focuses on building and
designing offshore oil and natural gas facilities. The
stock ticked higher and added to recent gains this week.
We believe management can continue to turn the business
around in the coming quarters.
ON Semiconductor (ON:Nasdaq; $9.66; 500 shares;
2.87%; Stealth Stock; $15 price target): The company
makes analog, standard logic and discrete semiconductors
for use in data and power management. It was a volatile
week for the shares, which fell 2%. We maintain that ON
Semiconductor holds value at 9x expected full-year
SandRidge Energy (SD:NYSE; $0.49; 2,600 shares;
0.75%; Inflection Point; $8 price target): The company
explores for natural gas and oil in the U.S., primarily
onshore. The stock dropped 3% this week. Even so, we
believe SandRidge is better hedged and has relatively
less debt than its peers.
Synovus Financial (SNV:NYSE; $29.92; 225 shares;
4.00%; Inflection Point; $33.25 price target): This
Georgia-based bank operates branches throughout the
Southeast. The shares ticked lower this week. We believe
the company can continue to deliver above-average growth
in the coming quarters.
TherapeuticsMD (TXMD:NYSE; $6.22; 1,000 shares;
3.69%; Game Breaker; $9.50 price target): The company
develops hormone-replacement medicines for women. It was
a quiet week for the stock, which gained fractionally. We
maintain that TherapeuticsMD has an attractive clinical
pipeline, with multiple potential catalysts.
Unilife (UNIS:Nasdaq; $1.34; 4,400 shares; 3.50%;
Game Breaker; $6.50 price target): This manufacturer of
retractable and prefilled syringes offers products with
convenience, safety and comfort advantages. The shares
bounced back 8% this week, as management said on
Wednesday that the company has retained Morgan Stanley to
explore strategic alternatives. In the meantime, the
company will continue to ramp production in the coming
quarters to meet customer demand.
Whiting Petroleum (WLL:NYSE; $18.52; 123 shares;
1.35%; Inflection Point; $51 price target): The company
explores for oil and gas in the Permian Basin, Williston
Basin and Green River Basin. It was a volatile week for
the stock, which added 5% to recent gains. We believe
management can continue to boost production in the coming
Zix (ZIXI:Nasdaq; $4.54; 1,700 shares; 4.58%;
Stealth Stock; $6.25 price target): Zix is a leading
producer of email-encryption software that enables
doctors to automatically send information to pharmacies.
The shares moved more than 2% higher this week on little
news. The company has a lot of sales momentum and we
believe the stock can move up through $5 in the coming
Cott (COT:NYSE; $10.16; 700 shares; 4.22%; Stealth
Stock; $12 price target): Cott produces and distributes
soft drinks and noncarbonated beverages. The stock pulled
back 4% this week. We continue to favor the company for
its solid 2.3% dividend yield.
David Peltier & TheStreet Research Team
We believe Vantage Drilling has lost its advantage.
Shares surge as company explores strategic alternatives.
We'll boost our stake on recent weakness ahead of upcoming results.
As market volatility persists, dropping one holding from model portfolio makes room for more.
Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.
David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Want more than one service? Sign up to one of our packaged services and take advantage of amazing savings!
After the Bell
Before the Bell
Jim Cramer's Daily Booyah
Winners & Losers