BEAS has been triggering a system on Stockpickr called the Mean Reversion System. Basically if a stock falls more than 10% below its 200 day moving average, buy it and hold until it goes above 5% below its 200 day moving average. Check the above link for the historical results of the system but its been reliable in bull and bear markets. On BEAS its worked 9 out of 12 occurrences since 1998 for an average return of 5% per trade. The trade this time has been open since May 1 at $11.43 so we can get a better a better price than the system. I think BEAS is a huge takeover candidate. With all the liquidity sloshing around, this company WILL get taken over and its just a question of when. I also like that deep value investor Bruce Sherman of Private Capital is long the stock. He's had over 40 companies from his portfolio acquired in the past few years.

JCOM – the Internet Fax company. They report earnings after the close Monday. Analystgs are expecting 32 cents a share, up from 24 cents a share a year ago. A couple of bullet points: - heavy short position. With 4.28mm shares short it would take over 7 days given the average daily volume for the shorts to cover their position. - Excellent balance sheet with $150mm net cash in the bank and almost zero debt. - The company has exceeded or met earnings estimates for the past four quarters - Analysts have been upping their estimates over the past 90 days. - They trade for only 18x estimated earnings for 2008 with analysts expecting earnings per share to go from $1.40 in 2007 to $1.65 in 2008 I've pointed out JCOM before in the portfolio, who will Cisco Buy Next? where I state ," JCOM is also an interesting play here. JCOM provides internet faxing (they used to be called JFax), conference calling, and other CRM services. A combination WEBX/JCOM would be a true unified communications platform for the enterprise. Similar to AKAM above, and WEBX, JCOM trades at 15 times cash flows. They have $156mm cash in the bank with no debt so the balance sheet is pristine. Last year they had EBITDA of$78mm and 21% revenue growth. This year, analysts are estimating revenues to grow from $181mm to $222mm. Substantial growth for a company that is trading at only a slightly above average P/E compared to the market-at-large." And they are also in The Forbes Top 10 a portfolio we created out of an article on the top 200 small companies in the US.

EEE I've pointed out before. They are a clean energy plant maker. Their stock fell from a high of above 10 to lows in the 5s before recently bouncing into the 7s. In the portfolio I set up a few weeks ago Beat the Street watchlist I mentioned, " Everyone is worried that this clean coal company will lose their deal with TXU to build a clean coal plant now that TXU is being bought by KKR. The stock has fallen from the 9s to the 5s since the TXU/KKR deal was announced. But the reality is that KKR has already stated they will keep the environmentalists happy, despite a planned shutdown of several TXU plants. The EEE deal is going to stay intact and this stock should make its way back to the 9s." The news that got them back into the 7s is that well known shortseller Manuel Asensio, who was shorting the stock, is now bullish on them. There's 18mm shares short of EEE. This stock is going to head back into the 9s or higher pretty quickly, particularly if TXU takes steps to start building these plants.

Trades at less than one times cash flow. The reason its so cheap is because of the Unlawful Online Gambling Act passed in October, 2006. but balance sheet is strong and I think people will start paying attention to the bill Rep Barney Frank just introduced to repeal the online gambling act.

Entered in the mean reversion system at 11.90 on 4/17. UBS upgraded to BUY. Snapback potential. This is just a short-term trade.

Mention in gross641's Game Plan of the Week. Earnings one week from Wednesday. Here's what gross has to say: "Jack in the Box (JBX)- Buy off of Qdoba and Franchise Growth I expect a run up in the stock price ahead of earnings, on the strength of Burger King, McDonalds, YUM brands and Chipotle's quarterly reports. Weak Consumer spending has shifted dinning from casual restaurants to fast food restaurants. In addition, Qdoba along with Chipotle is capatalizing off of an innovative concept of selling burritos. The strength of the Qdoba brand combined with the companiy's reasonable valuation compared to Chipotle makes this stock a buy. In addition, the companiy has high expectations for earnings growth as they raised their Q1 earnings forecast to 3.27-3.33 a share from consensus average of $3.08. Jack in the Box is facing resistance around its high of 72.14 but i think it can break this level ahead of the earnings report on may 16th. Remember, this company has a history of beating earnings (past 5 quarters)."

Entered in the mean reversion system on 11/6/06 at 46.45 and is still open. WFMI has historically been 15 out of 19 in this system. With an average return of +5.75%. The last 8 trades in a row, since June, 2000, have all worked.

Earnings on 5/11. Average change on the day after earnings day: 11.25% in either direction. Not quite cheap but analysts have been bringing down expectations and they trade at only 18x forward earnings. If they beat (and they've beaten or met for the past 4 quarters in a row) then I think we can see a run to 40.