Rocket Stocks for the week of February 2nd-February6th
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Date updated:02-04-2009

Each week I like to find beaten-up stocks that I believe have the potential to snap back in coming days due to a specific event driven catalyst that could either move the price higher or lower. I especially like when these stocks with near-term growth potential also qualify as solid long-term plays. And with the market down huge, there are penalty of short-term opportunities out there

symbol name last price % change open
  • +
  • CENX
    Century Aluminum
  • $8.99
  • +0.56%
  • $8.63

Century Aluminum (CENX): Long: Shares of Century Aluminum, which closed on Friday at $3.55, down a whopping 55% on the week, are setting up perfect for a snapback trade. Century, which is in the process of issuing an additional $100 million dollars of common stock, or about 50% of its total market capitalization, is in the process of announcing the secondary this week at $4.5 cents per share. In situations like this, the stock normally drifts higher after the secondary was issued. I am betting that this is what happens. Sure things are rough all over the place, particularly if you’re a commodity producer, but with a stated book value of $29+, Century certainly has the power to trade in the $5 range within a week’s time.

People owning CENX also tend to own: ABXAEMAPCCAMFCXGSFHES

TheStreet.com Rating: D What is this?

  • +
  • SMG
    Scotts Miracle-gr
  • $43.85
  • 0.00%
  • $N/A

Scotts Miracle-Gro (SMG): Catalyst: Earnings on 2/3 will likely pop this balloon. Everyone knows Scotts Miracle-Gro (SMG), which manufactures, and markets, the sale of lawn and garden care products in the US and EU. SMG’s principal line of sales come from their granular lawn fertilizer and combination products, including fertilizer and crabgrass control, weed control, or pest control products and plant foods. For 2008: SMG Net sales were $2.9 billion: broken down as follows: 75% global consumer, 12% global professional, 8% Scott’s lawn service, 5% Smith & Hawken. Net sales went from $2.871.8B in 07’ to $2.981.8B in 08’ a 3.83% increase, while gross profit actually declined going from $1.004B in 07’ to just 939.6M in 08’, a YoY decline of 10.556%. Adjusted EBITDA went from $382.6M in 07’ to $318.4M in 08’ a YoY decline of 21.4%. Thesis: Up roughly 50% or so in the past 6 months, shares of SMG represent an attractive short ahead of earnings based on several trends: 1) severely overvalued: forward P/E of 14.37, EV/EBITDA of 9.886. 2) Misperception by the market regarding Scotts growth potential/business---is not likely to grow more than 1%-2% MAX. 3) Mammoth insider selling ever since the stock started to rip higher in August---no buying. 4) Q1 SMG always reports a loss to the tune of -$0.80 to -$1. Ultimately, a short position in SMG is an indirect short on the consumer, and lack of discretionary spending. Despite dominate market share, there are SEVERAL generic versions one might use, which cost ½ the price of an SMG product. Going forward, one seriously has to question the profitability of such a company, given high unemployment, a massive amount of residential defaults, and extreme water shortages on the west coast. Additionally, SMG has a decent amount of debt to roll over this year and into next—any slight hick-up in revenue, could lead to a nasty roll over

People owning SMG also tend to own: BAMCNICOHEXPDFCE-BLMLUK

TheStreet.com Rating: C+ What is this?

  • +
  • APC
    Anadarko Petroleu
  • $64.83
  • -1.74%
  • $65.04

No Analysis added

People owning APC also tend to own: ACIAINVANRBBDBTUCHKCMCSK

TheStreet.com Rating: C What is this?

  • +
  • TSRA
    Tessera Technolog
  • $22.09
  • -0.99%
  • $21.97

No Analysis added

People owning TSRA also tend to own: AAPLBYICAHCCJCMECSCOCVS

TheStreet.com Rating: B- What is this?

  • +
  • OTTR
    Otter Tail Corpor
  • $23.55
  • +0.17%
  • $23.34

No Analysis added

People owning OTTR also tend to own: BBBBBMRNCABEPIQFDCFLMLHRB

TheStreet.com Rating: C What is this?

  • +
  • YUM
    Yum Brands Inc
  • $35.23
  • +1.24%
  • $34.82

No Analysis added

People owning YUM also tend to own: AESCKHCTRPDRHEBAYENSLFBG.OB

TheStreet.com Rating: B What is this?

  • +
  • DOW
    Dow Chemical
  • $24.80
  • -0.40%
  • $24.57

No Analysis added

People owning DOW also tend to own: DLSDVYGEINTCMATUSTWFC

TheStreet.com Rating: C- What is this?

  • +
  • MEE
    Massey Energy Co
  • $32.76
  • -0.21%
  • $32.11

No Analysis added

People owning MEE also tend to own: CLCTDENNFFEXJBSSJRCCMSFTPBY

TheStreet.com Rating: B- What is this?

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