16 October 2006

Hello members,


The stock I picked was Highway Holdings. (HIHO)

I got into the stock this morning at $4.28 with 607 shares. ($2,597 worth) (Bought it a little higher than I wanted to. But I think its good long term trade. (12 months) (I also don't need quite a double either to get to the $4,000 target.)

This company is making money and are selling off poor performing products etc.. They even pay a Dividend which is amazing for such a small company. They have about 3.5 million shares outstanding and are worth about $14 million market cap. They are growing revenue quickly with their new business even though they are discontinuing there old business. They will have some costs involved with the new business opening a plant etc.. But they have a good amount of cash vs debt.

They paid out .20 Dividend 3 times over a year period from August 05 to August 06. That alone .60 based on today's price is about 14% return! Normally I don't look at that stuff but hey if they want to pay it GREAT!

I was looking at this stock a week + ago when it was in the mid $3's and I like it a LOT at that price. At this price I think it is also a great deal but I think it will take longer to double than if I could have gotten it .75 cents cheaper. (Which is obvious I guess)

On the downside their is good support in the $3 range and again in the $2.50-$2.70 range. If it closed below $2.50 I would probably exit the trade. Which is roughly a 40% loss.

In order for the double of $8+ it would be an all time high. Assuming they aren't cooking the books I think a double is doable over the next 12 months if they continue to add revenue and earnings as they have. Their first quarter earnings was .16 per share!

IF they were able earn .55 cents for the year. (so an additional .39 for the rest of the year) at a 15x P/E that is a $8.25 stock not including the Dividend. They just purchased a company in September that based on my figures should add roughly .08 earnings for the year for them.

2nd quarter earnings for HIHO should be out sometime within the next 30 days.

Here are the other 4 stocks that were in contention for my Stock Pick. They are in No particular order. (I look through 100's and 100's of stocks. I narrow it down little by little usually to a group of 20-30 after a while than really go indepth. I than narrow it to 5 and out of the 5 I pick the best.) I have always included the other 4 stocks in the original email. The first stock pick back in October 05. 3 out of the 4 other stocks ended up doubling the other stock went up 75%. The second stock I picked back in May 2 out of 4 are DOWN 1 is up 25-30% and the other is up about 10%. So out of the 10 total stocks I listed 5 doubled 3 went up but not doubled and 2 are down. (JUST FOR YOUR INFO)

In random order! (I do not own any of these following stocks or plan to unless otherwise noted. Stock symbols are given with Friday Oct. 13th)

IOX ($1.67) Based on the chart it could be a double. Downside first would be $1.35 then $1. Great Cash value and good Book Value. Problem they are losing revenue and could be losing BIG revenue in coming quarters.

DCAP ($1.85) Based on the chart it could be a double. Downside first $1.75 then $1.25. Good Book Value, Not much cash though and lots of Debt. Declining business and owners seem to be out for themselves with raises etc..

ETLT (.55) This is a very interesting stock. Based on Chart could double. Huge cash about .90 per share. They are making good money. They just had an stockholders meeting last week news release will explain it later this week. 3rd quarter earnings out Nov. 15th. Downside is its up 35%+ in the last month or so. Could they be cooking the books a foreign company and on BB not always easy to get great info. This could be the quickest doubler though without a doubt. The story is GREAT. Only real question is are they cooking the books and you don't know that ever until something bad happens. (I did purchase a very small position in this stock late last week just for kicks as if it runs it will run quick!) It has about 40 million shares outstanding. Could be a very quick mover but downside could be all my investment worst case of course. First downside support would be .40.

TORM ($1.86) Based on chart it could double. Nice Book Value though low cash and lots of debt. Chart still may be in downtrend. Downside target $1.44 than $1.00. On a monthly close below $1.71 real trouble then. Insiders have been buying and they are expanding their new product line if it works this could easily fill the gap to $4. It may take a quarter or 2 though before can get a real picture of things.

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Steve Hoven

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