Sunday, February 12, 2012

"Sitting here watching American Pickers on the History Channel. I am amazed at the endless interest going on in other people's Surplus Assets"

Dow Jones Industrial Average 12801.23 (Down) Week ending 02-10-2012

Everybody seems to want everybody else's old stuff. It is like the Yankee Magazine swap page gone wild.    Ebay, Craig'sList, Amazon, pawn shops, swap meets, flea markets and people swapping texts and emails on their smartphones makin deals and trades. Odd ball items of all sorts changing hands. Everyone trying to raise cash and parlay it forward into more exciting stuff.

 It was no surprise to me that someone has made a real business out of surplus assets. But what really surprised me was when I discovered that Liquidity Services, Inc. ( Symbol LQDT, $40.12) showed up as Numero Uno in IBD's top 100 list from last week. CNBC's profile says that "Liquidity Services, Inc. is an auction marketplace for surplus and salvage assets. The Company enables buyers and sellers to transact in an automated online auction environment offering over 500 product categories."  Looks like 'swap-meet gone global'.

They don't sell & collect any antique pinball machines but they have all kinds of other stuff.  It is more likely that they have government surplus half-track trucks or motorcycles for sale.  Projected long term earnings growth here is 30% per year. 2013 earnings are projected at $1.62 per share.  The one year Total Return on the stock is 150.2%.  The 3 year Total Return has been 755.3%. 

I have been talking about a lot of high momentum stocks here in 2012. They do have a degree of risk to them, and do not have the traditional year over year fundamentals that I usually look for and recommend. I guess the 2012 election year has me looking forward to better times. These stocks have also run up a bit this year, so I would approach them cautiously and buy in in increments, rather than all at once. I think you are OK on this one though, they are growing pretty quick.

Could be a tense week, with the Iranian's spouting off about their current Nuclear acheivements. It could give the market an excuse to take a little profit of the table this week.

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