Special Situation Stock

NOTE:  This Trading alert was originally emailed to subscribers at Ritholtz Research & Analytics on Wed 9/19/2006 3:16 PM EDT.

This is posted here not as investing advice, but
rather as an example of a trading call for potential subscribers. We
expect to post future advisories in a similar manner — after the call,
but in the correct chronological location on the blog.


As mentioned previously, our recommendation on a special situation micro cap stock (under $100m) has been uploaded to the site (under Technical Review).

Or, you can click here to download it (requires log in).

As we note in the report:

With any company under $100m market cap, we look for several factors that suggest we won’t be sitting in the stock forever. Many of these elements are present here: Strong technology, excellent management, insider buying, and most important in our view, several catalysts which could raise the firm’s profile and generate institutional buying in the neat term.

As we have previously mentioned, given the difficulties of using stop losses with micro-caps, you should be only a measured buyer. This means scaling in over time, and trading in smaller dollar amounts and smaller position sizes than you would otherwise  tend to do.

-Barry Ritholtz
September 19, 2006

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