Markets Slipping Again, Buy ABTL, NTWK, JADE For Quick Gains

As expected, equity markets are slipping again after discouraging unemployment data. The recovery in the past week had all the signs for a fragile rebound and a trust deficit among market participants. Virtually no one was interested in carrying overnight positions. However, whatever gains have been, are justified returns of putting faith at a crucial time. Autobytel Inc (NASDAQ: ABTL), NetSol Technologies Inc (NASDAQ: NTWK) and LJ International Inc (NASDAQ: JADE) are also down, but they can be picked for a quick rebound.  

Most of us are well aware of Autobytel Inc (NASDAQ: ABTL), having used some of their new and used car price websites including Autobytel.com, Autoweb.com, AutoSite.com, Car.com, CarSmart.com, CarTV.com. This online advertiser in the automotive domain reported better margins for the second quarter and returned to profitability. With encouraging results, it has started getting analyst coverage as well. The stock trades at $0.920 , down 2 per cent. It has a range of $0.71 - $1.57 in the last 52 weeks.

NetSol Technologies Inc (NASDAQ: NTWK) makes enterprise grade software products for its automotive clients. The stock has slipped into the red with today’s cut of 3.5 per cent after recovering quite robustly in the last 15 days. It has a strong support at $0.77 and $0.68 from where it can give a sharp recovery. This high beta stock is available at a P/E multiple of less than 5. It is one of the few profitable mid size software companies and the latest quarterly result announcement this month is likely to consolidate its margins. There could be some pressure on margins on a sequential basis but it would be natural after last quarter’s high base of comparison.

Hong Kong jewelry retailer LJ International Inc (NASDAQ: JADE) reported higher net income for the second quarter yesterday and provided a robust outlook for the next quarter. Unfortunately (or fortunately rather), the stock got caught in the slipping markets today and trades down 3 per cent at $2.73. This compares to a 52 week range of $2.16 - $5.68 and a price earnings ratio of just 4.9. This stock can go all the way to $3 mark as gold prices are likely to soar further on festive demand in China and its emerging market sibling India. LJ International will be a direct beneficiary of higher gold prices.