One Way to Make Your Life Easier

Still waiting for our next stock pick? We'll address that in full below. In the meantime I want to remind all you good people of something I don't think I've mentioned in a while ...something that could make your investing life much easier, and clean up your e-mail 'inbox' at the same time.

For those of you who know what an RSS feed is - and use one - feel free to skip this section. You're already benefiting from this brilliant idea, because you're seeing our newsletter and commentary as soon as it's published. You don't have to dig through any ridiculous advertisements in your e-mail to get to the good stuff. 

If you're not familiar with an RSS feed, I think you should be. It stands for 'really simple syndication', and it can allow you to hand pick which newsletters, web pages, and articles (like ours) you feed in. Better still, it doesn't give you anything you don't want to see - you pick and choose what's piped into your 'feeder'. 

If you think it's too complicated, don't. If you can use e-mail or connect to the web - and clearly you can - you can definitely use an RSS feed. 

There are plenty of choices too. Like anything, some are better than others, so look around a little bit first. I suggest using one of the feeds available through your current e-mail client. 

For instance, if you're a Yahoo! user, just go to 'My Yahoo!', choose 'Personalize this page' and then paste in the correct URL. Or, an even easier option is to go to the Small Cap Network home page, look in the lower left hand column, and just click on the appropriate RSS feed choice - doing so will walk you through the entire process of adding a certain website to your feed. If you're a gmail user, you'll look for the 'Google Reader', and if you're an MSN user, choose 'Add Content' for your 'My MSN' page. 

If you want to look at all your options, search for an aggregator...the fancy name for the utility that displays all the RSS feeds you subscribe to. If you want a list of all your choices, Wikipedia has complied most all of them here. 

Again, you can find the Small Cap Network's RSS options in the lower left-hand column on any page of our site. 
 

	Where's the Pick?

We know you've been waiting several days now for our new small cap stock pick. It's been excruciating for us as well. 

You'll recall we held off on issuing a new trade alert because we wanted to wait until we saw the latest round of earnings. As we suspected they were impressive - the sixth consecutive improvement in the top line. And, the march towards profitability continues. However, we also mentioned we were waiting for the 'big one'...the news that could really mean the difference between night and day for the stock. 

Fortunately, though the response to last week's earnings was solid, the stock didn't go ballistic. I think the biggest reason for that is simply because investors had a lot of other stuff to distract them last week. When all the dust settles though, I still have a feeling this company could get a lot of bullish attention in a short period of time. Why's that? Because that 'big one' is still looming out there. If the possibility becomes a reality, well, we think you'll understand exactly why we're keeping this idea on the radar. 

In the meantime we've got a different stock idea for ya'... 
 

	And Now For Something Completely Different

I don't know how you all feel about it, but personally, I'm getting kind of tired of the way the media is pushing American stocks around - mostly downward. Oh, that's normal when you're in the middle of a correction, not to mention a recession. Tension is already high to begin with, so I'm not surprised. I'm just tired of it. 

To circumvent the problem - and to find a new trading idea - I've looked for calmer waters. Right now, that's basically anything except the United States' equity market (though a couple of Asian markets have been rocking and rolling lately as well). 

One of my favorite international hot spots is South America. It has been for a while. It's not without the same kinds of risks you inherit with American stocks, but the opportunity is commensurate. 

I found several potential ADRs (American Depository Receipts) I liked, but the one I'm going to put on the table as a trading idea is a name I don't recall having heard of until I started digging - Telemig Cellular Participacoes S.A. (NYSE: TMB). It's officially considered a Brazilian cell phone outfit, but they do a heck of a lot more than just offer cell phone service. 

Fundamentally, I have no complaints. The P/E of 11.9 is better than the industry average for comparable ADRs, as is the price/sales ratio of 1.37 (that's also better than the average American telecom/wireless stock). Earnings and revenue are growing consistently, at 8.1% and 11.8%, respectively. 

The chart is what got my initial attention though. After a huge run-up in the middle of last year - from $37 to $57 - shares have spent the last eight months consolidating. Effectively, they've been range bound between $53 and $61. Within the last several days, however, things have started to change. 

From my perspective, the stock was just waiting on the 200 day line (one of my favorite long-term indicators) to catch up on the chart and play a support role. Well, it did, in late December and then again in late January. Since then, we've started to see bullish cross-overs of the short-term moving averages. 

TMB shares are threatening to break past recent highs as well, and venture into new all-time high levels. 

The key to it all? Again, I'm a huge fan of post-consolidation breakouts. Though we don't have a true breakout yet, the subtle hints of one are starting to accumulate. Obviously I'm thinking pre-emptively here. 

I will warn you if you're looking to add a giant position ...volume isn't huge here. I believe there are enough shares 'for sale' for all the retail investors who want in, but I think it could take days - if not weeks - for a hedge fund or pension fund to trickle into a meaningful position. I guess sometimes it can be nice to be a little guy after all. Even then, if you're compelled, I'd suggest using limit orders just in case a little buying goes a long way. 

As for a potential move, I don't see this telecom stock repeating last year's 50%+ surge. I do think it could reach the next major Fibonacci extension level at $79.20 though. That would be about 30% gain. As for a stop, $56.13 is the lowest of all the key short-term averages (the 50 day line), but all of them have been acting as support lately. That $56.13 level makes the most sense to me as an 'uncle' point. 

Anyway, there's one of several trading ideas we hope to bring you in 2008. We'll let you know more about the other trading idea we were talking about as soon as we can, though it probably won't be this week. 
 

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