12 criteria to select a stock

http://seekingalpha.com/instablog/291078-myminter-com/56352-astrotech-corporation-astc-is-another-good-buy-at-this-pullback-for-long-run

Astrotech Corporation (ASTC) is another good buy at this pullback for long run. 0 comments
Feb 26, 2010 12:54 PM
Font: PrintEmail Recommend 0 Share this page
Share0 Like ATV, I bought ASTC without getting chance to write a recommendation and saw it moves up nicely. Then I thought it was too late to write a recommendation. Now it pulled back from its high at $2.91 without breaking any uptrend and close to its support. It is a good time for me to suggest a buy now. (NOTE: I’m not promoting this stock because I’m holding it and it went down. I usually recommend a stock on the day I bought.)
ASTC is a company having $0.371 per share in cash (Cash/ Price ratio at 13% based on the current price), positive $0.492 Diluted EPS (ttm). The very attractive part of this stock is its Quarterly Revenue Growth at 113.40%, its nice profit margin 22.86% and its EPS history $-0.095 (Feb 10 2009), $0.211, $0.145, $0.044 and $0.09 (Feb 01, 2010) .

Now let's test this stock by following MyMinter.com Investment Strategy ...
Click here to jump to conclusion
Click here to check all ASTC's indicators, gauges, charts and tailored search on myminter.com

1. There’s enough Real Cash on hand. i.e. Real Cash Price ratio >30% or >50%.
YES – Although its cash/price ratio is only at 13% but its Real Cash Price Ratio is at 45% (based on the current price).

2. Debt should be less than 30% of Real Cash.
YES – Its real cash is around $1.4 per share, its debt/share is $0.45.

3. The company’s Operating Cash Flow is positive.
YES – It is $9.6M and $0.5/share.

4. There’s no short or little shorts. Shorts may know something we don’t know and that’s why they bravely short, we should respect them in certain level. We alos should aware that shorts may sell shares to push the price down on purpose, in order to have their short positions profitable.
Short % of Float (as of 29-Jan-10) is only at 32.85K. Almost = 0%

5. The company should have profit to maintain or improve the current valuation. The earnings per share should be positive.
SUPER: It has nice profit margin at 22.86%, operating margin at 22.87% and its EPS history $-0.095 (Feb 10 2009), $0.211, $0.145, $0.044 and $0.09 (Feb 01, 2010). NOTE: Warrent Buffets's famous play has profit marging above 35%. This one is not as high as above 35%, but it is far better than most of stocks in the market.

6. The company should have growth. The revenue growth should be positive and better than previous quarter or year over year. It’d better if they have same healthy growth on earnings.
SUPER: Its quarterly revenue growth (yoy) is 113.4% and its earnings growth is very healthy. The earnings were not only from loss to profit (yoy) but also show a stable positive EPS for 4 quarters in a row.

7. The company should have nice profit margin. This is one of the factors to see Durable Competitive Advantage.
SUPER: It has nice profit margin at 22.86%, operating margin at 22.87% and its EPS history $-0.095 (Feb 10 2009), $0.211, $0.145, $0.044 and $0.09 (Feb 01, 2010). NOTE: Warrent Buffets's famous play has profit marging above 35%. This one is not as high as above 35%, but it is far better than most of stocks in the market.

8. The reading of daily, weekly and monthly charts should be healthy. i.e. all above certain moving average. The extreme oversold with huge volume (i.e. >70% of total outstanding shares) in one day can be treated as a good purchase opportunity after research carefully for the reasons.
The daily chart shows a pullback. The support is at $2.85 (That’s why we suggest it today). Weekly charts reading are bullish and above all support lines.

9. The company should have good daily volume with narrow bid/ask gap to maintain liquidity.
Its volume is healthy. NOTE: The down today did not come with heavy volume and it was after a nice strong rally. It means it is a pullback instead of a change of trend or leaving of an institution.

11. Don’t buy a company that had a move-up above 50% without enough congestion or a healthy pullback in the past few days or weeks.
The stock moved up from $2.26 to $3.4. Now it is experiencing a pullback, but this pullback builds a good opportunity to buy.

12. The company has strong competitive advantage in the industry
The Company is in a very exclusive position of the industry.

Conclusion
The stock is a safe buy at the current price $2.85-2.90 and it may at most go down to $2.5 with around 15% loss. The short term price target is at $8 and the long term is at $40 or even more than $60.

Disclosure: Holding Long ASTC