72 Hours to Buy for 48% Gains

By Travis Johnson, Stock Gumshoe, January 7, 2009

Louis Navellier is making another short-term prediction of outsize gains for a small, low-priced company — and these predictions do work some of the time, and drive the prices up on the day the ads start rolling most of the time, so I thought I’d rush this out to you before the market opens … just in case you’re one of those wild cowboys who likes to trade around these recommendations. Not that I’m suggesting you do this, of course — the stock has doubled since its lows in October, and it may well collapse tomorrow.

The promise? Well, first Louis wants you to take his Quantum Growth newsletter out for a spin, but if you do he’ll tell you all about this stock …

“You Have 72 Hours to Snap Up This $5 Car Stock Before Earnings Drive It Up to $15!”

The last few times Louis made this kind of promise, about a short-term spike in a stock, results were mixed — Fuel Systems Solutions spiked on the Navellier ads, then fell back when attention waned, and later recovered a bit before steadying itself and outperforming much of the market this fall (meaning it didn’t fall as badly); Gran Tierra Energy, touted earlier last Summer with similar promises of short term gains, also reacted very strongly to Navellier’s attention but fell off badly with declining oil prices and has never recovered.

So will this stock appreciate Navellier’s attention? Let’s see …

The stock is, as Navellier delights in telling us, a car company (sort of).

He tells us that “You stand to make between 48% and 133% in the 7 days surrounding this tiny, tiny auto company’s earnings announcement.”

And he gives some historical info:

“During the equivalent earnings season in 2007, it beat estimates by 3 cents—and jumped 48% in 5 trading days.

“And during last earnings season, when it came in with 45 cents to the expected 20, it soared 133%—IN TEN DAYS!

“….the surprise it’s about to lay on Wall Street, where analysts project a lowball 14 cents in earnings, the surprise is a stunner.

Louis goes on to provide a few other clues about this company:

“… This company basically has one customer: The military.

“And the military, in case you missed it, is moving back into Afghanistan, big-time.

“Stabilizing the country and crushing the Taliban (again) is one of Barack Obama’s top priorities. Up to 60,000 U.S. and NATO troops are likely to be deployed in Afghanistan this spring.

“Armored vehicles—$7 billion-worth of them—are on order, and our tiny automaker will demonstrate the benefit of these contracts at their upcoming earnings announcement in a few days. We’re looking at an order backlog of 12 months here, even with 3 shifts and expanded factories.”

So what are we looking at here?

A few moments in the Thinkolator, and I can tell you that this is …

Spartan Motors (SPAR)

This is sort of a car company — in reality, it’s a chassis maker for some specialized heavy duty truck sectors, and, to a lesser degree, a maker of custom emergency vehicles.

What Navellier’s talking about with the military is what they call their specialty chassis business, the core of the company — a few years ago, this unit was primarily focused on designing and building custom chassis for fire trucks and class A motorhomes (the huge ones). That’s still a significant part of the business, but by far the fastest growing part of the business is in building custom chassis for a variety of Mine Resistant Ambush Protected vehicles — known as MRAPs, these are the heavy duty military trucks that have been rapidly designed and built for the Iraq war, from companies like BAE Systems and Force Protection.

Analysts are indeed a bit pessimistic about the company, at least if you compare next year and 2010 to the curren year. There are indeed three analysts, and they are predicting 14 cents in earnings (I assume this takes into account the big legal settlement which will hit about 17 cents against earnings in the fourth quarter, according to this press release).

So … I wanted to get this out to you, since it’s a tiny company and the shares may well be buffetted by Navellier’s advertising, but that means I haven’t spent a lot of time digging into the books. It looks, on the surface, that they might be “lucky” and see the MRAP business indeed help with what’s likely to be some down years for motorhomes, and perhaps for fire trucks if municipalities continue to suffer. Since the last quarter or two have been the first ones when big military orders hit their books, it probably shouldn’t be that surprising that the analysts had a hard time hitting the mark — SPAR did indeed surprise hugely to the upside last quarter, as Navellier tells us, by reporting 45 cents in earnings versus a 20 cent estimate. Of course, the prior quarter they missed by a few cents, and analysts right now think that earnings will drop from $1.36 in 2008 to less than 50 cents for all of 2009.

Is that reasonable? Beats me. If you’ve got a few minutes to take a gander at SPAR’s numbers, let us know what you think — the next earnings release is likely to be a ways off, last year the annual report was released on Valentine’s Day, so it may move today if Louis is hitting a lot of folks with this email, but you’ve probably got time to think if you’re worried about fundamentals and the next earnings report.

Enjoy your day, everyone, and happy investing!

Related Gumshoe Articles

“Here’s the $1 Internet Doubler” You Asked Louis Navellier For

Sniffing out the "behind the scenes" cloud and mobile company teased by Navellier's Quantum Growth newsletter

6 Comments Read More

“Today’s $16 Tech Stock to Hit $30 With or Without You” — Navellier’s Graphene Chip Stock Revealed

Friday File Look at Navellier's non-mining play on Graphene

1 Comments Read More

Leave a Reply

23 Comments on "72 Hours to Buy for 48% Gains"

avatar

sponger
Guest
0
sponger
January 7, 2009 9:06 am

I find Navellier to be a bit of a putz. He claims early discovery of growth situations in their infancy, but in fact usually climbs on board late in their advance. He had a buy recommendation on ENRON as late as two months before they tanked in disgrace. His jumping and shouting about SOLF last summer resulted in a resounding thud, as he was once again much too late. He is a bit of a blow hard. Buys too late and claims too much.

MRAP
Guest
0
MRAP
January 7, 2009 9:25 am
SPAR was once a major MRAP player. They were helping Force Protection meet delivery targets and everything was going so well they built another plant. Couple of things happened. SPAR was embroiled in a bribe issue with Force Protection, not a biggie. The Department of Defence, wrongly, stopped awarding large contracts to Force Protection. Force Protection decided to start building more of the contract because there second plant came online and the intended product wasn’t being ordered , so they used it to fill orders on hand. BAE was a partner of Force protection but they in essence torpedoed that… Read more »
Henry Chakoian
Guest
0
January 7, 2009 9:58 am

I tried signing up for your annual irregular offering at $49.00. Had trouble logging in. Please contact me by E-Mail with help.

KA
Guest
0
January 7, 2009 10:51 am

Navellier bought SPAR on Dec 22nd at $4.25, so he MISSED most of the gain from the $2 of a few months ago.

SageNot
Guest
0
SageNot
January 7, 2009 1:33 pm

You could say that Louie believes in
“better late than never,” but us TA folks see the crossover below $3.00 as the optimum entry point. This chart view has SPAR crossing into over bought territory presently.

http://stockcharts.com/h-sc/ui?s=SPAR&p=D&yr=0&mn=6&dy=0&id=p73126511609

TV Guy
Guest
0
TV Guy
January 7, 2009 4:09 pm

Well we’ve had our entertainment reading ol’ Louie’s recommendations…but independent of his lousy track record…

Can we go out a limb and say that for ANY teaser that starts with a time-date statement …..you should hit DELETE ? Many of these teasers (particularly Navellier) promotes: “In 4 days this will happen”…”in 72 hours you can be up 200%”. We know that the markets don’t run on such a time clock…so right then and there..in the HEADING….we can automatically be suspiious of a potential pump-and-dump. (??)

bill hepburn
Guest
0
bill hepburn
January 7, 2009 10:39 pm

I have just received and options hotline publication, and would like to know more about this guy steven sarnoff. can anyone help?

bill hepburn
Guest
0
bill hepburn
January 7, 2009 10:41 pm

can anyone tell me about steven sarnoff? he is making millionaires per the article in options hotline.

TV Guy
Guest
0
TV Guy
January 8, 2009 9:58 pm

oh Gummie…you will always be in our hearts…you know that !!!

jman84
Guest
0
jman84
January 9, 2009 4:07 pm

a little too late, this stock will not move above $6 until President Obama takes office.

fsshon
Guest
0
fsshon
January 9, 2009 5:20 pm

Hey sagenot thanks for the chart. Looking at it, you can see that SPAR is about to go back down to the $3 mark again. Watch it for 10 days and you will see. What I see if to much buying and not enough selling. It is about to be over sold and plummet down down down… It is a good buy at $3 we’ll see if I am right…

Gravity Switch
Admin
11
January 9, 2009 7:43 pm

Just FYI, SPAR is still up a bit from Navellier’s tout — but today they fell 6% or so … then recovered it all after hours for some reason. Maybe Louis has the ‘ol email machine working again, or perhaps it was just someone making a silly trade during Happy Hour on a Friday.

Tim
Guest
0
Tim
February 19, 2009 7:01 pm

I guess he was wrong once again. The stock dropped 16% today and 6 more after hours. Mostly because of the 2009 outlook.

Gravity Switch
Admin
11
January 7, 2009 9:30 am

Thanks for the info, interesting. This whole rapid MRAP deployment played some crazy havoc with several companies, FRPT was a big teaser pick a couple years ago when they were just getting listed and investors thought they were the only ones who could make these vehicles.

Gravity Switch
Admin
11
January 7, 2009 9:37 am
Thanks sponger … his system is quantitative and definitely tries to find stocks that are already growing fast and that he thinks will accelerate, it’s largely based on earnings momentum, growth in fundamentals, and upgrades by analysts. In my history of sleuthing out his picks there have been both winners and losers, though certainly the last year has been a very tough one for many growth-type stocks and I expect his subscribers must have had an awful year (as did most of us, unfortunately). He has a huge mailing list, so sometimes when he turns on the charm for a… Read more »
MRAP
Guest
0
MRAP
January 7, 2009 11:12 am
They were the only ones until the DOD paid 10 companies to copy the FRPT solution. investors should have been pulling out the minute the DOD announced that competition to kill a monopoly FRPT was positioned to own. FRPT was more then a Teaser, its product saved thousands of lives and arguably, changed the course of the iraq war. Its an American made product far superior to anything on the battlefield. Unfortunately other forces were/are at play that diluted FRPT’s contribution. Spar was benefitting from that. Still not sure of what SPAR’s committment is with BAE. If its strong enough,… Read more »
sponger
Guest
0
sponger
January 7, 2009 12:25 pm
OK — good information. So by promoting it now he might be able to wiggle out of it at a profit. SPAR is already up .43 today and has reached $5.61. I remember his “discoveries” of NTRI and HANS some years ago long after they had sky rocketed. I guess I am sort of rough on the guy, mostly because he gloats like a bold sleuth but in fact is a conservative peeling off a few points late in a trend. I don’t have much respect for that approach, much less admiration for it. I called him a putz. Perhaps… Read more »
Gravity Switch
Admin
11
January 7, 2009 2:12 pm

Sorry if I implied anything negative about FRPT the company — by “teaser” I meant just that they were used as a hook by a lot of different newsletters back when the stock was breaking out.

Gravity Switch
Admin
11
January 8, 2009 9:45 am

Nothing wrong with being annoyed, especially with the heavy handed pitches he throws!

Gravity Switch
Admin
11
January 8, 2009 9:48 am

No, for God’s sake don’t DELETE! Send it to me! Of course you’re right that these short term predictions are right about as often as I can predict a coin flip, but we’ve got to keep the Gumshoe in business.

We can add that to the list of rules, my favorite of which is: If the adviser/touter shows you a picture of the fancy car you can drive once you’re wealthy, or mentions the car that he drives to demonstrate his own awesome level of success, time to turn off the computer and take a nap.

Gravity Switch
Admin
11
January 8, 2009 9:51 am

I’ve never written about him, but a few folks on the forum shared some opinions last year — none particularly flattering:

http://oneguysinvestments.com/gumshoe/comments.php?DiscussionID=1009&page=1#Item_0

Gravity Switch
Admin
11
January 9, 2009 7:39 pm

Ooohhh, I like it — SageNot and fsshon in a cage match with Navellier … excellent! $3 or $7.50, which will we see first? Will have to keep an eye on this one.

Gravity Switch
Admin
11
February 19, 2009 7:24 pm

Guess folks aren’t buying so many RVs right now, eh? Oh, and local governments are broker than broke, so the fire department might have to keep using that old engine for a few more years yet. Hard to top that last quarter unless there’s a big surprise government order in there somewhere, which I guess there ain’t today.

wpDiscuz