Gumshoe’s Monthly Review

So … only the second time I do a monthly review of the Gumshoe’s sleuthed picks, and it’s a week late. Those of you who know me will understand that this is typical, unfortunately.

What’s been happening with the stocks we’ve sleuthed out here in recent weeks? Well, a quick glance at the spreadsheet will tell you that these are the stocks that have fallen at least 25% since they were hyped in an ad:

AtheroGenix (Volume Spike Alert) -69%
GoFish (Quantum Investor) -55%
Solomon Technologies (Emerging Capital Report) -40%
Rochester Medical (Navellier’s Quantum Growth) -32%
Smith Micro Software (Navellier’s Emerging Growth) -30%
Big Cat Energy (Mike Schaefer’s Pure Energy Report) -29%
Signalife (Ann Sosnowski’s MicroCap HotSheet) -29%
Angeion Corp (Navellier’s Emerging Growth) -27%
Brookfield Asset Management (Navellier’s Emerging Growth) -25%

Those of you who are really paying attention will notice that the last one is a little screwy — that’s because Brookfield recently had a 3/2 split, so they’re actually performing quite well and I need to fix the spreadsheet. If Brookfield ever has a 25% drop, I’ll shed my rule about not recommending anything personally and tell everyone I know to buy it hand over fist.

You can see, even if we remove the unfairly impugned BAM, that Navellier didn’t have the greatest month here. Lots of suffering stocks, none of which have anything in common other than the fact that he recommended them (catheters, heart monitoring devices for exercise, and WiMax software). Does this mean that you should ignore the recent Navellier hype for Goldman Sachs and Morgan Stanley? Of course, he often ranks near the top over the long term among the newsletters Hulbert tracks, so weak performance from a couple months of his best ideas is probably not a fair way to judge the guy.

Cherry picking some other interesting stories from that list that have been very popular among Gumshoe readers (popular writeups, I mean, I have no idea if any of you actually like these stocks), Big Cat Energy and Go Fish stand out.

There was tremendous interest in the Big Cat Energy story before we were able to sleuth it out (that’s the Great Wyoming Flood one about coal bed methane, FYI), and I still think it’s a pretty interesting microcap story that may or may not ever make money, but a reader opined at one point that he thought Mike Schaeffer had actually been closely involved in the company as an early investor. Don’t know if that’s true or not, but if it is poor Mike has been losing two ways — losing his own money, and looking bad in front of his potential investors by hyping what has been, in the short term at least, a real dog of a stock.

And Go Fish was going to be the “next YouTube” — remember? I think back fondly on this because it was one of the first Gumshoe posts, but who would have thought a Web 2.0 company with a pretty big content store — and maybe less liability risk than YouTube — would fall so far, so fast? Perhaps we should have been concerned when we noted that the biggest selling point for Go Fish was that it had an exclusive arrangement with Taylor Hicks. In an unrelated note, Go Fish has recently been trying to get listed on the Nasdaq … this falling share price won’t help with that — they’re going to have to somehow get the share price back up over $5 and the market cap up to $75 million, which will take some doing and possibly a reverse split.

How about the good news stocks? If we use the same criteria, picking out the stocks that are up by at least 25% since their recommendation, we get:

ICICI Bank (Nicholas Vardy’s Global Stock Investor) 25%
Transocean (TrendAdvisor) 25%
Given Imaging (The Medical Investor, Rob Fannon and George Huang) 27%
PolyMet Mining (Greg McCoach’s Mining Speculator) 28%
Buffalo Wild Wings (Motley Fool Hidden Gems) 30%
Microvision (The Wealth Advantage, Andrew Gordon) 32%
Lenovo Group (Christof Amberger, Taipan) 36%
US Geothermal (Green Chip Stocks) 38%
Duluth Metals (Greg McCoach’s Mining Speculator) 53%
Range Resources (Christian DeHaemer, Taipan) 90%
Rusina Mining N.L. (Chris DeHaemer’s Red Zone Profits (Taipan)) 95%
Force Protection (Brian Hicks’ New America Investor) 125%
aQuantive (Motley Fool Rule Breakers) 132%
Lynas (Ann Sosnowski’s the MicroCap HotSheet) 163%

Some interesting stories in this batch, too — two that stand out are the boom in Aussie resource stocks and the power of takeovers and buyouts to make people rich.

Chris DeHaemer at Taipan has seen two near-doublers in Rusina Mining (the Phillippines nickel mine and China deal) and Range Resources (everyone’s favorite Somali oil exploration company that’s still being hyped to the rafters), and Ann Sosnowski’s pick of Lynas (the rare earth minerals miner) continues to be the single best performer in the Gumshoe universe. All of these Aussie stocks are still firmly in the speculative microcap range, of course, so this could change before I’m done typing today.

The other big news this month was aQuantive’s agreement to be acquired by Microsoft — that pretty much put Dave Gardner’s “next Google” pick at the top of this list in one day, and if any Gumshoe readers bought shares back when we looked at it (or better yet, options) they got some very nice gains. How you would have known to buy this one and not the various stinkers we’ve sniffed out, I have no idea.

On the rest of this list, Lenovo is moving up and surprising me quite a bit — I still think the “secret IPO” tease from Taipan on this one is a bit misleading, but it might well continue making money. US Geothermal surprises me a little bit, too, because it still looks to me like this one is pricing in many, many years worth of growth — geothermal power is a great idea where it works, but it seems to me like it’s going to take a while for this one to pay off its capital costs. And finally, Microvision has had a nice run late this Spring as the chatter continues to promise a significant new deal sometime before the end of the summer to get their technology into an OEM device, probably a cell phone. Folks who write about this one seem confused about whether that deal will still move the stock, or if it’s already been priced in. I, of course, have no idea.

Meanwhile, Buffalo Wild Wings is certainly in the crosshairs on Wall Street — if it was a “Hidden Gem” before, it no longer seems to be so, with an analyst talking it up this morning on CNBC as a play on the NBA Finals.

And if you’re asking me, the one of these companies that I would buy right now (though I haven’t — and why would you ask?) is Transocean … I still think the deep sea drillers are severely underpriced (though my opinion shouldn’t count for anything special, of course, and I own shares in one of RIG’s major competitors so I’m clearly biased).

This doesn’t include the stocks that have been sleuthed out here over the past two weeks — recent Navellier pick Morgan Stanley has already moved a bit in just a day, and Broadcom, PVD, and Sabesp have been pretty quiet (Broadcom was the “undervalued stock of the Month” for May … if this keeps up, it might repeat!). We’ll see how they hold up in the weeks to come. It also doesn’t include most of what I think are the compelling ideas I’ve gotten from the various newsletters — most of them that I’ve gotten at all interested in buying are still languishing at fairly near the price they held on the day I first read the ad.

Thanks for reading, everyone, and keep posting your sleuth challenges to the forum or emailing them to the Gumshoe. And let us know if you’ve come up with any favorite investments through sleuthing or reading the Gumshoe (or any awful ones), or if you think any of the ideas still percolating out there from newsletter-land might be worth a deeper look.

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