Entering 02012 Tier 3 Stocks

The following need to move from 3rd tier to 2nd tier: Kratos Defense & Security Solutions (#21 to #14); iParty (#22 to #17); Capstone Therapeutics (#23 to #16); Altair Nanotechnologies (#24 to #12); Mace Security Intl. (#26 to #15); StemCells (#29 to #13).

The following stay 3rd tier holdings: Isotechnika (#31 to #25); AT&T (#25 to #29); Axion Power Intl. (#28 to #20); Alcatel-Lucent (#30 to #23).

Red Hat moves from 1st to 3rd tier at #24. Amazon.com moves from 2nd tier to 3rd tier at #28. Concast is #27.

The following 3rd tier stocks are liquidated: Digital Angel #27 and Adamis Pharmaceutical #32.

The following is how the GDT::Portfolio should look at the end of 02012.

Geeknet #1, iRobot #2, Google #3, Illumina #4, Cray #5, Nanosphere #6, Bruker #7, Level 3 Communications #8, Spire #9, Aastrom Biosciences #10, NeuroMetrix #11, Altair Nanotechnologies #12, StemCells #13, Kratos #14, Mace Security #15, Capstone Therapeutics #16, iParty #17, LookSmart #18, Hanger Orthopedic #19, Axion Power #20, Trimble Navigation #21, Stewart Enterprises #22, Alcatel-Lucent #23, Red Hat #24, Isotechnika #25, US Airways #26, Comcast #27, Amazon.com #28, AT&T #29.

Entering 02012 Tier 2 Stocks

This posting contains some comments about the 2nd tier of GDT::Portfolio stocks as we enter in the year 02012.

LookSmart (LOOK) at #11 and that is a signal that the GDT::Portfolio had a tough 02011.

Stewart Enterprises (STEI) at #12 is fun because this one of the future low-tech stocks in the GDT::Portfolio. STEI should be a third tier stock.

Level 3 Communications (LVLT) is at #13, but it should be a top 10 holding.

Trimble Navigation (TRMB) is at #14. There have been numerous times when I've considered liquidating our TRMB holdings, but I just can't do it.

US Airways (LCC) is at #15 and that's after the stock lost almost 50% of its value during 02011. LCC ended 02011 at $5.07. LCC needs to a third tier GDT::Portfolio stock.

Amazon.com (AMZN) is at #16, but it should be a third tier GDT::Portfolio stock. The plan is to never sell another AMZN share.

Aastrom Biosciences (ASTM) is at #17, but it should be at least #10. ASTM ended 02011 at $1.82, but my average cost per share is $2.67. Huge bummer.

NeuroMetrix (NURO) is at #18. I added to our NURO holdings yesterday (02011.11.30); therefore, I must feel as though the stock is worth buying and holding.

Spire (SPIR) at #19 is a major disappointment. SPIR ended 02010 at #10 and it needs to return to that position. SPIR ended 02011 at $0.63. Yes! It's a penny stock much to my chagrin.

Comcast (CMCSA) is at #20, but this stock should be a third tier GDT::Portfolio stock.

The following 2nd tier stocks need to move to the 3rd tier: STEI (#12 to #22), LCC (#15 to #26), AMZN (#16 to #28), CMCSA (#20 to #27) and TRMB (#14 to #21).

The following 2nd tier stocks need to move to the 1st tier: LVLT (#13 to #8), SPIR (#19 to #9) and ASTM (#17 to #10).

The following 2nd tier stocks should stay in the 2nd tier, but LOOK at #11 and NURO at #18 should swap positions.

Entering 02012 Tier 1 Stocks

The GDT::Portfolio had a tough 02011. I could spend hours writing about the year that is ending today (02011.12.31), but I won't. Instead, I will spend some time studying the GDT::Portfolio to review how is it positioned to prosper some time within the next decade. I think it's possible we'll have exa-scale computing by 02018.

02011 data: DJIA up 5.53%; S&P 500 up 0.00318%; NASDAQ down 1.8%; Russell 2000 down 5.45%.

The GDT::Portfolio is a heavily weighted NASDAQ/Russell 2000 collection of investment seeds (i.e. stocks).

The GDT::Portfolio rankings starting year 02012.

iRobot #1, Google #2, Geeknet #3, Cray #4, Yahoo! #5, Red Hat #6, Bruker #7, Illumina #8, Hanger Orthopedic #9, Nanosphere #10, LookSmart #11, Stewart Enterprises #12, Level 3 Communications #13, Trimble Navigation #14, US Airways #15, Amazon.com #16, Aastrom Biosciences #17, NeuroMetrix #18, Spire #19, Comcast #20, Kratos Defense & Security Solutions #21, iParty #22, Capstone Therapeutics #23, Altair Nanotechnologies #24, AT&T #25, Mace Security Intl. #26, Digital Angel #27, Axion Power Intl. #28, StemCells #29, Alcatel-Lucent #30, Isotechnika #31, Adamis Pharmaceutical #32.

iRobot (IRBT) at #1 is a bit bothersome because our Roomba robotic vacuum isn't doing its job. I am hoping to never sell another IRBT share for under $40.

Google (GOOG) at #2 is--in a nutshell--exciting. To me Google as a 21st century Informatics company. GOOG ended 02011 at $645.90. My 1st GOOG target price is $1,869.37.

Geeknet (GKNT) at #3 is a major frustration and it should be starting 02012 at #1. GKNT ended 02011 at $17.05 and my 1st target price is $30.94.

Cray (CRAY) at #4 is a super risky supercomputing investment seed. Cray is helping enable exa-scale computing by the end of the current decade. The GDT::Portfolio got hit hard when SGI (my other supercomputing seed) died. I'm CRAzY about CRAY. CRAY ended 02011 at $6.47. PSR is at 0.64 and I can see it at 1.92, which puts CRAY at $19.41. I add a few cents to make the 1st target price $19.57.

Yahoo! (YHOO) at #5 is pure frustration. Yahoo! has a great web brand. Yahoo! should not be in the top 10. There is a chance that YHOO will exit the GDT::Portfolio during 02012. YHOO ended 02011 at $16.13 down 3% for the year. To me YHOO is a $52 stock.

Red Hat (RHT) at #6 should not be in the top 10. 02011 was a growth year for Red Hat, yet RHT was down 9.6% for the year. I am hoping to continue to be a long-term investor in Red Hat because it is a FLOSS company. FLOSS is the acronym I use when referencing Free/Libre Open Source Software. RHT ended 02011 at $41.29. Next target price is $67.48.

Bruker (BRKR) at #7 is nice. Bruker makes instrumentation that enables scientists and researchers to see the very, very, very small. I sold some BRKR at $18.07 and $21.45 during 02011. BRKR ended 02011 at $12.42.

Illumina (ILMN) at #8 is strange because it probably should be #1. It's as if we made a quick exit out of the Genomics Age. Illumina lost 52% of the its market value during 02011. I'd be extremely happy if I never sold another ILMN share.

Hanger Orthopedic (HGR) at #9 means the GDT::Portfolio is struggling. If only I could find some more Hanger Orthopedics...

Nanosphere (NSPH) at #10 is highly speculative and investors bailed ship during 02011. If NSPH could break into the top 5, then it would probably mean the GDT::Portfolio as a whole is doing well.

The top 10 is the top tier of three tiers. I'll document the second and third tiers in separate postings.

The following stocks should stay in the 1st tier, but be moved as follows: GKNT from #3 to #1; IRBT from #1 to #2; GOOG from #2 to #3; ILMN from #8 to #4; CRAY from #4 to #5; NSPH from #10 to #6; BRKR stays at #7.

Hanger Orthopedics moves from 1st tier to 2nd tier (#9 to #19). Red Hat (RHT) moves from the 1st tier to the 3rd tier (#6 to #24). YHOO is liquidated. The following stocks move from 2nd tier into 1st tier: LVLT #8; SPIR #9 and ASTM #10.

Bought More NeuroMetrix (NURO)

I felt like buying some stock on the last trading day of the year, so I bought a tiny bit of NeuroMetrix (NURO) at $1.29 per share. 52-week range: $1.15 - $4.20. PSR (Price-Sales-Ratio): 0.45

NeuroMetrix executed a 1:6 stock split on 02011.09.02. There 3.89M NURO shares outstanding with ~22% of them closely held (i.e. NURO has a thin float of ~2.2M).

Balance sheet data: $3.01 in cash; minimal debt (debt/equity ratio of 0.33); current ratio 5:22.

A couple of days ago, NeuroMetrix issued a press release titled "Commercial Milestone 100th NC-stat® DPNCheck™ Order". The following was copied from the press release.

“We are pleased with initial market reaction to NC-stat DPNCheck” said Shai N. Gozani M.D., Ph.D., President and Chief Executive Officer. “Approximately 200 physicians, mostly endocrinologists and podiatrists, in 100 medical practices are now using the device to improve their management of DPN. This achievement comes three months after commercial launch."

I would have liked to bought more, but cash was a limiting factor.

Notes: Web Brands and Stock Market Values

Comparing web brands to market values...

Google top online destination of 2011

Google #1 and YouTube #5; Yahoo! #3; MSN/Windows Live/Bing #4 and Microsoft #6.

Google+YouTube #1; MSN/Windows Live/Bing+Microsoft #2; Yahoo! 130.1 #3,

Market values on 02011.12.30: Google Inc. $208.07B; Microsoft Corp. $218.88B; Yahoo! Inc. $20.01B.

For comparison purposes: Apple Inc. $376.52B; IBM Corp. $219.44B; Amazon.com $79.06B.

A Yahoo! Tidbit and a Cray Tidbit

Financial Times reported this morning (02011.12.29) that Alibaba Group has hired a U.S. lobby firm to help it acquire Yahoo! Inc. I've lost patience with YHOO as a shareholder; nonetheless, I don't want a major Internet company like Yahoo! becoming a Chinese company. YHOO closed yesterday (02011.12.28) at $15.78. 52-week range: $11.09 - $18.84.

It's been a while since I wrote anything about Cray (CRAY). Today, 02011.12.29, hit $6.66 (it's a number thing). Yesterday (02011.12.28), CRAY closed at $6.60. 52-week range: $4.96 - $8.38. Back on 02011.12.01, SeekingAlpha.com had a posting about Cray Inc. titled "Cray's Big Contract Wins Not Priced In" and on that day CRAY closed at $5.99. The SeekingAlpha.com posting by Vince Martin ended with the following: "But the company's expertise and strong balance sheet make Cray stock worth owning. Disclosure: I have no positions in any stocks mentioned." D'oh! At $6.60, CRAY has a PSR (price-sales-ratio) of 0.64. Balance sheet wise, Cray has $2.50 per share in cash and $0 of debt.

Nanosphere: Must Be More Good News

Nanosphere (NSPH) issued this press release today (02011.12.27): Nanosphere Receives FDA Clearance of Gram-Positive Blood Culture Test for Staphylococcus. Today, NSPH closed at $1.53, up 20.5% for the day. NSPH hit an intra-day high of $1.70. Volume was 1.1 million vs. 0.3 million. 52-week range: $0.89 - $5.54

"With this clearance we continue expansion of our product offering, enabling microbiologists to replace century-old methods with rapid, accurate molecular diagnostic tests," said CEO Bill Moffitt.

Rewind about a week...

On 02011.12.19, Nanosphere issused this press release: Nanosphere Obtains CE Mark for Gram-Positive Blood Culture Test. After announcing this news, NSPH spiked from a close of $1.25 on 02011.12.20 to an intra-day high of $1.55 before closing at $1.38. NSPH closed at $1.30 on 02011.2.21 and $1.27 on 02011.12.22 (the last of of trading since today's [02011.12.27] news).

"With the BC-GP test, clinicians treating patients suspected of deadly infections now have a first-of-its-kind diagnostic tool for detecting a broad array of disease-causing bacteria while simultaneously determining antibiotic resistance within the critical timeframe for making and adjusting initial treatment decisions," said Bill Athenson, Nanosphere's Vice President of International Sales and Marketing.

If only a research firm having a significant following would issue a 'Buy' rating on NSPH.