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Introduction to the Dark Horse Traders' Hedge The Dark Horse Traders' Hedge is long/short virtual portfolio written by Scott Brown, President at Sabrient Systems and Sabrient Holdings (recently acquired Gradient Analytics). It is a based on Sabrient System’s highly successful and popular... More
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  • New Long Position for This Psycho Circus 0 comments
    Aug 9, 2011 1:02 PM | about stocks: KRO

    I’ve been waiting here to be your guide

    So come, reveal the secrets that you keep inside

    Step up, no one leaves until the night is done

    The amplifier starts to hum

    The carnival has just begun

    In the psy, Psycho Circus

    Psy, Psycho Circus

    I say Welcome to the show – KISS

    Let me start by saying no one can accurately guess the bottom in markets like we are in now.  Nor do we have to be able to see into the crystal ball and find the exact bottom.  Sabrient is always “waiting here to be your guide” and has the underlying belief in remaining Long/Short at all times to capture opportunities that arise in this “Psycho Circus.”  There is no doubt that the “carnival has just begun.”

    Yesterday we took opportunities to close 3 shorts we identified at different periods over the last months as stocks which in a downturn would fall more than most others.  Today is a good opportunity to pick up a long or two that should recover quickly as their “amplifier starts to hum.”

    Kronus Worldwide, Inc. (KRO), a producer of Titanium Dioxide, is a stock that was humming along at $31.15 and had just announced quadrupling earnings prior to the Psycho Circus events which began last week (many could argue, and well, that the Psycho Circus has always been here).  KRO closed yesterday at $20.20 after the CEO, Steven Watson, bought 10,000 shares on August 3, 2011 at $26.55 and 8,000 more on August 5, 2011 at $21.83.  The company is expected to grow earnings at 21.35% over the next 5 years and $3.59/share for 2012 providing us an opportunity to buy those for a forward p/e of 5.82.  This is a good opportunity to acquire a GAVRP (growth at a VERY reasonable price) stock and say “Welcome to the show.”

    Recommendation: Buy KRO at the market, Tuesday, August 9, 2011

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Stocks: KRO
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