Long a heavily shorted stock – Medis Tech Inc. (Ticker: MDTL)
I created a short list of stocks that were the most heavily shorted stocks in the market and did some research to evaluate if they had potential to grow revenues or profits. One that looked very interesting was Medis Tech Inc. (Ticker: MDTL). The company has a market cap of 710 million, 40.35 million in cash and no debt. The company has 32 million shares outstanding, but only a 18.42 million share float, and the shorted stock is a full 27% of the float (6.87 million). The company is in UL (Underwriters Laboratory) testing of fuel cell that will be used to power cell phones and other hand-held devises. The company claims they’re on schedule to launch the product during the first quarter of 2007. I took a position on Tuesday the 26th of October and the next day (yesterday) the stock moved up 9% on heavy volume. We’ll see if the uptrend continues.
posted by Greg @ 3:10 AM
5 comments
5 Comments:
Greg,
If you liked MDTL on Sep 27 you must love it today, up 12%. I've owned and traded this stock for three years. I believe there may big growth in the the next six months. Of course +21% in two days isn't bad!
Some fuel cell industry watchers are talking about exponential growth if the product sells as well as the company expects.
In any event the share price will probably continue to volatile which can make for some good trading opportunities.
Hi John,
Yep, we bought it on Tuesday before the runup started, so we're up 21% too. Its hard to beat that timing, huh? Do you have a system for trading? If so, I'd like to hear what indicators or system you use and what will be your sell signal. To be honast, I don't know if this company is going to grow revenues or if the hype is just hype. Tell me what you have learned about them through your DD.
Greg,
Since my last post I sold more than half of my position at 28.46 and bought again at 25.80. I trade on momentum with fairly loose stops. The daily hi-lo spread can be pretty big (Friday 25.76 - 28.15) so tight stops don't work.
My sell signals are crude, but work: after a run up, if the price declines 6% or more in two days I sell and then look for an upward trend of 5% over 3 days or more as a buy indicator.
I think Medis has valuable IP and a marketable product with great potential. The recent announcements regarding the agreement with two Russian firms and the contract with Israeli Aircraft Industries are just the beginning of a fast growing stream of business and income, in my opinion. My guess is, that once Medis receives UL certification (Nov),significant orders for the 24/7 Power Pack (cell phone charger) will follow from cell phone service providers, who the company has targeted as their prime retailer.
The toughest thing with a company like Medis is having the patience to stay with it. New technologies take time to bring to market, especially for small companies with limited resources. So I've done a considerable amount of trading in the stock as I wait for a possible long term pay-off.
As you pointed out, there is a large (huge!) and growing short position. This has built up over a number of years, much if not all based on the company's history of no products or sales. The short postion is 8 million, which could lead to fairly explosive pps growth when/if the orders roll in and the product has success in the marketplace.
Incidentally, the current short position is about 50% of the real float.
Done anything since your last post?
John H.
I am not sure when you folks made these posts about MDTL, however I would very seriously caution you on this stock. Many VERY smart and "in the know" analysts firmly believe this co. is nothing but a over-hyped and glorified scam. I would encourage you to do your own research, but if you did you will see that the company has been around since 1992 and has had a GRAND TOTAL of $0 in revenues in these past 14+ years. They have made promises to come out with everything from a cure for breast cancer to their latest alternative energy source for cell phones. They have thru many CFOs and have made many many announcements delaying the launch of their product. Their latest promise of production in Q1 2007 is just the ltest. If you go thru their filings, they have promised the launch of manufacturing of this particular product since 2004. I am short the stock, I will disclose, but for very good reason IMO--but, do your opwn homework on this on...Good luck.
Hi Guys,
I actually sold my shares around Oct. 4th for a quick 25% profit. I know it went up more after that, but this thing is all over the place and I like to see sales and profit usually.
To the shorter guy: the short interest is what made me buy to begin with. As far as analyst go, I don't believe any of them are worth listening to. They have their reasons for making their calls, and it's not in your best interest to listen to them. I've made more money doing the opposite of what they say than doing what they say.
That is just my opinion though.
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