Are YONG, ANW, and ARET Worth Taking a Shot on Now?

Date:2011-09-02     Source:hangmeilile  Text Size:

Small cap stocks Aegean Marine Petroleum Network Inc. (RCode:ANW:), Yongye International Inc. (YONG.NSDQ), and Arete Industries, Inc. (PINK: ARET) may not exactly be household names (even by small cap standards), but that doesn't mean they're not trade-worthy. In fact, all three are quietly building up some serious steam.

Yongye International Inc. - a Chinese fertilizer company - hasn't had a great 2011. Shares fell from higher than $8.00 at the beginning of the year to a low of $3.01 by May. It bounced shortly after that, but YONG failed to make any meaningful progress after that dead-cat bounce.... until now.

It shows up much better on the weekly chart nearby; in simplest terms, YONG has finally broken above the nagging barrier of its 100-day moving average line (blue). More than that, it's done so on net-bullish volume. Given how badly Yongye International was bashed over the prior eight months, this stock (now priced at only 5.1 times 2012's expected earnings) has a bunch of upside potential to be unleashed.

Along those same 'bigger picture' lines, small cap stock Aegean Marine Petroleum Network Inc. has cleared a major hurdle that's also only evident on a weekly chart. Today's move to $6.01 has now carried ANW above the second of two straight-line ceilings that extend all the way back to early 2010.

Backing up this bullishness is similar forward-looking value too; ANW currently trades at only 6.05 times 2012's anticipated earnings. Though the marine fuel/logistics business can be erratic, Aegean Marine Petroleum has managed the volatility pretty well, and managed to top earnings estimates in the past two quarters. Translation: That forward-looking P/E is plausible.

Finally, Arete Industries hasn't actually cleared any major technical hurdles. There's something stirring here though.... bullishly. While the buying volume's been solid for weeks (strangely, even on the way down), the buying interest for ARET has been very strong over the past two weeks. It's only meant a consolidation phase for the stock so far, but all that bullish volume may well be a glimpse into what the market's starting to think about this small cap stock.

If you're not familiar with ARET and its particular situation (entirely possible, given its Pink Sheet status and $26 million market cap), you may want to check out this recent write-up from James Brumley. It's a thorough overview of what Arete Industries is and does, and what it will need to do if it wants to achieve its stated goals.

In the meantime, anything above the 50-day line at $3.75 would be a green light for ANW

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