ManyPeaks.com

The monster growth stocks took a beating the last 3 days. Like many, I am off several percentage points from my highs. However the washout on Monday has led to a bit of recovery today in leading stocks. It’s still early for a wholesale turn back up, and I would definitely not want to own the indexes right now. I’ve still got some QQQQ puts that I’d like to liquidate into some kind of panic tomorrow.. which could easily occur if we get a hot CPI reading when the government reports come in at 8:30am.

While things get sorted out, I’ve taken a bit of time this week to find some big growers to stash away for a while. I recently mentioned Hansen (HANS) — maker of the Monster energy drink, and their incredible “triple double” — the move from $2 to $200 took only 2 years. That run didn’t happen out of nowhere.. while big short term moves often happen with little explanation, no 100 bagger ever materialized without great fundies to back it up.

If you want to see the company’s performance that fueled the massive appreciation, visit reuters.com, punch HANS into the quote window, and then click “Financial Highlights.” I personaly found it instructive to follow the quarterly sales/profit growth along with how the chart developed during the run. In hindsight, there were many many opportunities to get in as the story unfolded. And I certainly wouldn’t call any tops just yet.

To try and benefit from such staggering gains that I could never catch with my trading style, I’ll now divide my capital into trading and investment portions.. starting with a much smaller allocation to longer term holds. 25% seems about right for my personality.. much more and I’ll get trigger happy and sell out of winners too quickly because the position is too big for me to watch the wild fluctuations. Each position will represent only be 2%-3% of capital, so I can keep about 10 stocks in the long term “bin.” Of course the other 75% I’ll continue to use for catching shorter term moves that require less risk exposure.

Anyway, I found one today that might fit the bill.

After Sento Corp (SNTO) reported 16 mil in sales compared to 9 last year, and 12 cents EPS vs last year’s 21 cent loss, I watched the action stabilize for a few days and have now placed some limit bids around $9.50. I will buy higher if necessary. The float is only 3.8 million shares. Since I’m swinging for the fences here, I’ve gotta make it a smaller position size and also give it far more room to wiggle than I do with bigger positions. With a tiny $40 million market cap company like this, I simply must be patient. Timeframe for this emerging trade will hopefully be measured in months, not days.

Chart looks good too.. big recent upside volume as it challenges old highs means this thing is now gaining some attention.

None, yet