Skip to main content

Ebb and Flow

With shares of this name trading higher today, now's a good time to partly cash in.
  • Author:
  • Publish date:
Comments

Flow International (FLOW) is trading 5% higher today at $13, and we are pushing our rating to a Two and selling 200 shares. This will leave the position with 600 shares.

Shares have made a nice move to the upside since April, mostly on speculation that the company will be taken private. Hedge fund Third Point, Flow's largest investor, suggested that a takeover would be in the best interest of investors after Flow's CEO decided to step down. After completing a thorough review, management concluded that the company would be better off staying with its current growth plan -- which has resulted in shares trading in a range between $12 and $13.

As we've mentioned in past Alerts, Flow's waterjet technology is being adopted by numerous industries, and revenue is expected to grow north of 30% annually over the next three years. But after its latest move, we believe that the stock does not offer the same upside potential as it did at the model portfolio initiation price of $11.15.

If shares pull back to the $12 level, we would look to add to our position.

Frank Curzio is a research associate at TheStreet.com.

TheStreet.com is a publisher and a registered investment adviser. TheStreet.com Stocks Under $10 contains the authors' own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You further understand that the Stocks Under $10 Investment Team will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in TheStreet.com Stocks Under $10 may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

Past results are not necessarily indicative of futureperformance. Investing in the stocks chosen forTheStreet.com Stocks Under $10 model portfolio is riskyand speculative. The companies may have limited operatinghistories and little available public information, and thestocks they issue may be volatile and illiquid. Trading insuch securities can result in immediate and substantial losses of the capital invested. You should use only risk capital, and not capital required for other purposes, such as retirement savings, student loans, mortgages or education. As an editorial employee of TheStreet.com, Curzio is restricted from owning individual securities other than stock or options in TheStreet.com, Inc.

-----------------------------------------------------------Visit the TheStreet.com Stocks Under $10 site (available to subscribers ONLY) by clicking here: http://www.thestreet.com/k/su/index.html

To view TheStreet.com Stocks Under $10 portfolio on theWeb, click here:http://www.thestreet.com/k/su/portfolio.html

For customer service on your account please visit:https://secure2.thestreet.com/cap/selfserve/

-----------------------------------------------------------

(c) 2007 TheStreet.com, Inc., 14 Wall Street, 15th Floor,New York, NY 10005, Attention: Customer Service Department