short term trading - week starting 19th nov, page-84

Entry for STT List” for the week starting 26/11 /2012

PPX and LRS were good to me last week both moving up well from recent weakness , PPX about 20% , LRS about the same .

This week I am expecting one of my old favorites to break up out of a 12 month down then sideways trend .

The stock is PGC ( Paragon Care Limited ) .

I was reading their web site www.paragoncare.com.au , and they really are a much better business now than they were 12 months ago when they had a market cap of $12 m at 40c

The PGC chart shows a big fall in March 2012 from the 40c price all the way down to the current level in May where it has been ever since

The reasons for the fall I believe are 3 fold

1. The Options fell due with an exercise price of 20c and this put pressure on the heads

2. Company announced a small slowdown in the March 2012 quarterly .

3. A large seller with about 2.3m shares out of only 30m on issue began selling a very illiquid stock .

Why would I pick it now to move after doing nothing for so long ?

My thinking is that the seller is almost done , I guess about 150k left .

The AGM is on Wednesday and I have a feeling it could be a time for the company to give a renewed signal of good trading performance news for the first 5 months of 2012 .

The last quarter softly indicated an improvement but this only helped the big seller attract a few buyers but didn't move the price , I suspect any good news this time will clear the seller and then the stock should move up

If they can do 18m revenue and generate more than a $ 2m EBIT , in a sector such as health care that governments are supporting then the stock could bounce the 20% this weekly comp targets

Just this weekend the Vic gov announced the eye and ear hospital refurbish , a new children hospital in the eastern suburbs and I think a new rural hospital ...all good for PGC .
I am a holder .