Let's Be Patient With CSUN

The Hot IPO Trader
Monday, May 21, 2007
By Louis Basenese

Email – #130

** Let’s Be Patient With CSUN

As anticipated, demand for China Sunergy (Nasdaq: CSUN) was overheated. Shares immediately soared past our desired entry point and closed at $16.56, only to give back considerable ground in Friday’s session.

Like I mentioned in my original analysis, if we’re to meet our 20% return objective, based upon fair valuation methods, we need to enter at $13 or better. With current prices near $14.50, we’re still a good 10% away.

And just so you know, I’ve revisited my original calculations, inputting more aggressive revenue growth assumptions and still don’t think we should pay more than $13.75. So let’s be patient and look for a pullback to that level. If it materializes in the next week, I’ll be sure to alert you.

As for this week’s activity, no deals pass our strict selection criteria. There are, however, two interesting companies (Greenlight Capital Re and Sirtris) that I will cover at greater length in a subsequent alert tomorrow.

Please note that I consider both to be extremely speculative, all-or-nothing type IPOs. As such, I won’t be officially recommending them here because they fall outside the risk parameters I’ve set forth for this trading service.

However, I do think they are companies you should keep an eye on. And if you fancy yourself a true speculator – or should I say, brazen gambler – you might want to consider a very small investment. That is, as long as you don’t ever plan on needing the money again.

So stay tuned. And I’ll also provide a full update on our current portfolio and the one IPO for next week that I think is worth our attention. And it’s another China-solar play, LDK Solar.

Good investing,

Louis Basenese

P.S. – In case you haven’t done so already, sell your remaining shares of Simcere Pharmaceutical (NYSE: SCR) at market for a small gain. Prices dipped low enough on two occasions last week to trigger our sell stop.

Stock
Rec
Date
Rec
Price
Current Price
Comments

Interactive Brokers (Nasdaq: IBKR)
5/4/2007
$32.50
$27.00
Buy. Sell stop is $25.

Qiao Xing Mobile Communication (NYSE: QXM)
5/03/2007
$12.10
$10.30
Buy. Sell stop is $9.75.

Simcere Pharmaceutical Group (NYSE: SCR)
4/20/2007
$15.50
Sell
Take profits. Stock hit trailing stop.

AeroVironment (Nasdaq: AVAV)
1/23/2007
$23.50
$21.04
Hold. Sell stop is $19.50.

Grupo Aeroportuario (Nasdaq: OMAB)
11/30/2006
$21.00
$29.18
Hold. Sell stop is $27.

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