Applied Optoelectronics (AAOI). What rhyms with “Oh, My?” AAOI. Still going. Here’s a continuation of your trading plan. (July 18, 2017)
AAOI QQQ SP-500
I want to look at Applied Optoelectronics, AAOI ( NASDAQ:AAOI ). Here is the thing, this stock, last week it has kind of been uptrending for a while and I am pretty sure this is a growth stock that IBD has in their IBD 50 list; if they don’t they should, I am pretty sure they do. We have been looking at this stock for a while. I actually mentioned last week, in our Weekend Update, about buying this stock because it is popping out of this squeeze and it has just continued to move.
I think it goes higher; here is why: From a growth standpoint, the growth of this company from an earnings per share (EPS) perspective is almost off the charts. Their growth rate has been 235 percent per year. Their revenues are increasing dramatically from 11 percent, to 23 percent, to 60 percent, to 91 percent over the last 4 quarters. Again, 11, 23, 60, 91. You can draw the line on that, it kind of goes from lower left to upper right, off the chart. So, this has already made a big move. If we look at the weekly chart you can see, wouldn’t it have been nice to have bought this stock at 20.00? I will admit it, I didn’t. I wish I had though.
As I look at this stock right now, it is a weird thing, I heard this just shortly after I first started trading more than 20 years ago, that a very, very high percentage of stocks that break 90.00 reach $100.00, that type thing. We know this, generally speaking, because stocks that are on their way up to 90.00, hey why stop there? The point is, this thing, in my view, has at least another 10 percent in it, and I think it has that 10 percent before they report earnings on August 3rd. Now that is over 2 weeks away. August 3rd is two weeks from Thursday, so I think you are still okay here to be long this stock. If the stock moves higher again tomorrow I will probably add to the position that I have. My main reason for adding is because today’s volume was higher that yesterday’s selling volume. That tells me there is still institutional institutions that are still buying this stock.
Also, one of our members today says that he has, just on AAOI ( NASDAQ:AAOI ), made enough to pay his dues on Stock Market Mentor for the next 11 years. The bottom line is, people are making money on these growth stocks and we are hitting home runs on so many of them in Stock Market Mentor. Nice to be in a bull market ( NASDAQ:QQQ ), no question about it, and we are. The Nasdaq is no longer printing lower highs. It actually has got a higher high relative to the one in late June. So it is nice to be in a bull market. Nice to be in the good stocks, and we are.
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