Thursday, December 17, 2009

Buy AONE - A123 Systems

19.85 Last, +1.53

IPO 13.50 this year, rallied to 28.20, then fell back to 14.31.

I'm a believer in electric cars and think that A123 may profit from the production of lithium-ion batteries.

There is positive news today about a JV with another company.

Do your own due diligence.

Risk is relatively high as the stock moves about 10% per day. As time progresses I foresee the volatility dropping. I would consider buying at intervals for the next year. The hard part is setting a stop loss level. $14 seems logical to me, but also it is obvious. Perhaps $12 as that is 10% below the IPO price. So, buy slowly so that by the time a year goes by we can see if A123 is a leader or a laggard in the field. If it is a leader we can keep buying more and build up to a 10% position in a portfolio, (use 10% as a cost basis calculation).

Tim West 11:10AM

No comments: