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Weekend Edition

The Best of The S&A Digest
Saturday, January 30, 2010

This week, technology darling Apple announced a 50% earnings increase to $3.38 billion for the fiscal first quarter – the single most profitable quarter in its history.
 
Revenue increased to $15.68 billion from $11.88 billion. In the quarter, Apple sold 8.7 million iPhones, up from 4.4 million a year ago (but still below analysts' expectations of 9 million). The image below shows the explosive growth in iPhone sales:
 
 
Apple also sold 3.4 million Macs, 33% more than a year ago. The company saw a decline in iPod sales... "only" 21 million units sold in the quarter, down 8% from a year ago. And the company just unveiled the iPad, which is essentially an enlarged iPhone.
 
Apple is trading near all-time highs – $215 a share, which it hit January 5. Much of the good news surrounding the iPad is already priced into the stock. Apple shares trade today at about 18 times all-time peak free cash flow. So while Apple may continue producing steady earnings, it will be difficult to make any blockbuster gains buying the stock (the company's market cap is nearing $200 billion).
 
But if you can find a small company that sells component parts to Apple, the tech giant's growth could mean a double or triple in a smaller firm's bottom line. Investing in that smaller stock can make you two to three times your original investment. Penny Stock Specialist editor Frank Curzio calls this investment strategy "hitching a ride." It's one of the many ways he finds huge winners in the "under $10" universe.
 
Frank has been analyzing stocks for 15 years. But he found his niche 10 years ago and made his career picking stocks that trade for less than $10 a share. And his track record is spectacular. Take a look at some of Frank's biggest winners since 2006:
 
Company
Return
Ashland
488%
Yamana Gold
204%
IMAX
325%
McDermott
143%
Massey Energy
342%
 
Frank didn't pick a single loser in 2009 – a year the S&P 500 fell as much as 28%. Although his track record is already impressive, Frank's latest recommendation promises to be his biggest winner to date...
 
Using his hitch-a-ride strategy, Frank recently discovered a small technology firm that just started producing an integral component in Apple's iPhone.
 
The stock currently trades around $6 per share. But as Apple continues growing, this small technology company's stock will explode. Frank expects early investors to make 220% in the next 12 months.
 
So why do we know about this small stock when nobody else does?
 
One of Frank's contacts is plugged into the technology world. He actually makes a living taking apart, piece by piece, the newest electronic equipment on the market. He then studies every part to determine which company manufactures it. He can tell you, for example, which manufacturers supplied the different components that make up a Dell computer.
 
Recently, Frank's contact was disassembling an iPhone. He noticed the manufacturer of one of the iPhone's most important components had changed. He did some research and discovered this new company had just signed a giant contract with Apple... a contract that could cause shares of this small company to soar.
 
Frank thinks early investors could more than triple their money in one year. The earlier you get into this stock, the better. To be among the first in the market to learn the identity of this small technology firm, click here.
 
Regards,
 
S&A Research




This Week's Winners
S&P 500 Symbol Change
Marshall & Ilsley MI +17.60%
Abercrombie & Fitch ANF +16.25%
Regions Financial RF +15.65%

Countries Symbol Change
Taiwan EWT +4.77%
Russia RSX +4.55%
Thailand TTF +3.63%

Sectors Symbol Change
Homebuilding ITB +6.74%
Oil Services PXJ +4.87%
Nuclear NLR +4.32%

Commodities Change
Sugar +48.09%
Coffee +46.75%
Feeder Cattle +22.66%
Date Range:1/25/2010 to 1/30/2010
This Week's Losers
S&P 500 Symbol Change
Kroger KR -6.04%
Kohls KSS -4.38%
TJX TJX -4.22%

Countries Symbol Change
Ireland IRL -2.60%
Chile CH -1.30%
Italy EWI -0.55%

Sectors Symbol Change
Airlines FAA -1.74%
Big Pharma PJP -0.22%
Clean Energy PBW -0.20%

Commodities Change
Cocoa -12.46%
Aluminium 0.00%
Zinc +1.09%
Date Range:1/25/2010 to 1/30/2010
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