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Saturday, January 03, 2009

Penny Stock Pick - KFN

For a financial investment company like KKR Financial Holding (KFN) that invests heavily in mortgage and mortgage backed securities, it is inevitable that the company stock was down 90% for the year.  However recently the stock caught my attention as the volumn had increased while the stock price stablized and started going the other direction around late December.

To make sure I am buying the stock at the right moment, I checked the technical chart and Bingo!  KD line gives a buy signal as K line has just crossed on top of D line.  

And to make sure the company would survive the current storm, I made a final sanity check at the financial statement.  Looks like we've got a steal here!  Althgouth the revenue had dropped quite a bit, however, not only the company generated net income, the balance sheet shows the company has enough cash to cover it's short term payable and liabilities.  

So at around 70 cents per share I jumped in and has so far got 100% return.  Is it still the time to buy?  Well, so far it looks like the company would stay for quite a while so I wouldn't be worry to much.  Now that the stock is reaching the 50 day moving average, do expect some fluctuation in stock price.