joepetrow.com: profiling APII
the road to $2.56 has many ups and downs...    Image Enhanced    Low Image Site

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Quick comment regarding apii2001 page:
Summary: My first test stock (meaning I'm not actually spending any of my own money purchasing it) is Action Products International Inc. I was looking for a non-tech company that may have gotten dragged down by the rest of the NASDAQ slump that would be a good bargain. APII is a toy company that specializes in servicing museum and educational speciality retailers. They're web site isn't terribly UP to date, but they have a good infrastructure, low debt, and a solid business. Still, the stock has fallen from $5 a share in mid-1999 to $1.28 as of April 2nd, 2001, despite record sales in 2000. I can see these guys trading in the $3 to $4 range by the end of the year.

Check out their business.com entry for more details on the company.

APII 1 year stock chart
Results: Already I'm begining to wish I'd spent some money on this. On April 10th they jumped UP to $1.50 a share on the strength of their annual report. That's about 15% increase in just over a week. Whether they can sustain this growth or not is the kicker. I'll have some updates here from time to time, but the enclosed one year stock chart should update daily automatically, so check back from time to time to see how we're doing.

NOTE: While APII didn't do so good during the timing of this test, at $0.80 a share in December 2001, it may well be ready to start the next of it's historical surges. See the December 5th entry for more details.


April 17th, 2001:Well, dropped to $1.33 today. I'm starting to see the problem of owning such a little stock, as any motion at all sets off a rather big reaction. Even if the stock does double, would I be able to sell it for double?
...heck, Amazon has doubled in about a month!
April 22nd, 2001:Down to $1.25 a share, on no news. Ouch. Guess this stock predicting isn't as easy as it looks. It's certainly possible to pick a stock that doubles in six months; heck, Amazon (ticker AMZN) has doubled in about a month! But I suppose everybody will be billionaires if picking them beforehand was so easy.

Still, there's over five months left for this stick to get to $2.56, so I'll keep hope alive. Seems silly to write something here every time the stock moves, so next update will be either when it rises to $1.50, or sinks to $1.00 a share.

But I wanted a non-techie site, and boy I sure got it!
May 10th, 2001:APII stock rose 0.29, a full 22%, to close at 1.60, the highest value since I began following this stock. Still can't find any news to pinpoint why this is happening.

But I wanted a non-techie site, and boy I sure got it! They haven't even resolved all of their Y2K issues yet, as the bottom of the APII web site states: "today is friday may 11, 101"


Suddenly, the goal of stock doubling every six months doesn't seem so far-fetched after all.
May 16th, 2001:APII has slowly built on its big gain, and just closed at $1.75 a share. Suddenly, the goal of stock doubling every six months doesn't seem so far-fetched after all. I just wish there was a way I could find some news about this company to help figure out why this is happening...
Maybe I'll have to start putting my money where my mouth is...
May 20th, 2001:Wow, APII has jumped UP to $2.00 a share! That's over 50% increase since I started watching this stock a month and a half ago! Only 56 cents to go until the test round is a success! Maybe I'll have to start putting my money where my mouth is...
Hard to say if the cause [of the stock drop] is some profit taking, or a reaction to the Quarterly Report
May 22nd, 2001:Well, it looks like APII couldn't hold the two dollar range for very long, as it has slipped back down to $1.75 a share. Hard to say if the cause is some profit taking, or a reaction to the newly released March 31, 2001 Quarterly Report. I'll need to take some time to read it in detail, then let you know what I find...

On the plus side, it seems like the date problems on the web page have been fixed. Maybe somebody at APII is reading this site? If so, I hope they'll get in touch with me, I would love to get some material straight from the horse's mouth!

May 23rd, 2001:APII issued a press release today, basically clarifying the main story of the March 31, 2001 Quarterly Report: sales increased, but other expenses added UP to more than the total of sales. Result is that the company posted a loss for Q1, and the stock fell to $1.55 a share. Good time to buy and get on the bandwagon?
May 27th, 2001:If that was a good time to buy, now is an even better time, as the stock price has slipped all the way back to $1.40 a share.
...there's still a ways to go to get back up to the rarified air of the $2 range that the stock flirted with a month ago.
June 20th, 2001:APII gets to toot it's own horn a bit, and as a result, the stock shoots UP 18% in a single day. Still, at $1.77 a share, there's still a ways to go to get back up to the rarified air of the $2 range that the stock flirted with a month ago.
June 28th, 2001:Dropped back to $1.40 a share. The yo-yo ride continues.
...the odds that this stock will see $2.56 in the next two months seems highly unlikely now.
August 2nd, 2001:Well, while I was on vacation, it seems my virtual shares have put me in a virtual hole, dropping to under $1 a share at one point. No recent news that I can see to cause this, except the hiring of a new CFO. In any event, the odds that this stock will see $2.56 in the next two months seems highly unlikely now.
I'm pretty much ready to write this experiment off as a failure.
August 14th, 2001:I'm pretty much ready to write this experiment off as a failure. Four and a half months after starting, my virtual shares are still below the purchase price. Even ignoring all of the financial flaws in this stock, this experience has shown me that it is not a good idea to go jumping into such small volume stocks, stocks that jump or fall over 10% in value on a single trade. Anyway, I haven't given UP on my original concept yet, but I'll admit that it needs a good tweaking in various places.
What's the cause of all this, after such a promising start? My guess is that the toy industry is not a place you want be in during a struggling economy...
October 2nd, 2001:And so, at the end of six months, APII closed at $1.03 per share, less than what we started six months ago. And even this is unfairly high, as it closed at $0.86 the day before and the day after. What's the cause of all this, after such a promising start? My guess is that the toy industry is not a place you want be in during a struggling economy...

Anyway, since I didn't spend any actual money on this, I'll call it a good learning experince. And hey, I think the economy isn't going to go much lower before it perks up, so maybe I'll give this a try with another stock in the near future. Something a little more active, with at least several thousand shares trading a day...


The CEO blames this on September 11th, and says that profitability is just around the corner. Maybe, but who's gonna take a chance on this kind of stock in the current environment?
November 26th, 2001:For more information on why this stock has been going down, check out the 2001 Quarterly Cash Flow Statement, and you'll see that it's been negative for the past four quarters. Of course, the CEO blames this on September 11th, and says that profitability is just around the corner. Maybe he's right, but who's gonna take a chance on this kind of stock in the current environment? At 77 cents a share, maybe somebody should, but it seems awfully risky to me.
If you're one to believe that a stock's track record is an indicator of future results, then you may well want to jump on this stock now.
December 5th, 2001:If you're one to believe that a stock's track record is an indicator of future results, then you may well want to jump on this stock now. Looking at the full 15-year chart of APII, twice near the end of a year (1990 and 1995) APII was trading for under a dollar a share. But soon after the new year, the stock shot upward, both times eventually reaching the five dollar a share range. I also got in touch with a long time APII employee, who thinks that the stock is overly depressed due to the 9/11 effect, and that they are primed for sustained profitability from this quarter on. Is Action Products International Inc. ready to take it's next great surge?
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