HRT (Arrythmia Research Tech)

HRT has a long and checkered history. It originally started as a medical tech company and was not very successful. In '92 it purchased Micron Products which makes sensors and snaps for electrocardiograms. This is a stable business but had little growth potential. More recently in 2004 the company bought New England Molders which makes injection products for the medical industry as well as other plastic products for a diverse number of industries. HRT was able to combine both company's manufacturing facilities thereby saving expenses and this year it has finally begun to see significant growth in earnings and sales.

The stock broke out of its slump in August and began a very quick run-up in October through early December. After it peaked, it pulled back to the 50 day average. I had been watching it understanding that it was a good fundamental story but wanting to get involved at a technical juncture that offered less risk than buying when the stock was vulnerable to the inevitable correction.

I purchased 10,000 shares on Dec 28th which is a 3% position. This was on a day where the stock traded lower early and then reversed just above the 50 day to finish the day stronger. Volume came in above average even during a holiday week which underscores the buying power of institutions in this name right now. I don't expect to add to this position until we have cleared the previous high but at that point i will likely look for opportune times to increase until i have a 5% position. There are currently no options trading and the average volume is 139,700 shares per day so I have to be a bit careful about liquidity.

Jan 25, 2007

HRT is a fairly thin stock and while it has made new highs, the volume hasn't picked up substantially. I still like the position and feel the company has some great trends behind it but i wanted to lighten up on my exposure a bit so I sold 3,000 shares yesterday. This was actually a pretty difficult trade as the stock is quiet. It took some time to complete but eventually my friends at Knight Securities got me filled and I have less exposure now. I began to think, if it is this hard to get stock sold on a positive day, imagine how hard it will be to turn out if things turn poorly.

Feb 14, 2007

Yesterday the stock experienced its second day of selling after making a new high last week. The volume was definitely under control and I decided to take this opportunity to buy back in the stock I turned out as a precaution late last month. I now have more capital to manage so I actually bot an additional 5,000 shares to bring my position to 12,000 shares or just over 3%. Since the stock is a bit hard to get much volume done, I am going to have to be careful with how I trade it and often expect to turn small pieces out on days with strong demand, and possibly buy them back when the market is willing to sell them to me.