I stopped out of miners with a minor loss.
(a) The importance of using stops: http://www.kitco.com/charts/livegold.html
(b) Why am I trading miners to begin with? Miners are a volatile sector. When I nail a pitch, it's usually good for outsized rewards. The other reason is my penchant for buying out-of-favor sectors. Note that silver has now given up all of its parabolic rise since 2010: http://finance.yahoo.com/echarts?s=slv
The past two weeks includes the longest stretch of misfires in recent memory. Taking losses immediately has saved my ---, but it's been emotionally draining. Not sure what form the 'cure' will take, but obviously continuing to bet on miners won't be a good idea. I recall continuing to bet the pass line at the tables about two years ago, only to be wiped out by a relentless string of sevens. That experience was worth its weight in gold.
So now steel is taking or has taken off what does that translate to, some kind of manufacturing or construction?
ReplyDeleteI believe it has a lot to do with pricing power. I don't know the story incredibly well. I just loved that pullback in AKS....oh well. Not sure if there's a read through on the shippers.
DeleteSeems like the good news is with the domestic manufacturers. Not sure if it applies to the overseas ones which would drive business for the shippers.
DeleteFrom Steel Dynamics:
Profitability from the company's steel operations for the third quarter 2014 is expected to be higher in comparison to the sequential quarter. Both shipments and metal spreads are expected to improve across the steel operating platform, despite continued elevated import activity. Demand trends for key steel-consuming end markets is expected to remain favorable, as strength in automotive, manufacturing, energy and construction markets continue to improve.
Continued increased demand for the company's structural steel and fabricated steel joist and decking products indicates the nonresidential construction market is continuing a positive trend. Third quarter 2014 profitability from the company's fabrication operations is expected to continue to increase based on both improved volume and margin.
Metals recycling financial results are expected to be somewhat flat to slightly lower for the third quarter 2014 when compared to the sequential quarter, based on lower nonferrous metal spreads more than offsetting improved ferrous and nonferrous volumes.
STLD, per UBS
DeleteQ3/14 EPS guidance above consensus and UBSe
STLD provided Q3/14 EPS guidance of $0.42-0.46, above UBSe of $0.34 and consensus of $0.37. This
result would be above Q2/14 at $0.31 and Q3/13 at $0.25. Results will be impacted by a pre-tax charge
of $34M ($0.08/sh) related to the acquisition of Severstal Columbus. Our numbers excluded this impact
(we believe Street numbers largely exclude it as well); including this non-operating item reduces Q3/14
guidance to $0.34-$0.38.
Results to improve in steel operations and fabrication; recycling flat-to-down
Profitability is expected to increase in the steel operations segment owing to higher shipments and metal
spreads. Volumes and margins are expected to be sequentially better in Q3/14 for the fabrication
segment as well. Metals recycling results are expected to be flat-to-down versus Q2/14 due to lower
nonferrous spreads.
End demand strong, outlook remains positive
STLD is the third steel producer to guide up Street estimates in the last 24hrs. While we are impressed by
the improved profitability, we note that these results are somewhat backward looking: steel prices
through the summer were stronger than we had expected, and demand growth better than expected.
However, after today's service center report showed a pullback in August shipments, we are paying extra
attention to forward commentary. Positively, STLD expects demand trends to remain favorable as end
markets continue to improve. The company continues to see a positive trend in nonresidential
construction, as indicated by the growing demand for its structural steel, fabricated joist and decking.
Valuation: $23 price target, Buy rating
Our $23 price target is based on a 7.5x EV/EBITDA (2yr fwd) multiple. We rate STLD Buy.
Still watching the offshore drillers - 2 negative articles in Barron's today, so the bad news is getting very well known. I think any spark of good news would cause a big jump, but it may well be a 2015 story. But I think there has to be money to be made in this cycle over the next year. I can't see offshore drilling being in a long term decline, so it more just a situation of getting supple / demand back in balance:
ReplyDeletehttp://blogs.barrons.com/stockstowatchtoday/2014/09/17/adding-insult-to-injury-societe-generale-downgrades-offshore-drillers/?mod=yahoobarrons&ru=yahoo
http://blogs.barrons.com/stockstowatchtoday/2014/09/17/offshore-drillers-sinking-again/?mod=yahoobarrons&ru=yahoo
I think you're spot on about these guys. Oil has gotten rejected at the lows enough to tell me that it ain't going lower. Plus the much longer term charts do look positive.
DeleteMaybe we should jump once onshore are being downgraded as well? :)
DeleteENSV - Looks awesome.
Tough market out there, some stuff refuses to recover.
ReplyDeleteRe the miners, I think the base metals are interesting with the improving economy and the prices of Nickel doing well and Copper hanging in well, but it is still hard to judge demand from China. More domestic oriented stocks like X and AA seem better for now.
ReplyDeleteI'd still stay away from gold. Like I think TOF said, I think we have another leg down to really wash things out. The problem with gold is it really doesn't get used up like most commodities, so all those people who bought gold at higher prices for the last 4 years are probably looking to get out, especially with the broad market doing so well. I think gold goes back to the $800 - $900 range and crushes all hope in the gold bugs before it is ready to turn.
I still see lots of people asking when it is good time to buy miners. That's a very bad sign.
DeleteI don't know if any of you were paying attention to the miners back in the early 2000's - probably not as the US market completely ignored them, but they started to get attention in Canada and the disdain for miners back then was obvious. Comments like "no-one makes money in miners", "maybe a trade", etc. and the central banks were selling and CEO's kept their jobs by cutting costs, not growing mines.
DeleteI don't know if gets that bad again this time around, but it could. I know neither of my gold bug friends has sold yet and I'm pretty sure the one guy will before this bottoms.
Any of you guys follow GSM? They're another player in the solar game.
ReplyDeleteAdded 60% to my steel company stock CAM.TO a little bit lower than my initial purchase.
ReplyDeleteThe theory is:
1. well run company (I looked into in detail previously)
2. smart engagement who cut their dividend and expanded through acquisition during the recent cyclical trough
3. temporary weakness (30% pullback) the last couple of quarters due to short term issues
4. and now we are getting good news out of the steel market in general
OTC ticker?
DeleteCNMGF - no volume though
DeleteGLD/GDXJ...interesting divergence here though.
ReplyDeleteHola, amigos!
ReplyDeleteMy son's just starting to learn Spanish.
Como?
DeleteWheat, soybeans, sugar, coffee all taking it on the chin this morning.
ReplyDeleteI'm getting tempted to add to my DB purchase (previous buy was $33.03) up here at $35.70. I hated averaging up, but only have a small position as I thought I'd get the chance to average down. Even at this price, it is near the lows of the last 5 years and I still think it is a good one to own based on the fact that they've done capital raises, so should be OK in stress testing (I have to believe management was smart enough to get enough money) and they are very cheap and the investment banking market is improving.
ReplyDeleteIt's looking really good since I sold mine ! :(((
DeleteI've definitely changed my view on that sucker since the ECB announcement. I think I love it here only from a sentiment / catalyst perspective. I still have zero way of knowing whats hidden under the surface with those conglomerate banks.
DeleteECB announcement? I dunno if this was a proposal of if finally there's action? Bundesbank has been calling it illegal but seems Bundesbank needs to help their banks too, DB is one of the largest sinners, right?
DeleteAnd I'd guess if Europe is in recovery refiners might quickly find a bottom as fuel exports pick up? VLO/ALDW/TSO, etc.
DeleteSDS - New low, by a penny and SPY new high by a penny, LOL.
ReplyDeleteboy I tell you what, JDST looks like an excellent play on the coming destruction of gold and gold miners.
ReplyDeleteLooks different than DUST, to me (quick glance)
DeleteGSM - They produce silicon (purified sand) used for semiconductor wafers and metal alloys such as tough aluminum, sprayed-on cast iron coatings for engines, etc., right? Might also use this to make tough steel or aluminum components bearing silica that can handle abrasion.
ReplyDeleteGood performance here is bullish GM (Barrons)
INT - Air, land and ocean transport fuel sales?
ReplyDeleteGSM - I really like that chart, the way it actually moves up and down seems you could make money playing the channels.
ReplyDeleteBXE vs DB - I've been considering selling BXE and placing that capital into DB...
ReplyDeleteWhat got me out of DB more than anything was it kept gaping up and down, I figured it might gap down and I could get back in and I didn't want to be trapped in a gap down.
DeleteWNR - I owned this one at a ridiculous price, like $7 or $6 at one time, makes me feel like puking.
ReplyDeleteMaybe the market is climbing, but my port damn sure hasn't, it's been going the other way for months now.
ReplyDeleteWhat stocks are you holding?
DeleteOne way around it: go all in on TNA and EDC.
DeleteTwo are killing me but actually BXE is the biggest offender by far. have NLY/BXE/ORI and NLY is acting up now as well. If ORI crashes that wouldn't be helpful.
DeleteSat what though, TNA? I was thinking in terms of SDS or SRS, something like that. All boats should be floating higher not just a few?
DeleteEDC might be good though, was thinking of EWS and EPI as well. Problem with that is is US crashes then so do EM's, I'd guess.
PIR - Buying OP ?!?!?!?
ReplyDeleteWow! It was good for a trade back in the $14-16 area. I still view it as a good trading stock. Damn thanks for pointing that out need to set aside some time today to look at it again.
DeleteTAYO - It's quite true there's a real estate boom going on in West Texas, and when the buts come they're sudden but should be good for 5yrs or so, maybe more.
ReplyDeleteJack Flash. Opened 14.85, holding. Opened 14.56, off 14.92.
ReplyDeleteJust 1,000 jobs, too funny. This is proof why Japan unemployment is never greater than 3%, guaranteed employment for every office flower.
ReplyDeleteGSFVF - An idea that didn't pan out, I guess you could say.
ReplyDeleteORI - See this crap? TOF, I think you must be donning GOOG glasses or something?
ReplyDeleteUGAZ->second half off @ 14.95.
ReplyDelete(PWE) higher by 11.84% to $7.84 on heavy volume in mid-morning trading on Thursday, after the company reported an increase in 2014 second quarter net income to C$143 million, or 29 cents per diluted share, compared to a net loss of C$53 million, or 11 cents per diluted share for the same period last year.
ReplyDeleteHowever, the Canadian exploration and production company's gross revenue declined to C$650 million, for the most recent quarter, from C$745 million from the 2013 second quarter.
"We rate PENN WEST PETROLEUM LTD (PWE) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself."
BACML comments: "Penn West Petroleum Ltd.: Releases internal audit/Q2; no surprises, opex up 16-20%
Delete9/18/2014 1:51 PM
PWT released the results of its internal audit, restated financials, and Q2 2014 results this morning. Restatements were broadly in line with July estimates with opex up 16-20% and cash flow down 4-7%; 2012 to Q1 2014. Conference call at 1:00pm ET and analyst meeting at 2:30pm ET.
Seems to me Canadian energy is land locked and attempting to compete with US producers who perhaps have overproduction for an undetermined period, could be years.
"Sat what though, TNA? I was thinking in terms of SDS or SRS, something like that. All boats should be floating higher not just a few?"
ReplyDeleteCP - My thinking is pretty much everyone agrees that the Russell 2000 is breaking down and diverging and this is bad. Either it doesn't do much or it rips higher. I doubt it goes down. There's too much money out there shorting it or skeptical. I think there's a decent chance it breaks out above YTD highs. Obviously have to play it by ear but just based on sentiment I think that's a decent trade and the Russell 2000 may only be just consolidating right now.
TRQ - Mongolia play, remember looking at that one too.
ReplyDeleteNWLI - $243, eh? Something's up and I'm not liking it.
ReplyDeleteRe SNE, I think they said first year without a dividend in 50 years. Makes me wonder if they are having some cash problems. Have not looked at the balance sheet, but just seems like an extreme measure that a company would not take lightly.
ReplyDeleteCP,
ReplyDeleteNWLI was just a weak seller this morning.
Both NWLI and ORI are good companies and will do well over time. They are the types of stocks that you can really research and understand their business and know that you are getting good value when you buy. As far as short term movements go, who knows? Because they are thinly traded, they can be pushed around easily. But no way I would put a stop loss on them, as you can tell by this mornings NWLI trade.
I guess my broader point is I don't think you should trade value stocks like momentum stocks.
DeleteValue stocks generally get more attractive as they decline, so you generally look to see if you should add on declining prices.
I get your point but there's some weird stuff going on that's giving me the creeps, see hints of it here and there and too many securities getting crushed like flies to make me think overall growth is the course as opposed to central banks pissing money into the big losers to compensate their losses.
DeleteORI - I'm out, puked 'em at $14.91
ReplyDeleteWhy not just delegate that consumers must spend money they don't have or pay a fine and face asset confiscation?
ReplyDeleteCP,
ReplyDeleteseems with the market there is always enough unsettling things to keep people out of the market, but still it has almost doubled in the last 3 years. And if you look at things like the Fed surveys, PMI, unemployment, etc.the real economy is getting better
Typically when it feels good, that is when we get the big pullback.
I dunno, I'm kinda numb right now I guess.
DeletePabst is getting bought out, now there goes our last remaining cheap burp!
DeleteRAD - Another one being crushed despite beating comprehensive forecasts.
ReplyDeleteLooks like a big reduction in their forecast. Plus the stock has had a huge run from $1.00 to $6.00 in the last year, so you know a lot of people will be looking to sell and lock in profits.
DeleteMore offshore drilling bad news:
ReplyDeleteHercules Offshore (HERO -12.5%) plunges to its lowest intraday price in almost three years after disclosing it had idled another vessel, the sixth out of its fleet of 18 in the Gulf of Mexico.HERO likely will park two more rigs in the region next week as they roll off contract, Cowen analyst J.B. Lowe says, adding that the drop-off in Gulf of Mexico demand has been worse than expected and activity is set to stay depressed through end of hurricane season; he cuts HERO's stock price target to $4 from $6.As recently as May, HERO had 15 of its rigs working with another three out of service for regular inspections or upgrades.
There was a helicopter charter company that services offshore I was looking at, wonder how it's doing (forgot ticker but will look)..
DeleteI just started selling some of my ZU to take advantage of the dip in YELP. I was completely out of YELP but I believe scaredy cats (sp?) are getting out in advance of the IPO tomorrow. I think there's an outside chance YELP pops 10% tomorrow
ReplyDeleteLocked and loaded. $76.10
DeleteWell far from loaded but ready nonetheless
Deletethis is all based off my thinking that the BABA IPO goes off extremely well, YHOO owns a big chunk of them, and speculation turns around to what they sell. I think some people have mentioned this but most people are short/negative YELP. Thus the pop
DeleteMight follow U on that but gonna wait and see what happens tomorrow, maybe mid next week even. Especially if offshore shuts down completely perhaps some money comes back to Canadian producers and stops the bleeding then I can turn my attention to getting my head chopped off in cyberspace cadets.
Deletehaha. good luck man. i added to my position now at $76.02 avg. The way I see it is there's a decent chance it pops big right at the open or whenever they open BABA. I'll probably sell at that point and rotate back to other stuff. If it doesn't pop but instead drops I will sell my other positions and double down. I like YELP regardless so that's why I'm buying ahead of the IPO
DeleteNIHD - Take this one off too, nice gain.
ReplyDeleteSRS - I think this one is basically short mREIT's, right? Looks that way on one year chart.
ReplyDeleteKRE - Another at top of range. So if these guys break through then perhaps the old "Financials, energy, gold up then down" axiom is in play?
ReplyDelete2011.18 close, red penny over last top?
ReplyDeleteMONIF- Looks like V is exiting it's 5% stake and will develop mobile opps. in house going forward. Might give a little insight into MITK/KFX.
ReplyDeleteYour money pump finally vapor locked?
DeleteMaybe it's just really primed now?? Hard part really is good info on it.
DeleteMM is one of those kind of app developers, wonder why they don't seem to be making progress? I blame it all on Windows, LOL
DeleteAnd Oppenheimen is the worst comprehensive forecaster ever:
Delete"06-May-14 - Millennial Media technology underappreciated by market, says Oppenheimer theflyonthewall.com
MM is in the same space as some of the others like BCOV and YUME right? I was looking at TUBE the other day but couldn't quite figure out the difference between all of them so I passed. I do like the founder of TUBE though. Seems like someone I'd like to bet on.
DeleteSNE - Amazing, both top and bottom of channel are parallel, it had to sell on ANY news.
ReplyDeleteBXE - Going to $5's, I know it's gonna close the gap. I need to sell and take the loss then buy back once the gap up is closed but it's a big hit for me to swallow....
ReplyDeleteOne last thing before I go outside and start yellin' my head off: Seems like SRS and mREIT's are reacting in confirmation to something the FED head said or is it my imagination?
ReplyDeleteKPMG - Oh boy, same auditor as SVM was using when allegations of fraud were flying around.
ReplyDeleteHow much is Canada like China, in terms of corporate accounting fraud?
HELI - Offshore oil and gas transportation service
ReplyDeleteDBC - Back to lower trend line, econ vibrance definitely sucking up commodities faster than ever.
ReplyDeleteWLT/ACI/ANR/BTU...wholly shit.
ReplyDeleteYep, EMs definitely rockin' on their coal consumption! So where do we look for the clincher evidence EMs are booming?
DeleteWonder if they will continue burning naptha for their space heaters instead of switching to LED heat?
Deletenew post
ReplyDeleteCREE - Seems to be lifting, fakeout move?
ReplyDeleteTAYO - OMG, this thing traded 7k shares, talk about microcrap! Not much info on this one I can find without going to their web site but can't imagine being impressed.
ReplyDelete