I like it 2nd. And I agree. I moved a significant chunk of cash to work today in DECK, NOK, and NSPH...I also bought a little FAS near the close. I love the break above the 50 DMA and a retest back on it in XLF.
I also bought stock today in some small Canadian stocks - economically sensitive as i think the economy improves.
Looked seriously at DECK, but still not sure. My wife and older daughter say UGG's are still great, but my youngest who is 19 and works in a shoe store says they are OK, but moving out of style for higher, dressier boots. Plus, when I searched Twitter for UGGs, a lot of bashing. You don't want to be on the wrong side of a fashion trend with stocks like this as they can fall fast. Valuation is supportive and their CEO is saying good things, so likely will do well, but it really is an UGG company, so not ready to step up yet.
Good luck on this TOF. Always enjoy reading your analysis on stocks and you do good, thorough work.
You probably saw this, but in case you didn't - miss out of WWW and it's stock is down 8% pre-market. Will be interesting to see if the market thinks this is WWW-specific or a message about the broader footwear market.
Interesting report from BMO - possible explains why traders think the market is so bad, but also gives ideas where to look for winners for the rest of the year:
Majority of Factors Worked in June, Especially Fundamentals
Nearly 70% of the factors we track managed to outperform the S&P 500 during June. While many investors are quick to apply the “risk on” moniker while explaining periods of market strength, our work shows that fundamentals dictate performance – over the near and longer term. For instance, while high beta strategies outperformed in June, their performance paled in comparison to both EV to EBITDA and next-12-month price to earnings. In fact, high beta is dramatically underperforming the past 12 months. In addition, technical factors like relative strength and 200-day moving average were among the worst performers in June.
Quality, Growth and Low-Risk Strategies Are the Best Performers
Given our expectation of continued elevated market volatility and decelerating earnings growth, we believe that investors should focus mainly on higher-quality, lower-risk and selected growth strategies for the remainder of the year since such areas produce the most favorable results under these conditions, based on our work. Year-to-date trends appear to support this notion: 22 factors are outperforming the S&P 500 through June, including all eight quality factors, three low-risk factors and four growth factors we track.
Valuation Strategies Recover and Remain Better Positioned Longer Term
Each of our eight valuation factors outperformed in June; analysis that tells us that fundamentals do indeed matter and investor focus on such metrics is increasing again. As such, we remain comfortable with our overarching theme of higher stock prices over the next several months, with fundamentals, quality, and disciplined investing leading the way.
Interestingly, the best performing methodology since 2000 was just to pick the lowest priced 25 stocks in the S&P 500 each month and rebalance at the end of the month. This approach returned almost a 10-fold increase in value compared to a flat S&P 500.
The second best performing methodology is one you'd expect - lowest ratio of EV to EBITDA.
So, maybe it's as simple as just buying the lowest priced stocks 1 day a month and then head to the beach!
From what I read about them the funding needs aren't imminent. They also have debt expiring a few years out. So unless they lose way more than they did the past quarter for the next several quarters, they should be ok for a couple of years.
To my untrained eye, FSLR had a clear support at $14.5 since June 18. It just got broken. So I have just sold my 200 shares, which I purchased at $15.10, with the intention of getting back in if FSLR rises above $14.5 again.
This is the reason why I really like this NSPH stock. It has a very similar business model to ISRG (place the system in hospitals and make money off each test), just got FDA clearance on it's testing platform which is the only platform available that does multiplexing, there's been a crapload of insider buying very recently, and they should have enough cash to support the business for the next 12 to 18 months, during which time revs will be ramping quickly.
"Today Nanosphere (NSPH) received approval for their Gram Positive blood stream infection test from the FDA. This test will be utilized in hospital level labs to identify blood infection pathogens and their resistance markers in less than 8 hours. This test will replace the current blood culture lab test that takes 2 to 3 days for a result.
This is the first approval by the FDA of a sample to result, multiplexed test. Multiplexing is the detection of multiple pathogens within one test. A lab technician can perform the Nanosphere test with minimal test prep and the Verigene system produces an easily read result.
The increased speed of diagnosis of the test will allow doctors to focus antibiotic treatment faster. The faster the antibiotics can be focused (from broad spectrum treatments to pathogen specific treatment) will decrease recover times, side effects to the patients, and cost to the hospitals. Most of these blood borne pathogens are acquired while patients are already hospitalized for other illness or surgeries.
The company's research says that faster treatment will save hospitals $21,387 per patient and reduce mortality rates by 80%.
The cost of the tests are in the $30-$100 range and require only a lab tech to perform and read. The Nanosphere Verigene system's technology is similar to Cepheid's but allows for multiplexing. This allows for each test to detect a wide array of pathogens per test.
A full explanation of the technology, market size, and product can be found in the company's presentation here: June Presentation
This test will be the first of company's tests that will ramp revenue. The company has 3 more tests in clinical trials or development. The company expects another approval this year for a C. Difficile test with 2 more approvals expected in 2013.
The company also expects placements of its Verigene to increase to 381 by the end of Q1 2013. This footprint will give the company enough scale to approach profitability. The company finances and leases the systems to customers. The average cost of a system is about $100,000."
The 10-minute chart of $USD futures gives me a feeling that the next move would be down, within the next hour, and so the triple bottom in SLV will most likely hold...
$USD did not really move over the last hour, but SLV did break below Friday's low. If it doesn't rebound back up by the end of the day, then, 2nd_ave, I think it would be wise for you to exit your SLW position...
VFC - So assuming the heydays for Uggs are severely numbered, then certainly there will be a comeback for the venerable and stylish Van's canvas DECK shoe?
I find this one particularly amusing. The sum of the parts calc suggests NOK is worth at least 100% more than its current price and their price target is 100% higher...yet it only gets a sector perform. WTF! I wonder if these guys read their own notes.
"RBC Capital Markets’s Mark Sue thinks so, reiterating a Sector Perform rating on the shares and cutting his price target this morning to $3.50 from $5, writing that the company may have to write down some inventory of its current “Lumia” phones, designed with Microsoft (MSFT), because the latter’s next version of Windows, Windows Phone 8, won’t be able to run on existing Lumia models.
“Nokia may be in for a pretty rough 2H12,” writes Sue, given the overall smartphone growth is slowing, while Apple (AAPL) and Samsung Electronics (005930KS) are gaining share.
“Nokia’s 2Q12 results won’t be pretty as it donates market share and the 3Q12 outlook may be worse as Nokia may burn cash and see customers stall ahead of the Windows 8 upgrade,” writes Sue.
“We expect an inventory writedown as Nokia has little choice but to clear the channels of its Lumia 800/900 devices. Lumia 800/900 phones running Windows 7.5, while upgradeable to 7.8, will thereafter reach end-of-life as customers seeking Windows 8 will need to buy a new phone.”
Sue cut his Q2 estimate to €6.88 billion in revenue from a prior €6.94 billion, but keeps his 8-cent loss estimate. He cut the full year view to €28.26 billion and a 34-cent loss from a prior €29.68 billion and a 33-cent loss. The Street has been modeling €7.56 billion and an 8-cent loss for Q2, and €31.13 billion and a 25-cent loss for the year.
The larger concern is the cash burn rate, writes Sue. He thinks the company’s net cash may have declined in the quarter to €4 billion, or €1.09 per share, from €4.8 billion, or €1.30 per share, at the end of Q1.
If Nokia keeps paying its dividend, writes Sue, its value, on a sum-of-the-parts basis, would be about €2.91, or $3.67, including €6 billion for its patents. But if the company were to cut the dividend, it might be able to get away with more cash, giving it a value of €3.91, or $4.93 per share.
Sue also sees a risk Microsoft will court other phone partners, writing, “Microsoft has further become vocal about diversifying its partner-base, which reduces Nokia’s level of exclusivity with this supposed all-in partner.”
Nokia shares today are down 5 cents, or 2.7%, at $1.79."
"Windows Phone 8, won’t be able to run on existing Lumia models."
My first reaction is this is the best long-term strategy I never expected to hear, perhaps someone at MSFT has finally awoken to smell the coffee? I suggest a complete change of diet.
Assuming this is the case, it's gonna be more than just a tough row to hoe trying to win back/over those who've already defected to AAPL.
David, They are saying golds seasonal strength begins in a couple of days (http://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/get-ready-for-gold-bullions-season-of-strength/article4403228/)
I sold out of 60 or 70% of my longs this morning (well, really just DECK and FAS since DECK was the majority of it) and I can't get myself to buy more. I think this area needs to hold just because it's been an area of contention for a while and it's right where the 50 DMA is. I'm seeing lots of those potential setups failing so it's making me nervous. I'd like to get back into FSLR but I think it could go to $12 or so first...
Commercial advertising - Due to the ramp-up of US political campaigning, this will be the only sector to experience growth next quarter. The bad news is, the sector rally began last October.
I like it 2nd. And I agree. I moved a significant chunk of cash to work today in DECK, NOK, and NSPH...I also bought a little FAS near the close. I love the break above the 50 DMA and a retest back on it in XLF.
ReplyDeleteDavid - OBV doesn't always have a tight correlation with share price, nor is it the be-all end-all indicator of future price direction.
ReplyDeleteCoal...Wow, are we seeing the destruction of an entire industry? Leave that dirty crap in the ground and bring the boys above to work gas rigs?
ReplyDeleteI also bought stock today in some small Canadian stocks - economically sensitive as i think the economy improves.
ReplyDeleteLooked seriously at DECK, but still not sure. My wife and older daughter say UGG's are still great, but my youngest who is 19 and works in a shoe store says they are OK, but moving out of style for higher, dressier boots. Plus, when I searched Twitter for UGGs, a lot of bashing. You don't want to be on the wrong side of a fashion trend with stocks like this as they can fall fast. Valuation is supportive and their CEO is saying good things, so likely will do well, but it really is an UGG company, so not ready to step up yet.
Interesting stuff BB. Thanks!
DeleteGood luck on this TOF. Always enjoy reading your analysis on stocks and you do good, thorough work.
DeleteYou probably saw this, but in case you didn't - miss out of WWW and it's stock is down 8% pre-market. Will be interesting to see if the market thinks this is WWW-specific or a message about the broader footwear market.
BB - Check out that trading in WWW. It's up over 7%. Wow
DeleteCrazy - kind of glad I don't trade pre-market.
DeleteInteresting report from BMO - possible explains why traders think the market is so bad, but also gives ideas where to look for winners for the rest of the year:
ReplyDeleteMajority of Factors Worked in June, Especially Fundamentals
Nearly 70% of the factors we track managed to outperform the S&P 500 during June. While many investors are quick to apply the “risk on” moniker while explaining periods of market strength, our work shows that fundamentals dictate performance – over the near and longer term. For instance, while high beta strategies outperformed in June, their performance paled in comparison to both EV to EBITDA and next-12-month price to earnings. In fact, high beta is dramatically underperforming the past 12 months. In addition, technical factors like relative strength and 200-day moving average were among the worst performers in June.
Quality, Growth and Low-Risk Strategies Are the Best Performers
Given our expectation of continued elevated market volatility and decelerating earnings growth, we believe that investors should focus mainly on higher-quality, lower-risk and selected growth strategies for the remainder of the year since such areas produce the most favorable results under these conditions, based on our work. Year-to-date trends appear to support this notion: 22 factors are outperforming the S&P 500 through June, including all eight quality factors, three low-risk factors and four growth factors we track.
Valuation Strategies Recover and Remain Better Positioned Longer Term
Each of our eight valuation factors outperformed in June; analysis that tells us that fundamentals do indeed matter and investor focus on such metrics is increasing again. As such, we remain comfortable with our overarching theme of higher stock prices over the next several months, with fundamentals, quality, and disciplined investing leading the way.
Interestingly, the best performing methodology since 2000 was just to pick the lowest priced 25 stocks in the S&P 500 each month and rebalance at the end of the month. This approach returned almost a 10-fold increase in value compared to a flat S&P 500.
DeleteThe second best performing methodology is one you'd expect - lowest ratio of EV to EBITDA.
So, maybe it's as simple as just buying the lowest priced stocks 1 day a month and then head to the beach!
BB - This helps explain why I've had success the past month or so buying beaten down stocks based on earnings etc.
DeleteJCP- Can Ackman be this wrong??
ReplyDeleteMAKO - I knew this one would flop. I've seen so many "this is the next ISRG" articles about MAKO it was a sure red flag.
ReplyDeleteYuck.
DeleteHave you traded anything yet now that the kitchen is finished? or is it not finished?
DeleteNot finished. I'll be back in action on Monday. Countertops today. It's looking really good.
DeleteI bet it's not square! Don't do something stupid like put your eye out with a nail gun or something.
DeleteAGA - This one's beat up pretty badly...
ReplyDeleteJCP - No longer a Cara-100, it's curtains for JCP?
ReplyDeletehttp://www.jcpenney.com/dotcom/for-the-home/departments/window-treatments/cat.jump?id=cat100260213&deptId=dept20000011&cmJCP_T=G1&cmJCP_C=D1
Picked up a few more shares of NSPH at $3.28
ReplyDeleteJRCC - They're gonna put this one to rest as well.
ReplyDeleteFrom what I read about them the funding needs aren't imminent. They also have debt expiring a few years out. So unless they lose way more than they did the past quarter for the next several quarters, they should be ok for a couple of years.
DeleteSold all of my DECK at $45.1 to 45.2
ReplyDeletePicked up a little more of NSPH at $3.25
ReplyDeleteSQNM - This blood test stuff is beginning to get under my skin, feel like I should just cut this one lose now instead of allowing the stop trigger.
ReplyDeleteINTC @ 25.72.
ReplyDeleteAA @ 8.56.
Next European I see (or smell), I'm gonna kick him.
ReplyDeleteBAC @ 7.58.
ReplyDeleteX - Why is this thing 16% off it's 52 week low, this doesn't follow the end of world predictions...
ReplyDeletealright picked up my last bit of NSPH at $3.08. Avg is now $3.22. Let's see if this is a smart move.
ReplyDeleteactually i think i made a mistake...average is $3.27
DeleteQQQ @ 63.67.
ReplyDeleteSLW @ 26.81.
ReplyDelete2nd is on a buying spree! :)
ReplyDeleteI thought he was just quoting prices...
DeleteTo my untrained eye, FSLR had a clear support at $14.5 since June 18. It just got broken. So I have just sold my 200 shares, which I purchased at $15.10, with the intention of getting back in if FSLR rises above $14.5 again.
ReplyDeleteThis is the reason why I really like this NSPH stock. It has a very similar business model to ISRG (place the system in hospitals and make money off each test), just got FDA clearance on it's testing platform which is the only platform available that does multiplexing, there's been a crapload of insider buying very recently, and they should have enough cash to support the business for the next 12 to 18 months, during which time revs will be ramping quickly.
ReplyDelete"Today Nanosphere (NSPH) received approval for their Gram Positive blood stream infection test from the FDA. This test will be utilized in hospital level labs to identify blood infection pathogens and their resistance markers in less than 8 hours. This test will replace the current blood culture lab test that takes 2 to 3 days for a result.
This is the first approval by the FDA of a sample to result, multiplexed test. Multiplexing is the detection of multiple pathogens within one test. A lab technician can perform the Nanosphere test with minimal test prep and the Verigene system produces an easily read result.
The increased speed of diagnosis of the test will allow doctors to focus antibiotic treatment faster. The faster the antibiotics can be focused (from broad spectrum treatments to pathogen specific treatment) will decrease recover times, side effects to the patients, and cost to the hospitals. Most of these blood borne pathogens are acquired while patients are already hospitalized for other illness or surgeries.
The company's research says that faster treatment will save hospitals $21,387 per patient and reduce mortality rates by 80%.
The cost of the tests are in the $30-$100 range and require only a lab tech to perform and read. The Nanosphere Verigene system's technology is similar to Cepheid's but allows for multiplexing. This allows for each test to detect a wide array of pathogens per test.
A full explanation of the technology, market size, and product can be found in the company's presentation here: June Presentation
This test will be the first of company's tests that will ramp revenue. The company has 3 more tests in clinical trials or development. The company expects another approval this year for a C. Difficile test with 2 more approvals expected in 2013.
The company also expects placements of its Verigene to increase to 381 by the end of Q1 2013. This footprint will give the company enough scale to approach profitability. The company finances and leases the systems to customers. The average cost of a system is about $100,000."
Interesting observation from Bruce Krasting:
ReplyDeletehttp://brucekrasting.blogspot.com/2012/07/obamas-middle-class-tax-scam.html
NOK is down another 2% today. Keep in mind this has a $6.8 Billion market cap and over $7.5 Billion in net cash.
ReplyDeleteJRCC - Holding up well...
ReplyDeleteSLV is close to breaking below Friday's low, which would call into question the sustainability of the rebound off the June 28 lows. That would suck...
ReplyDeleteJust as I said it, SLV made a double bottom intraday and jumped up a bit...
DeleteAnd all the way back to today's low, making or breaking a triple bottom for today...
DeleteThe 10-minute chart of $USD futures gives me a feeling that the next move would be down, within the next hour, and so the triple bottom in SLV will most likely hold...
DeleteCoal - I recall someone predicted a few years back that coal would be put out of business, I guess that's what we're finally witnessing.
ReplyDeleteMUX - Back to 3 Bucks
ReplyDeleteTLT - There's must be a ton of value locked up in T's, consider just the direct gains returned on TARP alone were $350mm
ReplyDeleteAGA - Could today be the low, what are the chances I can pick the reversal?
ReplyDelete$USD did not really move over the last hour, but SLV did break below Friday's low. If it doesn't rebound back up by the end of the day, then, 2nd_ave, I think it would be wise for you to exit your SLW position...
ReplyDeleteVFC - So assuming the heydays for Uggs are severely numbered, then certainly there will be a comeback for the venerable and stylish Van's canvas DECK shoe?
ReplyDeleteI find this one particularly amusing. The sum of the parts calc suggests NOK is worth at least 100% more than its current price and their price target is 100% higher...yet it only gets a sector perform. WTF! I wonder if these guys read their own notes.
ReplyDeletehttp://blogs.barrons.com/techtraderdaily/2012/07/10/nokia-rbc-cuts-estimates-target-write-down-coming/#comment-1081246
"RBC Capital Markets’s Mark Sue thinks so, reiterating a Sector Perform rating on the shares and cutting his price target this morning to $3.50 from $5, writing that the company may have to write down some inventory of its current “Lumia” phones, designed with Microsoft (MSFT), because the latter’s next version of Windows, Windows Phone 8, won’t be able to run on existing Lumia models.
“Nokia may be in for a pretty rough 2H12,” writes Sue, given the overall smartphone growth is slowing, while Apple (AAPL) and Samsung Electronics (005930KS) are gaining share.
“Nokia’s 2Q12 results won’t be pretty as it donates market share and the 3Q12 outlook may be worse as Nokia may burn cash and see customers stall ahead of the Windows 8 upgrade,” writes Sue.
“We expect an inventory writedown as Nokia has little choice but to clear the channels of its Lumia 800/900 devices. Lumia 800/900 phones running Windows 7.5, while upgradeable to 7.8, will thereafter reach end-of-life as customers seeking Windows 8 will need to buy a new phone.”
Sue cut his Q2 estimate to €6.88 billion in revenue from a prior €6.94 billion, but keeps his 8-cent loss estimate. He cut the full year view to €28.26 billion and a 34-cent loss from a prior €29.68 billion and a 33-cent loss. The Street has been modeling €7.56 billion and an 8-cent loss for Q2, and €31.13 billion and a 25-cent loss for the year.
The larger concern is the cash burn rate, writes Sue. He thinks the company’s net cash may have declined in the quarter to €4 billion, or €1.09 per share, from €4.8 billion, or €1.30 per share, at the end of Q1.
If Nokia keeps paying its dividend, writes Sue, its value, on a sum-of-the-parts basis, would be about €2.91, or $3.67, including €6 billion for its patents. But if the company were to cut the dividend, it might be able to get away with more cash, giving it a value of €3.91, or $4.93 per share.
Sue also sees a risk Microsoft will court other phone partners, writing, “Microsoft has further become vocal about diversifying its partner-base, which reduces Nokia’s level of exclusivity with this supposed all-in partner.”
Nokia shares today are down 5 cents, or 2.7%, at $1.79."
I also don't quite understand where they're getting their cash figures from. I've been seeing varying cash levels all over the place.
DeleteJust saw this:
DeleteNokia Estimates that current annual IPR royalty income run-rate is approximately EUR 0.5 billion ($600 Million per year).
Shit this company needs to just liquidate its business and run the royalty side of it's business. That alone is $0.17 per share in income.
"Windows Phone 8, won’t be able to run on existing Lumia models."
DeleteMy first reaction is this is the best long-term strategy I never expected to hear, perhaps someone at MSFT has finally awoken to smell the coffee? I suggest a complete change of diet.
Assuming this is the case, it's gonna be more than just a tough row to hoe trying to win back/over those who've already defected to AAPL.
Oh no, not the old last-hour rally yet again!!!
ReplyDeleteAdded to QQQ @ 63.35. Also added MUX @ 2.84.
ReplyDeleteReopening OAKMX in the retirement accounts at the close.
ReplyDeleteWow, I guess I might have to make a play here sooner than I thought.
ReplyDeleteJAG- Is this one going BK...Kyle?
ReplyDeleteDavid, They are saying golds seasonal strength begins in a couple of days (http://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/get-ready-for-gold-bullions-season-of-strength/article4403228/)
ReplyDeleteWill be interesting to see if we get a turn soon.
I sold out of 60 or 70% of my longs this morning (well, really just DECK and FAS since DECK was the majority of it) and I can't get myself to buy more. I think this area needs to hold just because it's been an area of contention for a while and it's right where the 50 DMA is. I'm seeing lots of those potential setups failing so it's making me nervous. I'd like to get back into FSLR but I think it could go to $12 or so first...
ReplyDeleteGap up tomorrow, bro. I guarantee it.
DeleteI hope so man. This is a great area to get long because if it fails you can stop yourself out right with a small enough loss.
Delete$14.3 to $14.4 has been quite the area of support/resistance for XLF
ReplyDeleteDo you guys think Zappos/AMZN will eventually hurt FL much the same way that AMZN has hurt other retailers?
ReplyDeleteso do we short it?
DeleteCommercial advertising - Due to the ramp-up of US political campaigning, this will be the only sector to experience growth next quarter. The bad news is, the sector rally began last October.
ReplyDeleteGG - The gold demand myth reveals it's true color?
ReplyDeletenew post
ReplyDelete"golds seasonal strength begins in a couple of days"
ReplyDeleteWell aside from a probable brief dead cat bounce, how does one qualify a turn in just a couple days?
Yes, I'm one of those who doesn't fully comprehend increased PM prices during deflationary periods, despite whether or not the FED's hands are tied.
Go ahead and short the underlying while long miners, I'll be one of the last dipping my toe in that pool.