Tuesday, July 10, 2012
07/10/12 Got to get you into my life
From a common sense perspective, ain't no reason to own stocks right now. I was alone, I took a ride, I didn't know what I would find this morning. Reading negative commentary/general trashing of equities, I meditated on charts of AA/BAC/INTC/QQQ. The sixth sense found another road where maybe I could see another kind of mind there, and I suddenly decided, 'Man, I got to get you into my life!'
Long AA @ 8.5x.
Long BAC @ 7.5x.
Long INTC @ 25.7x.
Long QQQ 63.6x.
Long SLW @ 25.8x.
Long MUX @ 2.8x.
Long OAKMX @ 45.26.
Let the summer rally commence!
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"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.
Let me go out on a limb and predict that Hulbert will shortly release an updated sentiment survey that indicates the average recommended equity exposure among short-term market timers dropped over the past week by an unusually large percentage.
ReplyDeleteFL- Let me see if I can find some time to work on it tomorrow.
ReplyDeleteThat was easy...No way. It's actually pretty cheap, pays a good divy and is growing somehow.
DeleteI too got bit by the buy bug this afternoon. Bot APA to add to my other oiler, MRO. Both long term. Still hold cash, maybe 40%.
ReplyDeleteOn another note, here is an interesting post with a musical video of a new style band, complete with explanation from blogger Neil Howe, the expert on generation theory:
http://blog.lifecourse.com/2012/04/millennial-teamwork-hits-the-pop-culture/
Like APA a lot. PXP gave great guidance a few days ago.
DeleteGood positions, illini. Given a LT horizon, you really can't go wrong buying APA/MRO at current prices.
DeleteQCOR?
ReplyDeleteReuters:
DeleteTue Jul 10, 2012 1:39pm EDT
(Reuters) - Shares of Questcor Pharmaceuticals Inc (QCOR.O) fell as much 15 percent after well-known short-seller Citron Research raised questions about the marketing of the biopharmaceutical company's flagship multiple sclerosis drug, Acthar.
Yeah, I saw that..Your buddy again at work. I'm going to keep a close eye on this one.
DeleteI wouldn't touch QCOR with your money. A momo favorite. Although it will most likely bounce back. check out what they did to the momo faves today:
DeletePATK
QCOR
SYNC
OSIR
etc
Yeah, one of the main reasons I'm hesitating big time.
DeleteI tend to think Citron may be correct, who would ever seriously name an MS drug after a hair-ball?
DeleteAMD - Back to $5, I recall this figure many times over the past two decades.
ReplyDeleteCan someone explain to me how FIG is valued at only $700 Million? I believe they own 75% of NSM which is worth $2 Billion.
ReplyDeleteFIG Market cap is $1.83B?
DeleteDebit?
DeleteNot debit...
DeleteOh I see...Yahoo Finance has the wrong mkt cap. Still, though, the company is worth little more than it's investment in NSM.
DeleteI believe most of NSM shares are held in mutual funds that FIG administers, and thus the shares belong to muual fund clients.
DeleteIt's getting kinda scary how many symbols I know or guess correctly.
ReplyDeleteNOK sum of parts:
ReplyDeletehttp://www.istockanalyst.com/finance/story/5937587/nokia-nok-what-is-left-now-for-investors
PATENTS:
"The company has an expansive patent portfolio, and that there is a steady stream of payments to Nokia for the use of its patents to the tune of 500 million euros per year. Nokia owns over 10,000 patent families after investing more than 45 billion euros.
Nokia has one of the strongest and broadest patent portfolios in the industry, extending across all major cellular and mobile communications standards, software and services, hardware and user interface features and functionalities.
"We believe Nokia's patent portfolio could conceivably be worth as much as €6B to an Amazon or a Microsoft," Sue noted."
NAVTEQ:
"Another key asset of Nokia is Navteq, which it acquired for $8.1 billion in 2008, and comes under the location and commerce segment. Location & Commerce net sales increased 26 percent to 1.09 billion euros in 2011.
Navteq, which is a 75 percent plus gross margin business, may be the most pricey from a multiple point of view, in our opinion, and Sue assigns a multiplier of 3.0 times to forward revenues or approximately 3.9 billion euros."
NET CASH:
$4.9 Billion Euros.
PATENTS: 6 Billion Euros ($7.35 Billion)
NAVTEQ: 3.9 Billion Euros ($4.8 Billion)
NET CASH: 4.9 Billion Euros ($6.0 Billion)
TOTAL: $18.15 Billion
Market Cap: $6.8 Billion
Even if you account for losses from a write down of inventory, that's not a cash item, it's a book item. So the cash losses per quarter are more like $200 Million. It would take a long time for them to wipe out their net cash. Right now the business is worth 2.67 times the current valuation of the company. If you assign a 25% discount to patents/navteq and assume they lose $2 billion more restructuring the business, you still come to $13.1 Billion which is 93% higher than the current market cap.
Aren't the patents always the hardest to value?
DeleteAnyway...I can feel the trading juices flowing now that the kitchen crap is waning...
Yeah, I look at RIMM and wonder about all of this and where MSFT is heading... They need a dramatic change of course, seems like Windows is such an old and worn out concept that so often fails to meet expectation.
DeleteMark - The patents are normally the hardest to value except NOK already generates $600 Million in royalty income annually from it's patents. So 10 x annual royalty income ain't that insane of a valuation.
DeleteEvening gents. Got stopped out of my 2nd half of Akrx last Friday at 15.73. It goes in the log as a Landry trade that worked though since the purchase price was 15.72 and I sold half at 16.64
ReplyDeleteAlso sold half my LEN shares last Friday at 31.76. I'll prob get stopped out of my other half tomorrow if we have a big down day.
Fslr. If u guys are thinking ur gonna buy at 12 ish then I may sell short the aug 15 calls against my long stock I'm already short the jul 17 calls.
ReplyDeleteI'll be watching Akrx for a new long entry, the healthcare and telecom Etfs still have the best long setups to me.
ReplyDeleteLen looks interesting here for long entry at support with a pretty tight stop. I can't see the exact numbers but it looks like a long entry between 30 and 30.25 with a stop around 29.75.
Never ceases to amaze me how many market commentators just seem to be trend followers. Now that the market hasn't really done much since February (all trading in a +/- 5% range), people now call for a flat market for the next few months.
ReplyDeleteAnyhow, sold life insurer SYA yesterday as it is up 30% since I bought in Feb. (had a dividend increase which seemed to drive the stock) and put the money into P&C insurer ORI.
ORI is P&C company that owns a separately incorporated mortgage insurance business which is now bankrupt and in runoff. They tried to spin out the mortgage business as a separate company, but were stopped as the mortgage insurer gets tax benefits from being part of the larger business. I initially bought the stock at $9.85, but it fell hard when the split was stopped, so added to my position yesterday at $8.22 as it seems to have found a floor.
The overall company including the mortgage insurer had a loss last year, but the if you look at the company without that business, it was solidly profitable and improving.
Their dividend rate is 8.7% and they are the highest yield stock of the dividend "aristocrats" (have raised dividend for over 25 straight years) and their total return has exceeded the S&P by about 3.6% a year for over 40 years. They are also very cheap on standard P/E, P/B, etc. metrics.
The upside is if they move towards being valued in a similar manner to their peers like CINF, STFC, SAFT, they should easily be close to a double from here.
The are 2 main risks. First, management, even though they have repeatedly stated they will not give any more money to the mortgage insurance unit as it is separately incorporated and their is no legal reason to give them capital, they decide to do this. Second, they could technically be in non-compliance for their bonds due the GAAP requirement of consolidation that includes the mortgage business deficit, even though this does not affect the parent - management has also stated that the bond-holders have said they will not call them on this and they have contingency plans in place to replace this funding if needed.
Not as clean a story as it could be, but on the other hand, you don't get these kinds of yields with this kind of upside from a clean story. Plus, with all the people out their scouring for yield, seems this will attract attention fairly quickly as people become comfortable that they continue to pay their dividends.
interesting bb...i've tended to shy away from insurers because they tend to have unknown events that can crush them if they don't account for them. but i agree they all look cheap.
DeletePAL - "•North American Palladium Announces C$43 Million Offering of Convertible DebenturesMarketwire(Tue, Jul 10)"
ReplyDeleteLooks like about a 9% haircut?
Chikie...Anything come out of that GMO meeting?
DeleteNot a surprise, since they blew their cash raised by the previous offering on the Sleepy Giant gold mine. Not one of management's bright ideas, more like swindling shareholders to do someone a huge favor?
DeleteGMO - Yes, Eureka county acknowledged that GMO has their water and can begin operations, they voted to appeal to Nevada supreme court and noted that state engineer took special liberties in their opinion which may impact existing users rights. Of note was the unprecedented transport by GMO of water from one valley to another, they contend this is where the state engineer does not have authority.
Deletehttp://www.co.eureka.nv.us/news%20release%20july%2010%202012.pdf
it's early but NOK up 2.5%.
ReplyDeleteTOF, the P&C insurance business is good if you have conservative management that doesn't chase unprofitable business or take excessive risks. They generally reinsure for catastrophes, so losses are contained. It's a cyclical, self-correcting industry in that bad experience drives higher pricing and better profits and visa-versa. We are coming out of a poor period (they call it soft pricing in insurance) and rates are hardening up, so they should do well for the next few years.
ReplyDeletethat's the issue: you put a lot of faith in management being conservative right? one that i love in that sector is MKL.
Deletewell, i should say used to love. i don't really follow them anymore.
DeleteFED meeting minutes today likely to have profound effect.
ReplyDeleteI was wrong about a gap up.
ReplyDeleteA gap that needs not fill, since it doesn't exist.
DeleteLCC just continues to chug higher. I should have gone with my instincts on them a month ago benefiting from lower oil
ReplyDeleteYep, gained nice altitude. How much more sits on the table?
Deletevaluation is dirt cheap, but airlines are always cheap. i think they may have turned the corner though with those damn baggage fees.
DeleteAGA - Has it begun raining in Iowa yet?
ReplyDelete2nd - I think as long as we can hold the 1,330ish level we should be ok with longs. i'm still just trying to focus on stuff that works regardless of the market, though.
ReplyDeletePAL - This one's had IMO, a strong OBV even during times when share price has dived, I've got to keep watching it.
ReplyDeleteCatch you guys in a few.
ReplyDeletePAL - How long will it take to fill the gap down from yesterday's low of $2?
ReplyDeleteSQNM - Stopped out, probably the low...
ReplyDeleteMaybe the uggs ain't losing their popularity...DECK at HOD.
ReplyDeleteYeah, I see that. Could be making up for lost time sector catch-up?
DeleteAdded a little NOK at $1.85.
ReplyDeleteactually 1.859...funny how that works. obviously someone is getting that $0.001.
DeleteSeems like crap stocks are green, must be low risk hiding place?
ReplyDeleteOk I get it I should have held on to REED.
ReplyDeleteNOK may have bottomed here fellas.
ReplyDeleteFSLR was a shakeout yesterday. Saw lots of retail shorts hopping on it on Stocktwits and Twitter yesterday. Break of 14.50 got people out of it. Should have been buying...
ReplyDeleteHaving said that, I think it still gets down to around $12.5 to $13.2 and if so I will be going long there.
DeleteLONG PM's short PM miners working like a charm, especially so, with rising oil.
ReplyDeleteWhen's Bernanke scheduled to puke on us, 14:15?
Now that FSLR is back above $14.5, I decided to step on my Ego and re-enter at $14.66 the 200 shares I sold yesterday at $14.42. Such a re-entering worked well with JRCC (got stopped out at $1.95, re-entered at $2.10, exited at $3.42) -- let's see if it works now. I just placed a sell stop at $14.40 -- getting stopped out is a part of the trading game (haven't done that for a while, as I was focusing on value investing with PM miners).
ReplyDeleteGDXJ is back to its mid-May and late-June low of $18. So it either makes a triple bottom here or breaks this support level. This is yet another drama to watch, in addition to the declining wedge on SLV...
ReplyDeleteNice to see SLV staying green (and above its support at $26) despite $USD breaking out now to a new 52-week high...
ReplyDeleteTo be fair, however, the 1-year chart of $USD is a beauty (http://www.finviz.com/futures_charts.ashx?t=DX&p=w1), with higher lows and higher highs since last summer...
ReplyDeleteI just noticed that a little while ago I got stopped out of FSLR at $14.40.
ReplyDeleteI have a bid for some more NSPH at $2.90. I'm still bag holding!
ReplyDeleteJNK holding in nicely...I check in on this from time to time to confirm the market's health.
ReplyDeleteI was wrong about a gap up today, and taking losses immediately. I’m probably the least politically correct retirement investor Fidelity has this year, but I have decent year-to-date gains to protect. QQQ/INTC/SLW/MUX/BAC exited at fractional percentage losses (BAC with a gain!), and OAKMX will likely close down -0.3%. An additional factor (which I wasn’t aware of yesterday) is that insider selling for the week ending July 6 was at levels comparable to early May (which often portends a correction);
ReplyDeletehttp://www.marketwatch.com/story/insiders-betting-on-a-correction-2012-07-11
Combined with today’s sell off despite negative sentiment, I’m compelled to return to the sidelines!
Bernanke - Nothing disappointing it seems, could be fear of today's unknown is now defined and accepted?
ReplyDeletehey guys-
ReplyDeleteThought I drop in say hi!
hey guys-
ReplyDeleteThought I drop in say hi!
Hi Pz! How has your trading been going? Or are you an investor now? :)
ReplyDeleteI have become an investor all right, with a huge underwater position in AUMN...
DeleteDid that with a chunk of "Can't Fail" UXG I bought around 7.50 to buy and hold.
DeleteNot my style...still holding it at 2.80ish...ug
Lots of cash. I can't "engage" like ole Top Gun struggled with in the movie. :)
ReplyDeleteMy "New Job" limits screen time which isn't good for my style. Mostly flat YTD, maybe slighlty positive. I think we are at a big Pivot here though. Starting to pay attention. Flipped VXX today at 14.64 from 14.46, bought more at close at 14.04. That is all.
I will try to check in more often. If the dollar fails this resistance we might be in for some fun with names like MUX, RBY and SLW. I am looking for an entry soon I think.
Hey PZ...Good of you to drop in. Next time bring your own damn beer!
DeleteMark - You were asking about NOK's patent value earlier...here's a good article on just one of their patents that they won:
ReplyDeletehttp://www.guardian.co.uk/technology/2011/jun/14/apple-nokia-patent-case
If you're closely following technicals then I would say that the market is still a buy if it can hold above 1,330. it's getting close though. I'm still in about 55% to 60% cash and just waiting for setups. I haven't found a helluva lot to jump on right now. Lots of things are right above support which is good for a trade but I need conviction that I won't just get stopped out. So right now I'm just focusing on stuff that is either ridiculously oversold or in the medical field that is market agnostic.
ReplyDeletethe two sectors that have been doing ok are bios/pharma/healthcare and foods/natural foods (REED, SNAK, BNNY, WFM, TFM). i'm still watching AMNF and thinking about just dropping like 5% in it to take advantage of the div inc
DeleteTLT - How restless are the natives becoming? Despite being close to new highs, MACD is not participating in these new highs. Perhaps this could be an indicator that distribution, or perhaps dissent is building in this space?
ReplyDeletePossible double top coming soon, any other obvious formations beginning to appear?
you guys catch the price target piper jaffrey has on OCZ? $13. almost a triple from here.
ReplyDelete