http://blogs.marketwatch.com/thetell/2012/11/22/striking-hostess-workers-express-no-regret-over-looming-liquidation/
Hostess employees are saying they don’t regret going out on strike, and would
rather be out of work rather than concede any more to a company that they say
sought to reduce benefits along with wages.
One worker, Kenneth Johnson, told Reuters: “I’d rather go work somewhere else
[good luck with that] or draw unemployment [thanks from the rest of us]” than take another pay cut from Hostess, which he said had
lowered his salary, with overtime, to $35,000 last year from about $45,000 five
years ago.
Hostess will reorganize, move to Indonesia, and make more money than they've ever made. In fact, I plan to buy any new shares offered under that scenario. Global competition> get used to it.
Remember this from October 18?
ReplyDeleteLandry has a cousin, one who also draws arrows. His cousin's from Ohio. Here's a rough illustration of the arrows he sketched over lunch: October 1460>>>November 1380>>>December 1480>>>January 1500>>>February 1550>>>March 1290
His cousin's been right on so far.
DeletePlease remind me in Feb. Thanks!
DeleteRIMM - Quite a mover, turnaround in progress?
ReplyDeleteJCP - This one gonna rally, really?
ReplyDeleteI would agree with Mark that today may be a yawner. But half the game (more so with trading than most endeavors) is showing up. Opportunities lie around every corner, but they're meaningless if I'm not paying attention.
ReplyDeleteNSPH - We're being vandalized.
ReplyDeleteIn spite of its under-the-radar status, NSPH is one of those companies who have actually created useful/valuable products using genomics R&D. If this was 2000, the company would be flying.
DeleteRIMM is up, what, 20-25% from when I mentioned it? F!
ReplyDeleteWhy don't you buy NSPH prior to its 25% move over the next several weeks?
DeleteSeriously? I keep thinking you going to tell me to lighten up, aka David.
DeleteI'm actually thinking about opening a position, although the ideal point would have been at Slezak's last buy. That guy's a real gambler. Note that his original 2.7m share purchase in May 2011 took a 50% dive within 6 months, and he added all the way down and all the way back up.
DeleteTLM up 3%? That's kinda strange.
ReplyDeleteOur main job, were I to put everything in a nutshell, is to analyze the emotional impulses generated by our daily 'read' of price moves, headlines, and commentary. Then fade those impulses as best we can.
ReplyDeleteHaving survived following/trading the market for over 25 years, I feel 'entitled' to sound off with that kind of ---- now and then. With a straight face, even.
Agreed.
DeleteI should add that before thinking about fading those impulses, we first need to resist acting on them in the first place (easier said than done). Acting out those impulses has led to more mistakes than I can count. Even today, I occasionally click 'Buy' simply b/c I didn't sleep well and was unable to fight the impulse. No joke.
DeleteNSPH - Mark, you sold all of yours? If so, I have a feeling there's going to be another opportunity in the not so distant future.
ReplyDeleteI shoulda' added last week myself but feel no hurry.
Right now I would say that bears are in the slaughterhouse, while bulls are lining up to be next.
ReplyDeleteUltimately, however, we likely rally into year end.
ReplyDeleteTLM up 6%? That's kinda strange.
ReplyDeleteCP- No, I'm still in NSPH. Added about 30K shares on the 2.40-2.45 dip. 80K share total. Over 3 accounts avg. +/- 2.50.
ReplyDeleteDang, wish I'd added as well. Anyway have a great weekend, I'll be (looking forward to), cutting, splitting and stacking firewood.
DeleteI love working with firewood. Very satisfying.
DeleteOK, the best I can come up with this morning is that most traders with day jobs are probably off today and on the market playground. So the best strategy would be to stay away.
ReplyDeleteBingo, that's exactly what I was thinking.
DeleteRIMM getting some good buzz on BB10 and the expectation it will be delivered in Feb, 2012 now. Carriers are also positive on it and really want the third O/S to gain leverage with phone makers.
ReplyDeleteStock is worth $6 - $10 in patents + cash, plus have 80 million subscribers, a good number of which who will upgrade.
Still just a bounce though in my opinion and you are making a bet on this new phone. The good thing is they have built good phones before, but it's really a big unknown in my opinion.
Yep, that's pretty much how I understand it as well.
DeleteQuite a few guys up here in Canada seem to be playing it. It's made a lot of money for a lot of people, so it's kind of a goto name for hopefully more of the same.
DeleteCan easily think of over $250 million in charitable spending that has gone on around our city due to wealthy RIMers. Everything from a Physics Institute where Stephen Hawkings came to a big Cancer Center donation to a $7 million bridge for a trail to get across a river.
AGO - back to almost $14. Unless something really bad happens in a court case, think the embedded value in the stock makes it hard to go under $13.
ReplyDeleteAGO - The other one I shoulda added to.
ReplyDeleteYeah, lots of good buy opportunities recently. I suspect we don't get any more good chances to buy this year.
DeleteI'm looking at the Google 32GB Nexus 7 for my first tablet.
ReplyDeleteCurious. What/how do you see yourself using it.
DeleteI currently read/sleep with my phone at arm's length, which allows me to follow market action while in an easy chair/'read' the markets in Asia/Europe overnight. But navigating on the Droid with its small screen/need to zoom in on print size is a pain- a tablet would allow me to move anywhere at home with immediate/easy access to market data, the blog, and music/video.
DeleteOK. Makes sense. I was given an Ipad as a gift from a client, but have never used it. The kids love playing games on it though.
Deletehttp://www.mobilemag.com/2012/11/23/google-nexus-7-32gb-is-only-229/
DeleteOffice Depot
Thanks, Craig. We actually stopped in at the local Office Depot, only to find they were sold out. We'll try again tomorrow.
DeleteThe biggest unknown for my investing for next year is what happens to the energy market. So many cross-currents now. Probably have about 15% of my portfolio in energy. The stocks are cheap, but not sure if supply may overwhelm demand in North America with shale oil coming on more. Plus, not sure what it means to the energy service stocks. Then there's Nat Gas, which is getting much less investment and demand is picking up from utilities, but prices are up some and a lot of companies seem pretty anxious to increase supply
ReplyDeleteSo, could just sell and take the risk off the table, but I also look at the energy stocks as my protection against too much money printing since I still think the PM's are too high with the gold-oil ratio very much on the high side of its traditional range.
FIZZ..that's a good ticker.
ReplyDeletewhat's the deal with FIG? They get no love. The way I see it they will be paying a $0.40/share annual dividend, at least, within a year. That's almost 10% div income on today's price.
ReplyDeletebought some Z at $26.1 today...hopped back into DECK same size position at $33.2.
ReplyDeleteNice work with DECK. Side stepped about 3?
Delete3%
DeleteYeah. I bought a small position at $34.4 and sold at $34.1...but I'm now back on with original position of about 3k shares. If you guys don't mind buying some Uggs over the weekend that would be nice.
DeleteOf course the minute I sell my YRCW it rallies. F'n A man.
By the way nice move with NSPH. It's going back to $3.55 at least (old highs from first rally).
ANR is setting up VERY nicely. ALmost identical to Nat Gas and NOK rallies. 50%+ rally coming soon.
Last one...IRE...continues to set up (i.e., consolidate) for a HUGE move...I believe it can run to $10 on next rally. I'm just praying that Z and DECK run about 50% before ANR and IRE are done consolidating.
ReplyDeleteslezak mark
ReplyDeleteTWO NORTH RIVERSIDE PLAZA
CHICAGO IL 60606
Business Phone: 847-400-9000
RJA
ReplyDeletecheck out bid/ask on this puppy
Maybe the underlying commodities markets did not trade today.
DeleteESRX long
ReplyDeleteWith Obama care we are still going to need our drugs and maryjanes.
NSPH, IRE, MGIC round out the rest of my longs
DeleteDenzel pulls off another one in 'Flight.' It's not an airplane version of 'Unstoppable,' it's a story any heavy drinker can identify with. John Goodman plays the ultimate go-to guy, the substance abuser's 911.
ReplyDeleteJust realized that Z is actually up 13% on the year, despite a big drop since 11/1. This one has all the makings of a big gainer over the longer term. It's exactly what you like to see in an internet growth stock:
ReplyDelete*Rapid Revenue growth
*Increasing / steady gross margins
*Leadership position
*High short interest and well known shorts pounding the table
> Continuing on the short theme, most people point to old companies within the same industry or metrics that don't apply to growth stocks like price to sales or price to earnings.
*Big drop on a "missed" earnings report that fuels bearish sentiment, shakes out weak hands
*Enormous addressable market
*Huge scalable business model
EDIT: has all the markings of a big gainer, that is.
DeleteHow does Yahoo Finance arrive at 93.7% of the float being short? Now that's the kind of situation where I would almost have to take a long position.
DeleteIs there a site other than this one (http://www.nasdaq.com/symbol/z/short-interest) that offers more up-to-date short interest info?
DeleteRe Z.
DeleteI used the site quite a bit when it first came out, mainly to check on home prices in the neighborhood during the housing bubble> who doesn't enjoy watching the value of their home zoom almost every week? Now that we're actively looking for income property, I use it occasionally to scan neighborhoods using the street and satellite photos. It has also recently started to list foreclosures and homes in 'premarket' status.
Better data than Nasdq..not for free. This one has better data but you have to pay for it. http://shortsqueeze.com/?symbol=z&submit=Short+Quote%99
Deletehttp://seekingalpha.com/article/994451-zillow-significant-short-interest-is-a-gift-that-should-be-exploited
DeleteOver the last two months, Zillow ("Z") stock has dropped by about 45%. It dropped ~20% in one day after its 3rd Q earnings release on November 5th.
Zillow CEO Spencer Rascoff appeared on CNBC and expressed his confusion over the major decline in the stock price post the earnings announcement and explained why he thinks the business is worth more today than it was last month; not less. The company beat Q3 revenue expectations, matched EPS expectations and managed to add 4,000 premier agent subscribers (a key driver of revenue).
A fellow Seeking Alpha writer wrote a great overview on why he believes Zillow ("Z") is a great purchase at these prices.
Specifically he correctly points out that Q3 earnings will really positive:
"For the quarter, Zillow reported record third quarter revenues of $31.915 million, which beat analyst estimates of $31.66 million. On an earnings per share front, the company reported a profit of 7 cents per share, matching expectations. In the year ago period, Zillow reported revenues of $19.057 million, and a 2 cent per share loss."
Since then the business case has only become more compelling as Julian Hebron on a housing blog wrote a great article entitled "Ignore Zillow at Your Own Risk" about how Zillow's business is only becoming more diverse and stronger.
DeleteThe bulls have made a strong case for the company but short sellers have continued to push the price down. Since February short interest has risen from 630 thousand shares to a whopping 7.6 million, one of the highest short percentages of float on the entire U.S. stock exchange!
Citron Research published a hit piece on the company on September 25th outlining their dislike of the company. PAA Research published a great response to each of their points.
PAA Research comes to the conclusion:
"In the context of our estimates and the enormous total addressable markets in which the company operates, we think Zillow shares are attractively valued. We anticipate the stock could trade to 35-40x our FY14 EPS estimate within the next 12-months as investors gain greater understanding of the transformational role Zillow can play in the residential real estate market. On a much longer term basis, we anticipate Zillow could generate $1 billion in revenues with EBITDA margins in excess of 40%, which suggests upside in the stock could be far greater than our $50 near term objective."
Short sellers are able to pressure the market with aggressive selling thereby scaring shareholders into selling thinking that there must be something wrong with the company since the price is going down. I view this significant short interest as an advantage as you can now purchase the stock at a cheaper price and it also allows for a faster upward movement if positive news comes out and buying is sparked.
The Zillow business case is still intact. The company was able to sell $156 million of stock at $43 a share a month ago to educated investors. If you believed in the story then, things have only gotten better and clarity on the execution of the business plan has only gotten clearer with the positive Q3 results.
One should view the low market price as a gift from short sellers to allow one to purchase stock at a cheap level. If Zillow continues to outperform on the business case, short sellers will be forced to cover thereby driving up the price.
It is essentially a game of poker here. The longs and shorts both have the same information available. The shorts appear to be the chip leader and are therefore able to control the betting. So far we've only seen the flop, but we still have two more cards to come. The bulls are holding pocket Aces and the flop has so far shown 3 unsuited, unpaired low cards. Don't let the chip leader bully your decision on whether to hold or fold by his decision to go all in.
Zillow has a great business plan which they have managed to execute brilliantly to date. If you believed in the story 6 months ago or a year ago things have only improved. I recommend purchasing shares at this discounted level and ignore your gut which is telling you that the share price has gone down so there must be something wrong with the company. If Zillow beats earnings next quarter or some other positive catalyst comes along, shorts will be squeezed and should make the stock rise dramatically.
As Zillow mentioned on their earnings call:
"We continue our march towards reaching our near-term target model of 30% to 35% EBITDA margin at $200 million to $250 million in revenue. This was another fantastic quarter for Zillow, one that exemplifies the high degree of operating leverage that we have in this model."
Zillow currently only has "a 2.3% penetration of U.S. real estate agents" which means there is significant room for growth. As the real estate market continues to improve so should the companies earnings. Look to also see more of the offline advertising move to online in 2013.
http://thebasispoint.com/2012/11/07/ignore-zillow-at-your-own-risk/
DeleteThe company is a compelling growth story, but that's not the trading case here. A short squeeze must occur at some point. A squeeze can drive prices of even the most sorry POS higher than a kite.
DeleteSo the 'mystery' here is how prices managed to tumble as far and as fast as they did earlier this month.
Delete2nd - If you look over the trading history of high flier growth stocks you will see every one of them go through a 50% tumble at one time or another. I've been watching Z for the past year waiting for a drop to occur, knowing that they all go through this at one time or another. One of the arguments short sellers make is that this company is no different than Move.com or Realtor.com and both of those fizzled out to nothing. Zillow is far more interactive and fun to use and therefore much "stickier" to its users. It's a must use for any real estate agent looking to get their listings in the hands of mobile users. In my opinion its one of the few sites that is able to monetize mobile successfully because when you break it down to its core it is essentially a lead generation company.
DeleteAnyway, thanks for the link above. I'm planning on reading it today.
"So the 'mystery' here is how prices managed to tumble as far and as fast as they did earlier this month."
ReplyDeleteThe same thing happened to AUMN over the past 2 months. In fact, if you superimpose the charts of Z and AUMN since 9/14, you would think they were in the same business. It looks like the short-sellers have started to cover this week, when they realized that the price ain't going any lower for these companies, given their great future prospects.
Great read on Zillow, 2nd. Thanks for the article. Just reinforces my opinion that the site is becoming stickier for real estate agents, making it impossible to ignore going forward. With only 2.5% of agents using it, I'd say there's a ton of growth ahead for it.
ReplyDeleteTake a look at ELLI, a mortgage automation software company that has had a HUGE run. Their market cap is about $650 Million vs Z at $850 Million. Their addressable market is much much smaller. Z purchased Mortech for about $16 Million and with that purchase they have now entered the same game as ELLI. I bet that within two years ELLI will be back down to where it started (i.e., $5) and all of that lost market cap will have migrated to Z. Z has the consumer wrapped up. And agents are migrating to them. The rest of the services that goes into buying a home will also migrate on to their platform.
Does Z have an app for tablets/phones? And do they break out revenue from mobile? I bet not.
ReplyDeletenew post
ReplyDelete