Look out, now.
http://www.bloomberg.com/news/2013-10-25/zogenix-wins-u-s-approval-for-pure-hydrocodone-pain-pill.html
I suspect Zohydro will top the list of street drugs within a year. ZGNX.
"The FDA will recommend by early December reclassifying hydrcodone-combinations as Schedule II substances, Janet Woodcock, director of the agency’s Center for Drug Evaluation and Research, said yesterday. " Poor woman must have had a hard time with that last name growing up.
I think it's difficult to overstate the market potential. I'm surprised the FDA approved it. We'll probably see a run-up in the stock next week, followed by a pullback. I haven't taken a position.
You won't want to go to UVA then if you're in an automobile accident, they will not prescribe oxycodone, hydrocodone, codeine, morphine, methadone, fentynal, or heroin. Gabapentin is the only pain relief medication you might be prescribed.
Yeah, I wouldn't go so far as to say this news won't be good for the stock, it's highly probable it will be.
It's just that now calling it "Hydro" is putting the squeeze on doctors to not prescribe it for legitimate reasons. There's a huge backlash going on right now, this is a very controversial subject and they're working to get it under control. Say bye-bye to Opiates, UVA has made their decision, I doubt they'll ever prescribe it again in the future. I don't know when they stopped but you won't find a physician there who would even consider stepping out of line, done deal.
They also use the ISRG robot for brain surgery, this is the hospital that gets stroke patients helicoptered in from out of state. I'm waiting for ISRG to lose another $100 of loft then it's time to pounce.
Thinking about this more, I believe hydrocodone is available over the counter in Mexico. Considering, bringing that version over the border would be frowned upon unless you were to grease some select set of DEA palms, one could probably get a prescription version filled if he were to visit a doctor while in Mexico.
This is just one country, we need to consider the entire world perhaps...... Really, is the entire world saddled with abiding by US DEA/FDA regulatory requirements?
I like the toilet idea better, I bet some company is gonna make a mint manufacturing and selling toilets and sanitary sewage equipment in developing nations.
I've noticed a marked increase in patience on my part in 2013, which has become more pronounced the past few weeks. The patience is reflected not only in waiting for proper pitches, but also in reducing positions to a manageable size (as in 'emotionally manageable'). The results have not been spectacular, but the gains have become more consistent. You might say it's the equivalent of earning a modest but predictable income playing craps. I consider it an emotional achievement, a step up in trading maturity.
NFLX> 'Assault on Wall Street.' Don't miss it. I almost did, based on its 'Action and Adventure' genre listing and cover photo. It's actually a pretty powerful story of what might have happened to any of us during the financial crisis had we been hit with a perfect storm (REIT investments under Lehman/Bear Stearns management + adjustable rate mortgage + health crisis + unemployment).
Have increased revenue and earnings for over 10 years in a row, but got hit with an earnings miss Friday. Trade at a forward P/E of 12, which is pretty good given their record of increasing earnings. Problem is I don't understand the US health care market that well and if this is sustainable.
AA at $9.55 now looking to close at a new high for the year. Still think it is good to own as it is the type of stock where the price will move before the earnings. If the economy does improve as it looks like, AA will do well with aircraft, manufacuring, etc. plus kicker of increased usage in cars due to new fuel efficiency requirements.
I was just trying to play the higher low to be honest. $8.4 was the prior low. I think it bottomed at $8.7 today. If it keeps putting in higher lows it might be done selling off. Going to be volatile for a while is my guess.
By the way, does anyone know if Muddy Waters ever got penalized / fined etc for their fraud allegations on ONP, FMCN and EDU? Those are some pretty hefty charges for companies to fight. ONP was investigated by the SEC and found to not have any fraud.
Add on a little Cody Willard trying to sell subscriptions to his investment advice which from what I've read is fairly useless and it really becomes a nonsensical site. The issue is you have people that need to pump out as many articles as possible because they're getting paid on a per article basis. That's why the content in WSJ / NYT is so much better...you have people with full time positions and excellent backgrounds.
Just for the hell of it, why don't we both keep a small long-term position. Just in case the stock recovers the way other Muddy Waters' breakdowns have, and ends up at 26 next year.
My thinking on this is really simple: we've all seen "geniuses" in the market that have gotten one or a few trades right and then fade into oblivion. At 38 years old, is Carson Block a true genius or just someone that got a few calls right? Meredith Whitney, David Rosenberg, John Hussman and many others come to mind.
yeah i agree. i was kicking myself for not buying it at around $8 when i saw it putting in a bottom over the summer. let's say this blows over like FMCN and EDU did. wouldn't i then be kicking myself again for not buying around $8ish? as long as the position is small why not take some risk. this is a risky business in general. if we are looking to make 3% a year we can look elsewhere.
yeah i've been watching JCP today. i still haven't had a chance to look at it, but i did go to the mall out here in Natick MA where there was a JCP store and when I was looking at the directory of the mall it struck me just how big this brand is to malls...there's always a reference point with the JCP stores on the directories...its one of those brands that everyone knows. maybe it should just be as simple as that...the brand probably isn't permanently impaired and financial issues will probably sort themselves out over time. capital structure is always an issue. perfect example is C or AIG...they stayed in business but killed shareholders
I've been waiting to buy BALT for months now. Finally opened up a position at $4.6 today. They have earnings coming up soon which adds risk to it but I really like this one longer term as I think the baltic dry index rebounds over time and BALT is the most tethered to spot rates. They recently raised $60 Million in a capital raise at this price which leaves them with about $65 Million cash and $100 Million debt. They're actually operating at positive free cash flow and their book value is about 100% higher than the current price. I'm looking to add more should the stock fall after earnings.
I also finally bought some BKJ for the longer term account. Steady grower over the long term. Paid $0.48 dividend in 2012 and should boost that to around $0.54 total for 2013. That translates into a 4% dividend on the current price. Growth has been slowing a little but it's still a nice little bank and their branches are in one of the wealthier areas in NJ so that should support deposit growth over time. I know the area well since I grew up in NJ.
my suspicion is we get another thrust higher this week on the back of the Fed meeting. it will be interesting to see how the market trades after that, if it does happen. i think there's some risk here but there are still a bunch of beaten down sectors that look interesting to me. i like the shippers, some steel stocks, the fuel cell companies (BLDP, FCEL), and I still think some of those chinese small caps are interesting.
Purdue Pharma's Oxycontin generates sales of >2.5b/year. If Zohydro generates annual sales of just 1% of that, it would almost double Zogenix's current estimated 2013 revenue of 35m.
b/c it was mixed to make it "unpalatable", now it's the real McCoy. Many doctors wouldn't prescribe it b/c they didn't want to prescribe acetaminophen, they needed the real McCoy for their patients......... Except I'm thinking this requirement was/is US specific.
Opiates without acetaminophen offer dosing advantages when treating chronic pain syndromes. There is no 'ceiling' to the dose of an opiate, as long as the recipient is tolerant. On the other hand, it's generally recognized that the daily dose of acetaminophen should not exceed 4000 mg (in some cases, 2500 mg), due to the risk of liver damage. Thus Percocet (oxycodone 5 mg/acetaminophen 325 mg) is limited to a maximum of 12 tablets/24 hrs (60 mg oxycodone + 3900 mg acetaminophen), whereas it's not uncommon to see spinal injury patients taking Oxycontin or OxyIR doses that total several hundred milligrams daily.
TOF - What was the ticker you mentioned last week that might be receiving an adjustment to their IRS status? I was trying to research it but frick'n lost track.....
I also bought your zgnx pre market at 3.04. Probable should wait a bit but with biotech hot and this with a newly approved drug I think it makes sense that this goes a good deal higher
ONP another Muddy Waters stock that was found not to be a fraud by the SEC is up 18% today on good earnings pre-announcement. One day some of these Chinese stocks will eventually trade at higher multiples than 2X earnings
I have a hard time believe all companies man. Look at FMD. They were not fraudulent but definitely mislead people about the sale of those trust assets and how much risk they had with the position they took. Plus, look at all of these US based companies that use EBITDA or non-GAAP earnings instead of GAAP. Ummm yeah like paying people in stock isn't an expense. Or let's just ignore the depreciation on an asset because it's not a cash expense...even though when that equipment breaks down and we have to buy a new piece of equipment then we will have to pay cash for that. Lots of shenanigans
Added a little more BALT at $4.59. they have earnings coming up soon so there is a good deal of risk but I really like this sector longer term. Oversupply was epic as everyone knows but capacity is now growing slower than demand (around 4% vs 10%+ demand) based on presentations I've listened to. That should continue as the entire industry will be cautious going forward for a long long time. I think it's very similar to the housing industry which underbuilt for so long that the supply-demand equilibrium swung the other way and forced prices up significantly. I think the same thing happens here and within a year or so these shippers will be a good deal higher. I like BALT again because it is more tethered to the spot rate than the other shippers, it has a much better balance sheet after its recent equity raise, it trades at 0.5X book, and they have a history of paying dividends and want to pay more dividends when their earnings rebound. I think it will eventually be paying a 10% dividend on today's price.
In general I'm trying to move my portfolio more into stocks that will eventually be paying larger dividends over time as we are looking to supplement our business income with more passive streams of income.
NQ is a total mind ----. I reopened @ 9.49, watched it plunge immediately below 9, added @ 8.97 and 8.91, watched it plunge further to 8.5x, offed the second and third aliquots @ 9.30 and 9.27, watched it plunge to 8.8x, and finally closed the initial aliquot @ 9.44. Chump change which I plan to use at my next foray to the craps table (where the action is predictable!).
ANy of you guys follow SYNC? They have earnings on 11/5 I think. This is setting up very similarly to BCOV prior to their earnings a couple of quarters ago. They have $1.40 in cash, no LT debt, and are free cash flow positive. Something tells me this will explode higher since it's completely forgotten/ignored/hated.
I added some DATE today at $6.12. My avg is now $6.3. Position size is small but I'm sticking around for the longer term on this one as I think they should be able to grow dividends over time.
The RSI_EMA reading on every time frame was around the lowest I've ever seen when the stock hit $9.3. on the 5min time frame it was at 3 (out of 100), on hourly it was at 5, and on the daily it was at 8. Even if it goes lower the odds are high it bounces soon as there are no more panic sellers left.
Didn't he also buy NUAN as well? I don't get the strategy there either but apparently auto mfr's are having trouble meeting expectation with their integrated ipod interface stuff.
Sounds like an opportunity if we knew how to play it.
Jury duty, bro. I was on stand-by until 11, left work and drove in for a 1245 jury selection, among the first 50 called, and need to return tomorrow morning. In case anyone gives a ----.
2nd - correct me if i'm wrong but Zohydro would be the first prescribed drug to patients before they prescribe stronger ones right? It's a lower risk pain killer? and this is only for chronic pain patients correct? why was it a shock that this passed the FDA?
Personally, I think it's BS that a drug some people legitimately need contains potentially harmful "abuse deterrents", what good is it if patients can't take it?
As for people on the street having access, that's the DEA's money maker.
(a) Traditional pain control regimens begin with non-narcotic analgesics such as Tylenol and Motrin, then work their way up to opiates. (b) More recent thinking aligns with your sentiments, as opiates are generally safer than Tylenol and Motrin (in the sense there is less insult to the liver and kidneys). (c) Non-combination opiates are superior to fixed-combination formulations. It's always possible to replicate a fixed-combination product when appropriate. In fact, it's possible to create customized versions of fixed-combination products such as Percocet (available as 5/325, 7.5/325, and 10/325) using separate orders for Oxy IR (oxycodone immediate-release) and Tylenol. For instance, a patient may require 120 mg of oxycodone in a 24-hour period, with only occasional doses of Tylenol. A highly flexible regimen might be [1] Oxy IR 15 mg every 4 hours as needed for pain scale 1-5 + [2] Oxy IR 30 mg every 4 hours as needed for pain scale 6-10 + [3] Tylenol 325 every 4 hours for mild pain unrelieved with oxycodone alone, an hour following a dose of Oxy IR + [4] Tylenol 650 mg every 4 hours for moderate-severe pain unrelieved with oxycodone alone, an hour following a dose of Oxy IR. (d) There are patient populations for whom non-opiates are contraindicated. Tylenol should be avoided in patients with pre-existing/acute liver impairment (eg, alcoholic cirrhosis). NSAIDs such as ibuprofen should be avoided in patients with kidney disease or in patients taking other medications that may lead to renal toxicity.
ZGNX: $3.02 avg. I agree with 2nd. Don't even think about it. I casually watched ACAD go nuts for a full year and read so many negative articles and watched so many people jump off the train at $5, $7, $10, etc. I think this one could have a similar fate even though I don't know shit about it.
Really the only thing I can add on this is the company will need to raise capital. Whether it's an equity raise or a JV to bring the drug to matter, it is going to have to happen. Part of me is concerned about the short term concerns around earnings and the equity capital needed. But my 3rd grade comprehension of medicine etc is if this is able to treat chronic pain without having damaging side effects that tylenol etc have on liver function, then this has the potential to be a big market. i also don't understand the potential competition but from what I've read the runway to getting this drug launched won't be blocked which gives them enough time to launch it and get it in the hands of doctors quickly and establish themselves as the market leader.
Yeah, this does seem like such a no-brainer it's too good to be true. I almost bet I could cook this stuff in my coffee maker(illegally, no doubt) if I could get my hands on the ingredients, LOL.
Earnings next week. Would wait and see if they can turn things around at all. Continued to burn cash last quarter and probably continued. This refinancing they are looking at has the potential to wipe out equity holders. Seems like competition is increasing faster than their ability to improve the business.
From what I have gathered, there are 2 Million patients using Hydrocodone and the . I haven't been able to verify this but I've read it is the number one prescribed drug.
Here is what I've found regarding the effects on the liver:
"Hydrocodone itself does not cause possible liver damage, but the actual acetaminophen in the pill is what can cause liver damage in high doses. Typically one must consume more then 8,000 mg in a 24 hour period consistently over a period of time to cause damage. However, those with liver damage or conditions that make them higher risk for liver damage may not require such high doses to cause more damage. There are many different doses of hydrocodone pills, but the most commonly used is Vicodin 5/500. This is 5mg of hydrocodone mixed with 500 mg of acetaminophen per pill. Typically you take 1-2 pills every 4-6 hours. Depending on a person's size and age will determine the maximum dose of acetaminophen. Most adults over 12 years old can safely consume 1000 mg of acetaminophen every 4-6 hours. If required you can take up to 1500 mg every 5-8 hrs, but this should be limited. There is also Lortab, which is typically given 500/650 or 750/650 and Norco typically scripted in 10/350 or 10/500. The 1st number is always the controlled pain reliever and the latter is the acetaminophen. Pain meds are mixed with acetaminophen to increase the effectiveness and some believe reduce the amount of abuse, but it can be extracted with a complex cold water method for those that truly want to abuse the hydrocodone component. Acetaminophen is processed by the liver and it takes about 4 hours for the liver to break it down. Taking more then the recommended dosage can cause the liver hardship. Granted going over a few times won't necessarily cause permanent damage, but consistent use may. Adding alcohol to the mix can cause an even higher chance of liver damage, because the liver must now process the alcohol and the acetaminophen, which is hard on it. Be careful and note it is the same rules as an OTC bottle of 'Tylenol'. You mentioned Ibuprofen and that is mixed with the script called Vicoprofen and usually comes in 7.5/200. Ibuprofen is not metabolized by the liver, but actually the kidney's. However, it is safer than acetaminophen at high doses. Some scripts have as much as 1000mg of Ibuprofen per pill, but it is hard on the stomach and shouldn't be used in people with ulcers. One should not mix acetaminophen & ibuprofen, even with fever. It is a fallacy that alternating between the two is safe to break fever. Researchers have found, however, that acetaminophen metabolites can build up in the renal medulla as a result of renal ischemia caused by non- steroidal anti-inflammatory medicines such as ibuprofen. It can cause a toxic effect. Hope that answers your concern. "
It just seems to me that if the ability of Zohydro to treat pain is the same as Hydrocodone, then I guess the question becomes: why wouldn't you prescribe it to your patients? Analysts and the company are using a 90k patient population, as per the conf call: http://edge.media-server.com/m/p/f9gspsu7/lan/en
However, if the market size is toward the 2 Million level then the market size is huge. I don't know what the total number of prescriptions are but this article uses 2010 stats and states that there were 31 million prescriptions at a retail cost of $320 Million. Another site I found estimates the current size of the market for hydrocodone/acetaminophen at about $250 Million per quarter: http://www.drugs.com/stats/acetaminophen-hydrocodone
There's more than one way to ruin a patient's liver, perhaps a little arsenic would make for a good deterrent.
Hydrocodone is one of the least expensive pain treatment compounds out there too I believe, maybe too little profit for larger pharmaceutical companies?
Added some BALT just now at $4.56. Position is still small...trying to keep it small for now because of earnings risk even though I see this as a longer term winner.
Washington Radiology - WRA is first in Northern Virginia, Washington DC and Maryland to offer 3D Mammography, a breakthrough technology in the diagnosis of breast cancer.
I'm trying my best to view this as a longer term hold even though I said that with so many others that I sold right before the exponential rise (CECO, NOK arghhhh).
I just think the issue with excess supply of ships going away is a huge game changing thing for these companies. And because so many of them got burnt holding too many ships I think they will be very risk averse which means supply could be constrained for years. Even if demand weakens a little the supply demand relationship is definitely going to be tilted in their favor for a long time.
I've been adding more today below $4.5. I'm going to build up to a 30% position in it I think
With BALT you get the added kicker of them having already done an equity raise so that risk is gone and they now have a nice stash of $$ on their balance sheet. They also have a book value or $8 to $9/share which I think will be realized over time. And they pay a dividend which will definitely be rising over time. Should they get back to $0.60 EPS they should pay out at least a dividend of $0.30 annually which is at least 6.7% on today's price. These net asset plays generally work out over time. It takes patience but the two best examples I can think of recently are CECO and NOK, both of which gave you a 150%+ return.
TOF, re YRCW, the refinancing was announced back in August, but they said they wouldn't talk about it on the Aug. conference call until it was complete: http://www.reuters.com/article/2013/08/07/us-yrcworldwide-results-idUSBRE9760O220130807
There was also a good article written back in July, when YRCW was at $30, which shows how, including debt, it is not cheap on an EV/revenue basis, especially given the risk levels.
Numbers out of MET not that great tonight - will probably sell tomorrow. Stock is getting fairly valued, so upside would have to come from improved business and their last acquisition in South America really wasn't that great. Still, about a 65% return including dividends in the 2 years I held it after Mark pointed it out on an earnings miss - thanks Mark!
Leaves me with 3 insurers:
NWLI, very cheap, still could almost double from here if it gets some interest AGO, at least 50% upside and possibly more, and has the catalyst of the improving municipal market ORI - has about 25% upside to fair value and it's title insurance business is starting to rock and it's property mortgage insurance is turning profitable
Still, I don't judge the market much, but my stock holdings are going down and I'm about 20% cash now, which is the most in years (probably since 2008) and am having a harder time finding good things to buy.
Makes me wonder if a correction is near.
I remember back in 2006 / 2007 having similar thoughts, but back then it was really hard to find things. At least now, I can still get some like AA, BSBR, KB and CCL, so I don't think we are at the end of the bull.
But, if we do get a rip-roaring Nov/Dec like some people are saying we could, I think I would be very worried.
NWLI is my second largest holding. Very cheap on all metrics, business running well, but small dividend and the CEO not stock-friendly. May take time, but the last 2 bull market runs, got up over book value, which is 80% up from here.
I agree TOF, the cheap ones are in commodities like steel and emerging markets like China. Other ones like the Chile ETF (ECH) is near its 4 year lows too.
I have 2 concerns that are keeping me out of them:
1. After such a long commodity bull, I keep thinking the bear should be longer and that we see lower prices. 2. If we do get a correction, I suspect the pullback in these types of stocks would be more than US ones, even though they have better valuation support.
Yeah, sorry. I am in AEG and it is a large holding for me. I kind of lump it into my Euro-exposure, but it really is mainly a US life insurer with Dutch and UK exposure.
BB - On AEG: That's a discount to book value play right? I see they used to pay around $1.60 Dividend. I'm assuming earnings are not going to be able to support a return back to that kind of a dividend because interest rates are too low right? Also right now they're paying what looks like a quarterly dividend of around $0.15. Is this quarterly or semi annual?
The reason I like AEG is it really is a US insurer, with 70% of the business through Transamerica in the US and 30% outside, similar to many US insurers, but it is being valued as a European insurer. So, for example, Morningstar says MET's fair value is $47 and the stock is slightly over this, but AEG's fair value is $11 and the stock is under $8.
AEG receives high ratings from the agencies like Fitch, AM Best, plus have restructured the business to reduce risk,so should be little risk of a bad event hitting the price.
They do the Euro-way of dividends paying twice a year, and much more variable based on how the business did that year (not like the US, pay the same or higher every year way). Dividend this year should be around 0.23 Eurocents, so US $0.30, so a yield of about 3.5%.
I guess the risk is that they still haven't cleaned up all their legacy business, but that is unlikely. I believe that insurance is a pretty standard business, so they ROE's should converge over time. SO AEG's business should continue to improve and the discount to book value will decrease and the book value should gradually increase giving good upside potential.
FB- I changed my picture last night to this one. It was the first time I've been there in months and was shocked at the amount of adds. Having said that, TWTR seems to be increasing the amount and size of it's adds.
I kind of agree with the thinking that if we can still find stocks like AA and AEG and there are still sectors like the financials selling below book then there's still a decent chance we're going to head higher.
Have a good weekend guys! :)
ReplyDeleteI dunno 'bout that hydrocodone, hospitals/physicians aren't prescribing it anymore?
did you buy any 2nd? what's the market potential?
Delete"The FDA will recommend by early December reclassifying hydrcodone-combinations as Schedule II substances, Janet Woodcock, director of the agency’s Center for Drug Evaluation and Research, said yesterday. " Poor woman must have had a hard time with that last name growing up.
I think it's difficult to overstate the market potential. I'm surprised the FDA approved it. We'll probably see a run-up in the stock next week, followed by a pullback. I haven't taken a position.
DeleteSo the market potential is huge? it's just a pain killer right?
DeleteYou won't want to go to UVA then if you're in an automobile accident, they will not prescribe oxycodone, hydrocodone, codeine, morphine, methadone, fentynal, or heroin. Gabapentin is the only pain relief medication you might be prescribed.
Deletehttp://news.yahoo.com/fda-wants-limits-most-prescribed-painkillers-234427836--finance.html
Yeah, I wouldn't go so far as to say this news won't be good for the stock, it's highly probable it will be.
DeleteIt's just that now calling it "Hydro" is putting the squeeze on doctors to not prescribe it for legitimate reasons. There's a huge backlash going on right now, this is a very controversial subject and they're working to get it under control. Say bye-bye to Opiates, UVA has made their decision, I doubt they'll ever prescribe it again in the future. I don't know when they stopped but you won't find a physician there who would even consider stepping out of line, done deal.
They also use the ISRG robot for brain surgery, this is the hospital that gets stroke patients helicoptered in from out of state. I'm waiting for ISRG to lose another $100 of loft then it's time to pounce.
Thinking about this more, I believe hydrocodone is available over the counter in Mexico. Considering, bringing that version over the border would be frowned upon unless you were to grease some select set of DEA palms, one could probably get a prescription version filled if he were to visit a doctor while in Mexico.
DeleteThis is just one country, we need to consider the entire world perhaps...... Really, is the entire world saddled with abiding by US DEA/FDA regulatory requirements?
I like the toilet idea better, I bet some company is gonna make a mint manufacturing and selling toilets and sanitary sewage equipment in developing nations.
I like the sewage idea more also. Did my posts on the subject include the names of any companies? I can't recall.
DeleteFNMA - Closed at the high of day.
ReplyDeleteARNA - Coming back?
ReplyDeleteAGO - Okay guys, this one looks like it might be ready to break out of the channel. We coulda had it at $18, look at how it shot up!
ReplyDeleteI've noticed a marked increase in patience on my part in 2013, which has become more pronounced the past few weeks. The patience is reflected not only in waiting for proper pitches, but also in reducing positions to a manageable size (as in 'emotionally manageable'). The results have not been spectacular, but the gains have become more consistent. You might say it's the equivalent of earning a modest but predictable income playing craps. I consider it an emotional achievement, a step up in trading maturity.
ReplyDeletehttp://www.marketwatch.com/story/big-miners-offer-bleak-outlook-for-gold-metals-2013-10-25?pagenumber=1
ReplyDeleteNo one's really paying attention to stuff like that. The writing on the wall, if you will.
http://business.financialpost.com/2013/10/24/reflections-of-a-former-bear-why-the-economy-isnt-as-bad-as-the-fed-thinks/
ReplyDeleteNFLX> 'Assault on Wall Street.' Don't miss it. I almost did, based on its 'Action and Adventure' genre listing and cover photo. It's actually a pretty powerful story of what might have happened to any of us during the financial crisis had we been hit with a perfect storm (REIT investments under Lehman/Bear Stearns management + adjustable rate mortgage + health crisis + unemployment).
ReplyDeleteFutures are rippin'. No one's paying attention to the bear case.
ReplyDeleteLet me go on record as saying I'm bearish right now.
DeleteIt's lonely in the bear camp.
DeleteIt's always lonely at market turns.
DeleteHussman has yet to publish a weekly commentary. Taking a line from above film, there are only so many ways to say, 'Same old shit, different day.'
DeleteI hope it does rip higher, I won't be watching tomorrow (attending funeral).
ReplyDeleteOut of TBT premarket at $72.39. Closed out of TLT short as well.
ReplyDeleteThought YRCW was reporting this am.
ReplyDeleteAnyone looked at Express Scripps - ESRX?
ReplyDeleteHave increased revenue and earnings for over 10 years in a row, but got hit with an earnings miss Friday. Trade at a forward P/E of 12, which is pretty good given their record of increasing earnings. Problem is I don't understand the US health care market that well and if this is sustainable.
Sold CCl. +9% Thanks BB!
ReplyDeleteGlad it worked out - nice trading Mark!
DeleteFB @ 50.65. ZGNX @ 3.13.
ReplyDeleteAdded to FB @ 50.19.
DeleteNQ @ 9.87.
ReplyDeleteJumping bean, no lie.
DeleteAA at $9.55 now looking to close at a new high for the year. Still think it is good to own as it is the type of stock where the price will move before the earnings. If the economy does improve as it looks like, AA will do well with aircraft, manufacuring, etc. plus kicker of increased usage in cars due to new fuel efficiency requirements.
ReplyDeleteLong NQ at $9.00
ReplyDeleteSold at $9.50
Deletethat was the fastest I've every turned something around. One minute and 12 seconds for a 6% gain. this thing is nuts.
DeleteNicely played, tof.
DeleteI was just trying to play the higher low to be honest. $8.4 was the prior low. I think it bottomed at $8.7 today. If it keeps putting in higher lows it might be done selling off. Going to be volatile for a while is my guess.
DeleteBy the way, does anyone know if Muddy Waters ever got penalized / fined etc for their fraud allegations on ONP, FMCN and EDU? Those are some pretty hefty charges for companies to fight. ONP was investigated by the SEC and found to not have any fraud.
famous last words " I think it bottomed at $8.7 today."
DeleteI think trading bottoms are coming up in EGLE BALT etc. I am watching them closely.
ReplyDeleteMan, the guys who run Marketwatch have to believe that reporting negative opinions on the market drives ratings.
ReplyDeleteYou don’t need a Nobel to know investors are sheep
Irrational exuberance, part 3 - 5 signs that stock-market bulls are repeating yesterday’s mistakes
It's become such a useless web site, other than for reading about politics.
Add on a little Cody Willard trying to sell subscriptions to his investment advice which from what I've read is fairly useless and it really becomes a nonsensical site. The issue is you have people that need to pump out as many articles as possible because they're getting paid on a per article basis. That's why the content in WSJ / NYT is so much better...you have people with full time positions and excellent backgrounds.
DeleteLong NQ again at $8.6. Keeping it very small
ReplyDeleteJust for the hell of it, why don't we both keep a small long-term position. Just in case the stock recovers the way other Muddy Waters' breakdowns have, and ends up at 26 next year.
Deleteok sounds like a good idea. i was thinking about this earlier so let's do it.
DeleteMy thinking on this is really simple: we've all seen "geniuses" in the market that have gotten one or a few trades right and then fade into oblivion. At 38 years old, is Carson Block a true genius or just someone that got a few calls right? Meredith Whitney, David Rosenberg, John Hussman and many others come to mind.
DeleteHere's my take. It's not like we bought in @ 24. Or 15. Or even at this morning's 12. We bought in below 10. So WTF.
Deleteyeah i agree. i was kicking myself for not buying it at around $8 when i saw it putting in a bottom over the summer. let's say this blows over like FMCN and EDU did. wouldn't i then be kicking myself again for not buying around $8ish? as long as the position is small why not take some risk. this is a risky business in general. if we are looking to make 3% a year we can look elsewhere.
DeleteLet's not forget Bill Ackman, who shorted HLF (and bought JCP),. both after presumably great research.
DeleteSpeaking of JCP...
DeleteIt just takes a little patience.
Deleteyeah i've been watching JCP today. i still haven't had a chance to look at it, but i did go to the mall out here in Natick MA where there was a JCP store and when I was looking at the directory of the mall it struck me just how big this brand is to malls...there's always a reference point with the JCP stores on the directories...its one of those brands that everyone knows. maybe it should just be as simple as that...the brand probably isn't permanently impaired and financial issues will probably sort themselves out over time. capital structure is always an issue. perfect example is C or AIG...they stayed in business but killed shareholders
DeleteFB> half purchased @ 50.19 off @ 50.59.
ReplyDeleteI've been waiting to buy BALT for months now. Finally opened up a position at $4.6 today. They have earnings coming up soon which adds risk to it but I really like this one longer term as I think the baltic dry index rebounds over time and BALT is the most tethered to spot rates. They recently raised $60 Million in a capital raise at this price which leaves them with about $65 Million cash and $100 Million debt. They're actually operating at positive free cash flow and their book value is about 100% higher than the current price. I'm looking to add more should the stock fall after earnings.
ReplyDeleteSecond half of FB off @ 50.71.
ReplyDeleteAdded to ZGNX @ 3.05.
ReplyDeleteKeep looking at SYNC
ReplyDeleteI also finally bought some BKJ for the longer term account. Steady grower over the long term. Paid $0.48 dividend in 2012 and should boost that to around $0.54 total for 2013. That translates into a 4% dividend on the current price. Growth has been slowing a little but it's still a nice little bank and their branches are in one of the wealthier areas in NJ so that should support deposit growth over time. I know the area well since I grew up in NJ.
ReplyDeleteNQ- Wow. I bet a few people left this am thinking 'winner, winner, chicken dinner."
ReplyDeleteYRCW Nov. 7th.
ReplyDelete2nd - I ended up Chickenpookieing out...sorry. I sold it earlier today on a spike down (of course) at like $8.8
ReplyDeleteI'll admit it, I got spooked out by the Seeking Alpha article.
DeleteNo worries, bro. As I pointed out earlier, I'm trading position sizes that allow patience. I'm good with both NQ and ZGNX right now.
DeleteAA - I'm afraid this one's getting away.............
ReplyDeleteGood work today guys, thanks fer CCL
my suspicion is we get another thrust higher this week on the back of the Fed meeting. it will be interesting to see how the market trades after that, if it does happen. i think there's some risk here but there are still a bunch of beaten down sectors that look interesting to me. i like the shippers, some steel stocks, the fuel cell companies (BLDP, FCEL), and I still think some of those chinese small caps are interesting.
ReplyDeleteUGAZ.
ReplyDeleteNGas is responsible for more reversal gaps than any other asset I follow.
So what's the sales potential for Zohydro?
ReplyDeletehttp://www.drugs.com/stats/oxycontin
Purdue Pharma's Oxycontin generates sales of >2.5b/year. If Zohydro generates annual sales of just 1% of that, it would almost double Zogenix's current estimated 2013 revenue of 35m.
http://finance.yahoo.com/q/ae?s=ZGNX+Analyst+Estimates
Why is it going to be such a strong seller now that it wont be mixed/blended?
Deleteyeah all of this is over my head.
Deleteb/c it was mixed to make it "unpalatable", now it's the real McCoy. Many doctors wouldn't prescribe it b/c they didn't want to prescribe acetaminophen, they needed the real McCoy for their patients......... Except I'm thinking this requirement was/is US specific.
DeleteOpiates without acetaminophen offer dosing advantages when treating chronic pain syndromes. There is no 'ceiling' to the dose of an opiate, as long as the recipient is tolerant. On the other hand, it's generally recognized that the daily dose of acetaminophen should not exceed 4000 mg (in some cases, 2500 mg), due to the risk of liver damage. Thus Percocet (oxycodone 5 mg/acetaminophen 325 mg) is limited to a maximum of 12 tablets/24 hrs (60 mg oxycodone + 3900 mg acetaminophen), whereas it's not uncommon to see spinal injury patients taking Oxycontin or OxyIR doses that total several hundred milligrams daily.
DeleteTOF - What was the ticker you mentioned last week that might be receiving an adjustment to their IRS status? I was trying to research it but frick'n lost track.....
ReplyDeleteOPTT - This one's another hot popper.
ReplyDeleteOffed the NQ @ 10.21 pre-market.
ReplyDeleteToo funny I bot at 9.8 and sold at ur price
DeleteI also bought your zgnx pre market at 3.04. Probable should wait a bit but with biotech hot and this with a newly approved drug I think it makes sense that this goes a good deal higher
DeleteThey will have to do an equity offering of course which could cause some hiccups inthe short term plus earnings are coming up
DeleteONP another Muddy Waters stock that was found not to be a fraud by the SEC is up 18% today on good earnings pre-announcement. One day some of these Chinese stocks will eventually trade at higher multiples than 2X earnings
ReplyDeleteIf you believe them.....
Deletethe SEC?
DeleteSure, them too.
DeleteI have a hard time believe all companies man. Look at FMD. They were not fraudulent but definitely mislead people about the sale of those trust assets and how much risk they had with the position they took. Plus, look at all of these US based companies that use EBITDA or non-GAAP earnings instead of GAAP. Ummm yeah like paying people in stock isn't an expense. Or let's just ignore the depreciation on an asset because it's not a cash expense...even though when that equipment breaks down and we have to buy a new piece of equipment then we will have to pay cash for that. Lots of shenanigans
DeleteFATE- You guys know this one?
ReplyDeleteLooks like a new IPO right? Never heard of them.
DeleteYeah, there are some pretty high PT's for it.
Deletedo they have an approved drug? i have a hard time with bio's that don't have approved drugs.
DeletePhase II is the closet I think.
DeleteAdded a little more BALT at $4.59. they have earnings coming up soon so there is a good deal of risk but I really like this sector longer term. Oversupply was epic as everyone knows but capacity is now growing slower than demand (around 4% vs 10%+ demand) based on presentations I've listened to. That should continue as the entire industry will be cautious going forward for a long long time. I think it's very similar to the housing industry which underbuilt for so long that the supply-demand equilibrium swung the other way and forced prices up significantly. I think the same thing happens here and within a year or so these shippers will be a good deal higher. I like BALT again because it is more tethered to the spot rate than the other shippers, it has a much better balance sheet after its recent equity raise, it trades at 0.5X book, and they have a history of paying dividends and want to pay more dividends when their earnings rebound. I think it will eventually be paying a 10% dividend on today's price.
ReplyDeleteIn general I'm trying to move my portfolio more into stocks that will eventually be paying larger dividends over time as we are looking to supplement our business income with more passive streams of income.
NQ is a total mind ----. I reopened @ 9.49, watched it plunge immediately below 9, added @ 8.97 and 8.91, watched it plunge further to 8.5x, offed the second and third aliquots @ 9.30 and 9.27, watched it plunge to 8.8x, and finally closed the initial aliquot @ 9.44. Chump change which I plan to use at my next foray to the craps table (where the action is predictable!).
ReplyDeleteANy of you guys follow SYNC? They have earnings on 11/5 I think. This is setting up very similarly to BCOV prior to their earnings a couple of quarters ago. They have $1.40 in cash, no LT debt, and are free cash flow positive. Something tells me this will explode higher since it's completely forgotten/ignored/hated.
ReplyDeleteThis ZGNX looks like it's ready to explode higher.
ReplyDeleteSis ain't even blogging today.
ReplyDeleteSold the rest of the PEIX at $3.57
ReplyDeleteI added some DATE today at $6.12. My avg is now $6.3. Position size is small but I'm sticking around for the longer term on this one as I think they should be able to grow dividends over time.
ReplyDeleteAnnoyed I didn't buy SORL yesterday at $4.4. I was watching that one closely but was a little gunshy.
DeleteHoly shit. YRCW. Filling the gap!?! wow.
ReplyDeleteLong $9.54 a whopping 1,000 shares.
DeleteLooking to double down at $9.3
DeleteFilled.
DeleteThe RSI_EMA reading on every time frame was around the lowest I've ever seen when the stock hit $9.3. on the 5min time frame it was at 3 (out of 100), on hourly it was at 5, and on the daily it was at 8. Even if it goes lower the odds are high it bounces soon as there are no more panic sellers left.
DeleteLooking to sell at $9.75 (just below intraday lows before the panic sell)
DeleteDrove home to check it out. Another 100K shares sold by 10% owner.
Deleteactually i'm going to see if it bounces higher by the end of the day.
Deletethey actually only own about 2.5% of the fully diluted share count.
DeleteSold it at $9.65.
Deletebought back at $9.44. this is no different than NQ. volatile as hell
Deletetook a small hit...sold at $9.39.
DeleteIcahn bought more TLM.
ReplyDeletewhat's the strategy there?
DeleteSplit it up, but MOG say's overseas assets would have to take too large a charge. Wont work.
DeleteDidn't he also buy NUAN as well? I don't get the strategy there either but apparently auto mfr's are having trouble meeting expectation with their integrated ipod interface stuff.
DeleteSounds like an opportunity if we knew how to play it.
Yeah, he's been in NUAN for quite a while.
DeleteYRCW - 01-Jul-13 Upgrade BB&T Capital Mkts Hold → Buy $40
ReplyDeleteNSPH Nov. 6th.
ReplyDeleteX. That is an interesting reaction to earnings.
ReplyDeleteAs if the world does actually need a few pounds of steel, go figure.....
Deleteciti - Bearish eurozone forecast?
ReplyDeleteYRCW broke its uptrend line today from the 3/7/13 lows.
ReplyDeleteFor the life of me I can't figure out why he sold the shares the way he did. NOT the reason he sold.
DeleteIt's now below the CHEAPEST price I started selling at on the way up.
Deleteyeah nuts man.
DeleteJury duty, bro. I was on stand-by until 11, left work and drove in for a 1245 jury selection, among the first 50 called, and need to return tomorrow morning. In case anyone gives a ----.
ReplyDeleteNQ. Figures.
ReplyDeleteZGNX. Figures.
NQ goes to $14 tomorrow
Delete2nd - correct me if i'm wrong but Zohydro would be the first prescribed drug to patients before they prescribe stronger ones right? It's a lower risk pain killer? and this is only for chronic pain patients correct? why was it a shock that this passed the FDA?
ReplyDelete" I suspect Zohydro will top the list of street drugs within a year." The FDA advisory committee was opposed. High rate of opiate addiction.
DeleteTell 'em he's guilty!
ReplyDeleteMore on zohydro:
ReplyDeletehttp://www.fdalawblog.net/fda_law_blog_hyman_phelps/
Acetaminophen is the abuse deterrent?
DeletePersonally, I think it's BS that a drug some people legitimately need contains potentially harmful "abuse deterrents", what good is it if patients can't take it?
DeleteAs for people on the street having access, that's the DEA's money maker.
tof-
ReplyDelete(a) Traditional pain control regimens begin with non-narcotic analgesics such as Tylenol and Motrin, then work their way up to opiates.
(b) More recent thinking aligns with your sentiments, as opiates are generally safer than Tylenol and Motrin (in the sense there is less insult to the liver and kidneys).
(c) Non-combination opiates are superior to fixed-combination formulations. It's always possible to replicate a fixed-combination product when appropriate. In fact, it's possible to create customized versions of fixed-combination products such as Percocet (available as 5/325, 7.5/325, and 10/325) using separate orders for Oxy IR (oxycodone immediate-release) and Tylenol. For instance, a patient may require 120 mg of oxycodone in a 24-hour period, with only occasional doses of Tylenol. A highly flexible regimen might be [1] Oxy IR 15 mg every 4 hours as needed for pain scale 1-5 + [2] Oxy IR 30 mg every 4 hours as needed for pain scale 6-10 + [3] Tylenol 325 every 4 hours for mild pain unrelieved with oxycodone alone, an hour following a dose of Oxy IR + [4] Tylenol 650 mg every 4 hours for moderate-severe pain unrelieved with oxycodone alone, an hour following a dose of Oxy IR.
(d) There are patient populations for whom non-opiates are contraindicated. Tylenol should be avoided in patients with pre-existing/acute liver impairment (eg, alcoholic cirrhosis). NSAIDs such as ibuprofen should be avoided in patients with kidney disease or in patients taking other medications that may lead to renal toxicity.
Don't even think about NQ, bro.
ReplyDelete2nd- Hint. They're guilty.
ReplyDeleteI should tell the presiding judge about my sixth sense re human nature. That should get me off.
DeleteDrug addicts care about their liver??
ReplyDeleteSo are we in ZGNX? If so, at what basis?
3. Keep it small, and don't look at it for a year.
DeleteChronic pain suffers don't need their livers either, apparently.
DeleteXCO- Nice.
ReplyDeleteMeanwhile, PM's are trying their best to tempt momo chasers.
ReplyDeleteRobot's short 1746 call isn't working out too well, wonder if he flips long today?
ReplyDeleteZGNX: $3.02 avg. I agree with 2nd. Don't even think about it. I casually watched ACAD go nuts for a full year and read so many negative articles and watched so many people jump off the train at $5, $7, $10, etc. I think this one could have a similar fate even though I don't know shit about it.
ReplyDeleteSomehow I feel compelled to trust 2nd's sixth sense on this one.
DeleteReally the only thing I can add on this is the company will need to raise capital. Whether it's an equity raise or a JV to bring the drug to matter, it is going to have to happen. Part of me is concerned about the short term concerns around earnings and the equity capital needed. But my 3rd grade comprehension of medicine etc is if this is able to treat chronic pain without having damaging side effects that tylenol etc have on liver function, then this has the potential to be a big market. i also don't understand the potential competition but from what I've read the runway to getting this drug launched won't be blocked which gives them enough time to launch it and get it in the hands of doctors quickly and establish themselves as the market leader.
DeleteYeah, this does seem like such a no-brainer it's too good to be true. I almost bet I could cook this stuff in my coffee maker(illegally, no doubt) if I could get my hands on the ingredients, LOL.
DeleteAGO - Channel is being voilated, huh?
ReplyDeleteVIX - A brief spike
YRCW - Doesn't seem to be collapsing again today, long slow grind downward from here or was the selloff a pure BS stunt?
ReplyDeleteEarnings next week. Would wait and see if they can turn things around at all. Continued to burn cash last quarter and probably continued. This refinancing they are looking at has the potential to wipe out equity holders. Seems like competition is increasing faster than their ability to improve the business.
DeleteGood thinking there....
DeleteBACML upgraded JBHT not long ago, so maybe a great deal of the sector upside is priced in already....
DeleteFrom what I have gathered, there are 2 Million patients using Hydrocodone and the . I haven't been able to verify this but I've read it is the number one prescribed drug.
ReplyDeleteHere is what I've found regarding the effects on the liver:
"Hydrocodone itself does not cause possible liver damage, but the actual acetaminophen in the pill is what can cause liver damage in high doses. Typically one must consume more then 8,000 mg in a 24 hour period consistently over a period of time to cause damage. However, those with liver damage or conditions that make them higher risk for liver damage may not require such high doses to cause more damage. There are many different doses of hydrocodone pills, but the most commonly used is Vicodin 5/500. This is 5mg of hydrocodone mixed with 500 mg of acetaminophen per pill. Typically you take 1-2 pills every 4-6 hours. Depending on a person's size and age will determine the maximum dose of acetaminophen. Most adults over 12 years old can safely consume 1000 mg of acetaminophen every 4-6 hours. If required you can take up to 1500 mg every 5-8 hrs, but this should be limited. There is also Lortab, which is typically given 500/650 or 750/650 and Norco typically scripted in 10/350 or 10/500. The 1st number is always the controlled pain reliever and the latter is the acetaminophen. Pain meds are mixed with acetaminophen to increase the effectiveness and some believe reduce the amount of abuse, but it can be extracted with a complex cold water method for those that truly want to abuse the hydrocodone component. Acetaminophen is processed by the liver and it takes about 4 hours for the liver to break it down. Taking more then the recommended dosage can cause the liver hardship. Granted going over a few times won't necessarily cause permanent damage, but consistent use may. Adding alcohol to the mix can cause an even higher chance of liver damage, because the liver must now process the alcohol and the acetaminophen, which is hard on it. Be careful and note it is the same rules as an OTC bottle of 'Tylenol'. You mentioned Ibuprofen and that is mixed with the script called Vicoprofen and usually comes in 7.5/200. Ibuprofen is not metabolized by the liver, but actually the kidney's. However, it is safer than acetaminophen at high doses. Some scripts have as much as 1000mg of Ibuprofen per pill, but it is hard on the stomach and shouldn't be used in people with ulcers. One should not mix acetaminophen & ibuprofen, even with fever. It is a fallacy that alternating between the two is safe to break fever. Researchers have found, however, that acetaminophen metabolites can build up in the renal medulla as a result of renal ischemia caused by non- steroidal anti-inflammatory medicines such as ibuprofen. It can cause a toxic effect. Hope that answers your concern. "
It just seems to me that if the ability of Zohydro to treat pain is the same as Hydrocodone, then I guess the question becomes: why wouldn't you prescribe it to your patients? Analysts and the company are using a 90k patient population, as per the conf call:
http://edge.media-server.com/m/p/f9gspsu7/lan/en
However, if the market size is toward the 2 Million level then the market size is huge. I don't know what the total number of prescriptions are but this article uses 2010 stats and states that there were 31 million prescriptions at a retail cost of $320 Million. Another site I found estimates the current size of the market for hydrocodone/acetaminophen at about $250 Million per quarter:
http://www.drugs.com/stats/acetaminophen-hydrocodone
So it's a $1 Billion+ annual market.
There's more than one way to ruin a patient's liver, perhaps a little arsenic would make for a good deterrent.
DeleteHydrocodone is one of the least expensive pain treatment compounds out there too I believe, maybe too little profit for larger pharmaceutical companies?
Didn't know TradingTopics was turning into a drug house - maybe it needs to be renamed - haha.
ReplyDeleteContemplatingChange would get my vote! :)
DeleteAdded some BALT just now at $4.56. Position is still small...trying to keep it small for now because of earnings risk even though I see this as a longer term winner.
ReplyDeleteSo tempting! I tend to think this is a false break to downside.
DeleteSomething just caused some listing, rogue wave?
ReplyDeleteXCO- Nicer.
ReplyDeleteWay to manage expectations blood suckers.
DeleteYRCW- I wouldn't touch it before earnings. BB- Do you have a link regarding the financing you mentioned?
ReplyDeleteOkay, no taper per Ben
ReplyDeleteWashington Radiology - WRA is first in Northern Virginia, Washington DC and Maryland to offer 3D Mammography, a breakthrough technology in the diagnosis of breast cancer.
ReplyDeleteHOLX - Going to $28, or is this VAR? VAR is working on their improved version, it's under clinical evaluation..
DeleteBALT earnings on the 7th... Ut-oh, same day as YRCW.
ReplyDeleteI'm trying my best to view this as a longer term hold even though I said that with so many others that I sold right before the exponential rise (CECO, NOK arghhhh).
DeleteI just think the issue with excess supply of ships going away is a huge game changing thing for these companies. And because so many of them got burnt holding too many ships I think they will be very risk averse which means supply could be constrained for years. Even if demand weakens a little the supply demand relationship is definitely going to be tilted in their favor for a long time.
I've been adding more today below $4.5. I'm going to build up to a 30% position in it I think
With BALT you get the added kicker of them having already done an equity raise so that risk is gone and they now have a nice stash of $$ on their balance sheet. They also have a book value or $8 to $9/share which I think will be realized over time. And they pay a dividend which will definitely be rising over time. Should they get back to $0.60 EPS they should pay out at least a dividend of $0.30 annually which is at least 6.7% on today's price. These net asset plays generally work out over time. It takes patience but the two best examples I can think of recently are CECO and NOK, both of which gave you a 150%+ return.
DeleteThanks brody. You at the game?
Deletei wish due
DeleteTOF, re YRCW, the refinancing was announced back in August, but they said they wouldn't talk about it on the Aug. conference call until it was complete: http://www.reuters.com/article/2013/08/07/us-yrcworldwide-results-idUSBRE9760O220130807
ReplyDeleteThere was also a good article written back in July, when YRCW was at $30, which shows how, including debt, it is not cheap on an EV/revenue basis, especially given the risk levels.
Numbers out of MET not that great tonight - will probably sell tomorrow. Stock is getting fairly valued, so upside would have to come from improved business and their last acquisition in South America really wasn't that great. Still, about a 65% return including dividends in the 2 years I held it after Mark pointed it out on an earnings miss - thanks Mark!
ReplyDeleteLeaves me with 3 insurers:
NWLI, very cheap, still could almost double from here if it gets some interest
AGO, at least 50% upside and possibly more, and has the catalyst of the improving municipal market
ORI - has about 25% upside to fair value and it's title insurance business is starting to rock and it's property mortgage insurance is turning profitable
Still, I don't judge the market much, but my stock holdings are going down and I'm about 20% cash now, which is the most in years (probably since 2008) and am having a harder time finding good things to buy.
ReplyDeleteMakes me wonder if a correction is near.
I remember back in 2006 / 2007 having similar thoughts, but back then it was really hard to find things. At least now, I can still get some like AA, BSBR, KB and CCL, so I don't think we are at the end of the bull.
But, if we do get a rip-roaring Nov/Dec like some people are saying we could, I think I would be very worried.
Do you still hold NWLI?
DeleteThe undervalued ones I'm finding are primarily in China stocks + iron ore / steel and those that ship iron ore / steel.
the other ones i'm watching closely are SYNC, BLDP, FCEL, PACB
DeleteThanks BB, I'm watching them! :)
DeleteNWLI is my second largest holding. Very cheap on all metrics, business running well, but small dividend and the CEO not stock-friendly. May take time, but the last 2 bull market runs, got up over book value, which is 80% up from here.
DeleteI agree TOF, the cheap ones are in commodities like steel and emerging markets like China. Other ones like the Chile ETF (ECH) is near its 4 year lows too.
DeleteI have 2 concerns that are keeping me out of them:
1. After such a long commodity bull, I keep thinking the bear should be longer and that we see lower prices.
2. If we do get a correction, I suspect the pullback in these types of stocks would be more than US ones, even though they have better valuation support.
It's stats like this which make me think we do get a strong finish to the year:
Deletehttps://twitter.com/MktOutperform/status/395315022835892224/photo/1
BB - are you still in AEG?
DeleteYeah, sorry. I am in AEG and it is a large holding for me. I kind of lump it into my Euro-exposure, but it really is mainly a US life insurer with Dutch and UK exposure.
DeleteA lot better value in AEG than MET.
This is a real picture.
ReplyDeleteIs that corn?
DeleteLooks like corn that has swallowed a young boy up to his head!
DeleteYeah, he was at a pumpkin patch and they had this big bin of corn the kids could jump in. Pretty wild. That one might stick for a while!
DeleteBB - On AEG: That's a discount to book value play right? I see they used to pay around $1.60 Dividend. I'm assuming earnings are not going to be able to support a return back to that kind of a dividend because interest rates are too low right? Also right now they're paying what looks like a quarterly dividend of around $0.15. Is this quarterly or semi annual?
ReplyDeleteThe reason I like AEG is it really is a US insurer, with 70% of the business through Transamerica in the US and 30% outside, similar to many US insurers, but it is being valued as a European insurer. So, for example, Morningstar says MET's fair value is $47 and the stock is slightly over this, but AEG's fair value is $11 and the stock is under $8.
DeleteAEG receives high ratings from the agencies like Fitch, AM Best, plus have restructured the business to reduce risk,so should be little risk of a bad event hitting the price.
They do the Euro-way of dividends paying twice a year, and much more variable based on how the business did that year (not like the US, pay the same or higher every year way). Dividend this year should be around 0.23 Eurocents, so US $0.30, so a yield of about 3.5%.
I guess the risk is that they still haven't cleaned up all their legacy business, but that is unlikely. I believe that insurance is a pretty standard business, so they ROE's should converge over time. SO AEG's business should continue to improve and the discount to book value will decrease and the book value should gradually increase giving good upside potential.
Good morning guys, hope you're all having a good one!
ReplyDelete1770's - Wishing I'd shorted there........... LOL!
ReplyDeleteXCO- Nicest!
ReplyDeleteAre you buying or shorting or just watching?
DeleteStock is taking a hammering. At some point these nat gas stocks should be buyable, but I don't know enough about XCO to have an opinion either way.
YRCW- Only about a buck to go. Amazing.
ReplyDeleteFB- I changed my picture last night to this one. It was the first time I've been there in months and was shocked at the amount of adds. Having said that, TWTR seems to be increasing the amount and size of it's adds.
ReplyDeleteBALT - Going to $4, or WTF?????
ReplyDeleteIt's right at the 100 dma right now.
DeleteWhole cow, it's triple witching on the 7th... MITK reports that day too!!
ReplyDeleteAdded BALT at $4.39 today and added a small amount of ZGNX at $2.86. Can't friggin believe PEIX. Perfect example of buying a breakdown.
ReplyDeleteI kind of agree with the thinking that if we can still find stocks like AA and AEG and there are still sectors like the financials selling below book then there's still a decent chance we're going to head higher.
ReplyDeleteNWLI - Okay now fess up, which one of you guys has been snapping up shares today?
ReplyDelete