There is nothing I hate more than reading analysis and see people making calls without doing the work necessary to show any track record. Without accountability there is no As a up and coming financal 'blogger', 'resource', 'brand', 'talking head', 'raving lunatic' or 'pundit' in this game there are couple of datas I would like to state/make clear. I want all who read me to understand I take my recommendations/analysis on this corner of the web seriously. I am not just churning out empty fodder. Although my attempts at humor to keep the site enjoyable my give that impression. Below is a review of my calls since I have been actively updating my blog/twitter.
12/9/09 - I made two recommendations being LG Display (LPL) and Disney (DIS): LINK
*Disney gapped higher in the five days following my initial recommendation has since leveled off. It is more of long-term / allocation / conservative play as I mentioned. LPL has returned over 20% in a month.
11/24 - I noticed the gap higher in Medtronic (MDT) and stated quite plainly "In my fucking sleep I can tell you it goes to 45." LINK Lo and behold:
Market is going higher. Healthy consilidation and built a strong base. Should breakout to new yearly highs from here into new year. Top picks EPD, Ez Corp. (EZPW), LG Display (LPL). And short higher edu school stocks, specifically Grand Canyon Education (LOPE), and basically anyone in the business of giving online diplomas in communication/business areas of study. Implementation of thesis Friday at the close and have been rewarded thus far. However with the exception of LG Display, these have 1-3 month time frame in my mind.
"These days investors have relearned that the investments everyone is talking about are usually ones you don't want to buy. The risks of chasing a highflier generally outweigh the rewards. It takes a 100% profit to recover from a 50% loss.
The best investments are usually the ones nobody is talking about. Ten years ago, everybody was talking about which technology stocks to buy. Almost nobody was talking about gold. The Bank of England could barely give the stuff away at $260 an ounce." Don't Chase Highflying Stocks - (WSJ)
I like Disney here too. Despite being in an awful sector in transition they are a group of consumers who are historically suckers and slow to move. All one needs to do is look at record sales for High School Musical or whatever else parents are being talked into buying to realize these are not informed purchases necessarily. These are let go of my arm and be quiet and I will buy you that Miley coloring book or that Jonas poster. They own ABC, ESPN (which should be spun off IMHO), ABC Family, the parks (where business will continue to suck), Pixar, etc.
More academically, yes I have inspected the state of physical formats (CDs, DVDs). It is in flux (sucks dick) and will continue to. This is a bet not on the entertainment industry but on the Disney star-making machine. Disney just purchased the Marvel catalog which includes 5000 characters. Say it with me 'cross-platform revenue synergies'.
All of the investment dollars that are allocated within this sector have to go somewhere and while I can not get stoked an 11% 5-year income growth rate some people might have to. Technically it looks favorable to quite favorable, you get a 1% yield for your trouble and this is low volatility play (safe, use next years ComEd budget).
And I like LPL. (pin action from GLW and a great chart, k?)
I am bullish on the mainstream potential of the Keurig. Good revenue model and I see gloomy eyed caffiene addicts slowly realizing the benefits of having make@home espresso shots to the dome ON DEMAND. Triple shot plz.
I am bullish on coal. Global growth. Energy going up. Lack of a care for environment in large developing economies. Cheapest form of energy? Coal. To get raw materials to the coasts of countries to ship globally what do we use? Railroads. Which run on coal. Careful on this commodity trade as the momentum pendulum swings quick and hard. It 'trends' well. Trade with it. I sold Walter Industries (WLT) at $100 last year to watch it collapse to $10 as the world was imploding. So you may find yourself losing your Home Equity Credit line money you've been gambling with. Just warning.
Hope your weekends filled with many shake weight practice sessions. Take a report.
“new, state-of-the-art centrifuge uranium enrichment plant in 2010, and at full production by late 2012. With 30 new nuclear plants in the works, a DOE secured loan imminent for $2B, and a virtual monopoly on the US LEU market”
“USU is the most viable candidate to receive a lions share of $2bln-$4bln worth of Department of Energy loans earmarked for companies that enrich uranium. They are presently the only licensed enrichers of uranium in the United States. They enrich 50% of the uranium used domestically, and 25% of the uranium used world wide. They are presently tapped out of cash having spent every penny developing and proving an enrichment technology that reduces the power consumption of their enrichment process by 95%”
The opportunity: They just got their loan denied by Uncle Sam for the rest of the plant. Go figure, this is exactly not the sort of firm they would support being an alternative energy and a textbook example of American innovation. Glad that we are ‘just trying to make sure the working people get a fair shake in this country’, right?
The Valuation: Had sales last year of 2 billion. It now has customer commitments valued at more than$3.4 billion for the new plant, after Exeleon came to the table with a wet pen for 1.2 billion promptly after the Govnmnt balked. If they get the plant up it doubles their business, either way they have the technology. Now if we start making sense and we are going to see 30 new plants(QUESTION: WILL IT HAPPEN?) this would turn this into an absolute screamer. I have to think that if they were cranking at 8 billion in sales that the margins would expand (say conservative 5% from current 2%) and then you have a company with income of 640 mil a year, at current valuation it would be a 90 dollar stock.
NUKE industry friend outlook to the question above: "Do I think we will see new plants, absolutely maybe not 30 but with the amount up for application and the number already scheduled to break ground next year there will definitely be new construction. As far as reprocessing goes this is technology we developed some time ago and have yet to use it commercially it is currently only used for DOE purposes. The first commercial reprocessing facility was supposed to open in IL a year ago but clearly that didn't happen. I believe there was also a reprocessing facility slated to be built somewhere in Texas that was also abandoned before it got going. The reason for this is simply politics there are organizations spending ridiculous amounts of money trying to stop this from happening which in turn drives production costs up. France has been using reprocessing for quite some time now without any problems. The major drawback to reprocessing is that one of the byproducts is weapons grade plutonium. I think eventually we use reprocessing but we will see new construction at least 5 years before we start reprocessing. "
NCTY - The9 Limited - Company brings MMORPGs to China. Been following this company for past eight months and I can not think of too many stocks I would rather be in. My rationale is as follows:
THE FUNDAMENTALS, It is growth at a reasonable price. Look to Japan for an Asian culture where video games are a national pastime. Will it happen in China? Possibly, but even if it doesn't the growing middle class will have more and more disposable income. In addition, a legitimate well-paying job for the Chinese has been created through these games. Hardcore gamers and well-to-do casual gamers in countries with higher living standards have been increasingly paying for items in these games. These Chinese workers make their living by investing time in online games. (which of course brings value to NCTY, it has a Rockefeller™-esque market share)ERTS has $167m invested in them, why don't you? This leads me to speculate that investors may not have the chance to own The9 forever. With such a strong market niche and growth potential it would look good in many of the large internet service companies/game makers business portfolios.
ALSO, It is difficult to understand but some stocks just "trade" well. Pull up a six-month chart and the bollinger bands will tell you the story. Pull up a 5-day chart and you will see similar possibilities for short-term profits. It is not financially irresponsible to build a position in a stock you love while making small trades around the market's swings. For this strategy to work take a position (hopefully at a good entry point) , unload some of your position when it gets hot-take some $, and reload when it has lost it's way again. Using charts to determine levels to buy and sell is a good start but a valuation model probably isn't a bad idea either. Even though support/resistance can be misleading it will give you some control so you are not trading with your emotion only. For this strategy to make sense for anyone there must be a strong belief in the company's future. For NCTY I have strong belief the future looks bright.
To get an idea of the type of investment CERN is consider the year to year growth rates: Sales - 16%, 21%, 10%. EPS - 32%, 22%, 18% BVPS - 20%, 13%, 16% ROE - has improved by 27.5% over this time period (2004-2007)
This company will have consistent earnings due to the contractual nature of the revenue stream. They have proven it over the past four quarters by exactly making EPS estimates twice and having a very small positive surprise in the other two. This is a long-term investment, that is priced correctly by the market at 26x next years earnings for the rate at which is growing. There is no reason that earnings would deviate greatly from estimates.
This stock should continue to provide investors with growth from a sector that has unquestionably high upside. It has proven itself to investors, is becoming more efficient, and is growing at a rate faster than the industry average. This is pretty much all you can ask for sometimes in industries in which you do not have an information edge.
The stock got sold off early today on some analysts CF concerns. Reads to me like noise. Sometimes you gotta take the lay-ups when you can get them. However, this is the rare lay-up that has the potential to double your investment many times over. The stock has done nothing but go up since 2003 with a 530% return since May '03.
Outlet for the personal commentary, nervous energy, and youthful ambition of ingenuous young investment management professional. Taken by the allure and insanity of modern finance markets in a pre-TARP world my commentary reflects a cynical somewhat irreverent outlook. Overall, the tone is light and educational, because after all "stocks are fun"
