I wanted to wish everyone a HAPPY NEW YEARS!!! This has been a great year for me personally, professionally, and here at Urbanomics. I wanted to send a special shout out to ALL of the special people that are in my life. Whether we are travelling together, talking on the phone for hours, researching stocks by day, poppin' bottles by night, or just chillin' with family and friends these are all "Moments To Remember". Please remember that as we welcome in the New Year and tell all the special people in your life how much you appreciate them.
Peace!!!
Monday, December 31, 2007
Wednesday, December 19, 2007
Stay Tuned
I don't have a lot write about today. But one stock that I believe could continue to be a turnaround story is ADAPTEC (NASDAQ: ADPT). My screens have produced this stock again and I believe it should see gains from its current level. The stock was up tremendously today up .22 from it price of 3.22 and closed around 3.44. My price point is 3.38 which continues to be around that consistent mark where I have repeatedly written about acquiring this stock at these levels(adding the stock by Dollar Cost Averaging Down). I believe that Steel Partners, a private equity firm is (steely) locked into this company and finally directing the ship. By their proxy battle a few months ago I think it laid the groundwork and it was very visible by the 3 boards seats that were gained by the firm. With bullishness being seen in the stock going into the annual shareholder meeting, the perfect backdrop with be positive investor rhetoric from the CEO discussing:
1. continued improvements in its restructuring plan
2. new products are well received
3. company is exploring strategic alternatives
4. maybe even a change in management
One thing I have to go back to in to being patient with my investments...let, them play out because a number of these are turnaround stories that need time a positive catalysts to push them forward. If I continue being impatient I will miss out on the additional opportunities in stocks like RAD, EMKR, and others. EMKR was recommended at 10 and its superman price of 9.59...and today is sits at roughly 14...hmmm only if I were a little more patient.
Sunday, December 09, 2007
The Proof is in the Pudding
Now if anything else was inside my pudding I would be afraid, very afraid. Its almost sounds like something Bill Cosby would have mentioned in one of his Jello Pudding Pops commercials. This annoying phrase was hammered into my head when I first started my career. And I think this catch phrase is used when people want to emphasize focusing on just the facts (i.e., you can’t confuse chocolate pudding with vanilla). So in the last three months the proof is in the our recent investment decisions.Here is a summary of some of the decisions that we’ve made recently:
Positions with positive returns:
Best Buy (NYSE: BBY) – Up roughly 18% in 3 months
Burlington Northern Sante Fe (NYSE: BNI) Up roughly 12% in 3 months
Medcath (NYSE: MDTH) – Up roughly 7% in less than 1 month
Online Resources (Nasdaq: ORCC) Up roughly 13% about 1 month
Zhone Technologies (Nasdaq: ZHNE) Up roughly 11% in less than 1 month
Positions with a flatline or negative return:
Adaptec (Nasdaq: ADPT) – Down less than 1% in around 3 months; since early recommendations I am down 4% in more than 6 months
Rite Aid (NYSE: RAD) I will give a few scenarios for this stock b/c you would have likely experienced one of these situations (See my social picks tracker to the right to verify these percentages)
- If you’ve been along for the ride since the beginning of my RAD recommendations and sold your entire position based upon my November 21st posting (http://urbanomics.blogspot.com/2007/11/drink-and-my-2-step.html) you are down roughly 16%
- If you’ve been along for the ride since the beginning of my RAD recommendations and reduced your RAD position based upon my November 21st posting (http://urbanomics.blogspot.com/2007/11/drink-and-my-2-step.html), the portion you still own is down roughly 7%
- If you got lucky and only started following RAD since my October 26th posting (http://urbanomics.blogspot.com/2007/10/it-must-be-butter.html), you are actually up roughly 2%
Here is my note on RAD, so that I continue my ways of completely disclosing the truth. Some people may feel that it is unfair to list multiple outcomes of how things would have turned out if you actually owned RAD’s stock, but I have to do this because everyone’s decisions to BUY, SELL, or DOLLAR COST AVERAGE DOWN may not be consistent with when I post for my readers to take those actions. If you would consistently followed my postings you would have bought RAD at least twice:
- Initial BUY on October 6th and a Dollar Cost Average Down BUY on October 26th
To further complicate things I gave 2 recommendations on my November 21 to ‘Outright Sell” all your position or “Reduce Sell” some of your position in RAD. How you pay attention to my recommendations based upon your situation would have given you one of the three outcomes listed aboved.
My Actions: I chose to sell outright ALL my positions of RAD on November 21st for a 16% loss. This was because I had made the mistake of having to large of a position in the stock and it was negatively affecting my portfolio. I felt that I could better use that capital on my next 2 picks (MDTH & ZHNE) and I was right. If I didn’t have two new picks that I could have earned a better return on, I would have just reduced my position and I would experiencing the middle outcome of only a 7% decline so far. Notice that’s why I did not sell my RAD positions in my tracker portfolio (Socialpicks) located on the right side of my blog, because I still believe in the stock and its ability to still give readers a strong return.
Soon to come here @ URBANOMICS
I will outline how to trade based on my postings in case this has ever been a concern of yours. (This could be the case because Jim Cramer wrote a book for his viewers on how to trade based on his shows)
Finally I will highlight this year’s performance and the good, bad, and downright horrible decisions we made this year.
Thursday, December 06, 2007
Subzero - Mortgage Rate Freeze
My thoughts on the mortgage crisis have been chronicled, like Narnia...get it. All jokes aside, because this is a real serious situation that I sighted her on Urbanomics almost a year ago. I plead that people really think situations through and hold people accountable for the deals, offers, and negotiations that they make with you. And I understand the average person doesn't have time to pay attention to the economic indicators out there in the economy. So my compromise to you is that you tune in here and I will give you the real deal in average people words.
A recent example that I can cite is my dealings with my insurance company. When I got into an unfortunate car accident which wasn't my fault, I really thought the situation through. My insurance company, BELIEVE IT OR NOT, works for me. Let me remind you, I send them monthly payments and because of my good driving record they don't have to use the money on me...rather they reinvest the money so that it can make them more. So, when it comes time and I actually get into an accident...they have the responsibility of making it a smooth transition so that I can get my life back to normal. I will speed up my example by saying there were difference in what my SUV was valued once it was totaled. Here is the ACCOUNTABILITY part! I did not trust their methods for determining the value of my car even though they used a reliable industry expert. I asked many questions and made them explain in plain english how they value my truck. It was my job to be skeptical and guess what!!! We negotiated a higher settlement because I challenged the status quo.
In this article here (http://urbanomics.blogspot.com/2006/02/huff-puff-blow-houses-down.html), we were asking a few questions and challenging the status quo about the housing market. And I wish many more home buyers would have done the same. But whats done is done and now the government is being forced to step in and take unprecendented moves to try quiet the uneasy storm that is developing. I was glad that I did not bite my tongue then and I will continue to write what I believe. I have mentioned before that the data leads me to believe that the economy is grinding into a period that feels like a Recession. I think the markets will rebound slightly but the economy is still feeling like its taking a beating. So to ease the pain good ole Bush and his buddies have decided to get involved and set requirements that will offer struggling homeowners a five-year freeze on their mortgage rates... if they qualify. I agree with others that are protesting that this is a late move on behalf of Bush because the number of foreclosures have risen to the all - time highs.
Again this mainly effects the people who own subprime mortgages, or loans that are offered to people with not so great credit. Subprime loans often get you excited by their low rates for the first few years but then they jump very high making it difficult for your homeowner to keep up with payments. I don't think that this latest effort will change the economy that much in the short term. The plan helps a small group of people whose rates will adjust from 2008 through 2010. So where is the relief for the folks already impacted or that will be impacted before 2008?
This will not help the economy immediately. Again this move helps the investors of the world sleep easier at night. There is now some stability in sight for the markets and Wall Street got what it wanted to hear. Notice the last two days of the market have increased sharply. Because this means that homeowners payments won't rise which helps the retailers (whose customers have $$$ to shop), banks (don't have to take ownership of as many foreclosed homes), and other industries such as credit card companies who were worried their customers would't pay their bills.
A recent example that I can cite is my dealings with my insurance company. When I got into an unfortunate car accident which wasn't my fault, I really thought the situation through. My insurance company, BELIEVE IT OR NOT, works for me. Let me remind you, I send them monthly payments and because of my good driving record they don't have to use the money on me...rather they reinvest the money so that it can make them more. So, when it comes time and I actually get into an accident...they have the responsibility of making it a smooth transition so that I can get my life back to normal. I will speed up my example by saying there were difference in what my SUV was valued once it was totaled. Here is the ACCOUNTABILITY part! I did not trust their methods for determining the value of my car even though they used a reliable industry expert. I asked many questions and made them explain in plain english how they value my truck. It was my job to be skeptical and guess what!!! We negotiated a higher settlement because I challenged the status quo.
In this article here (http://urbanomics.blogspot.com/2006/02/huff-puff-blow-houses-down.html), we were asking a few questions and challenging the status quo about the housing market. And I wish many more home buyers would have done the same. But whats done is done and now the government is being forced to step in and take unprecendented moves to try quiet the uneasy storm that is developing. I was glad that I did not bite my tongue then and I will continue to write what I believe. I have mentioned before that the data leads me to believe that the economy is grinding into a period that feels like a Recession. I think the markets will rebound slightly but the economy is still feeling like its taking a beating. So to ease the pain good ole Bush and his buddies have decided to get involved and set requirements that will offer struggling homeowners a five-year freeze on their mortgage rates... if they qualify. I agree with others that are protesting that this is a late move on behalf of Bush because the number of foreclosures have risen to the all - time highs.
Again this mainly effects the people who own subprime mortgages, or loans that are offered to people with not so great credit. Subprime loans often get you excited by their low rates for the first few years but then they jump very high making it difficult for your homeowner to keep up with payments. I don't think that this latest effort will change the economy that much in the short term. The plan helps a small group of people whose rates will adjust from 2008 through 2010. So where is the relief for the folks already impacted or that will be impacted before 2008?
This will not help the economy immediately. Again this move helps the investors of the world sleep easier at night. There is now some stability in sight for the markets and Wall Street got what it wanted to hear. Notice the last two days of the market have increased sharply. Because this means that homeowners payments won't rise which helps the retailers (whose customers have $$$ to shop), banks (don't have to take ownership of as many foreclosed homes), and other industries such as credit card companies who were worried their customers would't pay their bills.
Wednesday, December 05, 2007
Mixed Emotions
Hello all out there. If you have followed our ride this year, you will quickly note that Maximus (NYSE: MMS) has been a crowd pleaser and a favorite of mine. I have written about MMS a number of times and since the beginning we've enjoyed great returns. But now I am at a point where I am struggling with Maximus and I would like a little bit of help. Here's the problem there is currently good and bad news out there about this stock and I will start with...
The Good:
I was alerted to additional comments today on Maximus, which were GOOD. Zacks.com, an investment website has listed MMS on its Zacks Buy list again. The first time it was listed as an Agressive Growth Play at the end of May this year. Now MMS is listed again on their buy list as a Value Play and still considered a buy. Here is an excerpt from Zacks.com's most recent write up:
MAXIMUS, Inc. is doing all the right things. Business is doing well, the company is buying back its own stock and staying friendly to shareholders. Valuations are attractive for the stock. MMS is trading at less than 12x next year's estimates of $3.27 per share. Over the past month, this year's numbers have risen 21 cents to $2.68 per share (Zacks.com)
The Bad:
I also can't believe that I missed something so obvious about 15 days ago by not analyzing volume and chart patterns. Run a one month chart for Maximus and you will see some disturbing trends. The volume on MMS is alarming but I missed the fact that indicators where sounding off all around us. Case in point: On 11.14, you will notice very unusually high volume which is an indicator...and the volume was unusually high selling volume. Ding, Ding, this creates pressure on the stock which caused it to drop from its high of 47 on that day and reached a low of 40. Now this date coincides with Maximus's earnings release so this can be brushed off as understandable volatility on a meaningful day. But even on days of good news, 11.19, when MMS disclosed new contracts they had won for their business and when "TheStreet.com" upgraded the stock, it continued its downward pressure due to high volumes of investors selling the stock. This piece of information is not good b/c when good info comes out you want to see the stock rise. Further, today when the market is up over 1% you want to see you stock rise...MMS was down again today. This tells me that the stock cannot hold up from the current selling pressure and will trend downward for a period of time...which could be short. Finally, I dug even deeper and found the culprit of the large selling volumes was none other than PRIVATE EQUITY...this final indicator tells me what all true 'Contrarians' believe. Its time to sell when the rest of the world is upgrading the stock but Private Equity is bailing.
Urbanomics Easy Read: Its time to sell MMS because some smart money is exiting. I believe the this stock would be a good long term hold if you were in it for a large position. Remember earnings are increasing and in a matter of months this has gone from an aggressive growth play to a value play which means it could be held for a long time but it may not provide the aggressive returns like it once was. For us here at Urbanomics we will get off the ride, but if this stock drops a lot (which I don't believe it will) then get back on.
I am officially telling you to sell Maximus even though there is positive news and recent upgrades on this stock. Get out with the smart money, lock in our over 25% points of gains and wait for another rainy day to build your portfolio with this stock if it drops.
The Good:
I was alerted to additional comments today on Maximus, which were GOOD. Zacks.com, an investment website has listed MMS on its Zacks Buy list again. The first time it was listed as an Agressive Growth Play at the end of May this year. Now MMS is listed again on their buy list as a Value Play and still considered a buy. Here is an excerpt from Zacks.com's most recent write up:
MAXIMUS, Inc. is doing all the right things. Business is doing well, the company is buying back its own stock and staying friendly to shareholders. Valuations are attractive for the stock. MMS is trading at less than 12x next year's estimates of $3.27 per share. Over the past month, this year's numbers have risen 21 cents to $2.68 per share (Zacks.com)
The Bad:
I also can't believe that I missed something so obvious about 15 days ago by not analyzing volume and chart patterns. Run a one month chart for Maximus and you will see some disturbing trends. The volume on MMS is alarming but I missed the fact that indicators where sounding off all around us. Case in point: On 11.14, you will notice very unusually high volume which is an indicator...and the volume was unusually high selling volume. Ding, Ding, this creates pressure on the stock which caused it to drop from its high of 47 on that day and reached a low of 40. Now this date coincides with Maximus's earnings release so this can be brushed off as understandable volatility on a meaningful day. But even on days of good news, 11.19, when MMS disclosed new contracts they had won for their business and when "TheStreet.com" upgraded the stock, it continued its downward pressure due to high volumes of investors selling the stock. This piece of information is not good b/c when good info comes out you want to see the stock rise. Further, today when the market is up over 1% you want to see you stock rise...MMS was down again today. This tells me that the stock cannot hold up from the current selling pressure and will trend downward for a period of time...which could be short. Finally, I dug even deeper and found the culprit of the large selling volumes was none other than PRIVATE EQUITY...this final indicator tells me what all true 'Contrarians' believe. Its time to sell when the rest of the world is upgrading the stock but Private Equity is bailing.
Urbanomics Easy Read: Its time to sell MMS because some smart money is exiting. I believe the this stock would be a good long term hold if you were in it for a large position. Remember earnings are increasing and in a matter of months this has gone from an aggressive growth play to a value play which means it could be held for a long time but it may not provide the aggressive returns like it once was. For us here at Urbanomics we will get off the ride, but if this stock drops a lot (which I don't believe it will) then get back on.
I am officially telling you to sell Maximus even though there is positive news and recent upgrades on this stock. Get out with the smart money, lock in our over 25% points of gains and wait for another rainy day to build your portfolio with this stock if it drops.
Tuesday, November 27, 2007
The Mixtape Series: Stockmaster Inc.
I am not overly excited about a lot of music out there right now. I'm still looking for that next great album that I can play all the way through. Its getting a little bit harder these days to finds those types of albums. I was in my ride, and I decided to bump the old Dr. Dre "Chronic 2001" album and I was so glad I could play the album through without having to skip through many of the songs. These days, the music scene is being steam rolled by mixtapes and a few of my personal favorites are the guys over there at Tapemasters Inc. I am also feeling DJ Drama's most recent album release. Drama, a.k.a Mr. Thanksgiving, is apropriately named because he is delivers music's next hottest hits or artists like turkeys are delivered to Thanksgiving tables all across the country.
I am bumping a few of the tracks like 5001 Ones (which has everyone and their moms in the video) but I am really feeling Andre 3000 on Outkast's lastest track featuring Marsha Ambrosius: Da Art of Storytellin Part. 4
I am bumping a few of the tracks like 5001 Ones (which has everyone and their moms in the video) but I am really feeling Andre 3000 on Outkast's lastest track featuring Marsha Ambrosius: Da Art of Storytellin Part. 4
And I have to send an honorable mention shout out to The Dream who has produced the catchy track: Shawty is the Shit. And before I hit you up with the video that has me two stepping in the club, I gotta leave you with some picks on my radar.
This is my official MIXTAPE Stock Pick list, I HAVE NOT RECOMMENDED any of these stocks but will be tracking them to see if they will be added to my portfolio:
ATP Oil and Gas (NASDAQ: ATPG) - Not over rosy about the volatility of oil. Build in a margin of safety around 5% and I may give this stock a hard look from it 44.58 price.
Candela (NASDAQ: CLZR) - I would like to see this stock hit its 52 wk low again of 6.05, before I gave it a serious look.
Orange21 (NASDAQ: ORNG) - Showed up on my screen at 4.70 and took off at the end of last week. What for these levels before possibly building a position.
Memory Pharma (NASDAQ: MEMY) .55c; this is your shot at a penny stock that could lift your spirits. A nibble of this high risk play at .55 cents and a serious consideration if it was slightly lower
Friday, November 23, 2007
Black Friday Shopping
Isn't it funny that someone somewhere marketed the day after Thanksgiving as Black Friday. It has become the day where no one gets any sleep and we all get up and spend money selfishly. Kinda the opposite thinking for the day day before...THANKSGIVING! How many people are out there buying things to give them away to the less fortunate. Not many is what I'm guessing, but hey what do I know. But come to think of it a new GPS navigation system has been on my list for awhile and its funny that I am bullish of this industry as I think this will continue to be the trend.
I guess I am feeling like a little bit of a scrooge today because with a little bit of a rebound today in the market (its up roughly 1%) that my portfolio isn't moving in line with the market today. I even have Best Buy in my portfolio so what gives. So on a day like this when I should be shopping, I will give you my random thoughts of stock recommendations and things I've heard as I've kept my ears to the street:
E-trade (ETFC) - The rumors are this stock may be up for SALE, what the #$%$#. How is this possible, those pesky mortgages are likely the reason. Its up roughly 20% today on news that it could sell itself to TD AMERITRADE (AMTD) OR CHARLES SCHWAB (SCHW)
The retailers are making a move today, Target (T), Walmart (WMT), Kohls (KSS), Best Buy (BBY), Circuit City (C), and others are moving higher.
Urbanomics Recommendation of the Day:
I have had this one on my BUY list but I can't remember if I have ever formally recommended it here. The stock is Electro Scientific Industries (ESIO) Buy Price @ $19.47
I guess I am feeling like a little bit of a scrooge today because with a little bit of a rebound today in the market (its up roughly 1%) that my portfolio isn't moving in line with the market today. I even have Best Buy in my portfolio so what gives. So on a day like this when I should be shopping, I will give you my random thoughts of stock recommendations and things I've heard as I've kept my ears to the street:
E-trade (ETFC) - The rumors are this stock may be up for SALE, what the #$%$#. How is this possible, those pesky mortgages are likely the reason. Its up roughly 20% today on news that it could sell itself to TD AMERITRADE (AMTD) OR CHARLES SCHWAB (SCHW)
The retailers are making a move today, Target (T), Walmart (WMT), Kohls (KSS), Best Buy (BBY), Circuit City (C), and others are moving higher.
Urbanomics Recommendation of the Day:
I have had this one on my BUY list but I can't remember if I have ever formally recommended it here. The stock is Electro Scientific Industries (ESIO) Buy Price @ $19.47
Wednesday, November 21, 2007
Drink and My 2 Step
Well this is one of my favorite tracks out there right now by the artist Cassidy. If my investing right now were phrased as a remix to this song it would be "I had too many drinks and made a MIS-STEP!"
I say this because all good analysts must own up when the make a huge mistake. My big mistake would be holding onto Rite Aid for way too long. So here today I would recommend that you reduce your holding or sell outright RAD. I think the turnaround story will take a long time to develop. I am playing the fence and say if you have years to wait then this will be a nice play...if you keep dollar cost averaging down. RAD can be picked up at these prices for $3.5 a share. So I've admitted my mistake or mis-steps and would recommend getting off the RAD bandwagon.
Next, is a lesson learned about the power of the market. Remember one of my rules to investment that I speak of very often is "sticking to your strategy". Well, I broke that rule yesterday. I was reading up on stocks that may be big momentum movers and I got in on the wrong side of a trade. it was an industry that made sense, Electronic Retailers...specifically video games. The stock was GameStop (GME) and I wanted to get a jump on a stock that all of Wall Street said was going up during the earnings call. Don't believe me, do a quick search for GME and read the articles leading up to their earnings release. So I bought GME, the earnings came out, they numbers were great for the quarter, but they communicated that their next quarter won't be as good. This began the sell-off of GameStop and I had to get out of my position. So I took a nice hit, but I had to get out of this bad investment.
The bright side is that I will remain firm in my little old strategy from college that has produced BIG sized gains. I repeat to all of you young and new investors out there to stick with a strategy, and enhance it over time but don't try to be something that you're not. Warren Buffet taught us that when he didn't invest in technology stocks during the technology boom of the 90's. It wasn't something he was good at so he stayed away. So no more stock chasing for me on raggedy Wall Street preictions!!!
Now back to proof that our strategy is a beautiful thing. Check out the performance of our most recent recommendation. Online Resources (ORCC) has moved impressively to the upside to gains of almost 10%. This is a positive sign because currently the markets are in steep declines each day. And when you have a stock that is moving up during down market periods you've got a strong pick.
And now for my 2 NEW URBANOMIS PICKS:
I am re-recommending ZHONE TECHNOLOGIES (ZHNE) as a BUY @ $1.25. Do a quick search here on my blog and you will see that it was originally recommended at $1.10. If we were long term holders (like we should have been), we would still be owning the stop and adding to our position. But we took the nice gain and ZHNE has come up again in my stock screen. I love this play because one, we have seen positive momentum when we previously owned it and we are seeing that same type of activity again.
Next, i am recommending MedCath (MDTH) @ $22.45. I love this stock for all types of reasons. The first would be that I realize that my investing strategy often leads me to undervalued plays and beaten down stocks. MedCath appears to fall into the beaten down stock play. After reporting 4th quarter earnings this stock took a big hit. I believe it dropped from the range of roughly $26 dollars to around $22. It is also a healthcare play which is always a great play with the surge of baby boomers across the country. My buy price is listed above, the stock could have be bought TODAY at @22.25...but note it is beginning to move to the upside.
Honesty is the best key, so my job is to keep it real! So enjoy these picks.
Disclosures:
I sold Rite Aid for a 16% loss
I bought and sold Game Stop in the same day for a loss
I bought Zhone Technologies @ the BUY price listed above
I bought MedCath @ the BUY price listed above
I already own ORCC at the BUY price listed in my previous post
I say this because all good analysts must own up when the make a huge mistake. My big mistake would be holding onto Rite Aid for way too long. So here today I would recommend that you reduce your holding or sell outright RAD. I think the turnaround story will take a long time to develop. I am playing the fence and say if you have years to wait then this will be a nice play...if you keep dollar cost averaging down. RAD can be picked up at these prices for $3.5 a share. So I've admitted my mistake or mis-steps and would recommend getting off the RAD bandwagon.
Next, is a lesson learned about the power of the market. Remember one of my rules to investment that I speak of very often is "sticking to your strategy". Well, I broke that rule yesterday. I was reading up on stocks that may be big momentum movers and I got in on the wrong side of a trade. it was an industry that made sense, Electronic Retailers...specifically video games. The stock was GameStop (GME) and I wanted to get a jump on a stock that all of Wall Street said was going up during the earnings call. Don't believe me, do a quick search for GME and read the articles leading up to their earnings release. So I bought GME, the earnings came out, they numbers were great for the quarter, but they communicated that their next quarter won't be as good. This began the sell-off of GameStop and I had to get out of my position. So I took a nice hit, but I had to get out of this bad investment.
The bright side is that I will remain firm in my little old strategy from college that has produced BIG sized gains. I repeat to all of you young and new investors out there to stick with a strategy, and enhance it over time but don't try to be something that you're not. Warren Buffet taught us that when he didn't invest in technology stocks during the technology boom of the 90's. It wasn't something he was good at so he stayed away. So no more stock chasing for me on raggedy Wall Street preictions!!!
Now back to proof that our strategy is a beautiful thing. Check out the performance of our most recent recommendation. Online Resources (ORCC) has moved impressively to the upside to gains of almost 10%. This is a positive sign because currently the markets are in steep declines each day. And when you have a stock that is moving up during down market periods you've got a strong pick.
And now for my 2 NEW URBANOMIS PICKS:
I am re-recommending ZHONE TECHNOLOGIES (ZHNE) as a BUY @ $1.25. Do a quick search here on my blog and you will see that it was originally recommended at $1.10. If we were long term holders (like we should have been), we would still be owning the stop and adding to our position. But we took the nice gain and ZHNE has come up again in my stock screen. I love this play because one, we have seen positive momentum when we previously owned it and we are seeing that same type of activity again.
Next, i am recommending MedCath (MDTH) @ $22.45. I love this stock for all types of reasons. The first would be that I realize that my investing strategy often leads me to undervalued plays and beaten down stocks. MedCath appears to fall into the beaten down stock play. After reporting 4th quarter earnings this stock took a big hit. I believe it dropped from the range of roughly $26 dollars to around $22. It is also a healthcare play which is always a great play with the surge of baby boomers across the country. My buy price is listed above, the stock could have be bought TODAY at @22.25...but note it is beginning to move to the upside.
Honesty is the best key, so my job is to keep it real! So enjoy these picks.
Disclosures:
I sold Rite Aid for a 16% loss
I bought and sold Game Stop in the same day for a loss
I bought Zhone Technologies @ the BUY price listed above
I bought MedCath @ the BUY price listed above
I already own ORCC at the BUY price listed in my previous post
Tuesday, November 06, 2007
Contrary to Popular Belief...
This phrase seems to define the stocks that are produced from my technical screens these days. As you may recall, Rule 1 that we defined here at Urbanomics is to have a strategy and stick with it. I guess I have to give props to my Purdue Univ business program that made me a quantitative investor by nature. I believe there are hidden indicators behind the numbers. I have taken a interesting approach as I attempt to document my every move so that we can both learn and prosper together.
Although my quantitative approach is great, I don't have enough money to invest in every stock that meets my screening. So I have to ALSO take a qualitative approach and try to find the BEST of my already BEST screen. To do this you must keep your ear da streets...that is pay attention to the markets around you. This is what I attempt to do as often as I can to make "general" assumptions. Now I am no economic genius, even though I play one on TV, but I can put the basics together when I assume that the mortgage and financial markets are in turmoil. I can also reason that oil at $97 a barrel can't be the best thing for you and me. Finally I can also guess that when enough well paid analyst are saying the same thing, they are either right or will influence the markets in a way to become right. Now that is another subject for another day so lets finish what we started. Remeber, when I was telling you that the market was whispering that there is a "Flight to Technology". You should do a search on my blog if you can't remember the post where I spoke on this subject. Then my investing began to shift in that direction, let's quickly recap:
Adaptec - telecommunications
Zhone Tech - can't remember what they do, but hey they have Tech in their name
Advent Software - financial software firm that increased 50% in only a few months
Radisys - Semiconductor company that was up %50 this year for us
Emcore - Semiconductor company that was a quick 10% gainer in 1 month, and can be traded in frequently
So my URBANOMICS November Play is another technology winner: ONLINE RESOURCES
(NASDAQ: ORCC)
This company provides technology services for financial companies. And I love this business line because I actually know something about it. Do you know how many times I get an offer from a company to "Pay My Bills" online! You'll love the fact that I make all my payments through my bank, via Internet Banking online. That is the service this company provides.
Here is yet another stock that I am beginning my evaluation after it has recently reached its 52 week low. Most investors are a little gun shy about approaching a stock at these levels and so am I. However, I also realize the BIG REWARDS can be made by a stock that hits bounces off of its lows and produces great returns for us. This can be a difficult science sometimes, don't believe me...see Rite Aid and how it keeps falling through my price points. Online Resources went into a deep free fall after its earning release and dropped around 29%. The next trading day it dropped even further and reached levels that hadn't been seen in over two years. Now I won't jump into this stock on blind faith. I have a little backing from the chairman and chief executive officer, Matthew Lawlor who in an open letter stated that ORCC "is a better investment than ever before" and his intention is to begin the stock as of November 1. Even better I have an idiot analyst who has downgraded the stock to $12 a share, but still rates it as a Market Outperform do the the potential for high growth. This is music to my ears, talk about hedging your stance. At these levels I will gladly buy this stock and take an exit point at 12 and if they "just so happen" to outperform...I get the extra $$.
ONLINE RESOURCES (NASDAQ:ORCC) BUY @ 8.93 (This is the price the CEO bought his shares...good enough for me). Take your time and accumulate the stock at 9.17 or lower with the price listed above as an optimal entry point.
I would SUPERMAN this stock at $8.75 but I need more time to see if this is a CRANK IT UP price.
Although my quantitative approach is great, I don't have enough money to invest in every stock that meets my screening. So I have to ALSO take a qualitative approach and try to find the BEST of my already BEST screen. To do this you must keep your ear da streets...that is pay attention to the markets around you. This is what I attempt to do as often as I can to make "general" assumptions. Now I am no economic genius, even though I play one on TV, but I can put the basics together when I assume that the mortgage and financial markets are in turmoil. I can also reason that oil at $97 a barrel can't be the best thing for you and me. Finally I can also guess that when enough well paid analyst are saying the same thing, they are either right or will influence the markets in a way to become right. Now that is another subject for another day so lets finish what we started. Remeber, when I was telling you that the market was whispering that there is a "Flight to Technology". You should do a search on my blog if you can't remember the post where I spoke on this subject. Then my investing began to shift in that direction, let's quickly recap:
Adaptec - telecommunications
Zhone Tech - can't remember what they do, but hey they have Tech in their name
Advent Software - financial software firm that increased 50% in only a few months
Radisys - Semiconductor company that was up %50 this year for us
Emcore - Semiconductor company that was a quick 10% gainer in 1 month, and can be traded in frequently
So my URBANOMICS November Play is another technology winner: ONLINE RESOURCES
(NASDAQ: ORCC)
This company provides technology services for financial companies. And I love this business line because I actually know something about it. Do you know how many times I get an offer from a company to "Pay My Bills" online! You'll love the fact that I make all my payments through my bank, via Internet Banking online. That is the service this company provides.
Here is yet another stock that I am beginning my evaluation after it has recently reached its 52 week low. Most investors are a little gun shy about approaching a stock at these levels and so am I. However, I also realize the BIG REWARDS can be made by a stock that hits bounces off of its lows and produces great returns for us. This can be a difficult science sometimes, don't believe me...see Rite Aid and how it keeps falling through my price points. Online Resources went into a deep free fall after its earning release and dropped around 29%. The next trading day it dropped even further and reached levels that hadn't been seen in over two years. Now I won't jump into this stock on blind faith. I have a little backing from the chairman and chief executive officer, Matthew Lawlor who in an open letter stated that ORCC "is a better investment than ever before" and his intention is to begin the stock as of November 1. Even better I have an idiot analyst who has downgraded the stock to $12 a share, but still rates it as a Market Outperform do the the potential for high growth. This is music to my ears, talk about hedging your stance. At these levels I will gladly buy this stock and take an exit point at 12 and if they "just so happen" to outperform...I get the extra $$.
ONLINE RESOURCES (NASDAQ:ORCC) BUY @ 8.93 (This is the price the CEO bought his shares...good enough for me). Take your time and accumulate the stock at 9.17 or lower with the price listed above as an optimal entry point.
I would SUPERMAN this stock at $8.75 but I need more time to see if this is a CRANK IT UP price.
Thursday, November 01, 2007
Ballin' on Wall Street...
We fly high, no lie and you know this Ballin'!!!!
Foreign rides, outside, it's like showbiz
Yeah boyyyyy, that is the song we play when our stocks do what we want them to do and that's move up. The lyrics above are from Jim Jones, a member of the Diplomats, who raps one of my all time favorite club anthems "We Fly High" or better know by the infectious hook "BALLIN". I've been working like crazy so I haven't had as much time to follow the market as I would like too. But again, ladies and gentleman you can tell my level of activity in the stock market by the amount of my posts. October was a time when I had to digest all of the data that was out there in the markets. Go back and check the story lines and news stories are littered with references to OIL, CREDIT CRISIS, FORECLOSURES, DEBT, UNEMPLOYMENT, and EARNINGS. I even wrote a post of the dreaded "R" word RECESSION because I will continue to REITERATE LOUD AND CLEAR that the turbulent markets are something that I have never witnessed in my short investing life.
But the reason why we are BALLIN' right now is because of solid stock picking. See, I can't remember which on my mentors told us that you know you have good stocks when they rise on the days that everything in the market is down. And that's what we have, our recommend list right now is on fire even on a day like today when the market is down over 300 points which is roughly a 2.6% decline. Well check some out one of my favorite stocks:
RadiSys (Nasdaq:RSYS) - They reported earnings a few hours ago and in after hours trading RSYS is up 18%....BALLIN
Let's get it!
Foreign rides, outside, it's like showbiz
Yeah boyyyyy, that is the song we play when our stocks do what we want them to do and that's move up. The lyrics above are from Jim Jones, a member of the Diplomats, who raps one of my all time favorite club anthems "We Fly High" or better know by the infectious hook "BALLIN". I've been working like crazy so I haven't had as much time to follow the market as I would like too. But again, ladies and gentleman you can tell my level of activity in the stock market by the amount of my posts. October was a time when I had to digest all of the data that was out there in the markets. Go back and check the story lines and news stories are littered with references to OIL, CREDIT CRISIS, FORECLOSURES, DEBT, UNEMPLOYMENT, and EARNINGS. I even wrote a post of the dreaded "R" word RECESSION because I will continue to REITERATE LOUD AND CLEAR that the turbulent markets are something that I have never witnessed in my short investing life.
But the reason why we are BALLIN' right now is because of solid stock picking. See, I can't remember which on my mentors told us that you know you have good stocks when they rise on the days that everything in the market is down. And that's what we have, our recommend list right now is on fire even on a day like today when the market is down over 300 points which is roughly a 2.6% decline. Well check some out one of my favorite stocks:
RadiSys (Nasdaq:RSYS) - They reported earnings a few hours ago and in after hours trading RSYS is up 18%....BALLIN
Let's get it!
Wednesday, October 31, 2007
All I need is a little bit...
Yeah this line was coined by my boy 50 Cent for awhile. And word on da street...wall street that is...was that Fiddy was on Cavuto, a financial show probably showing off his investment muscle. Now I haven't seen the clip of his on the show but can he have time to be making the returns that we are over here at Urbanomics. Maybe after his stake in Vitamin Water got bought out, but we bring the platinum picks and he brings the platinum hits.
Today I wanted to write about Emcore (NASDAQ:EMKR), if you have been patient with us...and btw you haven't had to wait long, we hit our target already. Yes boys and girls, EMKR was up around 8% on no news that I am aware of. This volatile stock, was a short term pick of mine and for anyone following I am selling EMKR here. This is a quick 10% gain and I will look to revisit my friend EMKR when it declines back to a price around $10. I would Superman this stock back at the $9.15 level and be a strong accumulator around 9.79.
Lastly I spoke to soon on Adaptec (NASDAQ:ADPT) by about a day or two. I was getting some weird stock chart readings on ADPT and it didn't jump like I had expected. But here is the good news, ADPT reported earnings and beat estimates by .05c. That led the stock higher and if you read into the earning release by the CEO, you will also notice what I call is a subtle hint at good things to come for us. Attached is the comments, provided by Market Wire:
"While our top line results were above the company's expectations, we continue to face difficult market conditions," explained S. "Sundi" Sundaresh, president and CEO of Adaptec. "Despite these challenges, the company has made significant progress during the quarter in several key areas: our restructuring plan announced last quarter is on track to fully realize the expected savings by the end of the fiscal year; our Data Protection and Storage Solutions groups have each released new products and the early indicators of customer reaction are positive; and we reached an agreement with Steel Partners, and together, I expect, we will pursue a course designed to maximize value for all of our stockholders."
Urbanomic readers, I know one thing and when companies align with Private Equity firms to MAXIMIZE VALUE...that usually means great things for stockholders because they lead to buyouts, stock buyback programs, splitting up the company, or anything that makes them money. Hope you jumped all aboard ADPT, b/c again you could have had ADPT at 3.40 today which is the price that I have REPEATEDLY said is a great level to continue to add shares.
Enjoy the quick hit gain with EMKR and lets watch ADPT open higher tomorrow.
Disclosures: I sold EMKR today
Today I wanted to write about Emcore (NASDAQ:EMKR), if you have been patient with us...and btw you haven't had to wait long, we hit our target already. Yes boys and girls, EMKR was up around 8% on no news that I am aware of. This volatile stock, was a short term pick of mine and for anyone following I am selling EMKR here. This is a quick 10% gain and I will look to revisit my friend EMKR when it declines back to a price around $10. I would Superman this stock back at the $9.15 level and be a strong accumulator around 9.79.
Lastly I spoke to soon on Adaptec (NASDAQ:ADPT) by about a day or two. I was getting some weird stock chart readings on ADPT and it didn't jump like I had expected. But here is the good news, ADPT reported earnings and beat estimates by .05c. That led the stock higher and if you read into the earning release by the CEO, you will also notice what I call is a subtle hint at good things to come for us. Attached is the comments, provided by Market Wire:
"While our top line results were above the company's expectations, we continue to face difficult market conditions," explained S. "Sundi" Sundaresh, president and CEO of Adaptec. "Despite these challenges, the company has made significant progress during the quarter in several key areas: our restructuring plan announced last quarter is on track to fully realize the expected savings by the end of the fiscal year; our Data Protection and Storage Solutions groups have each released new products and the early indicators of customer reaction are positive; and we reached an agreement with Steel Partners, and together, I expect, we will pursue a course designed to maximize value for all of our stockholders."
Urbanomic readers, I know one thing and when companies align with Private Equity firms to MAXIMIZE VALUE...that usually means great things for stockholders because they lead to buyouts, stock buyback programs, splitting up the company, or anything that makes them money. Hope you jumped all aboard ADPT, b/c again you could have had ADPT at 3.40 today which is the price that I have REPEATEDLY said is a great level to continue to add shares.
Enjoy the quick hit gain with EMKR and lets watch ADPT open higher tomorrow.
Disclosures: I sold EMKR today
Monday, October 29, 2007
Adaptec...Time to Sell?
Look people, I love the challenge that has been thrown in front on me. If I tell you I like something you are going to keep me to my word when its down and probably not remind me when its up (Not all of you...thx for the personal emails about BNI, BBY, ADVS). But I like a good challenge so that is why I have set up my stock tracking tool. Now this tool is not the greatest because I can't always get the optimal price points that I recommend on here or actually buy in my personal portfolio.
If I tell the tool to buy a stock, say ADPT tomorrow, it will wait until the open...then because most websites (Yahoo, CNNfn,etc) are on a 20 minute delay it won't buy ADPT until 20 minutes after the market is open. This works well only if the stock isn't moving to the upside, or else the tool is tracking my recommendation at a higher price. I will work on fixing this problem...but until then pay attention to the PRICE POINTS that I list here at URBANOMICS. A quick refresher...PRICE POINTS give you an idea of when I think the stock is buy. If you are aware of any other sites that give you this in bold print please let me know.
Adaptec is a great example of one of those stocks. I highlight this stock because there is some serious action going on AFTER-HOURS with this stock. It looks to be up over 11% and will likely open tomorrow up at least this amount. NOW LISTEN UP...this is the second time that ADPT will give you short term players an opportunity to SELL. Read my post from Friday...ADPT was highlighted as a stock that we could have sold for a gain (around 10%) but you may not have done so...when it hit levels of 3.92 less than a month ago. And I noted as Jim Cramer has told us don't get greedy because Bears and Bulls make money...PIGS get slaughtered.
PRICE POINTS are designed to dollar cost average solid investments. So like one clever person pointed out that I had recommended ADPT at 4.05 at one point. That is a true statement, and even though you will notice that I did not actually purchase until months later (Search for ADPT and read my posts until you notice my disclosure on when I purchased), I have to honor the fact that I did post that price on my site. Now even though, I am one of the VERY FEW SITES to POST PRICE POINTS, you must continue to follow the way we invest here are URBANOMICS religiously. Back in June, I noticed and recommended ADPT at 4.05, however remeber these rules you must follow:
1. Buid a margin of safety (a steadfast Warren Buffen rule) to the inital recommendation price
2. Use multiple PRICE POINTS to accumulate a position in the stock:
- There will be a regular PRICE POINT (with a margin of safety built in)
- There will be a SUPERMAN PRICE POINT (a load up the bus, truck, trailer price)
3. Follow this post for stocks that you own:
If you read my later posts that include ADPT, you will notice 3.40 as another price point and in fact this price made my SUPERMAN that stock PRICE POINT. So at 3.40 you would have accumulated more stock, which reduces your original buy price down (dollar cost averaging). Further because this stock was rated SUPERMAN you must CRANK IT UP, BACK THE BUS UP!!!! That means accumulate as much of the stock as possible, up to twice your normal purchase amount.
4. Finally, review your stock periodically to ensure that the fundamentals have not changed with the stock. If they have soured, reduced your position. If the fundamentals are the same or improving, create new PRICE POINTS and continue to accumulate more stock, which reduces the average price at which you own the stock. Notice: In my post, on Friday October 26, I mentioned that ADPT's fundamentals are still on track and said to buy the stock again if it reaches under 3.40 and I gave a new SUPERMAN PRICE at 3.23 (the 52wk low). Well the stock was below 3.40 today.
So what does this mean in English...you would have probably done something like this is you followed ADPT on this site (using 1 shares as the standard buy):
Dollar Cost Average Example:
Buy 1 @ 4.05 (June) + Buy 2 @3.40 (Superman Price identified in Aug) + Buy 1 @ 3.40 (Oct 29 post price) = Dollar Cost Average Price of 3.56
I am telling you this because I believe that ADPT will be up big tomorrow which will give us the opportunity to SELL...for the short term traders. And some people may say how did you sell ADPT for a profit and this is how it happens. Need proof follow the stock Radisys (RSYS) and the posts that recommend multiple price points. That is why with Radisys we are up almost 30% in that stock.
BTW - Check out the recent news, was I right about my analysis back in June of this year about the Private Equity Firm, Steel Partners tightening the belt around ADPT, see the Article here: Adaptec in a War
If I tell the tool to buy a stock, say ADPT tomorrow, it will wait until the open...then because most websites (Yahoo, CNNfn,etc) are on a 20 minute delay it won't buy ADPT until 20 minutes after the market is open. This works well only if the stock isn't moving to the upside, or else the tool is tracking my recommendation at a higher price. I will work on fixing this problem...but until then pay attention to the PRICE POINTS that I list here at URBANOMICS. A quick refresher...PRICE POINTS give you an idea of when I think the stock is buy. If you are aware of any other sites that give you this in bold print please let me know.
Adaptec is a great example of one of those stocks. I highlight this stock because there is some serious action going on AFTER-HOURS with this stock. It looks to be up over 11% and will likely open tomorrow up at least this amount. NOW LISTEN UP...this is the second time that ADPT will give you short term players an opportunity to SELL. Read my post from Friday...ADPT was highlighted as a stock that we could have sold for a gain (around 10%) but you may not have done so...when it hit levels of 3.92 less than a month ago. And I noted as Jim Cramer has told us don't get greedy because Bears and Bulls make money...PIGS get slaughtered.
PRICE POINTS are designed to dollar cost average solid investments. So like one clever person pointed out that I had recommended ADPT at 4.05 at one point. That is a true statement, and even though you will notice that I did not actually purchase until months later (Search for ADPT and read my posts until you notice my disclosure on when I purchased), I have to honor the fact that I did post that price on my site. Now even though, I am one of the VERY FEW SITES to POST PRICE POINTS, you must continue to follow the way we invest here are URBANOMICS religiously. Back in June, I noticed and recommended ADPT at 4.05, however remeber these rules you must follow:
1. Buid a margin of safety (a steadfast Warren Buffen rule) to the inital recommendation price
2. Use multiple PRICE POINTS to accumulate a position in the stock:
- There will be a regular PRICE POINT (with a margin of safety built in)
- There will be a SUPERMAN PRICE POINT (a load up the bus, truck, trailer price)
3. Follow this post for stocks that you own:
If you read my later posts that include ADPT, you will notice 3.40 as another price point and in fact this price made my SUPERMAN that stock PRICE POINT. So at 3.40 you would have accumulated more stock, which reduces your original buy price down (dollar cost averaging). Further because this stock was rated SUPERMAN you must CRANK IT UP, BACK THE BUS UP!!!! That means accumulate as much of the stock as possible, up to twice your normal purchase amount.
4. Finally, review your stock periodically to ensure that the fundamentals have not changed with the stock. If they have soured, reduced your position. If the fundamentals are the same or improving, create new PRICE POINTS and continue to accumulate more stock, which reduces the average price at which you own the stock. Notice: In my post, on Friday October 26, I mentioned that ADPT's fundamentals are still on track and said to buy the stock again if it reaches under 3.40 and I gave a new SUPERMAN PRICE at 3.23 (the 52wk low). Well the stock was below 3.40 today.
So what does this mean in English...you would have probably done something like this is you followed ADPT on this site (using 1 shares as the standard buy):
Dollar Cost Average Example:
Buy 1 @ 4.05 (June) + Buy 2 @3.40 (Superman Price identified in Aug) + Buy 1 @ 3.40 (Oct 29 post price) = Dollar Cost Average Price of 3.56
I am telling you this because I believe that ADPT will be up big tomorrow which will give us the opportunity to SELL...for the short term traders. And some people may say how did you sell ADPT for a profit and this is how it happens. Need proof follow the stock Radisys (RSYS) and the posts that recommend multiple price points. That is why with Radisys we are up almost 30% in that stock.
BTW - Check out the recent news, was I right about my analysis back in June of this year about the Private Equity Firm, Steel Partners tightening the belt around ADPT, see the Article here: Adaptec in a War
Friday, October 26, 2007
It Must Be Butter...
It must be butter, cause we’re on roll! Now I have to give credit to my boy, Stuart Scott from ESPN who popularized this phrase. Another pioneer who is doing big things, appreciates hip hop, and changed the way we view our television hosts. Now hopefully I can do that for you through this site and on the subject matter of financials (mainly stocks).
~Urbanomics Update ~
Yes sir how did you like the last post where we analyzed Advent Software (ADVS). Just two months ago I told you that this stock, which was already moving in a positive direction, had more room to go. And you know through my investment style all we needed was what I have called a catalyst (Use the search tool to see how many times I talked about catalysts) Now in my short time of watching the market, I’ve noticed that a number of stocks move quickly up or down after a catalyst has been communicated to the masses. That catalyst for ADVS was apparent to a few of us in a number of different ways. Once we found our entry point into this stock, we paid attention to the information that ADVS was giving us through its press releases. I know your thinking, now how hard was that!!! Sorry no magical equation, we just simply paid attention to the fact that ADVS was disclosing through press releases that business was cranking through the roof. In one of their releases ADVS told us that they have developed or enhanced a new product and tons of their clients were signing up to use. Now again, I’m not a genius but this sounds like a solid indicator that their earnings are going to move higher over time, which means the stock price should follow...this was confirmed early through our daily ritual of looking for information on our stocks (See Zacks Newsletter disclosure). So the stock didn’t just take off over night…it was creeping here and there giving us a number of times to buy in at great prices. Remember, ADVS was recommended by URBANOMICS @ 39.25 (click here for: ADVS Recommendation ) and has been up between 15-25% since that recommendation.
But a well known secret that I believe savvy investors take advantage of it was I call the Water Cooler Investor effect. This happens when everybody and their mother get the inside tip from a website, the news, or a friend that a stock is going to do well. When this happens, a catalyst has triggered your Water Cooler Investors to jump on board and we will see huge trading volumes in those stocks. This is what happened to ADVS...it reported earnings (catalyst) confirming exactly what they had told us in press releases for the past few months and when this was discussed in their Earnings Release Conference Call, major news outlets spread the news to our Water Cooler Investors. What was the result, hordes of investors flocked to ADVS and raised the stock up roughly 19% in one day. This was the Leading Percentage Gainer of the Day yesterday and made us all very happy. I will now recommend that you sell ADVS at these levels because while they will continue to grow, the effect of our catalyst will die down in the weeks and months to come.
The perfect scenario is that you own alot of the stock, sell enough to gain your original investment back and some profits, and they play with the house's money. ADVS will be a great stock for years to come but unless you own a substantial amount we can put these gains to better use. I often get the call you show you more proof that our strategy works here at Urbanomics, well do a quick review of some of our recommendations:
ADVS - a return of over 30% in the last three months
MSFT - up 9% today as a result of a catalyst; up 30 since first recommended
RSYS - up 9% today b/c of catalyst; up roughly 5 - 30% depending on when you bought it
BBY - a large value stock that is up 10%
BNI - a large value play that is up almost 10% since first recommended
We also highlight the stock that could do better:
Rite Aid (RAD) - recommended @ 4.45, I still believe in Rite Aid and believe this should be bought at 3.95 or lower to build up our shares in this stock.
Avid Technology (AVID) - This stock was up and could have been sold for a profit; recommended @ 32 and now at 28; I believe that AVID has a longer road to recovery but this stock should be repurchased at levels that approach its 52wk low of 25.55
Adaptec (ADPT) - This one could have been sold for a profit; check the press releases b/c private equity is tightening the reigns around this company in trying to win a board seat. Superman price is 3.23, but nibble at building positions whenever the stock drops below 3.40
~Urbanomics Update ~
Yes sir how did you like the last post where we analyzed Advent Software (ADVS). Just two months ago I told you that this stock, which was already moving in a positive direction, had more room to go. And you know through my investment style all we needed was what I have called a catalyst (Use the search tool to see how many times I talked about catalysts) Now in my short time of watching the market, I’ve noticed that a number of stocks move quickly up or down after a catalyst has been communicated to the masses. That catalyst for ADVS was apparent to a few of us in a number of different ways. Once we found our entry point into this stock, we paid attention to the information that ADVS was giving us through its press releases. I know your thinking, now how hard was that!!! Sorry no magical equation, we just simply paid attention to the fact that ADVS was disclosing through press releases that business was cranking through the roof. In one of their releases ADVS told us that they have developed or enhanced a new product and tons of their clients were signing up to use. Now again, I’m not a genius but this sounds like a solid indicator that their earnings are going to move higher over time, which means the stock price should follow...this was confirmed early through our daily ritual of looking for information on our stocks (See Zacks Newsletter disclosure). So the stock didn’t just take off over night…it was creeping here and there giving us a number of times to buy in at great prices. Remember, ADVS was recommended by URBANOMICS @ 39.25 (click here for: ADVS Recommendation ) and has been up between 15-25% since that recommendation.
But a well known secret that I believe savvy investors take advantage of it was I call the Water Cooler Investor effect. This happens when everybody and their mother get the inside tip from a website, the news, or a friend that a stock is going to do well. When this happens, a catalyst has triggered your Water Cooler Investors to jump on board and we will see huge trading volumes in those stocks. This is what happened to ADVS...it reported earnings (catalyst) confirming exactly what they had told us in press releases for the past few months and when this was discussed in their Earnings Release Conference Call, major news outlets spread the news to our Water Cooler Investors. What was the result, hordes of investors flocked to ADVS and raised the stock up roughly 19% in one day. This was the Leading Percentage Gainer of the Day yesterday and made us all very happy. I will now recommend that you sell ADVS at these levels because while they will continue to grow, the effect of our catalyst will die down in the weeks and months to come.
The perfect scenario is that you own alot of the stock, sell enough to gain your original investment back and some profits, and they play with the house's money. ADVS will be a great stock for years to come but unless you own a substantial amount we can put these gains to better use. I often get the call you show you more proof that our strategy works here at Urbanomics, well do a quick review of some of our recommendations:
ADVS - a return of over 30% in the last three months
MSFT - up 9% today as a result of a catalyst; up 30 since first recommended
RSYS - up 9% today b/c of catalyst; up roughly 5 - 30% depending on when you bought it
BBY - a large value stock that is up 10%
BNI - a large value play that is up almost 10% since first recommended
We also highlight the stock that could do better:
Rite Aid (RAD) - recommended @ 4.45, I still believe in Rite Aid and believe this should be bought at 3.95 or lower to build up our shares in this stock.
Avid Technology (AVID) - This stock was up and could have been sold for a profit; recommended @ 32 and now at 28; I believe that AVID has a longer road to recovery but this stock should be repurchased at levels that approach its 52wk low of 25.55
Adaptec (ADPT) - This one could have been sold for a profit; check the press releases b/c private equity is tightening the reigns around this company in trying to win a board seat. Superman price is 3.23, but nibble at building positions whenever the stock drops below 3.40
Wednesday, October 24, 2007
Welcome to the Good Life
I go for mine, I got to shine...Now throw you hands up in the sky! This is the third track off of Kanye West's "Graduation" album featuring T. Pain. Now this is the jam, but I am not sure what life Kanye was referring too. It's interesting I find myself not writing as much whenever there is a lot of turmoil in the market. This usually also reflects turmoil in the world, which then reflects itself through the market. Let's see, we have major financial companies, Bank of America, Merrill Lynch, Citigroup, and Wachovia Bank all getting hammered by the weakness in the credit markets and the mainly through the bad investments that were made. Add to that the mortgage crisis in the US which has led to homeowners everywhere defaulting on their homes. All the companies in these areas, which were once living the "Good Life" are singing the blues and laying people off. Then there is that pesky thing called energy...it currently sits at levels that are unthinkable. Oil is reaching levels of roughly 90 dollars a barrel and predicted to continue to rise. Now maybe I am too young to really know what I'm talking about but there has been the "R" word thrown out by some analysts and that would be RECESSION and from what I am seeing in the markets I don't think that some of the whispers are too far off.
I am no mathematician but poor financial markets + bad consumer debt + rising foreclosures + declining property values + layoffs = something is wrong (possibly RECESSION). I am not comfortable with the volatility in the market because as companies are beating earnings or being upgraded they go up and then immediately the market brings them right back down due to all the negative news. Now Warren Buffet wouldn't care because he's in it for the long haul (and he's rich), so for the rest of us that were out there speculating its time to take gains were it makes sense and build on our recession proof stocks...like dividend stocks. I like buying stocks that make products that we continue to buy even when times get tough and I still like technology. You'll appreciate the following updates:
Advent Software (ADVS) - reported positive earnings today; (technology)
Radisys (RSYS) - upgraded by Cantor Fitzgerald, price target raised from 11 to 18 (technology)
Emcore - coverage initated with BUY by Roth Capital (technology)
Burlington Northern (BNI) - reported positive earning (transportation)
They have a few things in common being technology plays and one defensive plays. I think this will be the direction to go for awhile.
I am no mathematician but poor financial markets + bad consumer debt + rising foreclosures + declining property values + layoffs = something is wrong (possibly RECESSION). I am not comfortable with the volatility in the market because as companies are beating earnings or being upgraded they go up and then immediately the market brings them right back down due to all the negative news. Now Warren Buffet wouldn't care because he's in it for the long haul (and he's rich), so for the rest of us that were out there speculating its time to take gains were it makes sense and build on our recession proof stocks...like dividend stocks. I like buying stocks that make products that we continue to buy even when times get tough and I still like technology. You'll appreciate the following updates:
Advent Software (ADVS) - reported positive earnings today; (technology)
Radisys (RSYS) - upgraded by Cantor Fitzgerald, price target raised from 11 to 18 (technology)
Emcore - coverage initated with BUY by Roth Capital (technology)
Burlington Northern (BNI) - reported positive earning (transportation)
They have a few things in common being technology plays and one defensive plays. I think this will be the direction to go for awhile.
Tuesday, October 09, 2007
Two New Picks
Enjoy these as we begin tracking them on our new tool.
AEPI BUY @ $39.8
This stock hit its 52 wk lows in Aug and has slowly bounced back. The historical price has not been very volatile and there was some downward pressure after AEPI reported a drop in third quarter earnings. Positive momentum action should drive this small cap stock higher from its lows.
RAD BUY @ 4.45
Rite Aid continues to have a tough time working in its acquisition of the Brooks and Eckerd chains. But this retail pharmacy giant will bounce off of its lows. Acquisition has been the name of the game with this sector just ask CVS with their purchase of Caremark. Everyone is trying to grow to keep pace with Walgreens. So buy RAD with support levels at its 52 wk low on the year and ride through the growing pains of their acquisitions to higher gains.
AEPI BUY @ $39.8
This stock hit its 52 wk lows in Aug and has slowly bounced back. The historical price has not been very volatile and there was some downward pressure after AEPI reported a drop in third quarter earnings. Positive momentum action should drive this small cap stock higher from its lows.
RAD BUY @ 4.45
Rite Aid continues to have a tough time working in its acquisition of the Brooks and Eckerd chains. But this retail pharmacy giant will bounce off of its lows. Acquisition has been the name of the game with this sector just ask CVS with their purchase of Caremark. Everyone is trying to grow to keep pace with Walgreens. So buy RAD with support levels at its 52 wk low on the year and ride through the growing pains of their acquisitions to higher gains.
Sunday, October 07, 2007
URB Update - NAVTEQ, Advent Software, Emcore
Here is a quick weekend update, as I do a periodic review of some our stocks in the news. I like to follow our picks through major newspapers, websites, and analyst reviews. The following stocks were commented on in the last two weeks or have major updates that require our attention. The stocks I will highlight are Emcore (up 10% in two days), Navteq (takeover target), and Advent Software (up roughly 20% in less than two months)
I will start with the newest recommendation, Emcore (EMKR):
This is a love/hate relationship with this momentum stock. As you recall we got this stock at our price point just a week ago. And luckily, we keep an hawkish eye on our new picks, because HIGH risk momentum stocks are labeled that way for a reason. This stock has experience great gains in roughly two day, but on Friday we got some shocking news, at the worst time. Late Friday, it was released that EMKR received an noncompliance notice from the NASDAQ...this is bad news...very bad. So now we must watch this stock closely on Monday...first off, follow my lead and remove and cancel any price points that were initially set, yes including our Superman price. Next, if you don't have the time to follow this stock on Monday, place a Stop Loss to sell this stock at 9.75. Why this price, because it appears that this stock is being impacted by the bad news. We were up to the 10.70 range on Friday, but when the news was released after the market closed...the stock appears to have declined in aftermarket hours. The lowest aftermarket price disclosed on Yahoo Finance was 9.85. If the back news is picked up by the rest of the investors out there like us, we will see further declines. If we set a Stop Loss of 9.75 it will automatically sell the investment at that price. And yes, we will walk away from the investment and wait for the dust to settle. I would like to revisit this stock but we need to wait until EMKR is compliant without a doubt with the NASDAQ. I am unsure how this will impact their scheduled earnings announcement.
Here is an article from Marketwatch: EMKR said late Friday that it received a letter from Nasdaq on Oct. 2 stating that the company is not in compliance with the exchange's listing requirements, and that its stock is subject to delisting. The provider of compound semiconductor-based products said the notice was expected and was due to its inability to hold an annual shareholders' meeting by Sept. 30. Emcore plans to submit a letter to request an extension to regain compliance with Nasdaq's requirements.
Navteq (NVT):
This analysis was provided by an analyst at Zacks.com -
NAVTEQ Corporation (NVT) has done a great job navigating for profits. Surging demand for maps in portable devices and some easier-than-expected expenses are contributing to outsized earnings gains. The company just reported a 72% profit gain and raised full-year guidance. Over the past 60 days, this year's estimates have jumped 19 cents to $1.52 per share. The past two quarters have averaged a 57% positive surprise. Analysts are projecting 20.4% growth over the long term.
(Note: On 9/27, NVT was listed as their aggressive growth pick of the day in their daily "Profit from the Pros" e-newsletter)
Advent Software:
This analysis was provided by an analyst at Zacks.com -
Advent Software, Inc. (ADVS) is enjoying phenomenal growth and its chart reflects it. The stock has been on a rocket ride since late July, after posting a 350% positive earnings surprise. Over the past 90 days, this year's earnings estimates have soared 12 cents to 33 cents per share. Analysts are projecting 27.8% earnings growth in 2008 and 21.7% growth over the long term.
(Note: On 9/27, ADVS was listed as their momentum pick of the day in their daily "Profit from the Pros" e-newsletter)
Lessons Learned, this means we should have SOLD EMKR when you get up 10% in one day, we were dead on with NVT, and we will be holding onto ADVS because were were exactly right with this momentum pick. As Jim Cramer often reminds us Bears make money (ppl who make money when the market goes down), Bulls make money (ppl who make money when the market goes up), and Pigs get slaughtered. We were pigish on EMKR and we've learned.
I will start with the newest recommendation, Emcore (EMKR):
This is a love/hate relationship with this momentum stock. As you recall we got this stock at our price point just a week ago. And luckily, we keep an hawkish eye on our new picks, because HIGH risk momentum stocks are labeled that way for a reason. This stock has experience great gains in roughly two day, but on Friday we got some shocking news, at the worst time. Late Friday, it was released that EMKR received an noncompliance notice from the NASDAQ...this is bad news...very bad. So now we must watch this stock closely on Monday...first off, follow my lead and remove and cancel any price points that were initially set, yes including our Superman price. Next, if you don't have the time to follow this stock on Monday, place a Stop Loss to sell this stock at 9.75. Why this price, because it appears that this stock is being impacted by the bad news. We were up to the 10.70 range on Friday, but when the news was released after the market closed...the stock appears to have declined in aftermarket hours. The lowest aftermarket price disclosed on Yahoo Finance was 9.85. If the back news is picked up by the rest of the investors out there like us, we will see further declines. If we set a Stop Loss of 9.75 it will automatically sell the investment at that price. And yes, we will walk away from the investment and wait for the dust to settle. I would like to revisit this stock but we need to wait until EMKR is compliant without a doubt with the NASDAQ. I am unsure how this will impact their scheduled earnings announcement.
Here is an article from Marketwatch: EMKR said late Friday that it received a letter from Nasdaq on Oct. 2 stating that the company is not in compliance with the exchange's listing requirements, and that its stock is subject to delisting. The provider of compound semiconductor-based products said the notice was expected and was due to its inability to hold an annual shareholders' meeting by Sept. 30. Emcore plans to submit a letter to request an extension to regain compliance with Nasdaq's requirements.
Navteq (NVT):
This analysis was provided by an analyst at Zacks.com -
NAVTEQ Corporation (NVT) has done a great job navigating for profits. Surging demand for maps in portable devices and some easier-than-expected expenses are contributing to outsized earnings gains. The company just reported a 72% profit gain and raised full-year guidance. Over the past 60 days, this year's estimates have jumped 19 cents to $1.52 per share. The past two quarters have averaged a 57% positive surprise. Analysts are projecting 20.4% growth over the long term.
(Note: On 9/27, NVT was listed as their aggressive growth pick of the day in their daily "Profit from the Pros" e-newsletter)
Advent Software:
This analysis was provided by an analyst at Zacks.com -
Advent Software, Inc. (ADVS) is enjoying phenomenal growth and its chart reflects it. The stock has been on a rocket ride since late July, after posting a 350% positive earnings surprise. Over the past 90 days, this year's earnings estimates have soared 12 cents to 33 cents per share. Analysts are projecting 27.8% earnings growth in 2008 and 21.7% growth over the long term.
(Note: On 9/27, ADVS was listed as their momentum pick of the day in their daily "Profit from the Pros" e-newsletter)
Lessons Learned, this means we should have SOLD EMKR when you get up 10% in one day, we were dead on with NVT, and we will be holding onto ADVS because were were exactly right with this momentum pick. As Jim Cramer often reminds us Bears make money (ppl who make money when the market goes down), Bulls make money (ppl who make money when the market goes up), and Pigs get slaughtered. We were pigish on EMKR and we've learned.
Tuesday, October 02, 2007
URB Platinum Picks ~ October '07
I am back with another update for October. We have had a great year so far and the plan is to continue the run into the end of the year. Urbanomics has enhanced the site to allow for you to track my picks as they are made (thanks to socialpicks). Every now and then I will detail ways for you to identify stocks that work for you...follow the Urbanomic Rules. I will place limit orders in for all of these stocks at the specified prices below. I will also disclose at the end of the post what stocks I was able to buy.
URBANOMICS RULE 1: Find and Stick with a strategy
I have run my most recent screen and I've included my latest picks below with background detail. Screens can vary depending on the investor's risk tolerance and expected return and can focus on Price to Earnings Ratio, Analysts Upgrades, Chart Analysis, Earnings Per Share (EPS) Revisions, and Institutional Ownership. Pick a strategy that works for you, backtest it to see how effective it would be, and stay consistent.
URB October Platinum Picks (In honor of Kanye West and 50 Cent)
I have multiple price points which I will explain in later Urbanomics RULES, but you will see a normal price point, and a SUPERMAN price point. Search the site for a better understanding of the Superman concept.
EMKR BUY @ 10.04
- Emcore is a semiconductor company that has run into a little bit of trouble. Accounting for pesky stock option grants has long been despised in the technology world. Well apparently EMKR didn't get the memo that is was a regulatory mandate to comply with. The great news is EMKR looks to be compliant with the SEC and the NASDAQ in October '07. Shares of Emcore have been on a tear in the last two weeks. It was up 15.8 percent for the week of Sept 21. During that week, EMKR was upgraded by an analyst to "Market Perform". Finally, EMKR is set to report earnings which could be a major catalyst for upward momentum. I will reiterate there is a 'Flight To Technology' within the market and their products support industries that are in high demand (solar panels, wireless, fiber optics). Look to exit is momentum slows down after the earnings release.
Superman Price: EMKR BUY @ 9.59
EMAG BUY @ 8.00
Emageon Inc has recently had an analyst initiate coverage with a "market outperform" rating. The target price is set to $11. EMAG is gaining market share and new product launches should provide more revenue down the road. A recent acquisition is increasing the number of clients and they have seen support levels above the stock's 52 week low. This stock hit a low of 8.09 today, so we're getting close.
Superman Price: EMAG BUY @ 7.42 (52wk low)
TRMS BUY @ 6.95
Trimeris Inc is a company with a good revenue stream, but has been hit hard by poor management. The stock has been falling recently due to both TRMS and Roche pulling the plug on a joint product. With Wall Street believing this company is poorly run, look for what I love to call is a catalyst such as management being pushed out or an outright sale. With a dramatic drop in stock price and market cap...Roche could be a likely buyer. With bad news out there, wait for more declines until we get to our price level. You can take a small bite at 7.11 or lower.
LAMR Buy @ 48.38
Lamar Advertising has been on my watch for awhile and has been mentioned in other posts. I was slow to react to this stock and I've paid the price. The price appreciation has been moving rapidly and I definitely have missed the intial momentum opportunity. LAMR which provides outdoor advertising space, is moving up as an analyst said is raising his forecast due to the deployment of 350 digital billboards next year. That's all we need is more distractions on the road. But guess what...Federal Highway Administration is approving the installation of digital billboards along roadways. This stock is getting away from me so, their can be small blocks bought around 49 and 50.
Superman Price: LAMR BUY @ 47.36 (Good luck I but limit buys in but I don't have my hopes up)
47.36
Disclosure: I bought EMKR today @ 10.04 on 10/4/07. This post was started on 10/02 but completed on 10/04.
URBANOMICS RULE 1: Find and Stick with a strategy
I have run my most recent screen and I've included my latest picks below with background detail. Screens can vary depending on the investor's risk tolerance and expected return and can focus on Price to Earnings Ratio, Analysts Upgrades, Chart Analysis, Earnings Per Share (EPS) Revisions, and Institutional Ownership. Pick a strategy that works for you, backtest it to see how effective it would be, and stay consistent.
URB October Platinum Picks (In honor of Kanye West and 50 Cent)
I have multiple price points which I will explain in later Urbanomics RULES, but you will see a normal price point, and a SUPERMAN price point. Search the site for a better understanding of the Superman concept.
EMKR BUY @ 10.04
- Emcore is a semiconductor company that has run into a little bit of trouble. Accounting for pesky stock option grants has long been despised in the technology world. Well apparently EMKR didn't get the memo that is was a regulatory mandate to comply with. The great news is EMKR looks to be compliant with the SEC and the NASDAQ in October '07. Shares of Emcore have been on a tear in the last two weeks. It was up 15.8 percent for the week of Sept 21. During that week, EMKR was upgraded by an analyst to "Market Perform". Finally, EMKR is set to report earnings which could be a major catalyst for upward momentum. I will reiterate there is a 'Flight To Technology' within the market and their products support industries that are in high demand (solar panels, wireless, fiber optics). Look to exit is momentum slows down after the earnings release.
Superman Price: EMKR BUY @ 9.59
EMAG BUY @ 8.00
Emageon Inc has recently had an analyst initiate coverage with a "market outperform" rating. The target price is set to $11. EMAG is gaining market share and new product launches should provide more revenue down the road. A recent acquisition is increasing the number of clients and they have seen support levels above the stock's 52 week low. This stock hit a low of 8.09 today, so we're getting close.
Superman Price: EMAG BUY @ 7.42 (52wk low)
TRMS BUY @ 6.95
Trimeris Inc is a company with a good revenue stream, but has been hit hard by poor management. The stock has been falling recently due to both TRMS and Roche pulling the plug on a joint product. With Wall Street believing this company is poorly run, look for what I love to call is a catalyst such as management being pushed out or an outright sale. With a dramatic drop in stock price and market cap...Roche could be a likely buyer. With bad news out there, wait for more declines until we get to our price level. You can take a small bite at 7.11 or lower.
LAMR Buy @ 48.38
Lamar Advertising has been on my watch for awhile and has been mentioned in other posts. I was slow to react to this stock and I've paid the price. The price appreciation has been moving rapidly and I definitely have missed the intial momentum opportunity. LAMR which provides outdoor advertising space, is moving up as an analyst said is raising his forecast due to the deployment of 350 digital billboards next year. That's all we need is more distractions on the road. But guess what...Federal Highway Administration is approving the installation of digital billboards along roadways. This stock is getting away from me so, their can be small blocks bought around 49 and 50.
Superman Price: LAMR BUY @ 47.36 (Good luck I but limit buys in but I don't have my hopes up)
47.36
Disclosure: I bought EMKR today @ 10.04 on 10/4/07. This post was started on 10/02 but completed on 10/04.
Monday, October 01, 2007
Class Is In Session...
and when I blog you listen, readers please don't doubt the need for you to pay attention. Now that wasn't a complete freestyle, because I took a few words from one of my favorite artists. But I do want you to take a few words from the Urbanomics "Throwback Movie of The Day". It is the one and only movie "Wall Street" starring Charlie Sheen and Michael Douglas. The line is from a high powered, ruthless, and greedy investment broker Mr. Gordon Gekko. And it goes a little something like this:
"I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought."
And even though Gordon Gekko is a cunning individual, he has one thing correct, I don't throw darts either...although there is no such thing as sure bets, we must put in work to win the battle before its fought. And that's what I am doing here for you folks. The battle is won with hard work and doing things you love. Now some people keep count of your victories, others will say lucky guess, and others may call you crazy but you gotta believe. So if you read the post I created just yesterday you may say a few of these things in disbelief. Now I am not ruthless like Gordon Gekko in "Wall Street" because he cheated to get ahead. He used information that wasn't accessible to the public and benefitted from trading the stock. Yes ladies and gentlemen, ala Martha Stewart he was participating in 'Insider Trading'.
The difference is I gave you the reasoning behind why I believed in GPS stocks yesterday. I gave you the basic principles that I learned from Peter Lynch so that you can follow along with me. Invest in what you know...right in front of you're eyes.
What unfolded right before our eyes was kinda crazy, not only were we on the money but Nokia must have been listing to what we were saying...because they have arranged to acquire Navteq in an 8.1 billion dollar deal today. See my post from yesterday. The following release was taken from Navteq website:
Nokia to acquire NAVTEQ
The combined entity would create a leading global player in the fast growing location based services marketNAVTEQ to support existing customers as before .
October 1, 2007 -- Nokia and NAVTEQ today announced a definitive agreement for Nokia to acquire NAVTEQ. Under the terms of the agreement, Nokia will pay $78 in cash for each share of NAVTEQ including outstanding options for an aggregate purchase price of approximately $8.1 billion (€5.7 billion), or approximately $7.7 billion (€5.4 billion) net of NAVTEQ existing cash balance. The acquisition has been approved by the board of directors of each company and is subject to customary closing conditions including regulatory approvals and NAVTEQ shareholders’ approval.
The navigation area is a fast growing business, and with location-based services expanding rapidly into mobile communications devices, the industry is poised for even further growth. NAVTEQ brings a number of key assets to Nokia: a great team with best-in-world maps and navigation industry expertise, a strong customer base and an industry-leading map data and technology platform with the broadest geographical coverage.
October 1, 2007 -- Nokia and NAVTEQ today announced a definitive agreement for Nokia to acquire NAVTEQ. Under the terms of the agreement, Nokia will pay $78 in cash for each share of NAVTEQ including outstanding options for an aggregate purchase price of approximately $8.1 billion (€5.7 billion), or approximately $7.7 billion (€5.4 billion) net of NAVTEQ existing cash balance. The acquisition has been approved by the board of directors of each company and is subject to customary closing conditions including regulatory approvals and NAVTEQ shareholders’ approval.
The navigation area is a fast growing business, and with location-based services expanding rapidly into mobile communications devices, the industry is poised for even further growth. NAVTEQ brings a number of key assets to Nokia: a great team with best-in-world maps and navigation industry expertise, a strong customer base and an industry-leading map data and technology platform with the broadest geographical coverage.
I will leave you with another memorable quote from "Wall Street":
The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you.
Let's all own and make the rules, the right way ~URBANOMICS
Sunday, September 30, 2007
Do you know how to get there...
Is a common question you get nowadays when travelling somewhere. The answer has now been simplified to a VERB that references a webpage. It usually goes something like this: Well I'll MAPQUEST it, or don't forget to GOOGLE it, or hey I'll look it up on Yahoo Maps. And for the sophisticated crowd they will be happy to let you know that they are looking up directions on their Global Positioning System (GPS) device. You have seen the increase in commercials telling us to use "Tom Tom" or a "Garmin" GPS device to get you to where you need without much thought on your part. And when you go to Google, Mapquest and Yahoo have you ever noticed the little company in the corner of the map with the trademark. It usually says NAVTEQ, which is the provider of digital mapping technology.
So I am bringing up the obvious because when I read a book awhile ago by legendary investor named, Peter Lynch, one of the themes I took away was INVEST IN WHAT YOU KNOW. And what I know is there is definitely a buzz around GPS devices and digital maps. So I remind all Urbanomics readers...when something is in front on your face, don't overlook the obvious. A friend of mine just bought a portable Garmin device that can be used inside and outside of the car. And the other night as we headed to a new club, my brother used the computer to get directions to the location. Lastly, I am in the search for a new car and for the first time ever I included in my search the cars with navigation technology.
So what companies are leading the way say in digital maps and GPS technology. Check these companies out:
GARMIN (GRMN) - maker of GPS devices
NAVTEQ (NVT) - digital mapping
TRIMBLE (TRMB) - maker of GPS devices
SIRF TECH (SIRF) - maker of semiconductor chips that are used in GPS devices
So if I am an average person and I realize the growth of this industry its pretty easy to guess that so have the guys on Wall Street. Need proof, just look at the stock prices of these companies. I think GRMN alone is up over 60% this year alone. So why am I telling you to talk a look at this group, because just like other technologies that were in the stages of taking off, like the IPOD, mapping technology will become a household function used everyday in cars, on the computer, and through portable devices. These stocks are richly valued so wait for an opportunity to buy them, especially going into the holiday season. One thing that I also have learned is that its difficult to price a fast growing stock like the ones listed above...they could keep going up and up.
So I am bringing up the obvious because when I read a book awhile ago by legendary investor named, Peter Lynch, one of the themes I took away was INVEST IN WHAT YOU KNOW. And what I know is there is definitely a buzz around GPS devices and digital maps. So I remind all Urbanomics readers...when something is in front on your face, don't overlook the obvious. A friend of mine just bought a portable Garmin device that can be used inside and outside of the car. And the other night as we headed to a new club, my brother used the computer to get directions to the location. Lastly, I am in the search for a new car and for the first time ever I included in my search the cars with navigation technology.
So what companies are leading the way say in digital maps and GPS technology. Check these companies out:
GARMIN (GRMN) - maker of GPS devices
NAVTEQ (NVT) - digital mapping
TRIMBLE (TRMB) - maker of GPS devices
SIRF TECH (SIRF) - maker of semiconductor chips that are used in GPS devices
So if I am an average person and I realize the growth of this industry its pretty easy to guess that so have the guys on Wall Street. Need proof, just look at the stock prices of these companies. I think GRMN alone is up over 60% this year alone. So why am I telling you to talk a look at this group, because just like other technologies that were in the stages of taking off, like the IPOD, mapping technology will become a household function used everyday in cars, on the computer, and through portable devices. These stocks are richly valued so wait for an opportunity to buy them, especially going into the holiday season. One thing that I also have learned is that its difficult to price a fast growing stock like the ones listed above...they could keep going up and up.
Tuesday, September 25, 2007
Urb Radar ~ September
For the past couple of weeks these stocks have been on my radar:
MNCP Motient Corp; now known as TSTR TerreStar
ASTI Ascent Solar Technologies, Inc.
CECO Career Education Corp
GGP General Growth Properties Inc
USBE US Bioenergy Corp
USG USG Corp
CPY CPI Corp
AITP - American Italian Pasta
I will update these as soon as I can.
MNCP Motient Corp; now known as TSTR TerreStar
ASTI Ascent Solar Technologies, Inc.
CECO Career Education Corp
GGP General Growth Properties Inc
USBE US Bioenergy Corp
USG USG Corp
CPY CPI Corp
AITP - American Italian Pasta
I will update these as soon as I can.
Wednesday, September 19, 2007
How do I get my Urb on!
Now I am going to go out on a limb and say the whole world is catching up to my personal movement. If you need a constant reminder, add the Urbanomics RSS Feed to you webpage or email inbox. It's a gameplan that slowly being rolled out and I hope you are taking advantage of it as we learn together. Even Yung Joc is jumping on the bandwagon with his new album titled "Hustlenomics". Hmmm...sound familar, Hustlenomics and Urbanomics. Now if that's not some inspirational stuff then I don't know what is. Like I said the movement is deep and there will be different versions of my plan. Joc's Hustlenomics is taking what he is passionate about, the rap game, and hustling his way to the top to achieve financial empowerment (maybe other things but I doubt it). Urbanomics is a different variation and the focus is empowering ourselves to make our lives better. It's somewhat of a hustle that focuses on spiritual, financial, emotional, and physical strength.
After reading my blog posts, its pretty easy to tell which area is my strong suit. Now I am no Jim Cramer, Suze Orman, Warren Buffet, or even Yung Joc but I get my hustle on by keeping up with the world around me, especially the financial markets. And the focus on Urbanomics is not to dumb it down but to make it easy for the average person to follow whats going in a way that we all can understand. A little bit of hip hop, urban flair to the old world of Wall Street.
For example if your favorite musical artist was a stock who would you be buying, holding, or selling based on how well they have been performing. My buys list would be:
Akon, Kanye West, T-Pain, Chris Brown, & Lil Wayne. I would be holding 50 Cent, Jay Z, & Nas. And personally I would be selling Britney Spears, Whitney Houston, Bobby Brown, and the Shop Boyz (Party Like a Rockstar).
After reading my blog posts, its pretty easy to tell which area is my strong suit. Now I am no Jim Cramer, Suze Orman, Warren Buffet, or even Yung Joc but I get my hustle on by keeping up with the world around me, especially the financial markets. And the focus on Urbanomics is not to dumb it down but to make it easy for the average person to follow whats going in a way that we all can understand. A little bit of hip hop, urban flair to the old world of Wall Street.
For example if your favorite musical artist was a stock who would you be buying, holding, or selling based on how well they have been performing. My buys list would be:
Akon, Kanye West, T-Pain, Chris Brown, & Lil Wayne. I would be holding 50 Cent, Jay Z, & Nas. And personally I would be selling Britney Spears, Whitney Houston, Bobby Brown, and the Shop Boyz (Party Like a Rockstar).
Monday, September 17, 2007
Tip Cup - Thanks Roger
Now if you were rolling with Lil Jon, Bishop Magic Don Juan and Snoop Dogg...you might confuse their cup with my glass. While I wouldn't mind having a diamond encrusted Pimp Cup, I decided to stick with my personal Tip Cup. Now I know I get made fun of every now and then b/c if someone needing money catches me coming out of a bar/club, its about as good as gold that they are getting some money. But this time I would like to send a special shot out to another individual who donated to the Tip Cup. It wasn't my personal jar but a jar that always needs to be kept full. This gracious donor was the legendary Roger Staubach who sponsored his charity flag football event selected Big Brothers Big Sisters as his designated charity for this event. It was a professional event with a number of corporate sponsors who paid to meet, greet and eat with the Hall of Famer. An awesome event where a number of great objects, like signed photos of current NFL players, footballs, box seats all were silently auctioned off for a great cause. A special thanks to Roger and all of the people that made this night possible. Ohhh by the way I caught a touchdown pass from at Soldier Field that night. Yeah I still got it!!!
Monday, September 10, 2007
Why fly to tech...
Because, I'm like a bird I wanna fly away. That was my best version of Nelly Furtado and it was darn good. I can't go pop so time to get back to the basics. You wonder why previously I said their has been flight. You usually here the statement: "There has been a flight to quality". And all of a sudden the industry that we all have been running away from since 2001 is now the one that we are flying back too now that the financial bubble begins to rear its ugly head. As usual I try to do the one thing most stock pickers don't do. All the websites and TV shows recommend picks but they don't do one thing that would have been helpful for me when I first got started and that was to recommend great entry prices. There have been a few simple concepts that have made a huge difference in how my returns affect my portfolio. Over the years, I have come to realize that entry price, transaction fees, dollar cost averaging, dividends, and earnings releases/market news have been important in understanding the stocks I pick and how much I buy and how long I hold. I would like to say that I am on the cutting edge by actually recommending an entry price but there is probably someone else out there making a bold leap and doing the same. But even some of my favorites, Jim Cramer, Fast Money crew, and Jim Jubak recommend picks but not exactly the entry price. Jubak probably comes the closest by disclosing he will purchase the stock three days (I think its still three) after he has noted that he will be buying the stock. So here goes my take on good ole' technology:
Adaptec (ADPT) $3.40 – Every portfolio needs a little risk and here is mine. This beaten down warrior blasted through its 52wk low. I see momentum action here that will create a floor and push this stock higher. If this stock every dips back to my recommendation price Superman that stock. I got in at $3.54 and since then this stock has gone up $3.82. It has come back a little and due to the markets negative outlook. I would accumulate at $3.50s if it dips and ride the short term wave to a nice quick gain. Save a little in the tank as this will be a great long term play.
Risk – Medium - High
Time Horizon – Short Term
Advent Software (ADVS) $39.25 – Another area not hit by the credit woes is technology. This company reported earnings in August and sales of their software geared towards investment companies and non-profit organizations grew at a decent clip. With the adding of new customers and management’s willingness repurchase the firms shares when they are trading at a discount, this company will continue to be rewarded for growth and look for an exit point of $45 to $47. My quick update is this stock is volatile and a little patience will be rewarded if this stock gets down back to my recommendation price.
Risk – Moderate
Time Horizon – Moderate Term
Zhone Technologies (ZHNE) $1.10 – Many well known investors note they would probably be small cap traders if they could start all over again in today’s world. And I don’t disagree with them. Small cap gives you the opportunity to accumulate a large number of shares just as a private equity firm would accumulate a large number shares for their investment portfolio of today’s medium and large cap stocks. The practice is to load up on a good thing (most funds hold a majority shares in the top 10 companies) and ride the great returns. But the problem with small cap stocks is risk… or should I say the perceived risk that in one quick swoop your $1 stock can become worthless. The way I recommend playing small cap stocks is find your entry point and give yourself some margin of safety to buy the stock. For example, I have indicated a target price for ZHNE of $1.10, but this is the margin of safety price after I noticed momentum at the $1.15-1.17 range over a month ago. On Aug 16, the death day of the market I got my margin of safety price of $1.10 and rode ZHNE for a few days and sold at $1.20. Well more momentum action is occurring at $1.20. I would say this consistent action should reduce our margin of safety and I would re-recommend ZHNE here at a range of around $1.15 to 1.17.
Risk – High
Time Horizon – Short Term
Ohh and I almost forgot my favorite tech stock of the moment, Radisys.
RSYS - This stock has tested the limits of the faint of heart. Many people watched this stock dip below the 52 wk low and thats when a technique that we discussed above came in handy. Dollar cost averaging allowed us to continue to buy this stock as it fell. The price here would be around the mid 10.80s. The "Superman that stock" price would be where I got lucky and repurchased the stock at 10.50s. If this stock drops to 10.50 I repeat...bring out the 18 Wheeler and jump all aboard. Notice the recent news of RSYS acquiring technology platforms from Intel has fueled a nice rally today. It could have been picked up today at around $11 but the nice upside move is just what the doctor ordered. It was reported the new acquisition will be completed in a little over a month and add around $50 million to the bottom line. Music to the ears of us buyers here at this point in the stock. Look for the completion of the acquisition and if as earnings begin to be revised upwards by analysts covering the stock...get ready for takeoff.
I'm Out....PEACE
Thursday, September 06, 2007
Reader Response ~ Coming Soon
I wanted to send a quick shot out to all of my peoples out there who are tuning in to the new revolution. We are taking our future into our own hands one stock at a time. I have had a number of people with recent interest in Urbanomics analyzing their stocks, possibly managing portfolios, or simply wanting to learn more about the market. I appreciate the love and I will keep pushing forward.
The following were taken from a few emails lately:
"Check out the uranium sector...its going bananas. There has been some major pull back lately look for a rebound. One stock I own is SXR - Uranium One , check it out and let me know what you think......"
"Dude, I love your site! Is it time to buy more BNI yet? You still see it shooting up more? Is Best Buy still hot to pick up?...."
I will be answering these questions very soon, so keep em coming!
The following were taken from a few emails lately:
"Check out the uranium sector...its going bananas. There has been some major pull back lately look for a rebound. One stock I own is SXR - Uranium One , check it out and let me know what you think......"
"Dude, I love your site! Is it time to buy more BNI yet? You still see it shooting up more? Is Best Buy still hot to pick up?...."
I will be answering these questions very soon, so keep em coming!
Thursday, August 30, 2007
Flight To Technology
As I commented before, with the turbulent markets reeling from the financial industries woes there has been a flight to technology. This is understandable as many investors still search for growth and safety. I will apologize ahead of time because I have bought a few names but here are the stocks I will bring to your attention. Some are technology plays while others show positive momentum action in this crazy market.
Adaptec (ADPT)
Zhone Technologies (ZHNE)
Advent Software (ADVS)
Lamar Advertising (LAMR)
Gatehouse Media (GHS)
Wachovia Corp (WB)
I should have more on these companies later.
Disclosure: I recently purchased Adaptec, and Advent Software. I recently bought and sold Zhone Tech for a profit.
Adaptec (ADPT)
Zhone Technologies (ZHNE)
Advent Software (ADVS)
Lamar Advertising (LAMR)
Gatehouse Media (GHS)
Wachovia Corp (WB)
I should have more on these companies later.
Disclosure: I recently purchased Adaptec, and Advent Software. I recently bought and sold Zhone Tech for a profit.
Reader Response - Berkshire Hathaway
Fred's comment:
I would have to agree that Buffett is the MJ of investments. No doubt BNI is pleased with the attention. Your love and knowledge of BNI is clear, so would you say that Buffett is trying to position Berk Hathaway for a takeover? (This article from NewsVisual makes a case for it: http://www.newsvisual.com/newsvisual/2007/08/as-berkshire-up.html ).
Urb Reader Response:
Fred, I wanted to say thanks for reading the article and throwing a very good question into the hat. After reading the article, it does make an interesting viewpoint on the many connections that BRK has with BNSI. However, I will use that same article and take a slightly different stance. I don't think that Buffett will buy BNSI because of the following:
- He has made multiple purchases in the sector and a quick SEC search will review his ownership in Union Pacific (10.5M shares) and Norfolk Southern (6.4M shares). I view these purchases as Buffett being bullish on the sector as a whole. Another long shot viewpoint could be he may try to use his influence to stir up further synergies amongst the companies. I would even say a possible merger, but I am unsure of the regulatory scrutiny over that type of transaction in this very mature industry.
However, I recently learned that Buffett had added an additional 845K shares to up his stake to 15% today. This again is another bullish sign for long term buyers.
I would have to agree that Buffett is the MJ of investments. No doubt BNI is pleased with the attention. Your love and knowledge of BNI is clear, so would you say that Buffett is trying to position Berk Hathaway for a takeover? (This article from NewsVisual makes a case for it: http://www.newsvisual.com/newsvisual/2007/08/as-berkshire-up.html ).
Urb Reader Response:
Fred, I wanted to say thanks for reading the article and throwing a very good question into the hat. After reading the article, it does make an interesting viewpoint on the many connections that BRK has with BNSI. However, I will use that same article and take a slightly different stance. I don't think that Buffett will buy BNSI because of the following:
- He has made multiple purchases in the sector and a quick SEC search will review his ownership in Union Pacific (10.5M shares) and Norfolk Southern (6.4M shares). I view these purchases as Buffett being bullish on the sector as a whole. Another long shot viewpoint could be he may try to use his influence to stir up further synergies amongst the companies. I would even say a possible merger, but I am unsure of the regulatory scrutiny over that type of transaction in this very mature industry.
However, I recently learned that Buffett had added an additional 845K shares to up his stake to 15% today. This again is another bullish sign for long term buyers.
Monday, August 27, 2007
Aug 28 - Urb Play of the Day
Have you witnessed greatness? How about Jordan... his "Airness" has had numerous moments where he has dazzled us. Taking off from the free throw line and flying through the air... his ability to defy gravity has often left me speechless.
Then you have the Michael Jordan of the investment world, Warren Buffet. His investment company Berkshire Hathaway continues to amaze us with timely investments that dazzle us with their ability to find companies with hidden value right underneath our noses.
Finally, some say I have come along and given hope where there was once despair. I have brought two worlds together, that some say couldn't exist. I know its difficult mantaining my natural swagger and love for hiphop and still dominating in the investment world. It's kinda like P-Diddy being your stockbroker you wonder could it ever be possible.
Now whenever I have a big investment, I have always told you to "Back That Thang Up"...ala Juvenile and buy tons of this stock. Well, I am releasing my Soulja Boy pick and telling you to "Crank That" and "Superman this Stock". I know... some faithful readers have been lost in translation but here we go. Crank That is my new reference loading up on a stock that I absolutely love. I am gonna superman this stock and give it a rating worthy of super hero status.
URB PLAY OF THE DAY:
"CRANK THAT" PICK -----> BURLINGTON NORTHERN SANTA FE (BNI)
I recommended this stock almost two weeks ago on strong momentum at the time. This was a time when most folks thought the sky was falling because of the subprime jitters in the market. The Dow went from an all time high at 14000 (See Dow Take a Bow) to skidding belowing 13000 in a matter of weeks (See The Dow and Beyonce's Fall). I still believe that the financial sector is in trouble but I won't rest until I find the best stocks out there. And boy have we found one. Go back to my post two weeks ago and you will see why I love BNI (See Balling on Wall Street Shopping List) . I disclosed then that I recently bought the stock at $79 and in the face of a deteriorating market watched it shrink down to $76, where I loaded up again. It was hard decision to make at the time but I played Soulja Boy's "Crank That" and it got me through the rough times. I was looking at my screens again tonight and all I can say is I love BNI, like a FAT KID LOVES CAKE. I promise you this stock opens higher tomorrow morning on more momentum.
And you keep asking who the heck is Soulja Boy and what does he have to do with my picks, well check him out here: Soulja Boy "Crank That"
Wednesday, August 15, 2007
Ballin' on Wall Street - Shopping List
Yeah, we’ve been through a rough period here in the market but you know what we’ve made it through. Reminds me of the song you’re guaranteed to hear when you fly down to Jamaica, goes a little somethin’ like this: “I can see clearly now the rain is gone, I can see all obstacles in my way…” The only problem is the obstacle is still somewhat in our way. The experts on Wall Street for the longest time were telling us that subprime issues were an isolated problem. How about this song, “Don’t Worry Be Happy”, should have played everything one of those idiots tells us that the subprime credit woes won’t spillover into the economy. So what has happened, it did spillover into the economy and “You Don’t have To Be Smarter Than a 5th Grader” to realize it would spillover rather easily. Hmmm let’s see if I can think of a few sectors that would be affected and why:
Mortgage – The source of the problem
Homebuilders – The receipient of the problem
Financial Services (Banks) – They financed the problem
Financial Services (Other), Retail, Consumer Services, Restaurants – They are the spillover groups that are hurt by people with poor credit, less disposable income, and fear that the money in their pocket today won’t stretch as far.
What’s left:
NOT MUCH
Energy, Commercial Real Estate, Utilities, Defense, Consumer Staples, & Technology
So with my shopping bag in hand, I am gonna hook you up with a Wish List like its going out of style. This is a mix of plays that is gonna get you on track for the long road ahead. And I’ve included entry points…the one thing most analysts out there never tell you. They tell you the good stocks but never at what point to buy them:
My Personal Shopping List:
Best Buy (BBY)- $44.00; Near a 52 wk low you are getting a steal of a deal. This best in class stock is expanding into China, pummeling the competition (Circuit City, Radio Shack,etc), and expanding into other consumer goods like appliances.
Risk – Moderate, you have a RETAIL stock, ride out the bumps to Long Term gains
Time Horizon – Long Term (over 1 year)
Burlington Northern BNI - $79; All aboard this stock. Folks one thing I’ve learned is when the best and the brightest on the street are onto something, like Brandy’s old hit “I Wanna Be Down”…I do want to be down with what they are buying into. And the railroads are being accumulated by some of the biggest names it the biz. I am going with the biggest name WARREN BUFFET. Yes, my main man is pumping serious cash into this stock which will create a nice floor for the stock.
Risk – Moderate, Transportation was the hot thing at the beginning of the year, but with stock prices cooling it has given us a nice entry point.
Time Horizon – Very Long Term – Buffet buys for the long haul so accumulate and store this one in the freezer. Call me in a few years when Buffet makes you rich
Equity One (EQY) $25 or below, Capital Trust (CT) $30 or below, Jones Lang LaSalle (JLL) 101 or below, General Growth Properties (GGP) 49 or below – Remember the sector that I said may not be affected by the housing downturn, try Real Estate Investment Trusts (REITs) with exposure with COMMERCIAL property. GGP was my favorite in earlier posts until I saw the momemtum in EQY. I wanted this one at the lows of $23.75 but not happening ppl jumped all over it. And CT has the backing of Sam Zell purchasing mad shares, buy with smart ppl. JLL is on the move, check Zacks.com
Risk – Low; beaten down only because they have Real Estate in their names
Time Horizon – Short Term gains will exist, but these are Long Term Gems
Stay tuned for my next entry on Flight to Technology. Who would have ever thought when the market turns sour that we would turn to technology to lead the way. Well its happening.
Disclosures: I own Best Buy (BBY) and Burlington Northern at the prices disclosed. I will update you as I add REITs to the portfolio.
Mortgage – The source of the problem
Homebuilders – The receipient of the problem
Financial Services (Banks) – They financed the problem
Financial Services (Other), Retail, Consumer Services, Restaurants – They are the spillover groups that are hurt by people with poor credit, less disposable income, and fear that the money in their pocket today won’t stretch as far.
What’s left:
NOT MUCH
Energy, Commercial Real Estate, Utilities, Defense, Consumer Staples, & Technology
So with my shopping bag in hand, I am gonna hook you up with a Wish List like its going out of style. This is a mix of plays that is gonna get you on track for the long road ahead. And I’ve included entry points…the one thing most analysts out there never tell you. They tell you the good stocks but never at what point to buy them:
My Personal Shopping List:
Best Buy (BBY)- $44.00; Near a 52 wk low you are getting a steal of a deal. This best in class stock is expanding into China, pummeling the competition (Circuit City, Radio Shack,etc), and expanding into other consumer goods like appliances.
Risk – Moderate, you have a RETAIL stock, ride out the bumps to Long Term gains
Time Horizon – Long Term (over 1 year)
Burlington Northern BNI - $79; All aboard this stock. Folks one thing I’ve learned is when the best and the brightest on the street are onto something, like Brandy’s old hit “I Wanna Be Down”…I do want to be down with what they are buying into. And the railroads are being accumulated by some of the biggest names it the biz. I am going with the biggest name WARREN BUFFET. Yes, my main man is pumping serious cash into this stock which will create a nice floor for the stock.
Risk – Moderate, Transportation was the hot thing at the beginning of the year, but with stock prices cooling it has given us a nice entry point.
Time Horizon – Very Long Term – Buffet buys for the long haul so accumulate and store this one in the freezer. Call me in a few years when Buffet makes you rich
Equity One (EQY) $25 or below, Capital Trust (CT) $30 or below, Jones Lang LaSalle (JLL) 101 or below, General Growth Properties (GGP) 49 or below – Remember the sector that I said may not be affected by the housing downturn, try Real Estate Investment Trusts (REITs) with exposure with COMMERCIAL property. GGP was my favorite in earlier posts until I saw the momemtum in EQY. I wanted this one at the lows of $23.75 but not happening ppl jumped all over it. And CT has the backing of Sam Zell purchasing mad shares, buy with smart ppl. JLL is on the move, check Zacks.com
Risk – Low; beaten down only because they have Real Estate in their names
Time Horizon – Short Term gains will exist, but these are Long Term Gems
Stay tuned for my next entry on Flight to Technology. Who would have ever thought when the market turns sour that we would turn to technology to lead the way. Well its happening.
Disclosures: I own Best Buy (BBY) and Burlington Northern at the prices disclosed. I will update you as I add REITs to the portfolio.
Tuesday, July 31, 2007
Damn Gina!
Yeah, I had to steal my favorite line from my Urb flashback sitcom "Martin", featuring Martin Lawrence. What does Martin have to do with investing, yeah you guessed it Damn Gina! That's what I say when I get something right but I am too weak to pull the trigger. I have to give some credit to a stock star (not rockstar) friend of mine that goes by "The Great". We were all over the fact that the mortgage world is imploding as we speak. Need proof read a few of my columns that date back to last year when we called the top of the market...need more proof check out American Home Mortgage!!! But I will get back to that story in a minute.
We are here to say DAMN GINA! to the fact that I wanted to:
MAKE MONEY off of the real estate market. Specifically I wanted to SHORT MORTGAGE companies. So I had this convo with "The Great" only 2 days ago and we plotted a master plan to make so dough off of this scenario. The scenario is simple but the buzz from my friends at Fast Money on CNBC is that shorting this sector was old news. But "The Great" mentioned a few great points. The bloodshed has only begun on the books of these real estate companies. They have assets that are deteriorating in value and they can't pay back their damn loans. So our strategy was to pick a few sectors in real estate and get to work SHORTING those stocks, or betting that the value would go down for these stocks. So J. Gotti wanted to take the least risk adverse road possible and I will not guess what stocks will tank I want some certainty.
Urb "Living Legend" lesson of the day: My main man, Warren Buffett says make big bets on highly probably events.
Guessing which real estate stock will tank is like shooting darts. So I want to pick a fund that has exposure to: Mortgages and Homebuilders and short the whole damn sector. Now this is highly likely that the sector will fall over time. So what did I come up with:
(REM) an Exchange Traded Fund that specializes in Mortgage companies
The Damn Gina part -> http://finance.yahoo.com/q?s=rem
REM was down over 9% today
So what have we learned today...go with your gut. And my gut is telling me that the main reason REM tanked today was because of American Home Mortgage fears. This stock is done, finished...beat it, scram. And the kicker is they issued over 50 billion in loans last year and non of them were sub prime. That means, none of their loans were really janky!!!! Janky is a lovely word for horrible. But guess what, most of their loans were Alt -A or almost Janky. And if companies are going bankrupt on loan portfolios that are not even sub prime then we are in big trouble folks. Alt -A loans are going to a lot more almost "normal" home buyers.
So to wrap things up folks I am going out a limb and say if the market hasn't punished the finance companies that specialize in Alt - A loans then its time for us to do it, before the market realizes the obvious. Here is a quick list of companies that I found that specialize in Alt A loans:
Alliance Bancorp - already bankrupt
M+T Bank
Hey if you know any public companies that specialize in these loans, let me know!
We are here to say DAMN GINA! to the fact that I wanted to:
MAKE MONEY off of the real estate market. Specifically I wanted to SHORT MORTGAGE companies. So I had this convo with "The Great" only 2 days ago and we plotted a master plan to make so dough off of this scenario. The scenario is simple but the buzz from my friends at Fast Money on CNBC is that shorting this sector was old news. But "The Great" mentioned a few great points. The bloodshed has only begun on the books of these real estate companies. They have assets that are deteriorating in value and they can't pay back their damn loans. So our strategy was to pick a few sectors in real estate and get to work SHORTING those stocks, or betting that the value would go down for these stocks. So J. Gotti wanted to take the least risk adverse road possible and I will not guess what stocks will tank I want some certainty.
Urb "Living Legend" lesson of the day: My main man, Warren Buffett says make big bets on highly probably events.
Guessing which real estate stock will tank is like shooting darts. So I want to pick a fund that has exposure to: Mortgages and Homebuilders and short the whole damn sector. Now this is highly likely that the sector will fall over time. So what did I come up with:
(REM) an Exchange Traded Fund that specializes in Mortgage companies
The Damn Gina part -> http://finance.yahoo.com/q?s=rem
REM was down over 9% today
So what have we learned today...go with your gut. And my gut is telling me that the main reason REM tanked today was because of American Home Mortgage fears. This stock is done, finished...beat it, scram. And the kicker is they issued over 50 billion in loans last year and non of them were sub prime. That means, none of their loans were really janky!!!! Janky is a lovely word for horrible. But guess what, most of their loans were Alt -A or almost Janky. And if companies are going bankrupt on loan portfolios that are not even sub prime then we are in big trouble folks. Alt -A loans are going to a lot more almost "normal" home buyers.
So to wrap things up folks I am going out a limb and say if the market hasn't punished the finance companies that specialize in Alt - A loans then its time for us to do it, before the market realizes the obvious. Here is a quick list of companies that I found that specialize in Alt A loans:
Alliance Bancorp - already bankrupt
M+T Bank
Hey if you know any public companies that specialize in these loans, let me know!
Urb Buzz - Reader Response
Thank you my upside down friend for your commentary about the Lindsey Lohan (Lilo) to this post -> http://urbanomics.blogspot.com/2007/07/urb-buzz-july-07.html. I love to debate so here we go:
First you say Lilo is not risky or unreliable. Wrong, she is risky because the cops found COKE on her and all she could say was that she borrowed someone's jeans and that's why drugs were found. Remind me to accidently borrow your jeans when you win the lottery. Unreliable, again she get the top prize because a movie has been put on hold because guess what...Lilo is a train wreck. So yes, before I jump ship I asked myself the same two questions you posed:
1. Does the person still make money - Investors evaluate the time value of money. Roll with me homey...the possibility Lilo will continue to make top dollar in the future is shrinking rapidly.
2. Will her actions affect future profits - Yes, when movie investors - big banks that fund movies, insurance companies that fund movies, and movie goers realize that Lilo is a train wreck the money stops flowing. And supposedly some of the insurance companies are pulling the plug...I know I would.
Finally, I do agree with you and most actors get a second, third and fourth chance...but like stock market crashes people do not quickly forget when they've been burned. And no CEO's drunk driving will not cause a stock to dive, but remember these incidents:
1. Martha Stewart - stock tanks
2. Rigas Family scandal - Adelphia telecommunication company split in pieces and sold
Honorable Mention - World Wrestling Entertainment, traded a little lower when people actually thought Vince McMahon died in one of WWE crazy televised stunts
Notice, big investors are pulling the plug on Michael Vick, Rawlings just canned him, Nike and Reekbok put his products on hold...and he hasn't even been indicted. Why, because the RISK is just to HIGH
get ur URB on
First you say Lilo is not risky or unreliable. Wrong, she is risky because the cops found COKE on her and all she could say was that she borrowed someone's jeans and that's why drugs were found. Remind me to accidently borrow your jeans when you win the lottery. Unreliable, again she get the top prize because a movie has been put on hold because guess what...Lilo is a train wreck. So yes, before I jump ship I asked myself the same two questions you posed:
1. Does the person still make money - Investors evaluate the time value of money. Roll with me homey...the possibility Lilo will continue to make top dollar in the future is shrinking rapidly.
2. Will her actions affect future profits - Yes, when movie investors - big banks that fund movies, insurance companies that fund movies, and movie goers realize that Lilo is a train wreck the money stops flowing. And supposedly some of the insurance companies are pulling the plug...I know I would.
Finally, I do agree with you and most actors get a second, third and fourth chance...but like stock market crashes people do not quickly forget when they've been burned. And no CEO's drunk driving will not cause a stock to dive, but remember these incidents:
1. Martha Stewart - stock tanks
2. Rigas Family scandal - Adelphia telecommunication company split in pieces and sold
Honorable Mention - World Wrestling Entertainment, traded a little lower when people actually thought Vince McMahon died in one of WWE crazy televised stunts
Notice, big investors are pulling the plug on Michael Vick, Rawlings just canned him, Nike and Reekbok put his products on hold...and he hasn't even been indicted. Why, because the RISK is just to HIGH
get ur URB on
Subscribe to:
Posts (Atom)