St. Joe's - Board Change Announced

St. Joe's Company has announced the CEO is stepping down, effective immediately. While having solid management in place is important, this could be the catalyst needed to reorganize this huge real estate company. If you look at a chart for St. Joe's you have seen this stock drop from highs in the $80s to definitely seeing the lows. I would have loved to muster up the courage and buy in the stock in the teens but I was a little nervous at that point. This cost me some percentage points but I'd like to think that at least we see pieces shifting that will cause this company to continue to move in the right direction with hopefully now a more limited downside. This is still a high risk high reward trade, as REAL ESTATE, FLORIDA, changing your Quarterly Reporting date, and big bettors are all going against the company. And my analogy for the day is, I hope the Florida (orange) squeeze is on, as that alone can move this stock in the right direction.

Training Day...Alerts

Come take a ride with me on your first day, just like rookie cop Ethan Hawke took a ride with Denzel...whips I mean Alonzo Harris. See in both of our worlds street justice reigns. In Training Day, Alonzo let his brand of street justice play out until he gets burned. In my world of investing, Wall Street enacts its own brand of street justice. You can get a cheap thrill by not doing your homework and buying the flavor of the month stock. Sometimes you'll win but you don't wanna lose...and get burned like Mr. Harris.

To help you transition into this tough game of investing I'll take you on a Walk down Walk Street. We are gonna ride because its not a race, its actually hours and hours of research to find deeply valued plays that have explosive potential. I believe in my process and hope to share some of these deep values with you. Email me to begin receiving alerts so that you can follow along while being your own boss by picking your own selections.

Here is a quick summary of my most recent Alerts:

Trade Deadline...

If you follow sports there is always a part of the season where the right to trade a player from one team to another comes to a close, this is the 'trade deadline'. And in the NBA this year its come with some big names on the trading block. Carmelo Anthony to the New York Knicks and Deron Williams to the New Jersey Nets sounds like these franchises are solidifying their rosters with serious talent.

Its time to solidify our roster of stocks with as many 'Melo's and Deron's as possible because turbulence is starting to set in on the markets. Many people forget when investing that you must really consider the entire global landscape these days. Listening to the news for a few seconds leads to a crash course in countries like Tunisia, Egypt, Bahrain, Libya...and then flickers of concern with names like Saudi Arabia, Israel, Iran. The unrest in these countries is the main reason why you must solidify your roster with serious talent.

I have been expecting a pullback for sometime but its always difficult to tell when it may occur. The economy is chugging along but there are still mixed data signals telling us the coast is not close to being clear. Unemployment, housing prices dropping back to historic lows, gas prices, and quantitative easing all make me uneasy. The catalyst of the pullback may oddly enough be Tunisia!! So its time to evaluate the roster and TRADE:

~ Trade your stud who's maximized their talent.
~ Trade your players who are not panning out.
~ Accumulate money to acquire the biggest stud out there (i.e., Lebron James)

I took the following actions:
~ Sold (or traded) Iron Mountain (IRM) shares for the roughly 30% gain accumulated in the last few months. This is a stud I wanted to take profits of before they reported earnings & before this pull back eats my profits.

~ Sold (or traded) Republic Services(RSG) shares for the roughly 5% gain accumulated in the last few months. This is a stud I wanted to take profits of before this pull back eats my profits. I hope to reacquire this prospect later.

~ I will buy a few Lebron James...starting with my 2 premium screen alert stocks. And keep the extra cash (or dry powder) for a rainy day

FEBRUARY 2011: BIOTECHNOLOGY PREMIUM SCREEN

STOCK: ******
HEALTHCARE
BIOTECHNOLOGY & DRUGS
TIP: Ribbon

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Risk On: Orexigen, St. Joe Company

I will start off by saying that my view of the economy is very MIXED. I will get into the reasons the next time around. Here are a few more free picks because these are very risky plays and I want to document my theory here. I have one premium pick posted a few weeks ago that is doing quite well. Please contact me for gaining access to my premium picks.

OREXIGEN (OREX): I hope you like this call! After this stock got hammered, I called for a 'NIBBLE' in my last post. I parsed through a ton of data on both sides of how the FDA approval would play out and I ended up with the right conclusion. The proof was in the pudding of the FDA panel advisers meeting at the end of last year. This panel advises the FDA and while they approved Orexigen, it was a narrow approval vote and the theme was that there were concerns with elevated heart readings of patients. As I mentioned before, the FDA had to pull a previous diet drug from shelves due to cardiac concerns and I have a strong feeling that they didn't want to make the same mistake again (duh). Hence, the FDA voted to not APPROVE the drug, but called for more studies.

HOWEVER, the reason I call for a nibble of this stock at the 52 week low of $2.47 is because of the probability. The probability is likely that this drug won't die. Its comprised of two drugs that have already received FDA approvals separately. That means there is a chance for a few different outcomes:
~ More testing until even FDA approval
~ Sale of existing drug to another company that can use the technology

These outcomes led me to recommend a gamble on OREX. Since then I believe its been up 44% in a few days.

St. Joe Company (JOE): JOE continues my love of all stocks controversial. I am not sure why the 'Risk On' trades are of interest to me at this point but I want to make sure that I capture it here in my posts and some of the reasons why. JOE is a tough stock to recommend because it has a LOVE/HATE story line going on. Real estate companies and prime Florida locations makes its a darling, but the downfall of all real estate across the country has many thinking its on its last leg. The story drags on amongst investment titans. This stock is loved by famed mutual fund manager, Bruck Berkowitz, and hated by hedge fund genius David Einhorn. So the reason why I picked up a few shares the other day is because of a few reasons simple to probably only me.

REASONS I LIKE JOE:
~ Valuation: Many (wink:Einhorn) have hinted at valuation troubles lurking. I used to subscribe to this school of thought until the financial crisis taught me, there is a valuation crisis only if you can't get access to capital. Once banks got infused, they didn't have to write down every asset, they could afford to wait.

My opinion is JOE will not have to value its property at these historic lows...they can wait it out

~ Catalyst: Institutional love. This stock is attracting some big players, Bruce and I believe BlackRock on one side and of course Einhorn on the Other.

My opinion is JOE will benefit from its largest shareholders actively attempting to make this company more efficient and profitable. The don't have time to play and Bruce owns 29% of the damn stock...can you say his voice will be heard. And it has been, he's been out pumping up the stock recently, check CNBC.

~ Short Squeeze: This last one may be dumb, but everyone and their mom jumped on the Einhorn bandwagon and started SHORTING the stock. If either of my first two points prove to be correct the shares should jump as short sellers get squeezed out of betting this stock will go down. They will have to buy their shares back and...TA DA the stock rises.

Now the stock on Monday was up between 8-10% but I still bought because I think this is just the beginning of a beaten down stock with a serious plot...think Young & the Restless.
Pick up shares around $29 and anywhere below. I had to settle for $29.30 right before the close of Monday after I learned that morning listening to CNBC that Bruce it trying to get himself the Chairman spot and his business partner Mr. Fernandez the Vice Chairman spot. Can you say catalyst for change! Say goodbye to the scrubs on the board, there is a new sheriff in town. Any news like this and you will have buyers jumping on a beat down stock and short selling feeling the squeeze.

Disclosure: I own shares of St. Joes Company

Positive Earning and all to important Approvals...

I will first start off with Orexigen (OREX). The did not get the coveted FDA Board approval for Contrave, their weight loss drug. I was watching closely as many people made calculated bets on which way this all too important approval would go. I think the best write up was from an article on Seeking Alpha which outlines the cases for this drug to not get approved right away. It outlined points from the 2010 panel, not board, meeting which outlined that many doctors on the panel and board are concerned about the elevated readings blood pressure in people that were part of the phase III testing. Glad I read that article because I almost pulled the trigger. Oddly enough I think their may be an opportunity now that the stock was slammed by over 72% to the downside after the closing bell. It was from roughly $9 to a 52 week low of $2.47. If you've got ice in your veins because of the blizzard. Nibble here on Orexigen because again there is an all to important thesis out there about this stock. It was known in the FDA panel review that they already thought more monitoring of patients would need to be done based on patient data. This along with the comments from panel members should have been taken into consideration as the FDA was not looked in a favorable light due to the last approved diet drug that had to be pulled from the market. There is clearly a high hurdle rate that must be met for diet drugs. But at these levels for a drug that made it through Phase III with fairly good efficacy tests should be looked at closely.

Baidu (BIDU) - I've been watching this stock and the earnings were better than expected. Now is way above where I want to acquire but remember this is the Google of China, and there is serious value to be had.

Radisys (RSYS) - Finally, they reported better than expected earnings. We will need more quarters of this for the stock to keep rising.

Its A Blizzard In Chicago...

It is literally white out conditions here in Chicago and I now know what a true blizzard looks and feels like. And like the snow, I'll tell you that its tough to see through the market right now. I am impressed with the run the market has been on and it has broken through the all too important psychological barrier of 12,000 on the Dow Jones Industrial Average. I am cautious as most of the stocks that I am analyzing appear priced for perfection. And the hardest thing to do sometimes is to be idle and have a little dry powder.

Here are a few stocks I am keeping an eye on but even they are pushing higher very quickly. Here are a few selections for free, but remember I usually like a little safety before I enter the position:

EXAR Corp (EXAR)
American Superconductor (AMSC)