Expiring December Trades - Summary of Value Trades [JOE|MANU|FNF|TDOC|THS|MU]

This year was filled with many highs. The biggest is we welcome a bouncing baby boy a few months ago!! I apologize for not posting as frequently but I've been running my cyber company and we doubled our revenue last year and we are closing out this year, 3X what we did last year. 

So, I often shared my pillars with you all -- if you don't recall them -- use the search bar for the term "pillars". I've had to prioritize time for family and the business deals that bring us the most benefit. My stock portfolio has taken a back seat but that doesn't mean I do not still trade. For your reference, many of these stock trades were placed months ago, based on theme of what I think will happen OR based on companies that I think offer value (search my 50c candy bar views). See my summary below for why I made these trades and whether they panned out. 

 I'm headed to a Board meeting shortly but here are my December trades:

Summary of Trades

THE ST. JOE COMPANY (JOE)

MANCHESTER UNITED PLC (MANU)

FIDELITY NATIONAL FINANCIAL, INC. (FNF)

Teladoc Health, Inc. (TDOC)

TREEHOUSE FOODS, INC. (THS)

MICRON TECHNOLOGY, INC. (MU)

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My next post will discuss what I'm doing going into the end of the year. Stay tuned for what we call tax loss harvesting. When you've had a great year, usually with short term trades like I have it offers me a chance to get rid of some of the underperformers in my portfolio.

Who to Watch / Company Watch - UPDATE

Who to Watch
My how times have changed!  In the past, young investors like myself would have wanted to follow in the footsteps of corporate raiders, mutual fund managers, and high profile investors.  One well known corporate raider is Carl Icahn, he and other corporate raiders were legendary for taking over companies or agitating boards for significant change. There was also those legendary mutual fund managers that made people in my parent's generation a lot of money by investing through their fund. Some well know names here are Peter Lynch (Fidelity), Bill Miller (Legg Mason), Bruce Berkowitz (Fairholme), and many others.  The last group of high profile investors are guys like Warren Buffet and George Soros.  Today some of the most well known money makers are in the hedge fund industry.    A small difference from the previous investors in the past, are hedge funds try to make money when markets are up or down by betting on and against the performance of stocks.  Here is a run-down of some of my favorite hedge fund managers:

• Steve Cohen, David Einhorn, John Paulson, Seth Klarman, 
• Bill Ackman, David Nierenberg, Monish Pabrai, Ray Dalio

JOBS, Company Watch - JOE, BKS, LULU, NFLX

January 9, 2012

JOBS BY THE NUMBERS

If you weren’t paying attention, some important data was released this week.  The US Labor Department released the number of jobs that were gained/lost in the previous month.  Drum roll…companies hired 200,000 employees in December and the famous unemployment rate dropped to 8.5%.  If you aren’t familiar with the numbers this is POSITIVE in my book.  The reasons are: (1) More people have been getting jobs and this has been consistently happening since last summer, (2) The jobs are being added across small, medium, and large companies, and (3) Jobless claims (i.e., people filing unemployment claims) are falling.  In case you were following along at home, the number usually has to be over 125,000 to signify that jobs are being added. 

We want more jobs, I want more jobs, and we should expect that are federal, state, schools, and citizens will do and try everything to continue to get this number to a level that allows our country to grow and people to work consistently.  So please when we watch debates or listen to the evening news keep that in perspective that without jobs a lot of other things seem pretty trivial.

COMPANY WATCH – St. Joes Company (NYSE: JOE) / Barnes & Noble (NYSE: BKS)

St. Joes Company – This stock is a great example of trusting your instinct.  I like the prospects of taking a contrarian, or against the grain, stand on some investments.  JOE was one of those companies that I thought is a better investment than owning home builders.  My thesis is you get to own land and that has an intrinsic value that should hold its worth in economic downturns like the ones we’ve suffered.  Well to make a long story short, I believe I had the right thesis however I never expected there was going to be such a dispute as to what the true value of the land is.  David Einhorn made a compelling case as to why the value of the land St. Joes held wasn’t worth what St. Joes was claiming and the stock has fallen sharply.  WELL, finally there appears to be some upside to the stock.  I’ve noticed that some analysts have upgraded their outlook based on future growth prospects.  The development of land in the Panama City area, the recent development of an international airport, and recent cost cutting measures are signs that they might be moving in the right direction. 

Price: $14.67

                                          

Barnes and Noble – I am a sucker for stocks on the decline and Barnes and Noble is showing up on my radar. The other day is dropped roughly 20% on news that they were changing their future outlook lower.  That is never good and investors let them have it.  BKS even mentioned making changes such as spinning of their NOOK business. 

Price: $11.65 

COMPANY WATCH  - Lululemon athletica (NASDAQ: LULU)  / Netfilx (NASDAQ: NFLX)  

Lululemon – I’ve had my eye on LULU for quite some time now.  This stock has been a high flier and it you don’t know they make money by selling $100 dollar yoga pants.  Yoga, it’s all the craze for people with money and to show of that dough they buy expensive pants to get their work out on.  Well LULU had come under some pressure and the stock dropped a bit.  I am a stock hater here! And because I like things on the cheap I want LULU to fall further before I begin buying.  I may not be able to get that opportunity because LULU seems to go one direction and that’s up.

 Price: $53.44

Netflix – Quick note, I trashed it on the way down and I love a good rebound.  NFLX, at the lows of $70 is attractive to me.  It’s rebounded strongly and they recently talked about expanding further internationally.

Price: $98.18

Happy New Years

Happy New Years from URBANOMICS

I wanted to wish everyone a Happy New Years. To all the first time investors, part-time investors, or people interested in their financial well being: Welcome to the site that explains everything financial in an easy to understand format.  We have it all covered from how to check your credit for free, tax advice, and where to invest in the complex stock market. 

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.

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