Sunday, October 23, 2011

Picking fruit from our trees UPDATED 23 Oct

23 Oct - We added Freeport (NYSE: FCX) to the MP at $34. We thought long and hard about CLF or FCX, but opted for the exposure to gold rather than iron ore. Also, the 3% yield is nice. Wish we had pulled the trigger under $30, but we'll live. There may be a bumpy road ahead, as the economy is on shaky ground which means copper demand will be uneven, but things will be up and down over the next 2 years and when they're up, this stock will take off. So one more spot left and I've got an idea.

2 Oct - We added MetroPCS (NYSE: PCS) to the MP at $8.70. I gotta believe this ATT/T Mobile potential deal is a positive for this company. If the deal goes through, Verizon, Sprint, or some unforeseen entity will be pressured to step up and buy them. If the deal doesn't go through, then great for PCS. In addition, wireless is just where everything is going, land line are dead. The wireless companies are the new mob, joining the cable companies. Getting online is critical and these two industries rule that. The stock is beaten up, but over the next couple of years they should emerge as the number 3 player in this space if they aren't acquired.

That's 8 spots taken. By the way, we know the portfolio has been beaten up lately and the fall has been dramatic in both the market and our portfolio, but none of these companies are going out of business and knowing we plan to hold into 2013 gives us comfort. Some of the sectors like solar and China Internet have been killed to the point where it's become ridiculous. This is when you buy.

10 Sep - I know we were reluctant to touch the insurers 30 days ago, because of European exposure concerns, but one of our old friends Hartford (NYSE: HIG) doesn't have much of that, so we're adding HIG to the list at $16.75 it's a bargain. We don't believe it or most of the other insurers fully recovered from the beating they took over the past few years. It's a solid name and has a 2.3% yield in here with book value over 40, we like it. While we looked at Genworth, there's still that uncertainty over the mortgage business and the potential restructuring down the line and no dividend to keep us warm at night.

We're adding another combo play, Renesola (NYSE: SOL) at $2.90 and Trina Solar (NYSE: TSL) at $10.50. These two stocks will hold one position. This sector has been beaten down to the point of absurdity. I think the real problem is there are too many solar companies and many need to go away. There's tremendous upside here and very little risk over the next couple of years. It's dangerous picking just one, as who knows who's going to survive, so we pick two of the bigger, better run companies. These companies are running out of cash and they have the scale and management to outlast and out do the competition. Also, both these names are heavily shorted which could provide some lift on good news.

That's 7 down and 3 to go.

22 Aug - So DANG appears to have been targeted by short sellers. Got hammered today and I didn't notice it was on the Reg SHO/Threshold list until today (been there for a while). For those of us who can wait it out, we should see a nice pop, eventually.

20 Aug - Adding a combo play Dangdang (NYSE: DANG) at $7.90 and Renren (NYSE: RENN) at $7. This position will hold one spot in the portfolio, so it's a split. This is our speculative play and gets ups good exposure to the Chinese consumer and both companies increased revenues by over 50%. Some of the negative news around these names doesn't bother me as I heard the same stuff about Baidu and Ctrip and Sina.

14 Aug - Adding Frontier Communications (NYSE: FTR) at $6.95 and that fat 10.8% yield.

So Cisco (NASDAQ: CSCO) had a good quarter so in to the bag it goes. At this price, why wait. We're adding it tomorrow, say we pick it up at $14.50 given where it'll probably trade. We're also adding Petrobras (NYSE: PBR) to the portfolio at $26.50. This is the oil company of the future and this is a dynamite price.

Remember, we're going to pick 10 names and spend equal amounts on each. So far we have NVTL, CSCO, PBR, FTR, DANG/RENN, HIG, SOL/TSL, PCS, FCX. We'll summarize them when the list is complete.

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Monday, October 3, 2011

Frontier is even more interesting

Frontier (FTR) paid the usual dividend today and the Board said they intend to keep paying the say dividend. What more do people need? Shorts are trying to force a dividend cut, but I don't see it happening. The yield is over 12% now and the stock is around 5.5. Oddly enough, the Jan 13 calls look expensive at $5 and $7.5. I'd add more in here and reap the rewards of a failed short attack and a fat dividend. 

Still looking to finish out the MP. Later this week we may get the chance to do that.

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Wow, the Solar industry is on the ropes

The Solar industry is so beaten up, it looks like it's almost over. I hope it's the 'rope a dope' and not the real thing! That's why I gotta believe we gotta be buying them. I think we're going to see some M&A activity in that space, but who has the money to buy? Definitely not another solar name. Maybe a big company like GE or Dow Chemical. Either way, I think the downside risk is so small and when people figure out they're not all going out of business, some of these are going to be up 5 to 10 times. 

I'm not sure which is beaten down worse, solar or Chinese Internet stocks? This much gloom and doom must be a good thing for those of us who can wait.

Read more...

Sunday, October 2, 2011

Picking fruit from our trees UPDATED 2 Oct

2 Oct - We added MetroPCS (NYSE: PCS) to the MP at $8.70. I gotta believe this ATT/T Mobile potential deal is a positive for this company. If the deal goes through, Verizon, Sprint, or some unforeseen entity will be pressured to step up and buy them. If the deal doesn't go through, then great for PCS. In addition, wireless is just where everything is going, land line are dead. The wireless companies are the new mob, joining the cable companies. Getting online is critical and these two industries rule that. The stock is beaten up, but over the next couple of years they should emerge as the number 3 player in this space if they aren't acquired.

That's 8 spots taken. By the way, we know the portfolio has been beaten up lately and the fall has been dramatic in both the market and our portfolio, but none of these companies are going out of business and knowing we plan to hold into 2013 gives us comfort. Some of the sectors like solar and China Internet have been killed to the point where it's become ridiculous. This is when you buy.

10 Sep - I know we were reluctant to touch the insurers 30 days ago, because of European exposure concerns, but one of our old friends Hartford (NYSE: HIG) doesn't have much of that, so we're adding HIG to the list at $16.75 it's a bargain. We don't believe it or most of the other insurers fully recovered from the beating they took over the past few years. It's a solid name and has a 2.3% yield in here with book value over 40, we like it. While we looked at Genworth, there's still that uncertainty over the mortgage business and the potential restructuring down the line and no dividend to keep us warm at night.

We're adding another combo play, Renesola (NYSE: SOL) at $2.90 and Trina Solar (NYSE: TSL) at $10.50. These two stocks will hold one position. This sector has been beaten down to the point of absurdity. I think the real problem is there are too many solar companies and many need to go away. There's tremendous upside here and very little risk over the next couple of years. It's dangerous picking just one, as who knows who's going to survive, so we pick two of the bigger, better run companies. These companies are running out of cash and they have the scale and management to outlast and out do the competition. Also, both these names are heavily shorted which could provide some lift on good news.

That's 7 down and 3 to go.
22 Aug - So DANG appears to have been targeted by short sellers. Got hammered today and I didn't notice it was on the Reg SHO/Threshold list until today (been there for a while). For those of us who can wait it out, we should see a nice pop, eventually.

20 Aug - Adding a combo play Dangdang (NYSE: DANG) at $7.90 and Renren (NYSE: RENN) at $7. This position will hold one spot in the portfolio, so it's a split. This is our speculative play and gets ups good exposure to the Chinese consumer and both companies increased revenues by over 50%. Some of the negative news around these names doesn't bother me as I heard the same stuff about Baidu and Ctrip and Sina.

14 Aug - Adding Frontier Communications (NYSE: FTR) at $6.95 and that fat 10.8% yield.

So Cisco (NASDAQ: CSCO) had a good quarter so in to the bag it goes. At this price, why wait. We're adding it tomorrow, say we pick it up at $14.50 given where it'll probably trade. We're also adding Petrobras (NYSE: PBR) to the portfolio at $26.50. This is the oil company of the future and this is a dynamite price.

Remember, we're going to pick 10 names and spend equal amounts on each. So far we have NVTL, CSCO, PBR, FTR, DANG/RENN, HIG, SOL/TSL, PCS. We'll summarize them when the list is complete.

Read more...

The Vix

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Where we rant and rave about the market and of course give our opinions on stocks we love or hate. We're not advisors and urge you to conduct your own due diligence.

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