Wednesday, April 25, 2012

Another V-day around the corner

So we find out if VVUS gets over the ED hump soon. Drug approval looks promising, but the media has given this almost no airplay. If this first drug gets approved that sets the stage for the company to become a very large player in the drug business if they get approval for Qnexa. I'm guessing if both drugs are approved, they get bought. The stock has moved back up nicely and the shorts have to be nervous, as they have to survive two potential "yes" decisions.


Wednesday, April 18, 2012

Arena taking it on the chin

So as usual just before the news we get the stories casting a shadow over the stock. It's the same thing that happens over and over. Whether the drug is approved or not, I think it's pretty predictable. Don't forget, options expire Friday and the stock has been on a huge run up lately. Regulators talk about stopping the manipulation in the oil markets, but more importantly is stopping this sort of thing. They get the machines rolling to trade the thing round and round, then they get the stories going, and finally the real people get scared - mission accomplished. The news I read today was old news and the same old cautionary stuff you read in all 10Ks. I picked up a bit more and I expect the trend to reverse if not next week, then the following week. we'll see how it plays out.


Wednesday, April 11, 2012

A few thoughts on a few names

So we have to wait a while longer on VVUS, but ARNA goes before the Advisory Board in early May. I was really looking forward to seeing the shorts squirm waiting on the word on VVUS next week. We're patient investors, so we'll wait.

Looking at adding some more Arch Coal (NYSE: ACI) if we get more selling in the market. Analyst are starting to jump on the bandwagon. Recall, we bought some 2 or 3 weeks back (just too cheap to pass). Our favorite strategy here is buying into sectors that every hates because it's going through a downturn - easy money, as long as it's a sector that isn't going away. The coal sector has been beaten down with natural gas, but those two sectors aren't going anywhere.

Sold just a little INTC, but it is of course a core holding. Had to sell some at $28. Been holding since $14 and collecting that dividend. The strategy is to always lighten up when we feel it's rich and add when we feel it's cheap. We said about a month ago we expected a rally and we got it in March, but the market is looking shaky and May is due up. I wouldn't add any new positions now without a really good reason, but might look to lighten up a bit.


Monday, April 2, 2012

An idea for Frontier management

Here's a thought. FTR is the second most shorted stock on the NASDAQ and more and more hated by the day. You know you're hated when the Seeking Alpha writers write about you non stop. Most of them are basically tools for hedge funds and other speculators who lean short. FTR is an easy target now because of all the shares, 1 billion. Why not take some of that money you saved by cutting the dividend and buy back some of those shares

You're saving about $350 million per year now, the company's market cap is about $4 billion. Why not spend $1 billion over 3 years and buy back up to 25% of the shares. We would all benefit and the capital structure would be much improved (I won't go in to details).

I think companies need to start thinking strategically in terms of the stock market because like it or not, perception has a way of becoming reality. Companies need to think about ways of dealing with a market that's dominated by speculators, lies, and algorithms. It's a new reality


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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