3SOF

Quote from: eggman11 on March 06, 2007, 10:59:38 AM
I think GOOG hit it's high already today. GOOG had a big gap up today with no news and the volume is slowing. As the day goes longer more people will get nervous and sell I believe it fill in the gap over the next 2 days. We will test the recent low of 437. If we break that we will test the 200 day at 432. If GOOG fall below 432, we will drop sharply quickly another 20 points to about 410-415. If this was all to happen within the next 8 trading days when the March options expire, that would be ideal, but I believe we will at least retest the 440 area within the next couple days. Any thoughts?

I have been trying to figure out what will happen when Yahoo reports, their quarter is expected to be good from what I have heard.  On the one hand people can take that to mean good things for GOOG, or that YHOO is actually taking business back from GOOG.  Anyone know when YHOO reports?

Quote2. MA (strong run, potential lower consumer spending)

Now MA, lets take care of that one. Ok, I get your point, you're selling short, buying puts on Goldman and Mastercard because you're worried about the credit picture of the US, right? Well, I'm worried too ... I feel credit defaults, especially credit card defaults and mortgage defaults, are going trough the roof. Suddenly, if a considerable amount of people start not paying their debts, others will start considering that option too. As time goes by it might even be considered normal not to pay debts by a part of the population.

If the default rate goes up to say 15 or 20% of loans, there will be huge losses at these companies. So, you think I'm crazy? Go ask the Japanese banks if I'm crazy. Many of them had to be rescued by the government (others just filed for bankruptcy), after the stock market collapse in Japan in late 1989.

Anyway, let's check the specific case of MA.

Technically the stock is now trading below the 50 days SMA, so looking like it is going to turn south.

Fundamentally:

- Market cap is $8.1 B. The Company is a global payment solutions company that provides a variety of services in support of the credit, debit and related payment programs of nearly 25,000 financial institutions.
- Balance sheet is strong, as cash levels are at $2.48 B
- Revenues have been growing nicely and in 2006 they were $3.33 B. The price to sales ratio is 2.43.
- They had a big tax charge in 2006. Without it they would have earned $3.62 EPS, so the trailing earnings multiple is something like 28.5.

The earnings multiple seems quite high to me, considering the risks the company faces.

Anyway, I don't know the business very well, I guess they sell their services to banks and not directly to consumers. I always thought Mastercard was a bigger than $8 B company.

I think shares will go down with the rest of the market, maybe it will close that gap at $76.25.

Good luck

Hi David,

Can you take a look at PRGX?

Thx,
Jerom.

Hi David,
Can you take a look at LEND?

THX

achim

Quote from: kpunarc on March 06, 2007, 09:48:21 AM
"DRL"
"EPEX"
"GSX"
"BEXP"

GMET (314M)
EGY (333M)
TMY (379M - good short point?)

Gee kpunarc, you're asking for 7 analysis in a row. I would have to work just for you all day ... how can we solve this?

Well, I'll just make a few comments for each one of them, trying to capture the essential:

1) DRL

It is in a deep downtrend, and it isn't from now, it already was going down in the bull market. Revenues are shrinking every year and losses are growing. I guess Doral will be a victim of the credit meltdown that probably is about to happen in the US ... or else something is going really bad in Puerto Rico.

Overall I would avoid the stock.

2) EPEX

Jesus, I call that a bear trend ! An oil company going down like that is odd. I guess there will be a rally somewhere down the line because the stock is just too oversold, but I would use the rally to sell/sell short.

3) GSX

Another quite bearish chart. You sure know how to pick them

But this is a $1.8 stock, can you short it?

4) BEXP

It looks like another one set to go down some more ... also into oil exploration. It looks like the market is discounting $oil will go down, as we look at these small companies in the field.

You we're thinking of buying or selling these stocks? The trend is your friend, I would sell them.

Good luck

(the other 3 next)

QuoteGMET (314M)
EGY (333M)
TMY (379M - good short point?)

1) GMET

Volume is too low to consider.

2) EGY

Going down and down, even today ! Perhaps these are the stocks I should be selling short, not the ones that are still, perhaps, in a topping process.

It is another oil exploration company, looks like a great medium/long term short.

3) TMY

Now, the stock with the most bullish chart (the only bullish chart on those 7 stocks), and you're telling me if it is a good short?

No, pick any of the other 6 stocks to short, but not TMY.

Good luck

I am amazed at how much the market can rally considering the numbers for the U S. economy are still negative.  For example this article citing the plunge in factory orders  http://biz.yahoo.com/ap/070306/economy.html?.v=9

It will be interesting to see how we close today.  I imagine the instititional investors are reducing or unloading into this rally to the retail guys.  This makes me more confident on holding my FMCN short since I don't believe this rally is long-term!

Quote from: mbaugh on March 06, 2007, 12:24:02 PM
I am amazed at how much the market can rally considering the numbers for the U S. economy are still negative.  For example this article citing the plunge in factory orders  http://biz.yahoo.com/ap/070306/economy.html?.v=9

It will be interesting to see how we close today.  I imagine the instititional investors are reducing or unloading into this rally to the retail guys.  This makes me more confident on holding my FMCN short since I don't believe this rally is long-term!

I agree but the markets can stay irrational long enough to lose your money before you are right. I think what were seeing is some weak hand shorts covering. Maybe the new comments from Greenspan will scare the Asians again. Who knows hopefully our leader will put everything into perspective.

yea they were all for shorting... thanks! i figure i throw in a few and leave it up to you to figure out which one(s) you would like to investigate further for the 3SOF on fire portfolio...

Thanks...you're the man!

Quote from: 2bun on March 06, 2007, 10:02:25 AM
GM David,could you look at edac.ob for me? At 52 week high,earnings soon and same sector as KRSL.

All right 2bun, I see you like low volume stocks, since EDAC.OB is a really low volume stock. At least today it is trading 47,200 shares, but yesterday just 4,300 shares changed hands. But the trend is certainly bullish, as the stock is trading above the 50 days and 200 days moving average.

Fundamentally:

- Market cap is $20 M. The Company provides complete design, manufacture and service meeting the precision requirements of some of the most exacting customers in the world for tooling, fixtures, molds, jet engine components and machine spindles.
- No dilution
- Balance sheet looks ok
- Revenues declined in Q3 2006 from Q2.
- EPS for the past 4 quarters was $0.32, so the trailing earnings multiple is about 14.

There's news out today:

• EDAC Technologies Reports Fourth Quarter Results With Operating Income Reaching a 5-Year High
PR Newswire (Mon 6:45pm)

So, $0.14 EPS in the 4th quarter, if we multiply this by 4 quarters and apply an average earnings multiple of, say, 15, we get a price per share of $8.4. With the stock trading at $4.6 now I have to say it looks attractive.

Good luck 2bun

Quote from: jerom on March 06, 2007, 11:27:57 AM
Hi David,

Can you take a look at PRGX?

Thx,
Jerom.

Wow Jerom, this sure is an interesting chart! It has been bullish lately after a 90% or so collapse. I like the chart, let me check the fundamentals ...

- Market cap is $89 M. The Company and its subsidiaries are a worldwide provider of recovery audit services to large and mid-size businesses having numerous payment transactions with many vendors including retailers, manufacturers, wholesale distributors and service providers.
- Book value is negative, that means the company is worth less than zero, according to the balance sheet.

I guess the company needs to recover a lot of money before being worth anything again. The stock probably is just making a rally on short covering.

Is there any reason why it is up now, do you know any? I could use some help.

Thanks

David, what do you think of BPG and ESST?

Short AHM?

Quote from: 1laya1 on March 06, 2007, 11:51:48 AM
Hi David,
Can you take a look at LEND?

THX

achim

The market thinks LEND is going bust, and I agree. Anyone thinking this issue will stop at sub prime lenders, and not spill over to other parts of the "credit economy" is blind in my view. Once something like this starts it only stops with the FED cutting rates by a lot a flooding the system with liquidity, which is a good short term remedy, but bad for the long term.

I would use a further rally to short the stock, good luck

David,

Could you take a look at EDU. I already have a short position but would appreciate your input.

Thanks