3SOF

MSI's volume dried again, but despite that the stock seems to be doing a rounding bottom. We don't get any news since May 11th. I've promised myself to be a reasonable and patient man (cowboys don't make any money trading over the long term), so I'll keep on holding MSI, since my initial motivation was the merger with Frederick's of Hollywood and that is still to happen.

Currently the market is valuing FOH at $49.8 M. The company was taken private in 1997 for $70 M and I believe it is worth a lot more today than what it was worth in 1997. By means of comparison, www.fredericks.com not even existed in 1997, and now it probably is responsible for more than 50% of the company's sales, that is, more than $75 M a year.

I'll continue holding MSI.

I started buying MSI shares again yesterday.  A solid base has formed and I see a nice white candle in the near future.  I hope to average down to about $2.60 and sell as soon as I can to break-even, before the FOH numbers.

Quote from: buddjas1 on May 26, 2007, 06:35:57 PM
I started buying MSI shares again yesterday.  A solid base has formed and I see a nice white candle in the near future.  I hope to average down to about $2.60 and sell as soon as I can to break-even, before the FOH numbers.

Strange strategy buddjas1, I hope your averaging down doesn't bring you problems over the long run.

MSI made another small step today, but there wasn't any new fundamental information. I just feel the stock is undervalued from the articles I've been reading about Frederick's of Hollywood. Let me check www.fredericks.com today ... it's there.

I'll keep waiting and holding MSI.

MSI was all over the place today, on very low volume of just 11,900 shares traded. Technically decision time is coming, since support and resistance lines are almost meeting.

Fundamentally, let me see if there were any news out ... no, nothing yet.

I'll keep waiting for FOH's financial details and I'll keep holding MSI while I wait.

Quote from: Garoh on May 21, 2007, 04:47:24 AM
Chart looks very nice now ...

We should have a nice move very soon 

I will buy it today for sure 

I got in at 1.99 and I'm still holding it . we may see it at 2.40 very soon , but i'm not gonna sell it 

QuoteI got in at 1.99 and I'm still holding it . we may see it at 2.40 very soon , but i'm not gonna sell it

Nice entry point Garoh

$2.40 would be nice because it would represent a bullish breakout of the current technical pattern, which is a descending triangle pattern. The theory says that usually the bears win these wars

But, since fundamentals point to a superior value, perhaps the technicals will unfold in a different way, and the descending triangle pattern will actually end up being broken on the upside. Time will tell.

But, whatever happens, my reason for buying MSI was the merger with FOH and FOH's long term potential value, so I'll keep holding MSI, at least until I know about FOH's financial details.

MSI traded just 3,400 shares on Friday, but the close was nice. Just one more step and it will break the descending triangle on the upside. Let's see if there were any changes to www.fredericks.com today ... yes, quite aggressive.

I'll keep holding MSI at least until FOH's financial details are published, which can happen anytime.

MSI remains undecided about breaking the technical pattern on the upside or the downside. I remain decided to wait for the release of FOH's financial details, therefore I'll continue holding MSI.

MSI almost did it, but closed just a bit shy from breaking the descending triangle on the upside. We also have the 50 days SMA working as a resistance, currently at $2.23.

The latest financial reports we have from Frederick's are from 1997 when the company was taken private for $70 M. We need to wait for MSI to disclose the current financial condition to better judge this investment. But I like the business, especially www.fredericks.com, which didn't exist in 1997.

Currently the market is valuing FOH at 23.7*$2.13 = $50.5 M, which seems too low.

I'll keep holding MSI.

MSI closed above the descending triangle pattern, which is a positive technical development. Now it would be nice to see the short term ascending trend continuing, and the stock to close above the 50 days SMA, which today stands at $2.22.

No news out. I'll keep holding MSI.

I am holding it as well, and also bought some around 1.9* to cover some previous lost, but i am losing confident on this one pretty fast. I guess learning trading strategy is not everthing, but i need to be calm and patient.

Again, nothing new out of MSI. 2nd quarter results will be out only in August, and maybe that's when we'll finally hear some more about FOH's financial details.

Tell me, do you have a Frederick's of Hollywood store in your hometown? How do you think the store is doing?

I search Frederick's of Hollywood in Google but can't find anything new or relevant in financial terms.

I'll keep holding MSI.

There is a FOH store at the Shopping Mall in Salem, NH, USA. There is Vic's Secret story down the hall as well. I think that although FOH offers better lingerie (my wife likes it more), the store display is kinda bland, not flashy. They don't put up their best stuff on display for passing males wanting to swerve in and leave some cash on the table to buy presents for their significant ones. They need pretty maniquenes dressed up in sultry sexy outfits. There are definitely more girls browsing the Vic's store (which is also 2-3 times larger).

Quote from: berloga on June 08, 2007, 09:30:40 AM
There is a FOH store at the Shopping Mall in Salem, NH, USA. There is Vic's Secret story down the hall as well. I think that although FOH offers better lingerie (my wife likes it more), the store display is kinda bland, not flashy. They don't put up their best stuff on display for passing males wanting to swerve in and leave some cash on the table to buy presents for their significant ones. They need pretty maniquenes dressed up in sultry sexy outfits. There are definitely more girls browsing the Vic's store (which is also 2-3 times larger).

Thanks a lot for your input berloga

Yes, Victoria's Secret is the market leader. It's owned by Limited Brands (LTD), a $10.6 B market cap company. FOH is currently valued by the market at roughly $50 M.

Technically both things may be happening, a negative reaction to the 50 days SMA resistance or a pullback to the previous resistance, now support, given by the medium term descending trendline.

I'll keep holding MSI.

Until we get substantial news regarding the merger or FOH's financials, the stock is a pure technical trade from here until calendar Q4.

Unless some buyers materialize to push it above 2.20-2.25 the stock is forcing straight line support around the 2.00 range.

The resulting squeeze either pops us to 2.50 or down to 1.50-1.60. I would suggest sitting on your hands until that happens. I would buy on a bargain or a clean break of this pattern on some nice upside volume. This is a fairly typical corrective/pullback drift on low volume.