VDSI

[David Randolph]

Possibly today isn't the best day to initiate a short position, because it is an holiday in Portugal, I'm at home with my kid crying all the time and my wife complaining because I'm working   (I'm not really working, having fun  ), but ...

I'll do it !

Excuse me because I don't have all much time to explain this short position (I still want to buy one gold company for the 3 Stocks on Fire Portfolio), I'll explain better and dig further at the first update after the close.

Here's the stock's chart:



I see a double top and a new bearish trend. Also the company seems to be, at first sight, way overvalued (market cap is $366.1M, cash $11.75M, insiders are all selling, P/E Ratio of 68, etc).

Looking at a shorter time frame, perhaps there will be some rebound because the stock already had a steep decline, but longer term I think the double top will confirm itself. That will only happen when the stock closes below $7.72, so you see there's potential for a big sell off from current levels of $9.61:



I just want to see how Ramsburg is going to deal with this short position on the 3 Stocks on Fire Portfolio, in programming terms. I hope everything goes well with this.

So, I'll sell VDSI stock short around the open, 6.66% of the Portfolio as always.

[fous]

Good luck on the 1st short stock Dave! Ive always been wanting to learn strats for shorting stocks but have never really had the time to look into it, with school and maintaining my long positions taking up most my time. Come to think of it.....Its 6:30am at the open right now, and i havnt even gone to sleep yet cuz im studying for damn anthropology Last final at 2pm and then a long winter break for me I'll be watching closely on your short selling strat 

once again, Good luck

-fousc

[ASR831]

This sucks!

My broker doesn't have shares to short :-(

Good luck David 

[1reilly]

Many members may not be able to borrow the stock. This stock also does not have an option chain.So puts are out of the question. I know David dislikes options but it would be a way for members to participate when unable to borrow stock. I like the pick and was able to borrow the stock  and do believe that shorts should be a part of this service. When you can't borrow the stock check for an option chain ,you may find a way to participate. If I see a put that makes sense to me on one of Davids picks and I am asked I will show a put and define the risks. This should only be used if you are shut out of the trade. I want to be clear here. Don't even look at the put if you can borrow the stock.

[ASR831]

1reilly,

who is your current broker?

I am not a big fan with trading options, one can lose pretty quickly with those. I have read that actually selling a call is much safer bet than buying a put since 95% of the calls if held expire worthless.

[1reilly]

Morgan Stanley
I don't want to muddy this thread up with conversation about options. David surely wants this about VDSI. I'll send you a private E-mail. But for everybody don't use naked options ever. If you ever sell a call or sell a put you better have that stock in your account. Covered option trading is prudent naked option trading is crazy. JMHO

[huayilu]

Please help me.

Does anyone know how to do short on Ameritrade?

Thank you. 

[AussieTrader]

Please help me.

Does anyone know how to do short on Ameritrade?

Thank you. 

My advice would be if you don't know how to short then don't short. Research the details of shorting first so that you understand the mechanics and principles of the process.
Good Luck

[puenthouse]

wow!!!  well hopefully you did not figure out how to short on ameritrade, but you do it exactly like you buy a normal sotck, put in a price, but place a dot in the sell short title.  then sit back and watch it go down.  I guess news that came out at 3 in the morning is sending this guy up.

[AussieTrader]

Good luck with this one, lets see:

[darkzx]

I waited a little, and shorted at $10.30.  I agree that this stock is still overvalued.

[1reilly]

Knowing my broker, he probably went long the stock just to make sure I could borrow it. He's so good to me!

[oicpecnoc]

My first short.  1000 shares at 10.19  

David, did you have this 3 am information when you made this pick?  Just curious.

[Ramsburg]

About the 3Stocks Portfolio Page.

As you may have notice, our Portfolio page is not showing this Short trade yet...
I'm working on that, because I have to make some changes on the code to allow us to track the performance of Shorts.

Our entry price was @ $9.67
(will be soon at the portfolio page)

best regards,

[defenderyou]

Hi David:

Well I decided to follow your lead although I have some reservations about the trade. I shorted  800 shares at 10.11 so far and am trying to short 1200 more at that price. However, here are my reservations, which are fundamental:

Revenue for 3rd quarter was 13.4 mm or 80% YoY. Out of that $1.7 mm earnings. Earnings grew 52% YoY, so while not keeping up with revenue still quite profitable. Looking at the trailing 12 months 43.4 mm with $5.2 profit, over 10% on a trailing 12 months. This is is BIG. The earnings yield dis in line with govies. Lets extrapolate out the 3rd quarter earnings - we may see $7mm; if growth continues this could be higher, say $10mm. Now $10mm earnings on 366 mm mkt cap is in like with market sector, and if growth stays strong this may not work as a short.

However, I see David's plan (I think) and if this closes below 9.44, we may well see this go into the 7s, as David is suggesting I think.

Good luck - and nice short darkz at 10.30!!

Defenderyou