Market Wrapup

Wild day but it's over...down slightly for the day but was prepared for this headwind with the TZA and TWM.

Have a great long weekend and a great 4th of July!

Thank God for your troops and our country, God Bless America

RF Sell and Short Sell

Sold short 15 isrg at 159.60

Bought 50 GNK at 20.44

Sold all GME for 4% loss

Sold MWA for 10% loss

RF Buy ERX

Bought 50 more at 26.60

Oil names so so cheap! Exxon cheaper now than in March!

RF Sell TZA and TWM

Sold half of each

TZA 23.64
TWM 43.89

Market Update

Terrible jobs number, worse than expected. This could signal fear back in the markets. Will keep shorts on for now

RF Buy TWM

Bought 15% Portfolio at open at 43.64

Short GNK puts at 19 and 20 strike for July

Market Outlook

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Hard to tell the tale of the tape today but futures are relatively very weak. At 10p EST the futures traded and held 919 (flat) for a while then around 12:30a the downticks came in. As you can see in the top right chart, we will drop about .79% at the open - given the ES holds the 912 print. (the low of the trading session) . The jobs report comes out at 8:30a so that will be today's catalyst or barbedwire hammer, depending on the outlook and number. In addition, there will be low volume as many managers will head to the Hamptons and get ready to get Shrimp and Filet Mignon, while you boy RF refuses to eat anything but Hot Dogs. All in all, I am proud that I raises my cash levels high yesterday, the only thing I wish I would have done is sold my ERX..but oh well. As commodities and basic materials roar again (and they will) the ERX should print $35.

RF Sell LUV

Sold all at 6.82, few penny gain

RF Sell ENTR

Sold my 1000 trading lot from Monday at 2.45 for quick $230 profit. Still holding the longterm play

RF Sell HIMX

Sold 1500 at 3.90, will hold last 500

35% gain

Market Outlook

The ADP report continues to be weak and job losses continue to expand, worse than expectations. As for the market, I'm more neutral now but expect a strong up day today or tomOrrow if program buying comes in on weak volume. The upgrades in GLW are incredible, I need to dig deeper from this point to determine my next move on the stock. I don't really acknowledge analyst price targets but I need to get a grasp on best case EPS for next year. If they can really boost pricing and margins the stock could hit another 20% from these levels. If not, the stock will probably top out at 17. The story is strong, so if it dips back to 14, I will double down.

GLW (RF wins again)

(Source: UBS investment research, click to enlarge)

Hot off the press, UBS raises estimates for GLW due to strong LCD demand and shortage of glass. Another one for the "bad guys"!

RF Long Portfolio Thru 2nd Q

Above is the update of the RF Long Portfolio Model. This portfolio is designed for someone who is an investor, more or less, and is concentrated on value. Since my purchase/post date (link below is the initial post made in March) I would deserve the fees since my I beat both benchmarks rather "handsomely". These are the benchmarks that the pros must face, come "judgement day" aka the last day of the quarter...unfortunately, many will get the "boot". I will post an updated one this week, which holdings that I will sell and replace them in the model. There are atleast 6 names here that I will totally sell out of and replace at current market level prices.

TTM

Today I bought some TTM and added more across all of my accounts. Here are my views:

I have been looking at Tata Motors for a while but want to find a "safer" entry and I believed $8.30 is good enough. $7.90 has been support, so if it falls through, I may get burned; however, I like this play for the long-term for several reasons:

• This year should mark a trough in sales; therefore, the probability for operational rebound is very good. Thus sales and EBITDA estimates should increase significantly for 2010 and 2011.
• Market share gains should occur in most of their busines segments, with the acquistion in Land Rover and Jaguar. The truck/bus segment should benefit the best, while the utilties segments seemed to be having difficultly, due to increased competition.
• The truck business should do very well because of the high barriers to entry in the business segment and through the scale and distribution of the segment.
• The bus segment is very niche and focuses on unique segments like school buses and ambulances. According to the firm, they have bagged about 60% of orders in this segment and should easily grow double digit in 2010 and 2011 from the execution of these strong order flows.
• The Jaguar and Land Rover acquisition is very unique in my eyes. According to management, Jaguar seems to be doing better; however, in my view Land Rover seems to be more of a truck and could add benefit to their truck segment. Regardless, export sales should be bottoming this year and the firm should do well in markets were Tata is already present.
• Tata is operating with a better cost structure - mainly due to the cheaper aluminum and steel commodity prices. In addition, management has reduce labor workforces, as well as overhead for many plants.
• The financial health of the firm seems to be doing well, with regards of the Jag/Land Rover acquistion. The deal was about $3B in US dollars and was through a bridge loan. Looking through the numbers, they sold off various operations at about $1.6B, issued about $850m in 7-year non convert. debentures at a 2% rate. The rest was rolled over for another 18 months on the bridge loan but at 6%. My guess is that they will pay this off through stronger cash flow (given my assumption of a rebound) or perhaps a portion made through an equity offering. This will also improve liquidity ratios and make the firm's debt load seem very much improved (especially come 2011).

Given the complicity of the firm, there are several ways to value it but I think it's worth:

Low case $10, Mid case $14, Best case $18

I'm long roughly 4,000 across the board - so we will see.

AAPL

Already seeing shortages in new iPhone...unreal

http://www.appleinsider.com/articles/09/06/29/apple_sees_brief_iphone_3gs_shortages_nvidia_intros_cs4_plugins.html

FDX

Looking to buy this under $50

FDX

Looking to buy this under $50

GLW

I got a feeling these guys are going to crush numbers....

Corning Inc. said Tuesday that second-quarter LCD glass demand is stronger than expected and that it sees second-quarter sequential volume growth of about 100% at its wholly owned business, compared to its previously revised volume growth expectations of more than 75%. The company noted that continued retail demand for LCD televisions is helping to prevent excessive inventory buildup. Corning expects third-quarter LCD glass shipments to be consistent with the improved second-quarter forecast.

market wrapup

Second quarter wrapups today and we win again. This has been the best quarter for stocks in a decade, so enjoy the 401k gains!

RF is up 254% YTD and is ready for this coming quarter. Great memories this year like the bottom call in financials (found in the first archive) and some other great winners.

Going forward will be tough. If you can't handle losses or short-term thinking, bonds might be a good idea but I think if you hedge your longs through shorts or put protection, you should be fine. I could cash out today and be set for the year, but then again what fun would that be?

RF Buy TZA

Bought 10% of my portfolio at 22.40

Hedge on longs

HIMX

Monster stock, still in from 3. Don't forget we got a 28 cent per share dividend coming July 6.

RF Buy TTM

Bought 160 at 8.40

RIMM

Initated at buy today by BMO capital markets with $100 price target

Market

RF calls it again, refer to last two sentences of market outlook.

RF Sell Cost

Sold all at 46.24, tiny wins

Market Outlook

Sorry for the lack of communication, been very busy with various things at work, so here are some of my viewpoints:

As for the market, the quarter ends today and I believe we should press downward one or two days this week, primarily in the NASDAQ. I am very close to adding short exposure but due to weak volume, I am a little hesitant. In addition, insurance through options are relatively inexpensive, which makes me believe we can also head higher. I would refrain from being short individual names during this week. Two years ago, Hilton got bought by Blackstone and it was the only merger run that actually came true in my career. The action and the options were on fire the day before the 4th as the market closed at 2pm and the deal was announced at 5pm. Cool stuff.

Going forward, the question remains, shall we take some profits now since the quarter is up? Or are we heading higher via a next leg up. Keep in mind we have bank earnings next week with JPM, C, and BAC. We know what happened last time banks reported, they killed it and the market shot way higher. I think the “smart money” is buying broad based financial etfs , like the XLF, now ahead of earnings and if banks blow out the numbers, they make a 5-15% return –OR- if earnings tank, the losses will not be as bad since it’s so diversified. Right now, financials are my favorite sector but still have some uncertainty. My bank bets are not trades, rather are investments with 1-2 year time horizons. As for the economy, we still have some serious problems that will hamper the market and the consumer:

• I believe that corporate tax rates and as well consumer tax rates will be both rise to pay this terrible debt
• 
  Credit will be more difficult to achieve, both from the consumer and business fronts, as banks will lend more conservatively
• 
  Job losses continue to increase
• 
  The dollar will continue to lose strength, unless fear comes back in the market. If fear rises, the dollar will rise because it’s really the only “fear trade” as treasuries are rather bloated.
• 
  Personal savings rates are at 15 year highs, which will hurt GDP and economic growth. Consumer spending makes up 2/3’s of GDP.
• Higher energy costs

Near-term: Over the next two weeks, I will raise cash and place more aggressive derivative bets. As for the next few weeks, we could rally as money managers have to start putting money to work in 3rd quarter. For the accounts that I manage, I have about a 50% cash position in them now and long the other 50%. I believe we will hit 1050+ this year and stand by that but will probably go next short in November and remain that way throughout 2010.

For the long-term: I just don’t have much confidence in our economic growth plans and believe the national debt that is being issued will reap dangerous consequences. I say there is a 10% chance we retest the 666 S&P low this year and 25% chance we retest it next year. I will say this (my opinion), if we do retest, we will blow through it and the market will be toast because the market confidence will take years to be restored. For the long side, I will look at emerging markets and may some precious metals via the actual metal etf or gold/silver miners.
As for current trades, I am raising cash but bought a trading lot of ENTR yesterday. My goal is to ride It up to $2.50-$2.70 by the end of the week and made a quick $300-500 bucks for some play $$. I will probably sell more stuff today but will feel out the market. Frankly, I anticipate a green or up open,then a selloff around 9:45 or 10a as the shorts try to come in on thin tape. I hope they get murdered and the longs wins!

RF Sell OPWV

Sold half at 2.41, 20% gain

RF Buy ENTR

Bought 1000 at 2.22


Will use this as my swing lot

Market Outlook and Special Watchlist

I will be out of town today for work but should be back at the computer around 11:30ish. If I make any moves in between, I will use my mobile and post here through that. Below is a great watchlist that has all of the 3G, 4G, and Smartphone plays. This will be a big play for years to come due to the very high CAGRs (compounded annual growth rates). Below is list:

VRGY , CAVM, OVTI, COMS, JNPR, ARUN, SMSI, BRCD, RAX, BGC, CTV, SDXC, EQIX, OPWV, XXIA, CSCO, NVDA, SNDK, CRNT, PRKR, S, NTCT, CLWR, NETL, CELL, SMSC, NVEC, SVR, ALVR, MOT, NOK, STM, QCOM, TXN, MRVL, ARMH, AKAM, LLNW, ANAD, TQNT, MVIS, BRCM, ATHR, TSYS, LVLT, ERIC, ALU, SWKS, RFMD, SYNA, TKLC, PALM, RIMM, AAPL, CY, ATML, STAR, ONNN

Jim Rogers is the man

Wall Street Wrapup - Week of June 22-26

(Source: Goldman Sachs - click to enlarge)

Healthcare continues to be hot and is this weeks top sector, for the second week in a row. Telecom tied Healthcare and in my view, Telecom is undervalued but has no real "mojo" to make it take off.