ENTR (Earnings Recap 7/31 - we win again)

(Source: Barclays Capital - click to enlarge)

Estimates and price target raised to $4 - the RF Stock Under $10 list will not be denied!

I am still holding 50% of my position and looking for bigger gains!

Weekend Humor

Sorry, I saw this today and laughed. Jim Cramer has a 'Action Alert Plus' portfolio of 30ish stocks that he buy and sells (long only - can't short sell) and this is year YTD return - 16.6%.


For $400 a year you can achieve that or follow RF and book 100%+ returns - oh yeah the big catcher - I am free

RF Portfolio Updates

RF Portfolio 1:

Cash (84.4%), Long stocks(15.6%)

AMD (Cost: $3.93)
ENTR (Cost: $2.40)
DRYS (Cost: $6.55)
PRU (Cost:$33.60)

RF Portfolio 2:

Cash (40%) Short (30%, levered 50%) Long (30%)

QID (Cost: $26.70 - 21% of portfolio) - Hedging/Short Exposure
BGZ (Cost: $31ish - 9% of portfolio - Hedging/Short Exposure
BAC (Cost: $11.90)
EXM (Cost: $6.20ish)
F (Cost: $4.93)
FTK (Cost: $2.40)
UNG (Cost: $14.10)

Market Outtlook

Sorry for lack of communication, been extremely busy with things. As for my trading account, here is the deal: (note I have 100 things going at once, forgive typos)
I was anticipating a 3-5% correction based on overbought conditions and a lack of earnings buzz; however, that did not happen at all. I applied all index shorts at 950 and got caught in a squeeze. My reasoning for this is that I had a high YTD the return at the time and did not want to lose it, so I tilted net short, leaning an the scenario of a correction and to lock-in gains. Well, I lost some but for the month I am up 10% even with the ultrashort meltdown. This is mainly due to huge gains in big portfolio holdings, like EXM which was my top holding that shot up nearly 45% in two weeks. Anyways, I was sick and tired of being caught short and squeeze, so I covered my AN short and sold all my ultrashorts except BGZ and QID. Actually, towards the end of the day, I added another 10% of my portfolio in QID. In summary, I am net-net meaning theoretically, 50% short and 50% long…technically I believe I am net long by 4 or 5%. I sold out of a bunch of things because I just got sick and tired of the market madness, even though I knew this was going to happen. Since April, I said we were going to 1,050 on the S&P as you recall, however, I did not think it would be this soon, I thought it would be early Fall because of the lack of volume in the Summer. Well, I will probably be right on the target but wrong about the timing. As for my portfolios, ALL of them have 50% cash+. Since the March low, the S&P has moved 49% in just 4 months lol. If this isn’t dot com like, I don’t know what is.
My game plan tomorrow is to raise more cash, regardless of market condition (up or down). I will be traveling tomorrow and will not be around to post but I will be selling out of GNK, FRO, and maybe DRYS (need to see action in DRYS first) as well, in full position sizes. GNK numbers weren’t bad, a solid beat, but there is some uncertainty about future revenue streams, hence the down tick today. I will hold out my AMD, praying that last quarter was a gross margin trough and the new products will generate better margins, so the sell-side can push the stock to the buy-side. I will hold F regardless and more than likely hold PRU and BAC regardless.
On dips, I will reload on technology and banks. In addition, I will construct deeper analysis on technicals, to find some quick trades.
As for the blog, I will be moving to a new site in the next month. I have been trying to get some help from the IT guy, so it will be completed soon.

DRYS

Rf wins again!

RF Sell

Sold all SRS loss
Sold all TWM loss
Sold all SDS loss
Sold all HIMX gain
Sold all Key gain
Covered AN loss

Note ultrashorts are risk hedges to protect gains, but mistake was too agressive. Similar to buying car insurance and never getting in a wreck, rainy day payoffs. The market is too sunny lol.

HIG

Hit me with a baseball bat

RF Sold SDS

Sold at 47.15

3 dollar loss per share.


My patience is wearing thin on this market.

Market Outlook

Futures are ripping higher, which of course will kill my shorts but Jobless Claims come at 8:30a - which most likely will tell the tale of day. I will probably cover my AN short today, as well as more of my shorts but probably will not buy anything until we dip.

KEY

(Source: Barclays Capital - click to enlarge)

Quarter was rough but I am still holding...I believe it's worth $6-7 near-term and "if" they can earn their way out of this, the stock could print $10 or $12 by 2011. Only time can tell how bad these loans will be...

AMD

(Source: Barclays Capital - Click to Enlarge)

Highlights from while I was out

FNFG

A great bank long...their acquistion will boost their Pennsylvania footprint and they got a steal on the bank! This is a regional bank that is becoming a monster! Keep this on your radar.

I will buy around $12

DRYS

Update: According to the 10-K, the preferred share conversion will not take place until 4Q of next year....so for now, the stock seems to be in clear. DRYS reports after bell tomorrow, we will see if the "juice" of the spot market is there or if GNK's strategy of the fixed revenue contract works.

GNK

Beat by 6 cents....we will see if the fun begins tomorrow!

Second Quarter 2009 and Year-to-Date Highlights -- Recorded net income of $37.6 million, or $1.20 basic and diluted earnings per share for the second quarter;
-- Took delivery of the Genco Commodus and delivered the vessel to Morgan
Stanley Capital Group Inc. for the commencement of a 23 to 25 month time
charter at a rate of $36,000 per day;
-- Signed short-term time charter agreements for three Panamax vessels, one
Supramax vessel and one Handymax vessel; and
-- Reached agreement to enter the five Handysize vessels chartered to
Lauritzen Bulkers A/S in a spot pool under the management of Lauritzen
Bulkers at the expiration of the current charters in August 2009.
Financial Review: 2009 Second Quarter
The Company recorded net income for the second quarter of 2009 of $37.6 million, or $1.20 basic and diluted earnings per share. Comparatively, for the three months ended June 30, 2008 net income was $60.9 million or $2.05 basic and $2.03 diluted earnings per share.

RF Buy DRYS

I did it, i regret this but doing it anyways

Bought 150 at 6.55

Also bought Sept $10 calls at .10 cents, 15 contracts. Low probability of breakeven on calls but I like risk

NVAX

Yet another RF classic.. I sell you buy!

Sold for 2% loss, held day later up 14% today

Damnnnnnn

Update

With oil tanking, there is a good chance that the market will fall with it, in my view. As for today, I am flat - no lose no gain. I am overly short, so I am hoping for a few down ticks so I can blow out of this short exposure. As for short exposure, I am long TWM, SDS, QID, and BGZ. For common stocks, I am short AN. As for my thesis on Auto Nation, I believe the stock is priced in at these levels. From my research, I see that 55% of their revenues are from new car sales, which are not great (unless they are selling 100% Fords) and their customer concentration comes from two states...any guesses on those two states? I will tell you, CA and FL, haha. I believe CA represented nearly 20%+ of all of the new vehicle sales last year and we all know what they state is going through -- utter hell. Credit has loosed; however, it is difficult to obtain car loans and I believe many people will hold on to their savings and drive exisiting cars longer. As for the bull side, they have done a lot to get into the repair side of the biz. In addition, the stock is HEAVILY shorts, with about 24% of the float shorted. Therefore, I will more than likely cover ahead of earnings on Friday because a "touch" of good news can send this stock up 15%+. However, if numbers are terrible, the stock will get back to $15 or $16. As for longs, I should have bought MSFT south of $23 the other day but was trigger shy. I will look to add longs on dips and I believe there are some upside related to homebuilding cases, particularly in Home Depot (HD) and Lowe's (LOW). I am long Lowe's in one of my account from a while back via $19 purchase and will build more in time. The fair value of both of these retailers is higher than the market prices in my view but we need a sure bottom in housing. The housing data was good yesterday but most of the sales were depressed properties, foreclosuers, etc...not "pure" family buying, from my interpretations. In addition, there are alot of Alt-A arms about to be reset in the next 6 months, so I would be cautcious of this, as well as the commercial real estate downturn that is beginning to weaken. GNK reports after the bell today. I am long in size but I am concered about the firm's operating costs. I believe they will beat EPS but I am more concerned about their cost cutting measure. If they reduce costs and increase operating margins, I believe that stock is worth another $4-8 points. If not, we will probably revisit low $20s. As for EXM, they have tons of exposure to spot freight rates and will do good, but it's had a 50% move in 2 weeks, so traders might flee. I might take a position in DRYS today. I believe the company has had the potential to generate great earnings power but I am concerned about a few things. As you know, I research the sector heavily and on July 9, DRYS repurchased 25% of the remaining interest in Ocean Rig. The price is good - 2 rigs for $330 million, where in 2008 they paid $800 million a piece! However, the payment is the problem. They put $50m down and financed $280m through preferred shares w/ 6.5% yields. If the stock held or rises above $6.80 (which is has) all pref shares are converted to common shares, which diluates shareholders and ulimately the share price. So, anotherwards, this could hurt any EPS surprises to the upside...but then again, this stock was $120 a share last year. I believe GNK remains the best with it's agreements but DRYS might be a shot if we get it below $6.

Market Update

What's up everyone..futures are slightly weak but then again, they always seem weak at the open then gap higher, so who am I kidding....

As for my positions, I am net short in serious size; however, could change my mind any given moment. In my view, the market seems to have a strong bullish sentiment and the market may shoot up another 200 pts but I just don't feel comfortable buying with all of these negative variables. The best option is too have a few longs and tons of cash but of course I decided to be an idiot and load up on these shorts.

As for longs, I am regreting selling my CIEN as well as my HIG. I read an analyst piece on CIEN yesterday and he is calling for a $14.50 price target, based on the fact that ground wire projects have bottomed and his belief is that the firm can earn over $1.20 EPS in 2011. If it dips back to $10 or below, I will buy it. As for HIG, I will let it slide and look to accumulate LNC on dips.

As for the market, I am betting on the the oscillators (graphs shown yesterday) and as this has been the most overbought period this year. I don't believe in a drastic downturn but rather a nice 3-6% correction across the indices to help level out the oscillators.

RF Buy QID

Bought 100 shares at 27.17


Please note this is a ultrashort and if we gap up, I will be in trouble, I am just not buying this rally any longer, therefore I am shorting agressively!

Updates

I am short AN ... other favorite shorts include ESS, HSIC, DHR As for inverse ETFs they are all now below my cost: my favorites are QID, SDS, TWM A 3-5% correction in my view IMMINENT! My views are as follows:-the market is selling goods news from the housing front-the technical osicaltors are at the levels of late March 09 where we corrected 820 to 780 in a day, if history is correct, we should correct on this alone, to create a psychological market sense of "flat" owned (nor overbought/underbought)-many stocks are fairly valued and earnings catalysts are disappearing If we reverse and tick higher, my patience will wear thin and i will more than likely go to 100% cash because this market is crazy....there seems to be little value out in the market now, in my opinion. I mean last correction, oil names were dirt cheap, so I could careless about a market downturn because I was buying a $1 for 80 cents but now mostly I see that I am paying $1 for a $1 ...which is not the biz I want to be in

RF Sold Short AN

Shorted 100 shares at 19.60

RF sell RIMM

Sold all at 76.85.

2.5% gain

I'm also out of all day trades for $90 loss

nvax

Went red, keep tight stop.

All day trades looking weak and techincal traders thinning out, will hold for another hour or so

RF buys

Bought 500 kfn at 1.75

Bought 500 nvax 4.24

Bought 500 heb at 2.44


All day trades will sell by 4PM today

Looks like we are overbought

required reading

JG - GMO Qtrly July 2009

my views

When looking at this market rally, I begin to think how this started from the recently quarterly earnings reports. In my view, the problem with this rally or believe of this bill market is that it seems very false.

Cost cuts have driven the EPS beats by most firms, however, cost cuts are not a panacea and for the most part seemed short lived. The most signicant part of the economy is the consumer, which seems to be weak. Unemployment is very high due to these cost cuts and many families will try to save and spend less to rebuild their net worth that was damaged last year. In addition, there is a high possibility that taxes will rise for everyone to fund obamas healthcare agenda.

With that being said, I believed we would see 1050+ on the s and p by labor (that was called at 820 in the archives section) but this move too fast, too soon may damper that has value is harder to come by. I believe the inner feelings of "fear to miss the rally" are here therefore I will remain in high cash levels, while the buyers who missed this huge rally come in. In my view, the same people who didn't believe in the bottom, are the buyers now, and will get hit on the downside.

As for economic scenarios and you believe inflation is the play, load up on commodities like gold, silver, oil, steel firms.

If you believe in deflation, you buy long bonds and short commodities against it.

My view is that inflation is inevitable and deflation is difficult to achieve with a printing press going but if fear comes, unemployment guys 14%, and people save to death, we will see deflation.

As for purchases, I am looking at TSYS. Its fair at 7.40 but may hit 6.50 on a downturn. Its a small cap tech that focuses on government services and text messenging. Small revenues and small non GAPP eps but Verizon is their customer and TSYS controls 25% of text messaging platform. Therefore I believe its worth 9 or 10 a share based on their generation of cash and solid ebitda.

As for sectors I like financials and tech. BAC MSFT DELL HIG PRU are some but not here at these levels

Update

The market is running fairly well but I remain skeptical. I am kicking myself for selling HIG but will live it out side my PRU continues to soar.

As for buys, I will provide a list of stocks this afternoon that I will be looking to buy. As for the market, I believe we are a little ahead of ourselves, given the economic situation we are facing.

Semiconductors

(Source: Bank of America/ Merrill Lynch Research - click to enlarge)

Above are some illustrations that you can review to try to get an idea of the semiconductor chain, as well an idea of historic sales data and valuation comparisons. Semiconductors have had a huge run as of late, about 80% or so since the March bottom but the Exhibit on the bottom shows that the valuation of the sector in general is still relatively cheap. Below is a list of all stocks that are semiconductors, segmented by niche focus (took tons of time, so I hope it's useful). As for my personal use, I will save this write-up under my favorites and keep this as a "shopping/research" list, although I know most well. I will accumulate more semiconductors on dips but own a good amount now.

Semiconductors - Broad Line: ADI, AMD, ATML, CAVM, CHRT, CY, ENTR, FORM, IDTI, INTC, ISIL, MLNX, MXIM, NSM, ONNN, OPXT, SIMG, STM, TXN

Semiconductors - Integrated Circuits: AMCC, AMKR, ANAD, ATHR, AXTI, BRCM, CAMD, CNXT, DIOD, EMKR, EXAR, FCS, HITT, IPGP, IRF, ITLN, MCRL, MOSY, MRVC, MRVL, MSCC, OPLK, OVTI, PLAB, PLXT, PMCS, POWI, PRKR, PSEM, PXLW, QLGC, QUIK, RFMD, SATC, SMOD, SMSC, SMTC, SUPX, SWKS, TQNT, TSM, TUNE, TXCC, UMC, VLTR

Semiconductors - Specialized: AATI, ACTL, AFOP, ALTR, ARMH, AUTH, CEVA, CRUS, ENER, HIMX, IXYS, LLTC, LSCC, LSI, MCHP, MEMS, MPWP, NVDA, NVEC, OCLR, RBCN, SIGM, SLAB, TRID, UCTT, XLNX, ZRAN

Semiconductors - Equipment & Materials: ACLS, AEHR, AMAT, ASMI, ASML, ASX, ATE, ATMI, BRKS, BTUI, CCMP, COHU, CREE, CYMI, ENTG, EZCH, IMOS, KLAC, KLIC, LRCX, MKSI, MSPD, MTSN, NVLS, OSIS, STML, SPIL, TER, TSRA, TWLL, UTEK, VECO, VRGY, VSEA, XXIA

Semiconductors - Memory Chips: ISSI, MIPS, MU, NETL, RMBS, RMTR, SNDK, SSTI

Semiconductor ETF'S (exchange traded funds): IGW, PSI, USD (leveraged double long etf), XSD