Archive for May, 2008

New Stock Recommendation: FEED

By: admin | Date posted: 05.31.2008 (6:57 pm)

FEED – AgFeed Industries (NASDAQ) – (Closing Price on Friday 5/30/08 – $15.37)

AgFeed Industries is a company that has experienced strong growth over the past year and the company is forecasting even stronger growth in the coming year. The company has given tremendous guidance for 2008 and if the company can meet its numbers the stock price should continue its rapid ascent.

AgFeed operates two integrated business lines in China: premix animal feed and hog production. The company is currently the largest premix feed company in China in terms of revenues and the company distributes its feed through over 700 independently owned chain stores. AgFeed expects to have a total of 1,000 independently owned chain stores by the end of 2008. The company also distributes feed directly to over 600 large commercial hog farms across China.

In addition to its feed business AgFeed has been rapidly expanding its hog production business. The company has acquired quite a few hog farms in the past year and the company raised money through a couple of stock sales in April to acquire even more. AgFeed currently owns controlling interest in 24 commercial hog farms throughout China with annual hog production capacity of 550,000 hogs. (more…)

Has Oil Peaked?

By: admin | Date posted: 05.27.2008 (10:08 pm)

The price of oil has defied logic and has continued to rise in the face of many bearish catalysts. However, I think the current price of oil has had a significant affect on demand and this can no longer be overlooked by the speculators who have been bidding oil to stratospheric levels.

The morons such as the analysts at Goldman Sachs who have called for $200 oil seem to think that the demand for oil is inelastic (that demand will remain the same regardless of price). This is definitely not the case and it is fairly clear that oil at its current price is putting a considerable dent in demand.

Edward Meir, and analyst at MF Global UK Ltd. said in a research not that “if the present trends continue, we could be heading for the first annual drop in gasoline consumption in some 17 years.” Also, Asian countries are being forced to cut subsidies due to the soaring price of crude.

I think the price of oil has probably peaked and if it hasn’t I don’t think it will run up too much more before there is a sizable correction.

When this happens it would be wise to buy airlines and short pricey alternative energy stocks such as solar stocks. You can also short energy stocks such as MXC that have made ridiculous speculative runs.

Disclaimer: I have no position in oil futures, airline stocks, solar stocks, or MXC.

Wall Street Humor

By: admin | Date posted: 05.24.2008 (3:23 pm)

Bumblet Cartoon

EGHT Q4 08 Results

By: admin | Date posted: 05.24.2008 (2:51 pm)

EGHT – 8×8 Inc. (NASDAQ) – (Closing Price on Friday 5/23/08 – $1.19) 

8×8 Inc. reported fourth quarter results on May 21 and the company continues to show improvement in its financial numbers.

8×8 Inc. reported revenue of 16.33 million and diluted EPS of 0.01. Revenue was up 14% YOY and EPS improved six cents from a loss of 0.05 last year. Gross margin also improved considerably from last year.

8×8 Inc. continues to be on the right track and I would continue to hold your shares or accumulate more. As earnings start to increase the share price should follow in tandem.

Disclaimer: I have no position in EGHT.

Converted Organics, Lesson in Speculating

By: admin | Date posted: 05.19.2008 (8:51 pm)

COIN – Converted Organics (NASDAQ) - (Closing Price – $8.05) 

I wrote an article about the foolish speculating in Converted Organics a couple of months ago and just as I predicted the greed that was driving up the stock price turned to fear and the stock price took a huge dive. However, the stock price rebounded from its lows and held up for a little while but is now starting to sell off again.

The reason for the most recent sell-off is the company issued a dismal earnings report last Friday. Converted Organics reported revenue of 260 thousand and a loss of 2.4 million. That is pretty egregious. Some of the greater fools that are still buying Converted Organic are going to say that this earnings report is better than their last earnings report because the company actually reported some revenue. However, this company was actually a better speculative investment when it had no revenue.

If you do not understand this let me give you a lesson in speculating. When you buy a company such as Converted Organics you are buying the story not the actual stock. The reason Converted Organics made such a big run was because it had a small float and was in a hot sector. It also helped that the company was a “developmental stage” company and had no revenue. This meant that people could justify their purchase of Converted Organics because of the potential of the company.

Now however, the hype has faded away and the brutal financials have to be taken into account. The reality is that Converted Organics is no where near making a profit. On top of that the chart is starting to get pretty ugly. I wouldn’t be surprised to see the stock price of Converted Organics fall all the way back to the $2.50 range in the next several months.

The lesson here is to trade the story and the momentum when it comes to super speculative stocks like Converted Organics. When those to things start to fade away it is time to get out.

Disclaimer: I have no position in COIN.

Wall Street Survivor

By: admin | Date posted: 05.18.2008 (4:08 pm)

I recently competed in my first stock market competition at Wall Street Survivor under the name Intspeculator and I did quite well. In the contest that finished in April I finished 17th out of more than 23,000 participants. I generated a return of 84.62 percent in just a few months. My return would have been higher but I stopped putting much effort into the competition when I realized I probably wasn’t going to finish in the top three (only the top three earned money). I was in the top three at a couple of points in the competition though.

I generated such a big gain by making the same investments I recommended on my website: shorting solar stocks and financials.

Wall Street Survivor is currently having a new competition that started on May 1 and ends on August 29. The top ten players in two categories (investor and trader) earn prizes. Investors are the players that place less than fifty trades. Traders are the players that place more than fifty trades.

The top player in each category wins a vacation to Cozumel worth $6000 and the next nine players in each category earn cash prizes. There are also cash prizes given out to the top five players with the highest weekly return. If you are interested in learning to trade stocks without any risk you should try Wall Street Survivor. Even if you don’t think you can place in the top ten you could potentially catch a hot stock and win a couple hundred dollars for having the highest weekly gain.

If you are interested in playing Wall Street Survivor click on the Wall Street Survivor picture on the left side of my website and sign up. Even if you are not interested in playing but you want to support my site sign up through the Wall Street Survivor banner and place at least one trade. You will be rewarding me for the time and effort I spend on the site.

Make Real Money at Updown.com

By: admin | Date posted: 05.17.2008 (3:55 pm)

I’ve mentioned Updown.com a couple of times on my website but for those of you who haven’t heard of it Updown.com is a great place to learn to invest stocks and earn real money risk free.

At Updown.com you get one million dollars in play money and you make real money by beating the return of the S&P 500, writing stock analyses, and referring people to the site. Even if you don’t think you can beat the return of the S&P 500 you can make significant money just by writing stock analyses. The top money earner, Legmaker, has earned $3700 in about eight months by writing a bunch of highly ranked stock analyses.

You can also make significant money by generating a large return. The player with the highest return, Invest, has made $2628 in five months by turning one million dollars in play money into 15 million dollars in play money.

If you are interested in joining Updown I would appreciate it if you would sign up through my referral link below:

http://www.theupdown.com/create-account.do?_refer=31970 

I will provide a couple of incentives if you sign up through my referral link. First, when you sign up through my referral link I will get an email that says you signed up through my link. I will then add you as a friend and when I see that you have written an analysis I will give you a good rating (providing you put at least a little effort into the analysis).

Second, I will tell you exactly how Invest is generating such a large return. You can either contact me through my website or through Updown and I will tell you what strategy/exploitation she is using.

China Automotive Systems Releases Impressive Q1 08 Results

By: admin | Date posted: 05.14.2008 (9:48 pm)

CAAS – China Automotive Systems (NASDAQ) – (Closing Price – $6.85) 

China Automotive Systems announced impressive first quarter results today and the stock price responded by trading up 25% on the news.

China Automotive Systems reported revenue of 41.47 million and diluted EPS of 0.18. Revenue improved 46% year over year and 10% sequentially. Diluted EPS improved 157% year over year and 100% sequentially.

Even with the big jump today China Automotive is only trading at a trailing PE ratio of 14. That is very cheap considering the strong growth in revenue and earnings. If China Automotive Systems can continue to show both top and bottom line improvement in future quarters China Automotive Sytems will reach a much higher share price. I think the share price could easily retest its highs of the past few years ($12 – $14 range) in the next few quarters. Therefore, I think it would be wise to be patient and hold onto your shares.

Short term I also think the share price will see more upside. Over 7% of the float is short and I think the shorts will continue to be squeezed over the next few days.

I don’t see any reason to sell I would continue to hold your shares of China Automotive Systems.

Disclaimer: I have no position in CAAS.

More on this topic (What's this?)
The Oxen Report: Market Looks to Open Higher But Will It Hold? (Phil’s Stock World - Members S..., 6/15/10)
Riding The Momentum Of China Automotive Systems (The Wild Investor, 2/23/10)
Read more on China Automotive Systems at Wikinvest

SWC Cover Recommendation

By: admin | Date posted: 05.12.2008 (10:21 pm)

SWC – Stillwater Mining Company (NYSE) – (Closing Price – $13.19) 

In my last update I wrote that I thought SWC was going to continue to decline and that you should continue to hold your short position. However, if you shorted SWC at my initial recommendation you are sitting on a big gain and I think now would be a good time to cover.

SWC reported lousy first quarter results last Thursday and the stock price has managed to hold up. Also the price of platinum is starting to creep back up again. Therefore, I am going to give a cover recommendation at today’s closing price.

Disclaimer: I have no position in SWC.

More on this topic (What's this?)
These Two Stocks Are Poised to Gain From a Palladium Rally (Contrarian Profits, 7/18/08)
Good Days For Palladium? (Hard Assets Investor, 7/11/08)
Read more on Stillwater Mining Company at Wikinvest

AMR Sell Recommendation

By: admin | Date posted: 05.07.2008 (9:08 pm)

AMR – American Airlines (NYSE) – (Closing Price – $8.57)

I recommended airline stocks, American Airlines in particular, as a play on oil falling in price from its highly speculative levels. I figured oil would pull back quite a bit after the Fed announced it would halt future rate cuts since oil has been rising mainly as a hedge against the falling dollar. However, after a very brief fall speculators have sent oil right back up in spite of bearish reasons for oil to go down.

Today it was reported oil inventories rose 5.7 million barrels last week and supplies of oil have now climbed a total of 11.9 million barrels over the past three weeks. However, oil continues to go up for reasons such as supply disruptions in Nigeria that only affect a few thousand barrels.

Due to the nonsense that is going on in the oil market I am going to recommend selling American Airlines essentially at the price I recommended it at. I should have recommended selling the news after the Fed meeting but I didn’t think oil would surge up from its bubble like levels in the face of bearish news. I will throw in the towel for now but this is a trade I will keep an eye on.

Disclaimer: I have no position in AMR.

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