Archive for May, 2010

New stock pick: Long Apple (AAPL) & Short Blue Nile (NILE)

By: ispeculatornew | Date posted: 05.24.2010 (6:29 am)

With only 2 active trades right now (RIMM vs YHOO & PCLN vs TZOO), we are now ready to take on a new trade. There were many options available this week. I always feel like when markets go down so much, many of the securities in my dashboard become mispriced and so there were many other opportunities. I discussed a few of them in yesterday’s premium newsletter. Apple is not the easiest stock to trade because of all the hype surrounding the company. Having consumers that are passionate about its products is certainly good but of course it all comes down to sales and profits. My basic assumption going long Apple is that the company still has a lot of growth in it. Ipad’s are a hit by any possible measure as they are selling out quickly in the US and are now ready for a worldwide explosion as they become available in 9 more countries within a few days.

That means huge sales numbers of course but it also means more incentives for developers to create solid applications that will generate recurring revenues. In the same way, Apple’s Ipad is taking over the power spot that Amazon’s Kindle had been enjoying as the top EBook reader which will likely create a similar (although not quite as powerful) environment as Apple has been enjoying with music. Apple is facing competition but like its dominant Ipod line, the Ipad seems to be the overwhelming #1.

As for Blue Nile, the same reasons give me incentives to short the stock again and again with success. The past two times that we did the trade were against Netflix (NFLX). Both were successful but I really feel like Netflix’s stock is not as cheap this time around which is why I did the trade against Apple (AAPL). The mystery surrounding Blue Nile is its high P/E ratios. The stock has not been able to generate as much growth as analysts had been anticipating and frankly I do not see any change in that regard in sight. Just take a look at its traffic stats and you will see the challenge of selling luxury items in a weak economy. I can hear those saying that Apple’s items are also luxury items. True. But try telling any Ipod/Iphone user to switch to save a few dollars… good luck:)

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthBook ValueRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
MWWMonster Worldwide Inc4.88230.318.5-13.96-4.654.788.75-5.83N/A
AAPLApple Inc93.4210.69.8-5.0127.8623.1340.6225.5634.76

Financial Ramblings

By: ispeculatornew | Date posted: 05.23.2010 (6:02 am)

Another brutal week in the markets as the indexes slowly continued their way down and even reached many of the lows that had been reached during the Flash Crash. Friday ended with a bit of catching up but it remains difficult to be very positive about this market doesn’t it?

How the Ipod took over @ The Big Picture
Markets revisit the lows from the flash crash @ TraderMike
America will pass $13 trillion in debt on Tuesday @ ZeroHedge
Android and the Iphone; the fall out @ Beust
The VIX approached the 2008 levels @ Vix and more
Google TV: Party like it’s 1999 @ MarketingPilgrim
Market oversold @ StockTradingTogo
Google (GOOG) near term out look @ DrDuru
3 different ways to invest in gold @ TheFinancialBlogger
Is that really an investment? @ MoneyNing
7 reasons for (and against) trading net worth @ Watson Inc

Quick news – May 21 2010

By: ispeculatornew | Date posted: 05.21.2010 (3:02 pm)


Google’s (GOOG) acquisition of Admob for $750 million has been approved by the FTC
Google (GOOG) raised to buy by MKM partners

A day for Zombies and Vampires?

By: ispeculatornew | Date posted: 05.21.2010 (4:10 am)

It was a day for the bears, the Zombies and the Vampires, a day where blood was everywhere.

“Investors are losing confidence,” said Robyn Hsu, who helps manage $3 billion at Capital Investment Trust Corp. in Taipei

Unlike the flash crash that we experienced ten days ago or so, this one was slower and more painful. With the global economic picture still a major worry to investors around the world, investors around the world are looking at Europe trying to figure out how serious the situation over there is going to end up being.  Yesterday was a good day to own bonds, be short the market or even better, be long leveraged short ETF’s…  We decided to take a look at the ETF’s that performed the best in yesterday’s action. Let’s be honest, it is probably not the last black day that we experience, and today’s action could be violent as many will hesitate to own long positions going into the weekend…

Before giving out the whole table, here are the charts of the top ETF’s in today’s action! As you can see all the top ones are leveraged short ETF’s except for VXX, the long volatility ETF!

#1-DRV +15,51%

#2-SRTY +15,26%

#3-TZA +15,18%

#4-EDZ +14,75%

#5-VXX +14,14%

Here are the top 50 Bear ETF’s that performed best in yesterday’s crazy markets:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthBook ValueBetaRevenue/ShareSales 5Y Avg Gr.EPS 5Y Gr.           
NILEBlue Nile Inc34.0638.2329-9.45.2210.8438.9910.394.54
TRIPTripAdvisor Inc69.6945.6230.95-18.4931.99.21.558.7124.67N/A

And for those wondering, these were the worst 20 ETF’s to hold in today’s action…hoping none of these names are familiar to any of you!

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthBook ValueBetaRevenue/ShareSales 5Y Avg Gr.EPS 5Y Gr.           
NILEBlue Nile Inc34.0638.2329-9.45.2210.8438.9910.394.54
TRIPTripAdvisor Inc69.6945.6230.95-18.4931.99.21.558.7124.67N/A