Posts Tagged ‘stock market’

The Current Stock Market: Volatile and Directionless

By: ispeculatornew | Date posted: 09.08.2008 (9:17 pm)

A few months ago I wrote the market was brutal and I think the current market has only gotten worse. There is still extreme volatility in the market and I don’t think anyone has a clue where the overall market is headed over the next six months to a year. I know I don’t.

There are just too many unknows yet to play out. Stocks rallied today after the government took over Fannie Mae and Freddie Mae but I don’t think this will lead to a sustained rally. In fact I think the market will react similarly to when the Fed cut interest rates so drastically earlier this year. The overall market, especially financials, will have a short term rally but then the reality of the credit crisis will come back into the picture and the market will sell off again. Until there is more certainty about when the housing market, the credit crisis, and the economy are going to improve I think you are going to continue to see a lot of volatility in the stock market.

I think the best way play the current market is to invest in stocks that you plan on holding for a while. Trading stocks over the short term (holding for a few weeks or months) is always very hard but it is almost impossible in the current market.

By the way, when did our government become the Robin Hood for the rich? The government seems intent on stealing from the poor (the average taxpayer) and giving this money to the rich (big financial institutions, etc.). The average American should be pretty pissed off by the actions our government has been taking to protect the wealth of the super-rich. I will touch on this in another post.

Check out Redbox

By: ispeculatornew | Date posted: 08.23.2008 (7:16 pm)

One of the investment strategies Peter Lynch touches on in his book One Up on Wall Street is to invest in companies that that you see every day. For instance, if you notice a new restaurant or retail store is performing really well you should check out the company’s stock (assuming it’s a publicly traded company) and see how the stock is performing. This can lead to potentially profitable investment opportunities.

One company that I have recently checked out is Redbox. If you don’t know the company by its name you have probably seen its DVD kiosks at a McDonalds, Walmart, or Walgreens. I first saw Redbox kiosks a couple of years ago but I never rented a movie from one until a few months ago. Now that I have tried it out I will only use Blockbuster (BBI) as a second option to Redbox. (more…)

AgFeed Releases Q2 Results

By: ispeculatornew | Date posted: 08.11.2008 (2:27 pm)

FEED – AgFeed Industries (NASDAQ) – (Closing Price – $12.77)

AgFeed Industries reported second quarter results today and reported excellent numbers. The company also raised its already impressive full year guidance.

AgFeed reported revenue of 35.6 million and diluted EPS (earnings per share) of 0.12. Revenue improved by over 400% YOY (year over year) and 193% sequentially. Diluted EPS doubled YOY and quadrupled from the previous quarter. AgFeed raised its full year revenue guidance from 135 million to a range of 145 – 155 million and raised its adjusted net EPS guidance from $0.96 – $1.10 to $1.08 – $1.20. The company mentioned the second half of the year traditionally represents its two strongest quarters.

AgFeed opened the day up over 19% from the previous close but finished the day with a gain of only 2%. I attribute this decline to day traders who were looking to sell after earnings regardless of results. I think the stock price will start to trend up after the short term traders exit their positions.

AgFeed just reported very impressive results and the company is coming into its strongest two quarters so I see no reason to sell. I would continue to hold your shares.

Disclaimer: I have no position in FEED.

SWIR Q2 08 Results

By: ispeculatornew | Date posted: 07.29.2008 (9:32 pm)

SWIR- Sierra Wireless (NASDAQ) – (Closing Price – $12.48)

Sierra Wireless reported second quarter results on July 23 and reported another good quarter. However, the company issued guidance below expectations and the stock price took quite a hit.

Sierra Wireless reported revenue of 156 million and diluted EPS of 0.35. Revenue and EPS both improved substantially year over year. For Q3 Sierra Wireless gave guidance for revenue of 140 million and diluted EPS of 0.27. This was below analysts’ expectations of revenue of 157.2 million and EPS of 0.37. Consequently, the stock price sold-off.

However, I think the sell-off was overdone and investors are currently pricing in a lot of weakness into the stock price. Sierra Wireless is almost trading at a single digit forward PE which is fairly absurd for a growing company. (more…)

The Market is Brutal

By: ispeculatornew | Date posted: 06.26.2008 (9:07 pm)

The current market is brutal and I think some of the selling is getting overdone. Almost all stocks, except speculative oil stocks, have been sold off indiscriminately. I think the indiscriminant selling provides opportunity for those who are willing to think like contrarians and exercise patience.

I think the sell-off in small caps and tech stocks has been undeserved. Some of my stock recommendations have taken a hit but I think it would by unwise to follow the herd and sell anything regardless of valuation, especially stocks that have improving fundamentals.

I think the market will probably continue to go down some more but I think it would be wise to start to accumulate small caps and tech stocks. I would avoid/short financials and airlines.

On another note oil continues to rise and nothing is being done to counter the excessive speculation taking place. The Fed, which is causing more problems than it is solving, needs to learn moderation and start being proactive instead of being reactive. In the aftermath of the housing bubble, which the Fed helped create, the Fed decided to drastically cut rates without regard to rising commodity prices. This has helped create the current commodity bubble. Now the Fed is just sitting there without a clue. (more…)

Free Stock Picks April Update Part 2

By: ispeculatornew | Date posted: 04.03.2008 (9:41 pm)

Here are the rest of my current stock picks:

SILC – Silicom Limited
The stock price of Silicom Limited have been erratic since my initial buy recommendation but the stock price is currently trending up. Silicom is set to report first quarter earnings on April 28 and I expect there will be a run-up in price before earnings. I will provide another update after earnings are announced.

SWIR – Sierra Wireless:
The stock price of Sierra Wireless has also been erratic since my last update but the stock price is currently undergoing a pretty strong rally. Sierra Wireless is heavily shorted and a short squeeze is already underway. The fundamentals of Sierra Wireless didn’t merit such a huge selloff and I think the stock price could easily rally to 20 – 25 dollars after earnings. Sierra Wireless reported first quarter results last year on April 26 so they should report earnings later this month. (You should also check out NVTL).

Short Recommendation:

SWC – Stillwater Mining Company:
Both Stillwater Mining Company and PAL have sold off since my initial short recommendation but they haven’t dropped as much as I expected. I still think there is further downside left and I would continue to hold your short position.

Disclaimer: I have a long position in SILC. I don’t have a position in the other stocks mentioned.

Free Stock Picks April Update

By: ispeculatornew | Date posted: 04.02.2008 (10:27 pm)

I usually don’t write about my stock recommendations unless they report quarterly earnings or some other important event happens (press release, news event, etc). However, I am going to start updating all my recommendations at the beginning of each month to keep you better informed on how each stock is doing and report on any important news.

Buy/Hold Recommendations:
CAAS – China Automotive Systems:
China Automotive Systems reported sound Q4 results on March 25 and the stock price has rebounded quite a bit from its lows. Today, the company announced that it completed its 35.5% acquisition of Henglong Automotive Parts and the transaction will be immediately accretive to earnings. China Automotive Systems is trading at a nice valuation and the company’s fundamentals should continue to improve in the coming year. I still think the company is a good buy. (more…)

Should the Fed Continue to Drastically Cut Interest Rates?

By: ispeculatornew | Date posted: 03.16.2008 (9:53 pm)

Wall Street pundits are saying the Fed should lower interest rates by a full point at its next meeting. I think such a rash decision would be unwise and the Fed should actually think about keeping interest rates the same or lowering interest rates by a more modest amount, 0.50 at the most.

It seems the Fed has been focusing more on the stock market than the economy. Earlier this year global markets had a huge selloff when the U.S. market was closed for Martin Luther King Jr. Day. The Fed reacted by unexpectedly cutting interest rates by 0.75 percentage points the next day. It was later revealed that the selloff was caused by forced selling by Société Générale as it wound down trades related to its rogue trader Jérôme Kervie. The Fed, which is supposed to be focusing on the economy, overreacted to what the global markets were doing.

Now, with all the turmoil surrounding financial stocks (Bear Sterns in particular), analysts are calling for another huge cut. I think another big cut would be foolish for a couple of reasons and would once again show the Fed is being bullied by what is happening in the stock market. (more…)

Greed, Fear, and Greater Fools

By: ispeculatornew | Date posted: 03.06.2008 (10:09 pm)

COIN – Converted Organics (Nasdaq) – (Closing Price – $16.59) 

I have referred to “greater fools” and the term “hope a dope” a couple of times and the company Converted Organics (COIN) is a perfect example of what I was talking about.

I came across Converted Organics on a day trading stock blog a few weeks ago and I have been following the stock out of curiosity. The stock price of Converted Organics has risen from around two dollars to the current price of $16.59 in the past half year. I am not sure what initially caused the stock price to surge but the stock price has continued to go up on sheer speculation.

Essentially people are buying the stock and hoping other fools will continue to buy the stock and send the share price up. The only thing Converted Organics has going for it is the company has an extremely low float (number of tradable shares). That is the major reason speculators have been able to manipulate the share price up. (more…)

Good Time to Short Financial Stocks: My Pick BAC

By: ispeculatornew | Date posted: 03.02.2008 (3:41 pm)

BAC – Bank of America (NYSE) – (Closing Price of Friday 2/29/08 – $39.74)

Financials have been one of the worst performing stock sectors over the last few months and I think the weakness in the sector is going to continue. The housing market is no where close to finding a bottom, the economy and job growth are slowing, and gasoline prices are projected to hit all time highs this summer. All of these things are going to bode ill for financial companies in the form of increasing foreclosures and overdue credit card and loan payments. Consequently, I think it is a good time to short financial companies.

Financial companies rallied earlier this year when the Federal Reserve caved into Wall Street demands and drastically cut interest rates by 1.25 points. However, the rally didn’t last long and the share prices of financial companies are once again dropping quickly. I think you can take your pick of which financial company to short but I am going to give a recommendation to short Bank of America. (more…)