Seeking out under the radar trades in equities and options using a variety of indicators including financial valuation, technical analysis, and current and future company news.
Thursday, March 28, 2013
No new trades today, My largest positions in descending order are APP stock long with a 4-6 month price target of $3.25, CRAY stock long with a 5 year price target over $60 a share, AAPL Jan. 2015 leaps with a $500 strike, looking to double my money, and last is TTS which is also a long term buy that could triple in a couple years. My watch list remains the same: HIMX (up 18% today), CSV, and GRPN. Larger Cap stocks I would recommend on a 5% market pullback are: FB, CRR, and NFLX. I would love to buy FB at $23 a share, CRR and NFLX are both great companies. CRR will benefit as the US becomes less dependent on foreign imports and relies more on domestic supply, this ultimately means more drilling and more fracking. NFLX is just starting its rise, I will explain my view on NFLX this weekend. One interesting idea that I noticed when shopping for a car; many cars including luxury cars were not equipped with a Satellite Radio receiver, I happened to be looking at 2008 Infinity sedans and I was disappointed that most of them had no satellite receiver. Then as I was waiting all day in the sales department I became interested in how the sales guys closed deals. They try to get you to add options. Well there were signs up behind their computers to remind them to sell the Sirius Radio package, they were selling some 5 year deal and the way they sold it made it very appealing. I was surprised that old grandmothers buying new BMW's really wanted this option, one lady did not really even understand it but it seemed like she was more impressed with the word "satellite" than what the added option really did. Everyone I listened to that bought a car added this option. Basically what I am saying is even a few years ago this option was not even a possibility because many new cars came with no receiver and so to get satellite radio you would have to go to Best Buy and get an ugly receiver and leave your car there to get it installed. I did this one time and the reception was horrible and even though I am a huge satellite radio fan I ultimately decided I did not want to hassle with the Best Buy ordeal of having them mess with the audio wires in my car, be stuck there for hours, and have an ugly receiver that looks out of place in a nice car. Now the majority of new cars have a receiver but the average age of cars on the road in the US is 10 years old, so the majority of cars on the road do not yet have a satellite radio option, but as time progresses so does the availability of satellite receivers in cars. That should mean steady increasing radio subscriptions for SIRI. I like SIRI a lot and remember trading it when it was $.30 a share, that means it is up over 1000%, could of, should of, would have, right? Long term I think this stock moves back into the $10-$15 range. Market is closed tomorrow, have a great Easter weekend and submit any stock trading ideas to AustinJMalone@gmail.com
Wednesday, March 27, 2013
APP was holding the $2.30 level yesterday and seems to be doing the same today as well, as long as it keeps bouncing off of #2.30 on a down day in the market then that is very bullish for the stock. As of now I am holding and might buy more if it keeps testing and bouncing off the $2.30 level. Bought more APP at $2.28 due to bull market, my optimism in the stock, high short interest, and technicals
Tuesday, March 26, 2013
APP shot up 8% today as the rest of the retailers are trading more to the downside, very bullish. TTS is probably trading lower off of misinterpreted home sales data. Long term hold and sticking with it. CRAY continues to impress me and I still recommend it as a buy. AAPL investors are still waiting on news so the stock and underlying options are trading slightly lower, could turn green as the day progresses. Piper analyst Gene Munster says they will announce a modest dividend in the third week of April and a cheap iPhone next winter. Although the cheap iPhone could bring in a ton of revenue I hope AAPL comes out with something innovative to impress the Street as investors consider AAPL a company based on innovation. Watch list: CSV, GRPN, HIMX
Monday, March 25, 2013
Trading 3/25/2013
Put in an order to sell 1/3 of my APP shares at $2.15, good to cancel so it may not execute today but that is fine because I am bullish on the stock. It is important to lock in profits when you can unless you are positive about the direction of and equity or option. Sold 1/3 of APP at $2.15 to lock in profits. Sold the rest of APP at $2.12. Bought back APP at 2.07, now that is trading, those pennies in difference from buying and selling drastically change my daily return percentage so I am very happy with this trade, especially since APP appears to be popping in the morning and is rather unpredictable after midday. If I get nervous about this trade I will put in a stop loss or sell at tomorrows market open. Sell order open at 2.14. Sold at $2.14 for a 20 minute profit of 3.38%, awesome trade. I like the way APP is trading toward the close so bought it back for the same price I sold it for $2.14, I would put a stop loss on it for $2.07 because tomorrows open largely determines this companies stock price for the entire trading session. Picked up AAPL $465 Jan, 2014 calls at $47.05, I am anticipating news from AAPL this week or next week. Looking for about a 10% gain in the options within a two week investment horizon.
Saturday, March 23, 2013
Monday Anticipation
Going into Monday I am set up nicely being long APP stock, just awarded a $28 million contract for military uniforms, that's a big contract for a $250 million market cap company. Long AAPL $500 strike Jan 2015 calls, long TTS stock and it's not slowing down, long CRAY stock, up over 15% since I bought it, 5 PE ratio, long term play but is hitting new highs right now so you could trade it long as well.
Friday, March 22, 2013
Trades 3/22/2013
Sold APP for a one day gain of over 3%, I will get back in it around $1.98, great one day gain though, gotta lock in profits when I have them, for my other positions refer to yesterdays post. More trades coming later. APP is getting support at $2.00, look for an pullback today and if it holds that support then I think you can buy at $2.01 and make money on the upside. If your not trading then just keep holding this stock because it looks very bullish in the 1-3 year time horizon. Got long APP at $2.02
Thursday, March 21, 2013
Trades 3/21/2013
Stopped out of MODN at $19.50, did not pop up like I expected so I cut my loss quick. Still long CRAY, TTS, AAPL 2015 $500 leap calls, and long June $16 $VIX calls. APP-should of, could of, would have, I will wait for it to pull back. Put in a limit buy order at $1.98, ended up buying APP long at $2.00, got long more TTS at $21.55, I think housing recovery and more importantly renovation is just underway and will continue to propel TTS higher. Sold June $16 $VIX calls for a loss, this bull market is not giving up any steam. The hardest thing to do when trading is cutting losses quickly because it is never fun to admit you were wrong and take a loss, but after years of trading I know that taking a small loss is much less detrimental than holding a loser when that money could be going to work on a winning trade. If you do not want to trade then look at my long term recommendations: TTS and CRAY
Wednesday, March 20, 2013
Trading 3/20/2013
Before market open-Entered a sell order for DEXO at $3.64 bc the stock may easily hit that number and I will take a 10% gain on holding a stock overnight any chance I get. Still holding CRAY long term, holding my $VIX protection with a 20% down stop loss just in case the market continues to hit new highs. Any big down day would make this trade profitable and I would probably sell. Long Jan 2015 $500 AAPL leap, it will be up at market open, overall AAPL has very limited downside, they can only mess up with bad earnings or failure to innovate. Both of these scenarios are unlikely although an earnings miss is not out of the question. TTS keeps moving higher and I am considering buying some to hold long term in my Roth IRA. Update as I trade through the day.--------------------Got long TTS at $21.23, housing renovation recovery will be great for this growth stock. Market Cap is still under $1 billion and growth into nationwide expansion is just starting so this is what I like, a company with minimal downside and a ton of upside. This is a great risk/reward ratio, I would say $5 downside to $20 upside this year. Buy it and if you are worried put a $19 stop loss on the trade. Bought another Jan 2015 $500 AAPL leap, Samsung is now littering the market with news, this is frightening everyone, but AAPL has always kept product innovation secret until it is ready to present something incredible to the consumer. Investors are fearful that AAPL is dumbfounded and that the company has little to offer in the future. Unlikely------------------Had to sell DEXO at $2.29, lost money on the trade, still long term bullish and will keep an eye on the stock. Got long MODN at $20.03, looking for a pop as institutional investors take positions in the stock.
Tuesday, March 19, 2013
Trading 3/19/2013
APPL leaps I talked about in my last post held up well at the open but started trailing with the stock so I sold 2, still long 1 contract. Gotta lock in profits and not take chances on turning a profit into a loss. Ill update this post later. Oh, I also bought 2000 shares of DEXO at $2.41, then 1000 more at $2.39 this is a 3-5 year story that I will trade and explain when I have time later. Merger with SPMD will go through and this company will gain a tremendous amount of strength, this is an underdog story that I think can at least double this year. Got long 10 June 19th $16 call $VIX contracts at $3.08 an option. Did this for protection against a correction and Cyprus contagion fears.
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Back to AAPL, the company may report a massive dividend increase after the market closes, I am still long AAPL
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DEXO-Dex One Corporation, a marketing solutions company, offers various solutions to promote businesses on the Internet through its proprietary search engine marketing product, DexNet. The companys solutions include assessment of marketing programs and advertisements, message and image creation, recommendations for advertising placement, industry-specific research and information, market-specific research and information, in-depth understanding of how consumers search for businesses and what influences them to buy from one business versus another, and mobile and online Web site development. It also offers online reputation management, online video development and promotion, Dex published yellow pages and white pages, search engine marketing and optimization strategies, keyword implementation, social strategies, and tracking and reporting, as well as Dex Mobile, a mobile application; and CityCentral, an iPad application. The company also provides printed yellow pages directories, including core directories, community directories, and plus companion directories to meet the advertising needs of local and national businesses and the informational needs of local consumers. In addition, it offers digital products and services comprising DexKnows.com, an Internet yellow pages site, which enables customers to find local business information, as well as to refine their searches, such as specific product and brand names, business name, hours of operation, payment options, and locations. Further, Dex One Corporation provides marketing solutions, such as local business and market analysis, target market identification, advertising and digital profile creation, and distribution strategies.
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DEXO/SPMD long thesis-Dex One Corp (DEXO) and Supermedia Inc. (SPMD) were popular purchases for institutions due to their upcoming merger which is expected to close in the next couple of weeks. Both trading at market caps less that 25% of their free cash flows, these two advertising companies have huge upside potential.
Popular? Really? I guess if you ignore that over 20% of the float is short, the debt is trading subpar and that the companies make phone books you might be allowed to sit at the popular table… but there is nothing popular about these two purchases, unless you count popularity by my personal blog roll, and then by all means, apparently I should be a fashion icon for what is popular in the future, because it’s definately not popular when i get involved… i mean nothing popular trades at 52-week and all-time lows.
Perspective is everything. There is a lot of upside here across the next couple years. Contributed by "The Whiz Kid" Glen Bradford, follow him on the web at www.globalspeculation.com
Monday, March 18, 2013
Trading 3/18/2013
There was a lot to consider and think about during today's market open, Ill call it a fake out panic. I did not like the price action on APP so I sold all my shares at $1.91 and plan to get back in between $1.80 and $1.87 because the stock is loosely traded and can move to those levels with relative ease. Still long CRAY. I got long another AAPL Jan 2015 $500 leap contract at $49.00 and one more at $49.50. Total of 3 contracts long. For you new investors there are 100 options in one contract so you have to multiply the price of an option times 100 to realize the contract cost. This small idea has turned into an investment of over $15,000 and could easily double as Apple rebounds even as Europe continues to report crisis after crisis. Samsung is trying to sell the Galaxy4 with some eye scrolling technology, sounds like the potential for a massive amount of frustration and simply an irrelevant technology. Blackberry will appeal to some business professionals but will not really materialize into anything Apple investors should fear, BBRY is too small and threw everything possible into one device. Basically as these semi-competitors fail to innovate Apple is rebounding. Based on this it seems to me the best investment with the least risk are these AAPL leaps, AAPL equity downside is less than $50 where the upside is around $150. This is a great trade as AAPL will announce an increased dividend and is developing more new technology that Samsung will copy next year. Keep innovating Apple.
Saturday, March 16, 2013
Trades 3/16/2013
Started off long American Apparel, ticker APP, positive earnings to end Q4 2012 is very bullish especially for a forgotten company with a market cap around $200 million. I think this goes to $2.50 without much resistance.
Bought AAPL JAN 2015 Leap with a $500 strike for $41, contract cost $4100 so just bought one but ended the day at $45 so already a +/- %10 move to the upside for me. 6 month price target $80-$85, so I plan on doubling my money, would sell and take a loss if AAPL stock trades below $415.
Holding super computer maker CRAY based on the prospect that super computers will increase in demand. Demand will increase as government agencies and companies accept that solving problems such as weather storm detection can be solved with the use of super computers. CRAY is essentially the hardware leader in noncompetitive super computer market. Holding for longer term ROTH IRA investment, not a trade. Looking for a 2 year 100% return.
Looking at The Tile Shop, TTS. If you saw how Lumber Liquidators stock shot up then this is a compelling story due to their ability to be essentially unaffected by Home Depot and Lowes. It will be interesting to see how fast this company grows and can increase their revenue over the next 3 years. I see very little downside in this company and as the housing recovery is beginning to ramp up their same store sales should really benefit.
Have fun trading,
Austin Malone
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