Friday, October 20, 2006
Rival Schools: Used For Glue
Despite armageddon numbers out of CAT and SNDK, the market managed to go green-- a clear sign of a market wanting to go higher. Therefore, I am putting my shorts to bed and will come to work Monday with buy tickets in hand.
As for me:
It was a rough week, owning CTXS and SNDK caused my year to date gains to slip about 1% to 21.1%. Furthermore, I am starting to rethink some of my positions and will likely make some major changes next week, considering I have been making a lot of rookie mistakes.
For one, I will start buying some speculative micro-cappers. Call me crazy, but I love playing the junior stocks more than anyone. At the end of today's trading, I started a position in MVIS. I don't recommend you follow me on this one, but take a look at their technology-- pretty cool. Also, they own a chunk of LMRA's stock. Check the run that stock has been on. Finally, an employee of Microvision has a pretty cool blog, describing the company very well.
Fly Sell: VLO
Fly Buy: GLBC
Fly Buy: ATHR
Sector Spotlight: Internet
As I said earlier, the earnings season has been terrible, so far. Companies like CTXS and SNDK are not supposed to disappoint, but they did. If there ever was an ideal time for a broad market pullback, now is that time.
Take a look at some leadership stocks like BRCM, AKAM and YHOO. They are all sucking some serious wind.
In short, be careful. The bear will eventually have his way with the market-- at least for awhile.
With regards to the Internet sector:
Obviously GOOG is smoking, but YHOO is not. Because of YHOO's struggles, many believe they will start acquiring small, high growth internet companies, a la IACI, in order to jump start its stock. Frankly, I believe if YHOO doesn't make some strategic acquisitions, the stock is doomed for $18.
With that being said, here is a short list of fast growing dot coms that could be targets:
QPSA, RATE, KNOT, CKCM, AQNT, VCLK, INSP, NILE, MCHX, ALOY, WBSN, LQDT, GMKT, TOMO, TFSM, BIDU, NFLX, DTAS, and WSSI.
Honestly, owning stocks during earnings season is like walking through a narrow alley while some asshole throws piano's at you from the rooftops. I hate it.
So far, the season has been a major disappointment-- with the exception of select small cap surprises.
NOTE: The Mets lost to the riff-raff of the National League. Nice job Beltran.
Thursday, October 19, 2006
Linkin Park: Crawling
MOLX BEAT; GUIDES HIGHER
INFA BEAT; LIGHT ON REV'S
OO BEAT; GUIDES LOWER ON EPS; GUIDES HIGHER ON REV'S
CLDN BEAT; LIGHT ON REV'S
LNET BEAT; LIGHT ON REV'S
LAUR BEAT; GUIDES HIGHER
CREE BEAT; LIGHT ON REV'S
RHI BEAT; LIGHT ON REV'S
BRCM BEAT ON REV'S; DID NOT REPORT EPS; DELAYS 10-Q; GUIDES LOWER
RMBS MISSED; REPORTS STOCK OPTION PROBLEM
CNI BEAT; GUIDES HIGHER
CAMD BEAT; GUIDES LOWER
HYSL MISSED; REV'S STRONG; GUIDES HIGHER
PKTR BEAT; LIGHT ON REV'S
LEG BEAT; LIGHT ON REV'S; GUIDES LOWER
SNDK BEAT; CITES CHALLENGING PRICING ENVIRONMENT
SYNA BEAT; GUIDES HIGHER
XLNX BEAT; GUIDES HIGHER
STMP BEAT; LIGHT ON REV'S; GUIDES LOWER
CYT MISSED; STRONG ON REV'S; GUIDES LOWER
SVVS MISSED; STRONG ON REV'S; GUIDES HIGHER
MLM MISSED; GUIDES LOWER
Position Updates: CTXS
As for analyst comments: Most downgraded the stock because the had to. However, some said the selling was overdone and to buy on this dip.
Here are a few excerpts:
Citrix-CTXS core business showed weakness in Q3-Neutral@SUSQSUSQ believes CTXS was a "beat and raise" story going into the call, and they believe expectations will get reset from here.
Citrix-CTXS downgraded to Neutral from Outperform, tgt to $34@FBCOThe firm expects limited upside until new product drivers begin to impact business.
Citrix-CTXS business trends positive, would buy the shares-Outperform@PACSPac Crest believes the PS4 license shortfall will overshadow the positive trends.
Citrix-CTXS would use weakness today as a near-term buying oppty-Buy@BOFABank of America's long-term Presentation Server estimates are largely unchanged after the quarter, noting the slowdown came earlier than expected.
Citrix-CTXS downgraded to Neutral from Outperform@BARDThe firm cited the slowdown in CTXS's core business for the downgrade.
Citrix-CTXS downgraded to Hold from Buy@STFLStifel expects concerns regarding near-term growth following the company's disappointing revenue and bookings performance in Q3.
Also, Cody Willard from Cramer's Realmoney site opined on the CTXS drop:
On another note, Citrix is down nearly 20% today after last night's mostly in-line. A lot of mo-mos are/were in Citrix, as it has been the antithesis of the overpromise-and-underdeliver approach by eBay and Yahoo! for the past few quarters. Citrix needed to beat and guide higher to keep from going lower today.
That said, I think the downside is overdone here. Although I won't step in and try to catch a falling knife today, I will start building a position in Citrix in the next few trading days. Citrix's Netscaler is inside of Google's original video platform. While that business doesn't have the sizzle of YouTube in the near term, there will be a lot more growth for Internet video at Google (and elsewhere, of course), and Citrix is likely to see Netscaler heat up again. No rush, though.
200 Pizza's for CTXS
Frankly, I am staggered by today's swan dive and will remember to hate CTXS until the day I die. My knee-jerk reaction is to sell the fucker, break my monitor and move on. However, my brain tells me its a mistake to sell here-- too late.
In short, the earnings weren't that bad and the stock is already down 20%. I will probably wait a day or two and bulk up on it, in order to bring my cost in line.
As for the general market:
It feels like it wants to go down. The Semi's are fucking every sector with their AMD-LLTC-NVLS-MU type earnings. I think its a good idea to stay short the Semi's, particularly stocks like KLAC, SLAB and ATHR.
Additionally, I really like the action in the oils and feel they will move higher. Right now, VLO is my fav oil stock.
Finally, today the GOOG reports. If you are afraid to short it, because it is nucking futs, take a look at AQNT or VCLK. Should GOOG disappoint, those stocks will get knife-jobbed or vice versa.
Wednesday, October 18, 2006
Cary Brothers: Ride
ICUI MET; LIGHT ON REV'S
CYBS BEAT LIGHT ON REV'S
AZR BEAT; LIGHT ON REV'S
ADS BEAT; GUIDES HIGHER
BSX BEAT; REV'S STRONG
SSTI BEAT; LIGHT ON REV'S
COF BEAT; GUIDES HIGHER
CTXS BEAT; LIGHT ON REV'S
RX BEAT; LIGHT ON REV'S
WSTL BEAT; GUIDES LOWER
CBST BEAT; LIGHT ON REV'S
ALL BEAT; GUIDES HIGHER
EBAY BEAT; GUIDES LOWER
AMD BEAT; MARGINS WEAK
ISIL BEAT; LIGHT ON REV'S; GUIDES LOWER
IFIN BEAT; LIGHT ON REV'S; GUIDES LOWER
AAPL BEAT; GUIDES LOWER
ATR BEAT; GUIDES LOWER
ALAB MET; LIGHT ON REV'S
TER BEAT; GUIDES LOWER
HYC MISSED; GUIDES LOWER
COSI MISSED; GUIDES LOWER
Late Day Horse Shit
Oh, and congrats on the 12,000 thingy.
AKAM Breaking Down
At these levels, under $47, AKAM looks cheap and could see a bounce tomorrow.
NOTE: I have no position in AKAM, but may buy if it dips to the 50 day.
UPDATE: Fuck it. I am not going to touch AKAM today. It has the falling knife feel to it.
Position Updates: ERS
Here is the excerpt:
Commodity stocks have been making a comeback lately after a late summer swoon. Many well known names have moved up sharply (ATI, RTI, TIE in the titanium sector; NUE, STLD, X in the steel sector etc.). We noticed that aluminum prices have begun to recover, which brought us to look at ERS. The stock has been forgotten, but was once a momentum favorite. ERS is near and dear to our heart as it's one of our best performing profiles ever. In May 2005, we profiled it at $5.20 then a year later it was trading as high as $64. It has since come back to earth, so we thought we'd revisit the name. Empire Resources is a distributor of semi-finished aluminum products to customers in the transportation, automotive, housing, appliance and packaging industries. The co does not typically purchase inventory for stock which lessens the commodity price risk. Instead, it places orders with suppliers based upon orders received from its customers (this sounds like a just-in-time system which allows the co to avoid exposure to swings in aluminum prices as it carries little inventory). Its largest customer is Ryerson (RYI), which accounts for 14% of revs. The co is profitable and Q2 revenue rose 23.4% yr/yr to $110.3 mln. The stock appears to have fallen off the radar and there is no coverage. However, the stock has established a decent base in the $10/11 area over the past few months. Also, as a former momentum name, most traders know of it but probably have not looked at it in a while. If the commodity rally continues, it's worth a look as a secondary play in the space given its small float of 4.6 mln shares and high short interest of 20%. Mkt cap $109 mln, avg vol 540K.
Quick Alert: Big Reversal
UPDATE: The bulls are trying desperately to not-be-fucked. However, with the Trannies and SOX deep in the red, I doubt they will succeed.
NOTE: The Mets and the Yankees are paper tigers. Whereas, the Tigers are tigers.
Fly Sell: ATHR
Quick Alert: Big Drawdown in Distillates
The E.I.A. reports that gasoline inventories had a draw of 5.22 mln barrels (Bloomberg consensus is a draw of 200K barrels); crude oil inventories had a build of 5.02 mln barrels (Bloomberg consensus is a build of 1.5 mln barrels); distillate inventories fell 4.55 mln barrels (Bloomberg consensus is a draw of 800K barrels).
UPDATE: Oil getting raped. The insanity of the oil traders deepens. Oh, well.
Sector Spotlight: Software
I am a little surprised that the market is ignoring obvious fundamental weakness in the Semi's and MOT. You would think, if the Semi's and MOT are weak, maybe the consumer is sucking wind right about now. Apparently, the buyers just want to buy and, once again, the sellers want to buy.
So, what we have is a runaway train with nothing but a few weak bears to stop it. The CPI data was benign, earnings (so far) were weak, but so what.
Until the buyers exhaust themselves, the market will continue moving higher.
As for Software stocks:
Aside from the Networkers, I really like software. I own ADBE, ORCL, CTXS, SYMC and MANH. Moreover, in light of strong numbers from ORCL and IBM, I feel confident that CTXS will have a good earnings report tonight. Normally, I try to avoid earnings plays; but I have a good feeling about CTXS-- due to report tonight.
Bottom line: Despite weaker-than-expected earnings, the market wants to go higher. So, for now, I will hang on to my longs and make offerings to the stock God's to limit the upside of my only short, ATHR. Within the market, I like the Networkers and Software and would buy those sectors, aggressively, on a modest pullback.
NOTE: Considering we broke through 12,000, it wouldn't surprise me if the sellers try to bring the market down-- because they need to. So, beware of the bear today.
The following Software stocks have mojo:
Tuesday, October 17, 2006
James Blunt: Goodbye My Lover
NFX LOWERS GUIDANCE
SYK LIGHT ON REV'S
NVLS BEAT; LIGHT ON REV'S, WARNS
CNW BEAT; LIGHT ON REV'S
INTC BEAT; LOWERS CAP EX BUDGET, REAFFIRMS REV RANGE
YHOO MET; LIGHT ON REV'S, WARNS
TSS BEAT; GUIDES HIGHER
LLTC MET, WARNS
PKG BEAT, WARNS
PNFP BEAT; GUIDES HIGHER
Don't be a Gambler
But, in my opinion, they are both idiots. Unless you have inside information on a specific earnings report, buying or selling ahead of earnings is a gamble.
My rule is simple: Unless the economy is in expansion phase, which it is not, I steer clear of earnings.
Now, let's say YHOO smokes the estimate and they project sunny days. Why not pay up the next day for certainty of strength, instead of flying blind?
As for INTC, I find it hard to believe their "price war" with AMD is over and done with in one quarter. I could be wrong, but I think INTC may disappoint.
Quick Alert: Dip Buyers Out and About
However, if the buyers want the market to close up, they will have to do a better job with the trannies, down 1.53% so far.
Also, the Semi's are still down 2.5%, with the exception of fucking ATHR, naturally.
Fly Sell: ATHR
Sector Spotlight: Semiconductors
Downgrades of LRCX, INTC, YHOO and XLNX. But, Cowen decides to fuck Broker A, by UPGRADING ATHR, my only short. Fuck you Cowen, this turkey is going down today.
Additionally, LVLT bought BWNG. Now, I suspect stocks like GLBC, BKHM, FNSR, SCMR, AVCI and EQIX will be in play-- due to takeover speculation. Again, providing the market cooperates, I feel the Networkers are the place to be.
Also CME bought BOT. Perhaps, ICE or ISE will get a bid next.
As for the Semi's:
So far, they are being poleaxed, down 2.3% for the day. With the market selling off, coupled with Goldman's downgrade of INTC, ahead of their earnings tonight, investors are cashing in their chips-- literally.
Regarding INTC, I believe they will hit their numbers, but will lower guidance. Therefore, I feel the SOX will have its head chopped off, in fairly short order.
NOTE: So far, the "Fly Survey" has been a contrary indicator, regarding the price of oil and the direction of the market. This week's survey suggests you, the sheeple, are bullish. Makes you think. Hmm.
The following Semiconductor stocks have absolutely no mojo:
Monday, October 16, 2006
Bob Dylan: Hurricane (Live)
Everyone believes Bernanke is walking around with a pina colada, taking sun-- on perma vacation. The market feels the Fed's next move will be to cut rates. However, Fed Poole says there is a 50-50 chance of cut or hike.
Personally, I do not like those odds.
Aside from Poole, the market will earn its stripes tomorrow-- when earnings season officially kicks off.
Personally, I do not have enough hubris to get in front of an AAPL or INTC number. I rather watch, timidly, from the sidelines.
So, with that being said, if you are a bear or bull, tomorrow will make or break you.
NOTE: A recent buy of mine, FNSR, is smoking. However, I have no idea how high it could go, so don't ask. I did see many stocks, which happen to be small cap and heavily short, gap higher today. It appears the gambler is out and about. Beware.
Quick Alert: Fed Trying to Wreck-a-Rally
Fed's Poole says sees equal chance of a Fed rate hike or a rate cut - Reuters
Sector Spotlight: Energy
Additionally, with the price of crude stable, oil stocks are being accumulated-- in a big way. Just a few weekes ago, I loaded up on VLO, as the knife was falling. Many of you thought it was a mistake buying it (VLO)-- as CNBC brainwashed the masses into believing oil was done. Now, all of a sudden, oil looks good.
With the weather getting colder and Iran acting bolder, oil looks poised to hit $70 before $50.
Besides traditional oil/gas companies, its worth noting breakouts in alternative energy stocks, such as: PEIX, MGPI, IPSU, ARTW, ENER, ESLR, VSE and ADM.
The natural gas stocks I like are: SWN, CHK, NGAS, BEXP, GGR, NGS, TXCO, GMXR and COP.
As for oil, I like: CEO, VLO, SU, HYDL, UPL and CNQ.
The following Energy stocks have mojo:
Quick Alert: Dow 12,000 Imminent
For a bear, nuclear explosions coupled with hyper inflation and a housing meltdown is a fucking wet dream. Don't get me wrong, I short stocks too-- in order to hedge my long positions. But, I never beat off to bad economic data, like some of these fuckers.
In short, betting the house on a super decline, after we already got one in 2000, is ridiculous. For now, the market is going higher, live with it-- bitch.
NOTE: Wallstrip officially launched today. I really like what these guys are doing. Good job and good luck.
Sector Spotlight: Networkers
The market goes up everyday, with little variation. Once again, I really like the action in the Networkers and feel many of them will report kick ass 3rd quarter earnings.
After such big run ups in many big cap Networkers, I am screening for micro->small cap stocks that may jump on the momentum bandwagon. So far, my list includes: FNSR, LNOP, BKHM, AFOP, TXCC, LTRX, ONT, MSPD, TERN, TUTS, MRVC and AMCC.
As for the general market action, the only weakness is the banks, led by WB's weaker than expected earnings. Aside from that, gains are abundant in Steel, Homebuilder and Networker stocks.
The following Networkers have mojo: