Wednesday, April 23, 2014

Time For Plan B?

AAPL Spikes Post Earnings

AAPL is up 7 to 8% after hours this evening.  As my readers know, I was STRONGLY considering re-buying AAPL in my May 6th 2014 tranche.  However, unless it pulls back in the next 10 days, it looks like I will need to find another option.

Ironic, I had actually gone so far as to build AAPL and my other likely choices into my official MFI table.  Of course, I did not chisel it in stone, nor did I write it in permanent marker.

5/6/2014 Start Current Dividend Pct Gain R3K Gain
AAPL      531.32       524.75 $0.00 -1.2% 0.0%
MSFT        39.99         39.69 $0.00 -0.7% 0.0%
NOC      121.79       121.66 $0.00 -0.1% 0.0%
CSCO        23.56         23.50 $0.00 -0.2% 0.0%
LO        55.01         53.65 $0.00 -2.5% 0.0%
Totals -1.0% 0.0%

Irrational Exuberance?

I am not really sure why AAPL is worth 7% more post their earnings.  But at least they reported earnings.  The even greater head scratcher is why is my GTAT up 2.2% in very active after hours?  I kind of understand a stock like CRUS (up 6.6%) as they are a direct derivative of AAPL. If AAPL sold more phones than projected, then CRUS probably made more money.  But GTAT has extremely little involvement with AAPL products sold in the past quarter.  So why is it up?

  1. Tim Cook saying they are looking at acquisitions?
  2. People not understanding the GTAT / AAPL relationship and how it is more prospective?
  3. Extrapolation of more future sales for AAPL ==> greater $ for GTAT?
I do not know.

Down Day

GTAT, LMNS and GNW were all down around 2% today and it was too much for the rest of my stocks to overcome.  I ended up down almost 70 basis points.  KLIC had another good up day as did RIOM, but it really has to be about the portfolio.

Win Win

A commentator on TV mentioned something that made me think the other day. She said that for the first time in her memory, when mergers are being announced, the stocks of both companies are going up substantially.  Historically, the buyer stock goes down and the company being acquired goes up. The thought is the purchaser may have over paid, integration risk etc.

Why the change? Is it because companies have so much cash, or debt is so cheap that investors are cheering acquisitions from both sides? Is it because companies are still cheap to buy? Is it because the stock market has gotten complacent? Is it because tax laws are so convoluted that deals really can be win win due to tax savings?

I do not really know the answer, but boards of directors have to be noticing the shift. And if you will not be put in the penalty box for an acquisition, that may rally light a fire under m&a.

Speaking of M&A, the bid for AGN with a combo of an activist (Ackman) and an serial acquirer (VRX) is certainly a new twist.  Even Carl Icahn is grudgingly admitting it seems smart.

If these are the new trends, we could certainly have another leg up in this bull market. And it could bode well for inexpensive, but alluring MFI stocks. Stay tuned.

Tuesday, April 22, 2014

What Is It Two U?

Well - I had been waiting for an opportunity to de-risk my portfolio. Today, TWOU was rated a buy by two analysts and the stock popped 7%. Perhaps I will be sad down the road, but the pop essentially allowed me to sell TWOU for my buy in price, so psychologically,  I was happy.  My only open position now in the higher risk post IPO plays is LMNS. And while it is up a snappy 4% today! it is still 20% below my average purchase price. For those of you who are math challenged, that means I need it to go up another 25%. I suppose I could double my bet and then just need 12.5%....

Actually, that comment makes me smile. I am back in New York and I was listening on the drive to a show on CNBC (CNBC bets on Las Vegas 'sports consulting agency') about a firm in Las Vegas that advises sports bettors. They called themselves "the bookies worst nightmare". Listening to this show would stop anyone from actually using them. Here is how it went down.

The owner had one of his big whales coming in to Vegas to bet on three or four games over the weekend. The big whale was prepared the wager $50,000. I think the adviser gets some sort of cut of the winnings.

I was expecting something super sophisticated in the gambling advice. I was very disappointed, I think the local barber could do as well. The first game was a baseball playoff game, dodgers and cardinals in St Louis.  The advice was to bet on the Dodgers as the Dodgers had the better pitcher going. I heard that and thought, "duh, but don't the odds already consider that easily known fact?"  Anyway, the bet was $10,000 and the Cardinals won in extra innings.

So now the advisor is nervous, if the client loses over the weekend - he may lose the whale. Game 2 is college football, North Carolina against the ranked Miami Hurricanes. Again the advisor tells us what I expect every person in the world already knew, "I expect Miami to win, NC has not beaten a ranked team in 10 years".  Duh.  But what about the 10 point spread? Has NC ever come within ten points of a ranked team? That seems the more pertinent question. Very disappointing. This time the whale bets 20,000 and while Miami wins, they do not cover the spread.  Now the whale is down by 30,000.

Obviously, if the man planned to only bet 50,000 on the weekend, he is going to walk away a loser as he only has 20,000 left to wager.  The adviser somehow convinces him that the Sunday bet is a "sure thing", even though he had said the same thing the prior two picks.  The whale digs deep and bets 60,000 on the Sunday game, Seahawks against Cardinals.  Then the adviser takes them out driving a fancy car instead of watching the game (probably could not bear to watch).  Thankfully, the story has a happy ending. The Seahawks win, cover the spread and the whale walks away net $30,000 richer (not counting what he had to pay the adviser, who was a dismal 1 for 3).  You know, I could do that job just as well. And every time I lost, just convince the whale to double his bet.  7 out of 8 times, I would be a "winner". Of course, the one time I lose, the guy is out 90,000 - but that is why it is called gambling.

Interesting Stock Action + Great Day

My portfolio was up almost exactly 2% today.  Pretty much everything I own that is larger in size was up nicely, GTATGNWKLICRIOMLMNSRPXC and TWOU (though owned no longer).  A few of the stocks had some very interesting action.

I did increase my FGL holdings by 25% today as it was under $22. This is a $25 to $27 stock in my opinion, unless I am missing something. Have a great evening everyone.

Monday, April 21, 2014

Third Straight Solid Day

Up nicely for the third straight day today. Up almost 80 basis points, really assisted by GTAT going up 3.8%. I did add to my RIOM position (about a 40% increase in shares) at 1.87.

I did see where GTAT announces their earrings on May 7th. That should be interesting to see if they give a little more transparency on what to expect in 2014 and 2015.  A others exciting stock recently has been SYNA (manufacturer of touch screens).  I bought them in November at $48 (what a bargain). They got as high as $65 in late February. Then when everything on the Nasdaq sold off a week or two ago, they closed at $55.88 on 4/11.  Now, just 10 days later they closed at 65.63,  a 17% gain - on really no news that I have seen.  Digging deeper, there is a very large short interest on SYNA. So when they start to go up, I expect the shorts get a little nervous.

Sunday, April 20, 2014

Detailed Look At 2014 MFI Index

Thought my readers would be interested to see how the MFI Index has performed so far in 2014.  In a word, flat.  Almost exactly on par with Russell 3000.

Index Stock Start Last Month Current YTD Change Monthly Change Shares
1   ATVI      17.83         20.69         19.69 10.4% -4.8%         13.07
2   MO      38.39         37.39         38.93 1.4% 4.1%           6.07
3   APOL      27.32         35.16         27.92 2.2% -20.6%           8.53
4   AAPL    561.02      544.70       527.99 -5.9% -3.1%           0.42
5   AGX      27.56         30.00         27.21 -1.3% -9.3%           8.46
6   BAH      19.15         22.42         22.20 15.9% -1.0%         12.17
7   BKE      52.56         46.55         43.24 -17.7% -7.1%           4.44
8   CA      33.65         31.84         30.66 -8.9% -3.7%           6.93
9   CACI      73.22         74.06         69.40 -5.2% -6.3%           3.18
10   CHE      76.62         90.71         87.46 14.1% -3.6%           3.04
11   CRUS      20.43         20.21         19.05 -6.7% -5.7%         11.41
12   CSCO      22.43         23.27         23.57 5.1% 1.3%         10.39
13   COH      56.13         49.99         49.82 -11.2% -0.3%           4.15
14   CRTX         9.49           9.50            9.50 0.1% 0.0%         24.56
15   DLX      52.19         53.59         51.32 -1.7% -4.2%           4.47
16   DHX         7.25           7.52            7.15 -1.4% -4.9%         32.15
17   EBIX      14.71         17.56         16.65 13.2% -5.2%         15.85
18   EGL      33.40         45.03         43.56 30.4% -3.3%           6.98
19   GME      49.26         42.58         41.80 -15.1% -1.8%           4.73
20   GTIV      12.41           9.36            7.72 -37.8% -17.5%         18.78
21   GNI      68.10         19.12         19.45 -71.4% 1.7%           3.42
22   HLF      78.70         58.50         55.40 -29.6% -5.3%           2.96
23   IQNT      11.41         15.07         14.09 23.4% -6.5%         20.43
24   ESI      33.58         28.85         26.58 -20.8% -7.9%           6.94
25   LPS      37.38         37.30         37.30 -0.2% 0.0%           6.24
26   LQDT      22.66         22.35         18.00 -20.6% -19.5%         10.29
27   LO      50.68         54.58         55.14 8.8% 1.0%           4.60
28   MSFT      37.41         41.70         40.29 7.7% -3.4%           6.23
29   MYGN      20.98         35.15         37.97 81.0% 8.0%         11.11
30   NATR      17.32         13.68         14.15 -18.3% 3.4%         13.46
31   NOC    114.61      124.56       122.61 7.0% -1.6%           2.03
32   PDLI         8.44           8.37            8.41 -0.4% 0.0%         27.62
33   PFMT      10.30           8.89            8.66 -15.9% -2.6%         22.63
34   PETS      16.63         13.48         13.32 -19.9% -1.2%         14.02
35   PRSC      25.72         38.00         41.93 63.0% 10.3%           9.06
36   QCOR      54.45         69.77         77.25 41.9% 10.7%           4.28
37   RTN      90.70         99.13       100.74 11.1% 1.6%           2.57
38   RAI      49.99         54.36         55.57 11.2% 2.2%           4.66
39   RPXC      16.90         16.46         16.71 -1.1% 1.5%         13.79
40   SAIC      33.07         36.59         39.31 18.9% 7.4%           7.05
41   SWHC      13.49         14.76         14.20 5.3% -3.8%         17.28
42   STRA      34.47         47.85         44.29 28.5% -7.4%           6.76
43   RGR      73.09         63.23         63.19 -13.5% -0.1%           3.19
44   UIS      33.57         31.19         29.00 -13.6% -7.0%           6.94
45   UNTD      13.76         11.55         11.95 -13.2% 3.5%         16.94
46   USMO      14.28         19.00         17.30 21.1% -9.0%         16.32
47   USNA      75.58         75.30         76.81 1.6% 2.0%           3.08
48   VCI      34.25         34.02         34.02 -0.7% 0.0%           6.81
49   VGR      16.37         21.55         21.27 29.9% -1.3%         14.24
50   WTW      32.93         20.59         20.69 -37.2% 0.5%           7.08
Total    17,682      18,324       17,908 1.3% -2.3%

As you can see, up 1.3% overall. But down 2.3% in April. Three stocks (APOL, LQDT and GTIV) have sort of imploded this month.  Then for the YTD figures, GNI is down a crushing 70%.  But people have warned on this blog many many times (Eric Y for one) that GNI had a limited shelf life.  It shows you how inefficient markets actually are with the market over-pricing GNI for so many years.

Dividend Stocks

I wanted to provide a little more color on my dividend portfolio, showing the average yield and expected annual income:

 Stock   Shares   Ann Dividend / Share   Yield   Projected Dividend   Worth 
 AOD         13,890                    0.68 8.0%                    9,418     117,096
 BBEP           5,713                    1.95 9.6%                  11,141     115,807
 CSQ           6,856                    1.00 8.9%                    6,856        77,059
 FGL           4,000                    0.26 1.2%                    1,040        90,200
 FSC           6,704                    1.00 10.6%                    6,704        62,951
 NTC           6,692                    0.68 5.6%                    4,577        81,642
 O               593                    2.17 5.2%                    1,287        24,842
 OIBAX           4,125                    0.29 4.7%                    1,196        25,288
 PM           1,000                    3.76 4.5%                    3,760        83,150
 TGONF           7,000                    0.60 5.9%                    4,200        71,750
 TPVG           5,000                    1.20 7.6%                    6,000        78,650
              
              
              
              
              
              
              
              
              
 Total  6.8%                  56,179     828,435

Then here are upcoming dividends.  Note CSQ just bumped their distribution (

CEF Update: 10 Large Distribution Changes).


Stock Shares x Date Div/Share Est New Shares Amount
AOD        13,890 4/20/14  $         0.06                       93.0              785
OIBAX          4,125 4/30/14  $         0.01                         9.0                58
O              593 4/30/14  $         0.18                         2.0              108
SNDK              569 5/1/14  $         0.23                         1.0              128
CSQ          6,856 5/8/14  $         0.08                       50.0              571
BBEP          5,713 5/9/14  $         0.17                       46.7              947
WNR          1,011 5/10/14  $         0.26                         6.0              263
GA          3,502 5/10/14  $         0.23                       68.0              805
FSC          6,704 5/12/14  $         0.08                       59.0              558
NTC          6,692 5/13/14  $         0.06                       31.0              381
CF              228 5/14/14  $         1.00                           -                228