I've been adding some more AER today, as I agree with the thesis that leasing jets makes the most economic sense for airlines going forward, and that size matters in this sector of the airline industry.

I think some of this decline has come about because a major shareholder indicated that it was selling half of its position.

http://finance.yahoo.com/news/waha-enter-funded-collar-transactions-215402368.html


I think we should start to see some support here as we just touched the lower level of this collar:

"On September 2, 2014, the Stockholder entered into funded collar confirmations (the “Funded Collar Confirmations”) with each of Deutsche Bank AG, London Branch (“DB”), Nomura International plc (“Nomura”) and Citibank N.A., London Branch (“Citi”, and together with DB and Nomura, the “Funded Collar Counterparties”) that relate in the aggregate to 14,923,306 Ordinary Shares (the “Collared Shares”).
Pursuant to the Funded Collar Confirmations, the Stockholder is purchasing put options relating to Collared Shares from each Funded Collar Counterparty with the initial strike price equal to $42.39 and selling call options relating to the Collared Shares to each Funded Collar Counterparty with the initial strike price equal to $61.23. Under each Funded Collar Confirmation, the Stockholder expects to receive on September 8, 2014 from the Funded Collar Counterparties cash in the amount equal to the present value of the put strike price of the put options on all the Collared Shares, discounted from the expected expiration of those options in approximately three years, less the net premium payable by the Stockholder for those options.
To secure the Stockholder’s obligations under each Funded Collar Confirmation, the Stockholder has entered into the funded collar security agreements (each a “Funded Collar Security Agreement”) with each Funded Collar Counterparty under which the Stockholder has pledged to such Funded Collar Counterparty the Collared Shares and granted to such Funded Collar Counterparty a rehypothecation right permitting it to borrow, sell and transfer the pledged Collared Shares (subject to the Stockholder’s ability to irrevocably recall such rehypothecation right, in which case such Funded Collar Counterparty will be obligated to return securities equivalent to the rehypothecated Collared Shares to the Stockholder, subject to the pledge in favor of such Funded Collar Counterparty). The Funded Collar Counterparties have exercised their respective rehypothecation rights with respect to the Collared Shares pledged to them in full by borrowing and selling in aggregate 10,180,679 Collared Shares in an underwritten offering through Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., as underwriters, and advising the Stockholder that they intend to borrow and sell (either themselves or through their affiliates or agents, which may include one or more of the underwriters or their affiliates) the remaining 4,742,627 Collared Shares from time to time in transactions, including block sales, in the over-the-counter market, on the exchange, in negotiated transactions or otherwise, and that they expect to purchase (either themselves or through their affiliates or agents, which may include one or more of the underwriters or their affiliates) an equal number of Ordinary Shares in the open market over the same period of time. The offering of the Collared Shares has been conducted pursuant to an effective registration statement filed by the Issuer in accordance with the Registration Agreement (the “Registration Agreement”) dated as of September 2, 2014, among the Issuer, the Stockholder, the Funded Collar Counterparties and the underwriters, to be filed by the issuer as an exhibit to its Report on Form 6-K to be filed on or around September 8, 2014. Under the terms of the Registration Agreement, the Stockholder agreed not to sell or otherwise transfer any Ordinary Shares (other than the Collared Shares) for 60 days following September 2, 2014, without the prior written consent of the underwriters.

Down today? That is a bit surprising....but not for the recent 3 mos let alone the last 2.5 weeks.

I think this article sums it up nicely:

http://blogs.marketwatch.com/thetell/2014/09/24/two-charts-say-dont-panic-over-a-small-cap-stock-rout/

Nearly half the Russell index is off at least 20% from 52-week highs and 16% of the components is down 40% or more, says Greenhaus.

.............the smallest, most volatile, or highest-beta, plays are suffering the most. “Some of these companies have revenues measured in tens of millions of dollars, hardly reaching the level of ‘economic barometer,’” he notes.




[/img]

CPSS insider continues to buy more shares.

Greg Washer (director) bought 20k shares just below 7.00

http://www.sec.gov/Archives/edgar/data/889609/000101968714003625/xslF345X03/washer_f4.xml

GILD has some good news out this AM.

http://finance.yahoo.com/news/european-commission-grants-marketing-authorization-102200387.html

Stock still trades at a very low FY15 multiple of 11.3x Its one of my largest holdings...don't see why it can't get at least a market multiple (15-16x) given the strength of Sovaldi and its pipeline of new drugs. I know that Sovaldi sales have slowed a bit sequentially, but that is likely because Hepatitis patients and doctors are waiting for a newer version that promises to have fewer side effects.

Hard to find decent values like this in the market, regardless of market cap.

HALO up +7.6% on two insiders (the CEO and CFO) who filed Form 4s yesterday indicating they purchased a combined 75,000 shares of the company just below 9.00.

Could be one to buy on weakness.

The company just announced two very beneficial developments:

FDA approved one of the company's drug therapies for sale:
https://finance.yahoo.com/news/fda-approves-baxter-hyqvia-treatment-230200320.html

FDA gives "fast-track" designation to its flagship pancreatic cancer fighting therapy:
https://finance.yahoo.com/news/halozymes-pegph20-program-metastatic-pancreatic-123000841.html

Stock hasn't recovered since the FDA halted trials for PEGPH20 back in July. The drug seems on-track again, although the stock is still significantly lower than where it was before the halt was announced. Stock doesn't trade on earnings; there aren't any and won't be for at least a couple of years. The markets they are targeting are huge (multi-billion) and if they continue to be successful in their research, I'd expect them to be bought out at some point.

I just added some shares in AER in the low 44s. Stock is now trading below where it was after an excellent quarter.

I think some of the reason for the recent decline in the stock lies in recent announcement that a major shareholder was selling a block (14MM shares) and had entered into a collar arrangement that requires some shorting and purchasing to accomplish. LT trends seem to be in the company's favor as airlines turn toward leasing more and more.

Stock seems cheap at 8x next year's eps estimates. I think it could be worth high 50s

Then again, look at AAL. Its trading at 5.4x FY15 earnings estimates and the stock has sold off even as estimates have risen.

Airlines have been a tough industry to make money in, from a shareholder's perspective. The last 12 mos have been very good for shareholders and so perhaps this is some "risk-off" trading occurring.

LEN (40.00) in with a good quarter earning 0.78. Beat expectations by 0.11, showing Q eps growth of +44%. Trades at 12.5x FY15 estimates, which might get boosted on the back of a strong increase in orders and backlog.

Not a sexy sector, but a critically important one for measuring the overall health of the economy. LEN seems well managed, showing solid increases in margins in the quarter. Statement on outlook:

"Our sales backlog increased 29% from last year to approximately $2.5 billion, providing an excellent foundation going forward.

The housing market in general has continued its slow and steady recovery. This recovery has been driven by years of production deficit that has limited supply while demand has come back to the market. Concurrently, the market has been constrained by reduced access to credit available to many potential purchasers. The recovery has traveled in a fairly narrow channel driven by a need for production and limited by credit availability. Within that channel the road has been somewhat volatile, atypical of previous recoveries, and often difficult for many to read. Our core homebuilding business is hitting on all cylinders as we have properly considered and understood the uniqueness of this recovery."

Mr. Miller continued, "Complementing our core homebuilding business, Lennar Multifamily recorded its first two sales of apartment properties in the third quarter. Both sales produced greater than our targeted 25% return on invested capital, and demonstrated that our multifamily segment is maturing and beginning to contribute to the bottom line. Our geographically diversified $5 billion pipeline of multifamily product will become a more predictable source of quarterly earnings starting in late 2015 and 2016."

https://finance.yahoo.com/news/lennar-reports-third-quarter-eps-100000890.html

------------
Should provide a boost to the homebuilders today.

Buying some TSEM in the 10.90s on a pullback. Like this foundry chip supplier based on its adjusted forward PE (< 6x) and its positioning within the industry. Some of its major customers (RFMD, SWKS) are among the fastest growing semiconductor chip makers, benefiting from trends in RF (wireless) and image sensors.

Here's a good article to get you up to speed:
http://seekingalpha.com/article/2450305-towerjazz-a-towering-double-in-share-price

One highlighted top down summary from the last quarterly CC:

Let’s look now at the organic growth of the company, another area of great significant. I will refer to three things: the revenue growth from our top customers; two, the number of full mask sets or in other words products entering our factories; and three, design wins.

As Oren had mentioned, our top five customers by revenue in the second quarter of 2014 grew 50% as compared to our specific revenue from them in the second quarter of 2013. The same measure for our top ten customers shows a growth of 40%. All business groups have sales and roadmap activities within the top five, as well as the next five customer groupings.

Growth numbers that’s just mentioned can only be achieved by serving customers who are giving us the major portion of their market share within strong industry growth segments. We expect this trend to continue and within our third quarter forecasted guidance, the top ten year-over-year revenue would be a 47% growth, that being our revenue from the top ten customers.

The second quarter was a corporate all-time record for new full mask sets entering our Israeli and California factories at 242, up 80% from a 130 in the second quarter of 2013. First half of 2014 versus first half 2013 is up 70% from 252 to 410 new products entering the factories. These products typically take three to six quarters to reach peak volume production, which is then maintained typically for one to one and a half years. Hence the second quarter and first half records of new products are strong indicators of 2015 and 2016 continued core growth.

The last growth indicator is the amount of design wins. This is the first step in acquiring a new product or new customer. Second quarter also demonstrated a record in design wins. This is a longer term metric taking from six months to one and half years from the design wins until the product or masks that if will enters into the factory, and then three to six quarters to reach volume production.

To summarize, all of the above indicators are revenue growth from our top customers. New products entry in the Fab’s and design wins for long term potential are strong indicators that we are serving the right customers in the right markets, fuelling quarter-over-quarter and year-over-year top and bottom line improvements.

Bought some CCS today. Its a homebuilder that went public back in June. It has one of the lowest forward PEs I can see in its sector. Also own LGIH and WLH for the same reason and think they are good comps.

CCS had a good first report:
http://finance.yahoo.com/news/century-communities-reports-second-quarter-200100561.html

Backlog way up:

"Net contracts in the second quarter 2014 increased to 279 homes, an increase of 125.0% compared to 124 homes in the prior year quarter. Excluding the impact of acquisitions, net contracts increased 23.4% compared to the prior year quarter, largely attributable to a higher number of average open communities. At the end of the second quarter 2014, the Company had 394 homes in backlog, representing $167.8 million of backlog dollar value, compared to 188 homes, representing $83.5 million of backlog dollar value in the prior year quarter. "

Management seems bullish on its future. Like any IPO, there will be some extra supply of shares coming down the pipe in 6 mos:

Of the total number of shares of our common stock to be issued and outstanding upon completion of this offering:

• 4,480,000 shares are being offered and sold in this offering 5,152,000 shares if the underwriters exercise in full their over-allotment option to purchase 672,000 additional shares of our common stock in this offering). These shares will be freely transferable without restriction or further registration under the Securities Act, except that any shares held or acquired by our “affiliates,” as that term is defined in Rule 144 under the Securities Act, will be subject to the volume limitations and other restrictions of Rule 144 described below;

• 11,595,000 shares will be registered for resale on a continuous basis pursuant to the resale shelf registration statement we have filed with the SEC as part of the registration statement of which this prospectus forms a part. These shares will be freely transferable without restriction or further registration under the Securities Act, except that any shares subsequently acquired by our affiliates will be subject to the volume limitations and other restrictions of Rule 144 described below. In addition, these shares are subject to a lock-up agreement for 60 days after the date of this prospectus (or 180 days in the case of any such shares held by the selling stockholders and our officers and directors); and

• the remaining 5,377,587 shares have not been registered and may be “restricted” securities within the meaning of Rule 144 under the Securities Act. These shares may not be sold unless they are registered under the Securities Act or the restrictions under Rule 144 have lapsed or another exemption from registration is available. In addition, these shares are subject to lock-up agreements for 60 days after the date of this prospectus (or 180 days in the case of any such shares held by the selling stockholders and our officers and directors).

------------------------------

With low interest rates, firming employment in many areas in the country, and low inventory of homes available for sale, the conditions seem pretty good for most homebuilders to do well. The market hasn't seen it that way, choosing to see the glass as half empty. I think CCS will be a bit of a laggard until the shareholders who want out dump their shares....but I would treat this weakness as a decent buying opportunity.

Update on Yahoo Finance portfolios....I was just able to make an edit. Keeping my fingers crossed that it won't go down again!

....5 min later, its down again.

Still down for me Wade. I emailed Yahoo customer service and got a standard reply...."engineers working on the issue."

You can send them an email as well here:

https://help.yahoo.com/kb/helpcentral

Any one else out there affected by Yahoo Finance's portfolio problems? Seems like whenever I try to use the add/edit holdings feature, it always tells me that it is "under maintenance" and will be back shortly. That was about 3-4 days ago......

I've tried clearing out my cache, different browsers....nothing.

To quickly sum up, Q1 was impacted by rising interest rates, regulatory concerns, and temporary interest expenses. They also had a tough y/y comp.

Here are the quotes from the Q1 PR:

• Adjusted unrealized gains on VIE and other finance receivables, long term debt and derivatives*, net of the loss on swap termination was $51.8 million in the first quarter, as compared to $64.7 million in the first quarter of 2013 and $44.6 million in the fourth quarter of 2013.
• Revenues were $136.6 million, a decrease of 25.4% from revenues of $183.2 million in the first quarter of 2013, due primarily to the impact of higher interest rates on unrealized gains on VIE and other finance receivables, long term debt and derivatives and lower TRB purchases.
• Net income decreased to $34.5 million, as compared to $89.7 million in the first quarter of 2013, driven by increased interest expense on the Company’s term loan as well as the impact of the aforementioned higher interest rates.
• Adjusted Net Income*, or ANI, decreased to $10.1 million, as compared to $23.5 million in the first quarter of 2013, driven primarily by lower revenues.
• ANI as a percentage of TRB was 3.88%, as compared to 8.70% in the first quarter of 2013.
• Term loan interest expense was $9.9 million, as compared to $7.7 million in the first quarter of 2013.

Mr. Miller said, “Our ANI margin remains consistent, with earnings of approximately $0.04 on every dollar of TRB purchased from customers.” John Schwab, JGWPT’s Chief Financial Officer, said, “The impact of higher interest rates on our first quarter profitability was partially offset by reduced operating costs driven by our operating efficiency and cost reduction initiatives.”

JGW still looks undervalued after a decent earnings report.

Bouncing back from a horrific Q1.

Lots of moving parts and hard to understand financials, but its heavily shorted and looks cheap at first glance.
http://finance.yahoo.com/q/ae?s=jgw&ql=1

Could be a decent low float play if the momentum traders get involved here.

R59, have you dug into AER at all? I'm curious as to how a price target should be derived here. Adjusted forward PE looks very low, but the leverage used here is quite high...so EV/EBITDA is not as cheap.

Would love to hear your thoughts on this.

Its true that AXAS has the lowest forward PE compared to some other E&P companies. However, given that they don't pay taxes, I'm not sure that PE is the best way to compare it to those others. Also, PQ has a much higher depreciation and depletion cost as % of revenues vs AXAS. Not sure what to do with that, but its another key reason why AXAS appears to be cheaper on a PE basis. Lastly, AXAS backs out hedging costs from its non-GAAP earnings presentation while PQ does not.

Both companies appear to have bright prospects and I own both to get some exposure to the oil/NG sector.

I'm impressed by PQ's lower trailing 12 mo EV/EBITDA ratio which shows it to be about 20% cheaper than AXAS according to my calculation.

ECPG in with a decent quarter, with adj fd eps of 1.10 +29% y/y. No explicit guidance given, but the company has said in the past its goal is to shoot for 15%+ annual fd eps growth.

Trading around $43, its got a forward PE of 8x (using FY15 analyst estimates)

http://finance.yahoo.com/news/encore-capital-group-announces-second-200100679.html

I saw that gain in HIMX and that kept me away for now. Without it they would have shown a drop in pretax income Y/Y for the quarter.

I guess the analysts are simply using the company's definition of non-GAAP? This is a murky area of course, but I'd generally back out the one-time economic gains for non-GAAP calcs. Oh well, it just makes the bar more difficult to exceed for next FY, but that is a ways off to worry about.

Looks like the stock is getting closer to FV in the mid 7s.

I think they (LL) were the big seller of CPSS over the past week. The director probably knew that and was buying it all the way down knowing that it was largely temporary selling pressure.

Not going to say that the coast is clear for CPSS. They are in an industry that is facing increased scrutiny and heavy regulation. I also think management has been too cautious about buying back stock and they could have alleviated this pressure a long time ago by offering to buy off Levine. So, they get poor marks from me regarding improving shareholder value.

Lets just say its about time that an insider finally put their own money on the line to demonstrate that the stock price was too low.

Actually, this is probably the most bullish thing for CPSS, besides the insider buy.

LL has been a constant seller of its low priced CPSS stock (via warrant conversions) and if they are fully out, it will remove a BIG drag that's been there for the past two years.

Nice find!

Interesting news. Yahoo Finance will no longer publish Seeking Alpha articles:

Yahoo! Finance and Seeking Alpha Part Ways


July 25, 2014 11:03 AM EDT
A major change is afoot in the financial blogosphere. As of next Monday Yahoo! Finance will no longer be displaying staple Seeking Alpha headlines on its website. The move was initiated by Yahoo! Finance and comes amid news earlier in the week that Yahoo! Finance launched its own contributor network via Tumblr.

The news is a surprise to many as the two sides were seen as close. Some have even suggested that Yahoo! (NASDAQ: YHOO) was interested in acquiring Seeking Alpha.

While contributors are seeing the news as a major blow, Seeking Alpha is taking the development in stride and today announced a host of new opportunities for itself and contributors.

Seeking Alpha noted that it's been paying Yahoo significant amounts every month for traffic and the traffic they receive in return is "lower quality." The company will take the extra money and pay contributors an additional flat payment of $35 on top of the $10 per thousand pageviews they already pay.

Below is a post from SeekingAlpha's VP Content and Editor in Chief Eli Hoffmann explaining the situation and opportunities:

An End To Our Relationship With Yahoo, A New Era For SA Contributors

Dear contributors,

As of next Monday Yahoo Finance will no longer be displaying Seeking Alpha headlines on its website.

We’ve had concerns about Yahoo Finance for a while. Rather than a negative, we view this as major opportunity for Seeking Alpha, one which will deepen our relationship with our contributors.

First I’ll discuss why we feel the time has come for Seeking Alpha to part ways with Yahoo Finance, and then specify how this enables us to pay contributors more and increase the value we provide to our readers.

Why it’s time to part ways with Yahoo Finance

Our relationship with Yahoo put Seeking Alpha on the map, allowing us to build influence and readership. We’re tremendously grateful to Yahoo for that. But recently we’ve had growing concerns about our relationship with Yahoo Finance:

1. We’ve been paying Yahoo significant amounts every month for traffic. As with most of its partners, Yahoo charges Seeking Alpha per click, and the aggregate amounts are high. We’d rather pay this money to our contributors.

2. Our approaches to content have diverged. Seeking Alpha’s vision is to be a crowdsourced platform for serious investors, while Yahoo leans more toward populist, personal finance and general-interest content. For example, SA contributors published articles on 5,962 tickers over the past year. In the area under these articles, we show headlines with maximum relevance to the stock under discussion. In contrast, the Yahoo Finance features populist articles on its homepage (as I write this, “Wealth-Building Secrets of the Millionaire Next Door” and “Chinese Billionaires Criticized for Giving Harvard $15 Million”), and has introduced a feed of these headlines below every article.

3. Yahoo’s readership is lower quality than Seeking Alpha’s. Given the different approaches to content, it’s not surprising that Yahoo Finance readers are on average less serious and less knowledgeable than Seeking Alpha readers. For example, visitors to Seeking Alpha from Yahoo Finance read 40% fewer articles per visit than visitors who come from our email alerts. We care enormously about the quality of discussion on Seeking Alpha, which comes from the quality of our community and readership.

Perhaps as a result of these factors, the percentage of our traffic from Yahoo Finance has steadily declined over the last few years. When we first partnered with Yahoo, it provided the vast majority of our traffic. Now, only 19% of our daily visitors come from Yahoo Finance.

A win for SA contributors

The end of our partnership with Yahoo allows us to re-allocate the money we were paying for traffic to our contributors, and reward outstanding content. Here’s what will change this coming Monday (July 28):

1) Exclusive articles will receive an additional flat payment of $35 on top of the $10 per thousand pageviews we already pay. This means average earnings per article will increase significantly. Yahoo Finance sent us an average of 1,400 pageviews per article, contributing $14 in pageview payments. The new $35 additional flat payment more than doubles that number. Why? First, we would rather put money in contributors’ pockets than in Yahoo’s. And second, contributors are helping us to build other areas of our business (such as mobile), and deserve to be compensated for that even if we’re still working out monetization. A flat payment also means that contributors with valuable expertise in undercovered areas are less dependent on pageviews and free to focus on the topics they care about, which are often more valuable to other investors. (Minimum guaranteed payments of $150 for PRO articles and $500 for Top Ideas remain the same.)

2) Starting next week, we’ll be searching through our long and short idea archives looking for outstanding stock ideas that played out, and awarding two $2,500 “Outstanding Performance” prizes every week. More details about how articles will be selected can be found here.

More to come

We appreciate the value of high-quality financial content. It has the potential to make readers money, and that means contributors who share their research should have the potential to earn meaningful income. We also recognize the value of the broad exposure Seeking Alpha provides authors. We will continue to drive greater and higher-quality exposure to contributors. As organic pageviews increase, contributors will earn more money, incentivizing more great contributors to join our network, and enabling all contributors to produce and share high-quality equity research.

But we’re not going to stop there. Expect to hear more from us in coming months. It’s a good time to be a Seeking Alpha contributor.

They don't like it because it reminds everyone of the terrible share structure of EZPW. (I.e. public shareholders have no voting rights) Cohen's move on Friday to fire the CEO flies in the face of the slowly improving corporate governance that had been happening here.

A lot of the poor performance (besides the drop in gold prices) came about because of moves that had been recommended by Cohen's advisory group. (Fired by the previous CEO, who has now been fired himself)

This is like having Jerry Jones manage your football team's trades and personnel decisions.

SOHO was pretty cheap when I mentioned it in the mid to low 6s. I wouldn't be a buyer here though, given the price rise AND recent shelf they filed.

Once its approved by the SEC, I think they will be issuing more shares. Hazard of the REIT class.

I sold the last of my shares in the 7.90s

Ha! The market gods have a sense of humor....

I generally shy away from the airlines, but I'm impressed with the industry wide pricing discipline and ability to squeeze profits out of their overhead. I agree with this poster on SA that the merger with US Air should have some substantial benefits going forward:

http://seekingalpha.com/article/2168443-american-airlines-group-as-the-integration-continues-solid-upside-ahead

R59, NQ is down over 25% today on its inability to file its 20F on time. Are you willing to roll the dice again?

I don't trust these Chinese companies any more, and NQ seems a bit scammier than a lot of the listed Chinese ADRs (assuming you believe the Muddy Waters reports). Potentially high reward in the short run if they file, but the risk is their accountants have some major issues and decide to resign. Traders seem to be assuming the worst today, but shorts will probably be looking to cover too. A trading halt doesn't really do them much good if they have carrying costs.

AAL is also pretty cheap, although it does have a higher EV/EBITDA ratio. I own AAL.

SOHO (6.50) looks like an undervalued hotel REIT. Trades at <6x forward adjusted FFO with decent growth prospects and 0.20 annual dividend.

Just reported earnings and raised guidance:

https://finance.yahoo.com/news/sotherly-hotels-inc-reports-financial-130000379.html

Not sure if you follow HALO, but its stock was thrashed after it announced a halt in clinical trials for one of its promising drugs PEGPH20. However, in their earnings PR they noted this very promising development:

"In early April, we temporarily halted dosing of PEGPH20 in Study 202 so the Data Monitoring Committee (DMC) could evaluate a possible imbalance in the rate of thromboembolic events between the drug arm and the control arm in the trial. We have since provided the DMC with requested information including an amended study protocol, and the DMC has informed us that they now support continued enrollment of patients and dosing of PEGPH20 in the trial with the proposed study modifications. We have provided information to the U.S. Food and Drug Administration (FDA) so they can conduct their assessment of our request for the clinical hold to be lifted so we may continue enrollment of patients and dosing of PEGPH20 in the Phase 2 trial."

I would think its highly likely the FDA will lift the hold and trials should resume for this late stage pancreatic cancer drug. Pancreatic cancer is one of the more lethal types of cancer you can get, and I'm sure that patients would be willing to take the risk given the alternative. Of course, its not up to the patients and their families, but the early results from PEGH20 had been very promising.

Thought of KERX in this regard too. I might add to my position on KERX, given that Klarman likes the company. The risk is that the FDA doesn't allow them to move forward, but Baupost just put ~4% of their fund at risk. NOTE: Baupost filed a 13G which indicated that they had purchased their 10% stake prior to the big drop last week. I wonder if Klarman was adding or not on the latest drop? We should know fairly soon.

Wow. That is big news. Seth Klarman is a legend, and Baupost is one of the most respected hedge funds out there. Looks like a new position for them too, as they probably acquired all of it in the panic selling from last week.

I think some are concerned that Sovaldi almost works TOO well and that there won't be sizable follow on orders from patients currently taking the drug. That and the pricing issues have weighed on the stock, and so now it trades at very low forward valuations.

If GILD has gotten caught in the biotech downdraft and the selling has been indiscriminate, then once it subsides, the strongest and cheapest stocks should rise faster. I think GILD will be one of those.

They have a sizeable buy-back plan in place. Competitors don't seem likely to challenge on pricing, if recent CC comments from AbbVie can be trusted. You also have to remember that the LT cost to deal with Hep C is sizeable too. The headline issues aside, I think there is a decent counter argument to the pricey drug costs.

Thanks. I nibbled on a few, but its a very small position for me. Another one you might be interested in is HALO, which has also been slammed on clinical trial delays.

Both are very spec, as is a lot of biotech. On of my faves in specialty pharm is GILD. Check out the last quarter and its resulting impact on forward estimates.

Thoughts on the KERX quarter and the negative reaction (at least in premarket)?

Good chance to pick up some shares down here near the 200 DMA?

Hasn't traded this low in a long time, and now well below its secondary offering of 14.50.

I listened to the RM CC yesterday evening. Management's assessment of this disastrous quarter was that accounts/per/employee (APE) got up too high and that they were unable to properly collect on the smaller installment loans they made in the past 3-6 mos. They claim that the problem was NOT because of their model.

They seemed a bit surprised at the depth of the problem. And it was a huge hit....the chargeoffs in their portfolio were at a 27 year high. Let me repeat that: 27 YEAR HIGH. I don't see how it gets much worse, but it won't get cleaned up until the 2nd half at the earliest.

On a brighter note, the % delinquencies have started to trend down, so that would indicate that they taken the bitter pill and cleaned up their portfolio. Another key impact in the quarter was higher gasoline prices. They spiked a bit higher and their typical customer's disposable income gets hurt big time when gas costs rise. I also can't help but think that some of the bad weather also hurt, but management didn't really use that excuse.

Also, FWIW, March was a bad month for the charge-offs in the small installment loans. They don't see much improvement in Q2, but I think with slower loan growth going forward, and lower APEs, this can be contained and turned around. APEs were at 340/employee and know they are down to 300/employee. Of course, employee costs will rise a bit in the short run which could further impact margins in Q2.

I'm with all of you who just couldn't dump the position down here. I'd rather wait 6 months and see where we are for 2015. I could see it hitting the 11 - 13 level before bottoming out.

I don't own JVA, largely because its operating margins are so closely tied to (unpredictable) coffee prices and hedges that I haven't taken the time to figure out.

Wow, NQ hit 9.65 during trading today. Almost back to the lows last hit when the Muddy Waters report was first released in October 2013.

Here is their latest follow up:

http://www.muddywatersresearch.com/wp-content/uploads/2014/04/MW_NQ_04132014.pdf

Congratulations! Very nice trade.

R59, are you still hedged on NQ? Looks like it might revisit the 10 - 12 level again....

Missed badly on the Q4 eps, although guided for a stronger than expected revenue number for FY14. I'm guessing that most are focused on the lower margins (adjusted) and disappointed by that. They didn't provide a margin forecast either.

Wade, I think you'll see steady sequential increases in sales and earnings at least through Q3 for CPSS. Q2 also sounds like it is a seasonally strong quarter for them. NOTE: Q2 last year was a bit of a confusing quarter for CPSS. They had a gain of 10.9MM on a debt cancellation, but also booked a charge for litigation expenses of 9.7MM. The gain inflated revenues...but if you back that out, you'll see that CPSS has shown solid sequential growth in revenues over the past 12 quarters.

I'd guess that they will earn 0.91 - 0.93 this year, helped by improving pretax margins and a continuation of the trend in sequential revenue growth. They have another easy comp for y/y Q2 eps, once you adjust for the one-time gain/loss.

Wade re: CPSS. Just to be clear, I did NOT say that top line growth would be 11-18% in FY14. That figure refers to new business (originations). Revenue growth depends upon the changes in portfolio size and interest mix of the underlying loans. The net difference between originations - loans paid off/charged off is added (or subtracted) from the portfolio balance. If originations grow faster than the rate that old loans get paid off, the portfolio grows. Int rates also affect the interest income. Some of this is limited by regulation, but as long as CPSS has a favorable securitization market to turn to, they can keep churning out decent net interest margins.

Top line growth will be much stronger than origination growth for a while, but it lags what is happening with new business.

Competition is definitely getting more intense, but they are not forced to reach to still grow. Hence, their margins are strong and rising as is their portfolio. Charge-offs are rising in a normal pattern and at some point will become an issue for pretax margin growth. They seem to be in the sweet spot right now, but I admit they will see some more challenging comps next year.

Having said that, While I like the stock and still think its cheap, its tough to sit still when the stock has moved up so dramatically in the past few days. I sold some of my position yesterday too, but still hold a decent core. I was a bit overweight coming into earnings. I rotated some of those sales into RM, which is still very beaten down and a better risk:reward right now IMHO.