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YONG: Does not look like a buyout to me at all after the MS preferred investment. The manager of that MS fund is on the YONG board now and obviously liked what he saw -- Which is why they are now grabbing shares in the common.
I view it a MS simply increasing exposure to YONG at attractive prices, nothing more.
-Fernando
YONG: AFAIK, management has *no* aim at a market outside China. Their market-share inside China is still way to small for them to aim outside.
Regarding trading, I certainly do believe it will 'deflate' a bit once MS is done buying. The question is: If MS buys until $7, will it hold the 200day afterwards? What if MS buys till $7.5?
-Fernando
Heh, just goes to show you: When you see Morgan Stanley jump into the common of a small company, BUY and HOLD it for the ride ;).
3.6M shorts can't be very happy right now.
-Fernando
YONG: Just crushed the 200day Moving Average, WEEEE!
-Fernando
HRBN: Yeah I made tons of money selling puts on HRBN earlier in the year. Shoulda done so again but wanted to limit my exposure with OOM calls only this time ;).
I have no intention of holding my calls on the date of the vote (chuckle). Purely a psychological trade for me.
-Fernando
HRBN: It seemed clear to me that as the date approached the going-private vote, that the stock would go higher from that $15-$17 area. I just sold half my calls today, playing with house money now =). Easy money.
-Fernando
CCCLW: I still have bids outstanding at 0.206 and 0.17, lol. Maybe the nutty seller will hit the bid like earlier again (Market order maybe?)!
Only 100 shares traded at $0.36, so not really stable there yet. I doubt it closes below $0.30 though -- I'll happily buy more over the next few days under $0.30.
Interesting risk reward at these prices, LOL!
-Fernando
CCCLW: Yes, I grabbed around 30k warrants this morning =D.
-Fernando
TSTC: Very true. Of course, the overall DOW market *has* come down 600 points since Thursday of last week (chuckle).
YONG on the other hand is hanging strong above those moving averages.
-Fernando
YONG: Permit for mine exploration finally granted it seems. Wonder if this is one reason MS has been jumping into the common (chuckle).
http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20110906:nPnCN62766
-Fernando
SVM: That is one heck of a response. The actual utilization of a buyback (heavy usage) also speaks volumes.
Haven't heard the hit piece on it, but after that response i'll keep an eye on the story going forward!
-Fernando
I had completely written off Realty, so was expecting to get nothing but legal costs and handing back propeties :P...So the terms make me quite happy :).
We will have filings by the end of Sept. I'm hoping the markets crumble so I can double down at $2.5 (Even though my cost basis is around $2.2, heh).
-Fernando
Hip Hip Hurray :).
10M annual fee, 3.5M+ incentive... Certainly a good resolution, IMO.
Am I reading this right, we get to keep 58 properties (Backed by CDO owned debt) or will we send those properties to KBS over the next 3 months as well?
-Fernando
Shrug, something to consider in 5-6 months as we approach 10-K season. Too much time to foresee the state of the CGS space at that time. Certainly it won't be as virulent as THIS year's 10-K season since many many shorts have moved onto other segments of the markets.
Regarding short interest, don't bother looking at the actual number. What matters is percentage of the float. Going from 50k to 150k means very little, its a rounding error as a percentage of the float.
-Fernando
My level of concern with regards to any specific CGS name during 10-K/20-F season will be proportional to short-interest levels in that specific CGS name :).
-Fernando
You should never have such a large position that you start feeling that way about any single position, IMO. I don't think buying any position, in any company, with a 'If it doesn't move in X months i'll sell' mentality will work very well...Inevitably, it will move right after you sell ;).
With that said, when has CCCL gone 3 months without a nice rally? Heh.
Personally I am looking 6-9 months ahead after the production-capacity expansion has finished and they have ramped it up. The numbers will look very strong, it will show YoY EPS growth, cash will start being built up in the balance sheet versus going into capex, etc.
-Fernando
CCCL: Time for it to rebound, has been bottoming nicely lately. MACD about to cross above the red line again ;). Fun to take some profits in my US names like NM today and push some of the profits into CCCL. Nibbled 4k shares today. La La La.
-Fernando
YONG: Not that surprising when you compare YONG's price action to the rest of the CGS space (Its outperformed almost every name I can see in the RTO space from the moment MS got involved). There has been significant across the board institutional(and retail) outflow from the space -- Clearly the reason the stock has not gone higher even though the CEO bought tons of stock and the shorts covered 3M shares, yet the stock price was still in the $4's yesterday.
-Fernando
YONG: Shrug, all I know is that MS has pretty damn deep pockets and seems intent on accumulating common fast (laugh). Whomever thinks its a scam has lost a LOT of conviction, since shares short went from 7.6M to 3.6M ever since MS started getting involved ;). You'll see the conviction of those remaining 3.6M shorts be tested soon as MS keeps driving the stock higher.
Note that MS was buying heavy today at $4.95 still. Maybe this is their way to take the company private, just buy up most of the common on the open market? (chuckle).
Loving my calls.
-Fernando
TSTC: For those who like to see China companies do business in the USA, look at these projects done with Telestone's technology in the USA: http://molitorisgroup.com/index-5.html
Alot more to come. Mexico too :).
-Fernando
YONG/TSTC: Anyone else excited to see both these companies try to break above the 100day MA? We have seen them both try to do so before and then get pushed lower over the past months -- This time there is a decent chance they stay above, as long as overall markets don't kamikaze, which is great. Getting the 100day MA ceiling removed will be very positive for both names.
-Fernando
BDI - Yep, after going from around 1250 to 1602 over 2 weeks, it has had two negative days and is now at 1541 ;). Its just a breather so far, nothing goes up in a straight line (laugh)... Definitely watching to see if it retraces back down though :).
-Fernando
OT: Yeah, they play these games. Some other companies tried to do it in 2009-2010, they fail though since these contracts are enforceable by law unless the company goes BK (Some ship owners don't stick by their guns and agree to change terms though). Happily SSW stuck by their guns and kept every contract in 2009-2010 for example :). Thats another reason I like Navios (NM) because they have charter insurance -- They can just tell Costco "Go talk to my insurance".
-Fernando
OT: All current rates are fairly low, so long-term rates given protection from the current environment. BDI has been going up lately but thats from a very low base due to a supply glut.
-Fernando
YONG: Morgan Stanley going nuts buying common now!
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7792303
Trade Date Purchase (P)/
Sale (S) Price Quantity
08/18/2011 P $4.3370 110,137
08/19/2011 P $4.6204 249,178
08/24/2011 P $4.5116 26,065
08/24/2011 P $4.5467 123,218
08/25/2011 P $4.5265 135,361
08/26/2011 P $4.5657 145,556
Weeee!
Up to 830k common now total:
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7792427
-Fernando
I own a very very small position. I'll buy more around $0.50 if we get there before Q3 results come out.
-Fernando
OT: I've looked at SB before. Doesn't compare to NM in my mind. Many reasons, but i'll give three: 1) NM has counter-party insurance on all its charters. 2) NM has alot more capesizes AND Handymaxes as a percentage of its fleet. I like those much more than panamaxes. 3) NM has profit sharing agreements on its charters, providing strong upside on any recovery scenarios.
You might also want to check into debt repayment profiles, orderbook commitments, covenant differences, etc ;).
The BDI index is volatile since activity can vary significantly from month to month, I mainly use it as a barometer. The fact that it is up 25% is NOT consistent with a *current* worldwide massive slowdown as some predict.
Regardless, i'm loving my buys around $2.9-$3 since NM is now at $3.5 (Just closed above 20day MA yesterday and is green today on a negative market day). I'll sell some at around $4 =).
-Fernando
OT: Forget the debt, look only at its subsidiary ownership. NNA and NMM have long-long term charters. Look at NSALI in South America.
NM is cheap even if you eliminate ALL its debt and ALL its direct-ownership of ships, just by counting its subsidiaries. Of course, NM itself has pretty decent long-term coverage charter on its own ships so this would be silly ;)... And the debt starts to be due in 2017 and 2019...Kinda far away ;).
I'll bet you $10,000 right now that it hits $7 before it hits $0.50 =P.
-Fernando
OT: LOL, Navios at 50 cents...I think i'll dream of that tonight =D. I wouldn't mind a 50% dividend payout, although i'd probably break every concentration rule I have... =D. Heck at those rates i'd run up every CC I have, get mortgages and second-mortgages on my properties and invest it all in Navios (laugh).
Hmm, at 0.50 cents on NM -- Its holding of NMM would be down to 150M market cap or a 65% yield. Guess i'd be buying that too! (chuckle).
-Fernando
OT BAC: Was something amiss with Goldman Sachs when they let Buffet buy preferred/warrants in 2009? ;). Certainly that ended up being a darn good entry point.
Alot of times these companies choose to make a minor bad deal to get onboard a large respected investor and to build market confidence. I'm sure management was getting a TON of pressure from shareholders to do anything to stop the pain.
5B extra liquidity should also go some distance to assuage fears of them needing more capital too.
Just saying there is no automatic 'bad interpretation' here. With that said, i'm not about to buy BAC stock (chuckle).
-Fernando
CCCL: 100k trade just went off at $3.85. There has certainly been a lot of buying support in the 3.75-3.9 area the past few months. Hopefully the selling abates at some point!
I nibbled another 2k shares today...Doing my part to support the price everyday, LOL. Will keep it up as long as I can keep shifting profits from other positions into here :).
Oh yeah, someone sell me CCCLW at 0.40 already! Grabbed a few today but am still on the bid right now ;).
-Fernando
I look at everything (chuckle). I do find the transportation numbers to be a good barometer of economic activity: Baltic Dry, Container, Railcars, Trucks, etc etc. It can be hard to use those metrics since they have supply/demand variations -- You can see the Baltic dry go down due to supply gluts while demand remains strong for example (Thus its a better indicator when it goes UP than DOWN)...
I look at export/import numbers for China for example. If we see their exports start to suffer that means US or Europe is buying less.
Inflation numbers and interest rates, country by country, can be a good gauge of 'probable paths' the future will take with regards to tightening policy/etc. Take Brazil for example: They had inflation problems the previous year and its market has massively underperformed. Their interest rates are HUGE right now at 12%+. As inflation is being brought under control, they will lower those rates. That will provide a big tail-wind to their economy in the coming few years. I think Brazil, as a whole, is a very big "Relative to rest of world" buy right now (Of course, I like some sectors/companies more than others). Of course, if my world predictions are off, Brazil could still go lower.
-Fernando
Let us please not descend into political or economic-policy-opinionated discussions on this board :).
Obviously ideologies differ quite strongly on these subjects -- And discussion adds zero value to board readers.
-Fernando
Everybody needs to do their own analysis of where the overall market will go. Opinions vary :).
Heres a tidbit: The BDI, Baltic Dry Index, which is a pretty darn fundamental 'pulse of the world economy' has been surging the past few weeks. That is not consistent with ideas that the world's economic activity is 'falling off a cliff'. China export's have been very strong lately, to EUROPE of all things. Not quite consistent with activity over there going haywire either.
Nobody can say we have not experienced a slowdown, but the markets have gone down 18%. The average recession has markets go down 25%-27%. We have priced in quite a huge percentage of that and still have no recession -- Simply a decent probability of one.
The market can go lower, but it can go higher from this point as well. I invested a good chunk of my portfolio around the lows of last Monday -- We have yet to break lower than that on either the S&P or DOW. Many many stocks are significantly higher than the lows from that big down day, thankfully every single one I bought (Lucky!).
Good luck to us all!
Note: I now have 25% of my portfolio in semi-cash (What I call Agency REITs like NLY, AGNC (my favorite) and ARR). If the markets go lower, say to around DOW 10000, then i'll take it out of those and invest that part of the portfolio as well.
-Fernando
SPU is such a controversial name :D. I've heard from two groups with teams on the ground in China that they like the name, its been checked out by boots on the ground, etc, etc... At the same time its been talked about negatively by a couple of short-seller groups as well.
Will be fun watching which way this stock goes over the next few years, but it would definitely not be a top-pick short for me.
Disclosure: No position in SPU.
-Fernando
Question for you then. I remember SIAF gave guidance in 2010 of around 28-30 cents EPS. Did they ever revise that downward later during the year? They only made $0.14 EPS -- Even if you remove the 6M bad-debt expense they still only made $0.24 which is well short of the initial guidance.
Did they update investors on that before they reported the year end results? I honestly don't know, can someone who followed SIAF closely during that timeframe answer?
Relevant questions because nobody can argue that if they did not update guidance last year, we can't expect them to do so this year either... In fact it would show they like giving aggressive guidance (Which is fine, but we need to be aware that its aggressive).
-Fernando
With all due respect, that's hogwash since it happens all the time in the china sector that a company does not update guidance even once it knows it will be WAY off. I'm making no judgement call on whether SIAF will meet that guidance btw.
I even bought a small amount when it dropped to around 0.65, although it is a trading position for me.
I thought the quarter was ok... Nothing to yell about in either direction. Q3 and Q4 is where we will see if the company can walk the talk.
I wish... I've heard bad things about skbi from multiple sources with on the ground information. I won't touch this one.
Those four names are certainly some of the seemingly 'safer' names in the space. Personally I also like YONG, despite its fairly high short interest, because of four reasons 1) High potential reward & good industry, 2) Morgan Stanley involvement, 3) Matching SEC/SAT documents for 2008/2009 and this was obtained last year before the fraud frenzy -- So its fairly dependable, 4) Short interest has come down by HALF in the past few months. That has to be taken into consideration as well.
Some might like LIWA, but that depends on trusting "China 360's" research. I'd want to do more research on the three entities which create "China 360" before having a large position. Short interest is fairly high but has also been coming down significantly the past few months. I view the fact that China 360 AND "Jones Associates" both did investigations separately as a positive personally. The more watchers the better.
Personally the highest risk stock which I own is TSTC. I only became more interested in the name after looking into their technology (they got their hardware approved by US regulators, have US ongoing installations and have some affiliations with US carriers). Talking to Mr. Ballard, the CEO of Quell which does their US installations, helped me become more comfortable here. High A/R bothers me but the fact that GRRF and Comba (same industry) have similar long collection cycles helps to assuage my fears on this end. Good to see short interest decline here lately but I bet a significant portion of that short-interest comes from the huge A/R and corresponding doubts it gives investors. It also helps that I see Telestone being mentioned prominently in Chinese media regarding the Big3 Telecom job auctions, etc.
-Fernando