StocksandBlogs.com

RSS Feed Homepage

Articles: 1, 2, 3, 4

Selling into Rallies
2008-02-26 08:25:00
The DJIA is up triple digits two days in a row and 3 out of the last 4 days. I am using this opportunity to sell some stocks and increase my short exposure. I just feel that the market needs one strong leg down before I can start buying long positions again.So I have made my shopping list, which includes TAO, GAF, KOL and TKF, along with Fording Canadian Coal (FDG). I am also hoping Home Depot (HD) pulls back to $25 and Disney (DIS) to under $30 so I can start picking them up.Home Builders have also put in a bottom and at any sign of weakness, I will look to buy Toll Brothers (TOL) and MDC Holdings (MDC).Why do I want to buy TAO, GAF and TKF? Because the chinese real estate market is hot and second tier emerging markets in Africa and Asia present a better opportunity than the original BRIC nations. KOL and FDG - because coal is on fire and demand is increasing. FDG also has a 5% dividend to boot. HD and DIS - because they present great long-term value and are cheap!-- Faisal LaljeeF...
More About: Selling , Rallies

Take Profits on Take Two
2008-02-26 03:05:00
This buyout offer of Take Two (TTWO) by Electronic Arts (ERTS) is great for investors of TTWO. If you bought the stock on my recommendation back in September, you are now sitting on a 65% gain. While TTWO might move higher from here, I would sell at least half your position in case they decide not to sell or if ERTS backs off.-- Faisal LaljeeFull Disclosure: I do not own TTWO or ERTS but my position can change anytime without notice.Related Stories:Take Two's Blockbuster or TwoBuy Video Games this Holiday SeasonTake a Second Look at Take Two
More About: Profits

Apple Stock Looks Tasty at $120
2008-02-24 03:38:00
Apple (AAPL) is a consumer related stock and with the tightening consumer credit and a recessionary environment consumer stocks tend not to do well. Having said that, AAPL's stock price seems to reflect this negativity. So while at $120, I recommend buying, it would not surprise me if the stock went down to $110 or even $100. That is why I recommend you buy half now and then put in a buy order at or below $110 for the rest. In 2-3 years, the stock should double your investment.-- Faisal LaljeeFull Disclosure: I do not own AAPL but my position can change anytime without notice. Related Stories:Stay Away from Consumer Stock sConsumer Slowdown is Bad for AppleApple iPhone in Strong SupplyApple Even Better than I ThoughtApple Still Strong Despite Short-term Market ConcernsAn Apple All Year Will Make you 35%
More About: Apple

Build your Defense
2008-02-12 00:13:00
With economists arguing over inflation and considering that this bull market is over 5 years old now, I thought I’d spend some time reflecting on the current economic environment and what it could mean for the stock market.   1)      Let’s consider the current state of our Economy. Interest rates are at multi-year lows and historically at extremely low levels. Therefore, drawing comparisons to the Great Depression might not be a fair proposition when interest rates were much higher and our banking standards, much lower. Low rates mean that people will look for places to put their money to work. Is that going to be the stock market? Perhaps. It certainly is not going to be housing. Even government bonds don’t pay as much as companies like GE, Pfizer (PFE) or Bank of America (BAC) pay out in dividends.   2)      A weaker economy and a possible recession bodes negatively for consumers and consumer spend...
More About: Defense , Build

Rate Cuts - Will they Trigger a Sustained Economic Recovery?
2008-02-06 19:32:00
The Fed seems so reactive and the government so scared of a recession. I don't know why we can't accept that recessions are part and parcel of a capitalist society and a modest recession is healthy for long-term economic growth and prosperity. On that note, I think that the rate cuts will not be enough to prevent a recession or a further decline in the housing market. If anything, it will prolong the inevitable - a recession, and the further we prolong it, the deeper it will get.   Do you agree with the recent aggressive rate cuts as a strategy for sustained economic recovery?   -- Faisal Laljee  
More About: Recovery , Economic , Rate , Cuts

The Amero - America's version of the Euro
2008-02-04 02:06:00
I was at the post office last weekend and the guy helping me there mentioned that in a few years, we will have the Amero replacing the dollar in the US. Like the Euro , this would be a common currency across the US and its neighbours - Canada and Mexico come to mind. I laughed off his casual comment but it occured to me later that he was only half joking. Not that I am in the habit of taking advice or paying much attention to conversations with people at the post office, but this time, I thought about it and I wonder if the Amero is really a possibility. The concept behind the Euro is not just a common currency. It is also free trade, a common belief (capitalism), unilateral monetary policies aimed at curbing inflation, a common passport that allows for people to travel to those in the Union without restriction, much like travelling from Los Angeles to Boston for those of us in the US. So can Mexico and Canada ever get on board with our priciples of capitalism? Canada often has polic...
More About: Version

Yahoo is just Bad Luck
2008-02-01 20:12:00
I have been holding Yahoo (YHOO) shares for just about a year now, with a cost-basis of $23. After yet another disappointing quarter, I finally sold the stock at $19 yesterday morning. With the Microsoft bid today, I am left wondering if this is just a cruel joke. I just lost an opportunity of 47% in one day, after holding on to this piece of s**t for what seems an eternity. Just another lesson in investing. Sigh.-- Faisal LaljeeFull Disclosure: I do not own YHOO or MSFT but my position can change anytime without notice.
More About: Luck , Yahoo!

Fancy Exchange Traded Funds for all Appetites
2008-01-30 10:42:00
ETF’s are a relatively safe way to invest in the stock market. It is often the preferred way to invest for inexperienced investors or those who don’t have much to invest. It allows you to diversify even the smallest of portfolio’s without the cost of buying many different stocks. With the markets in recession mode, here are some ETF’s that you might consider:MOO – Agriculture is one of the more bullish areas of the market and this is a good way to play the sector. This ETF has 3 of my favorite names in agriculture including Monsanto (MON), Mosaic (MOS) and potash (POT). A recent 15% pull-back presents a great buying opportunity.TAO – This ETF covers the real estate market in China, Hong Kong and Macau. While some of the high flying Chinese stocks and the major indices in Shanghai are due for a pull-back, China is still growing at over 11% and wealth creation is in full swing. As more people migrate to the middle-class, there will be an increase in urbanization, resulting...
More About: Exchange , Funds , Exchange Traded Funds , Fancy

Blackstone Group should be bought
2008-01-29 04:52:00
Blackstone Group (BX), which went public at around $30 per share just last summer, is now selling for less than $20. Mr. Blackstone himself bought some shares last week. I think that at these levels, BX is a buy. Incidentally, with interest rates low and going lower, and company valuations 15% lower than they were last summer, I suspect we will start seeing M&A activity pick up soon. Case in point - CME's acquisition of Nymex announced today. -- Faisal LaljeeFull Disclosure: I do not own BK but my position can change anytime without notice.Related Stories:Trading Volumes and Volatility will boost Chicago MercNasdaq Needs to Get a LifeInternational Securities Exchange Flies Under the RadarTop 10 US Stocks to Buy Now
More About: Blackstone , Blackstone Group

Time to Buy Financials
2008-01-25 11:49:00
With the market looking like it put some kind of bottom on Wednesday, an financials rebounding the way they did, it is time to buy the beleagured names like Citigroup (C) and maybe even some Merrill Lynch and Morgan Stanley here. These stocks have gotten too cheap and the risk/reward is certainly favorable at current levels. Keep in mind that foreign investors in Abu Dhabi and Saudi Arabia own almost 50% of Citibank. These are the same investors that bought almost 15% of Apple after the dotcom fiasco when the stock traded down to the single digits. Patience is required for these stocks, but I do expect a 40% return in Citi over the next 18 months. -- Faisal LaljeeFull Disclosure: I do not own any of the stocks mentioned here but my position can change anytime without notice.Related Stories:Bank of America Will Pay Dividends
More About: Time

Countrywide and Bank of America - What is the true value of the deal?
2008-01-23 20:07:00
It is hard from individual investors sitting on the sidelines to come up with a resonable valuation. I have seen publications and websites state that the price BAC is paying for CFC is $6.90. Today I saw this article on fortune.com titled Betting against the BoA - Countrywide deal. I recommend you read it and understand what it is saying. Here is my take away from it:If the financial climate improves between now and summer (when the deal is set to close), meaning no more major write-downs and wtf's, CFC shareholders will probably get the $7 per share. However, if we get some more major bad news, the deal could get re-priced. Lots of moving parts here, not to mention interest rates.-- Faisal LaljeeFull Disclosure: I own BAC but my position can change anytime without notice.Related Stories:Countrywide Woes Worse Than ExpectedBank of America Will Pay DividendsThe Countrywide ConundrumTime to Cover Countrywide
More About: Bank of America , Deal , True

Stay Away From Consumer Stocks
2008-01-23 08:27:00
There is not a bull out there who hasn't been hurt by the 16% drop in the S&P 500. Such a steep decline in less than 2 months is certainly cause for panic. I am sure I don't need to remind you that this decline has not only impacted financials and retail, but it has also impacted emerging market stocks. EEM, is down 21% from its all time high back in November. FXI, the Chinese ETF is down 35% during the same period. I will be the first to admit that our markets were due for a breather. In fact I have been cautious for a while now. More recently, in October of 2007, I cautioned against buying stocks like Baidu (BIDU), Apple and Intuitive Surgicals. These stocks, since, are down anywhere from 20-30%.If you haven't lightened up on your long positions, it might be too late. Wait for that oversold bounce and sell some into strength. The only people who will make money in this environment are traders who buy on dips and flip it into strength or those who short into strength and cov...
More About: Stocks , Consumer , Stay

Time to Cover Countrywide
2008-01-08 20:32:00
There is just so much beating a stock can take. Yes Countrywide (CFC) is a mess and has been for the last 12 months. The stock has lost most of its value and is down from $45 last February to less than $6 at one point today. The company's market cap has shriveled down to a mere $3.5 billion and this is the largest mortgage company in the US. Their servicing portfolio alone is worth a lot more, but investors are not taking any chances.Back in July, with the stock at $35, I recommended shorting the stock and at various points during the slide, I have shorted the stock and made money. Today, I recommend covering your short. Easy money has been made to the downside and while things are still very bad, this decline is somewhat overblown. If you shorted the stock then, you are up 82% on the stock. From this level, being on either side of the stock is very risky.-- Faisal LaljeeFull Disclosure: I covered my CFC short last week and currently have no position in CFC. However, my position ca...
More About: Time , Cover

I'm Alive
2007-12-31 23:46:00
When I last wrote on this blog, little did I know that it would be my last meaningful post for the year. The combination of a lack-lustre market, an increase in my social and charitable committments, and a couple of other ventures have prevented me from writing. This is a first for this blog in its brief 22 month history. In fact, never have I not written at least once in a two week period, let alone a six weeks.   To those who I have lost during this period, I hope you return - this blog is just getting warmed up. To those who checked back periodically, I thank you for keeping the faith. I expect to be posting feverishly over the next couple of weeks to make up for some lost time.   Meanwhile, here is wishing you a Happy, Prosperous and Safe New Year.   --Faisal Laljee Full Disclosure: I think about writing on this blog everyday that I don't write. So my intentions don't always reflect my actions :) 
More About: Alive

Benazir Bhutto's Asassination May Have Far Reaching Implications
2007-12-31 11:10:00
I asked a friend who lives in Karachi, Pakistan about the state of things in his city a couple of days after the Bhutto assassination and his response gave me the chills. Please keep in mind that he lives in one of the richest areas of Karachi, a city that is the New York of Pakistan."factories looted! thursday everyone was stuck in traffic and their cars stoned(people had to leave their cars on the road and run), over 2000 vehicles burnedin karachi alone, shops all over the city looted!!!buddy it was something evenwe have never experienced in karachi! it put the 12th may fiasco toshame. was caught inside National Hospital for 6hrs, doorsbarricaded, ALL the cars parked outside on fire, nearby petrol pump on fire,till rangers came and rescued them after one am! :-(driving to work today washorrible, burnt cars on the rd (counted 5 vehicles on my route). THE COUNTRY ISIN FREEFALL AT THE MOMENT..."Since the readers of this blog are not here to listen to geo-political banter, I will get ...
More About: Benazir , Implications , Hutto

Players in the World of Digital Marketing - Is ValueClick the Next Buyout T
2007-11-14 10:57:00
The online advertising business, whether it be display advertising, pay-per-click or pay-per-call is in bull mode. Giants like Google (GOOG), Yahoo (YHOO), Microsoft (MSFT) have recently snapped up a host of players in the business. First, lets look at the different types of companies in this space.Microsoft, Google and Yahoo are the big players that are consumer facing. They get enormous traffic on their portals and search engines and that allows them to display ads on their sites.Companies like Doubleclick, 24/7 Real Media, Aquantive and Valueclick (VCLK) partner up with advertisers and serve up ad's not only on Google, Yahoo and MSN, but also on other widely circulated venues. They act as agencies to their advertisers and also have technology that serves up a variety of digital marketing mix for their clients including video and display advertising.Companies like Visual Sciences and Omniture (OMTR) provide analytic tools to monitor ad performance, traffic, conversion, transactio...
More About: Marketing , Players , World , The World , Digital

Another Currency for Greener Pastures
2007-11-10 19:23:00
My recommendation for Canadian Dollar (FXC) was up 8% in a week before pulling back these last couple of days. Another currency that I like is the Swiss Franc. In fact, I opened a position in FXF on Friday. -- Faisal LaljeeFull Disclosure: I own FXF but do not own FXC. However, my positions can change anytime without notice.
More About: Currency

Synaptics Revisited after Strong Earnings Growth
2007-11-10 03:34:00
Synaptics (SYNA) is a technology outfit that makes touchpads, click wheels and other control components used in laptops, mp3 players, cell phones and other mobile devices. The company also manufactures touch screens that allow users to tap and slide their fingers on screens across the spectrum of consumer products.While Apple's iPhone does not use Synaptics' technology, LG's Prada phone and other LG models are using their gesture-recognition technology. Moreover, the company has also signed up Samsung and Motorola for future such versions of their phones.In their most recent quarter, Synaptics earned $11.3 million, or 41 cents a share, on revenue of $86.7 million. This is an increase of 176% from the $4.1 million, or 15 cents a share, on $54.8 million in sales in the year-ago quarter. In fact, excluding one-time items, Synaptics earned 54 cents a share, which demonstrates the strength of their business.Over 80% of Synaptics' revenues comes from laptop sales, but the company has ...
More About: Growth , Earnings , Strong , Earning

EMC Sell Off is Madness
2007-11-09 23:43:00
EMC is down almost 25% in two weeks and trades at 12 times earnings after taking out the VMWare (VMW) stake. While Apple (AAPL), Research in Motion (RIMM), Intuitive Surgicals (ISRG) and Google (GOOG) are being sold off for good reason (they are expensive and are up huge since summer), EMC is cheap and a great buy here. -- Faisal LaljeeFull Disclosure: I own EMC but my position can change anytime without notice.
More About: Sell , Madness

US Steel is a Steal
2007-11-08 18:50:00
US Steel (X) is sitting at its 200 day moving average. The stock is off over 20% from its summer highs, but this is not indicative of their business. Demand for steel has never been greater and the company has its own iron ore production - which means it does not have to outsource this commodity and as a result, can keep its margins relatively higher. The only caveat is that US Steel makes low end, lower margins products. With consolidation still very much an option as indicated by the BHP Biliton bid for Rio Tinto (RTP), it is possible that US Steel might be snapped up. Regardless, I would buy the stock here.-- Faisal LaljeeFull Disclosure: I do not own X but my position can change anytime without notice.Update: I bought the stock on Friday Nov 9th, but my position can change anytime without notice.
More About: Steal

Bank of America Still a Buy
2007-11-08 18:46:00
Despite being on the losing end of the trade since my bullish call on Bank of America (BAC) last week, I am sticking with it. In fact, I bought more earlier this week and I believe its a stronger buy here. The dividend seems very secure and this carnage will end soon.-- Faisal LaljeeFull Disclosure: I own BAC but my position can change anytime without notice.
More About: Bank of America

Solar beats Ethanol
2007-11-07 15:12:00
With oil near $100 a barrel, one of my calls from last year about oil is on its way to being realized. Back in July of last year, I predicted that oil would hit $125 in two years. In the short-term, I looked like an idiot as oil retracted back from $75 at the time to the $50's. Now that its finally higher than when I made that call, speculation about ethanol and solar has somewhat settled. Solar seems to have beat out ethanol for the top dog in alternative energy (at least between these two).Solar stocks have sky rocketed this year, while companies like Andersons Inc., (ANDE) and Imperial Sugar (IPSU) have underperformed. I'd like to reference a couple of my posts this year that might get your caught up on my position on these names. I last recommended Andersons Inc back in June of last year as part of my buy list, and before that in May , but the stock has really been a disappointment, giving up some gains since May 2006, but in the black since my call in June. Similarly, I recom...
More About: Ethanol , Beats

Cyberonics Gives Anxiety to Shareholders
2007-11-07 14:04:00
Cyberonics (CYBX), a stock I picked back in February of this year, has been a terrible stock. I am sorry to say that I followed Carl Icahn into this name and came out very short. The only positive: it might help offset some of the capital gains, but thats no solace. The stock is at a 52-week low, so I am not sure if it makes sense to sell now or wait for a possible recovery or for the stock to get bought out. I leave it to your judgement.-- Faisal LaljeeFull Disclosure: I do not own CYBX, but my position can change anytime without notice.
More About: Shareholders , Anxiety

Closing Doors on Cubist
2007-11-07 13:58:00
Cubist Pharmaceuticals (CBST) has been a relative underperformer of a stock ever since I recommended it back in February. At its peak, the stock was up 25% from my recommended level, and is still up over 10%. But with biotechs, specially small cap ones, a 10% move is not worth the risk. If you bought it on my recommendation, I would sell it. -- Faisal LaljeeFull Disclosure: I do not own CBST but my position can change anytime without notice.
More About: Doors

Google Marches On
2007-11-06 12:09:00
I have been a long standing bull on Google ever since I fell in love with their search engine, GMail and Google Toolbar. In fact, it was one of my first 5 picks on this blog. I had initally set a price target of $800 for GOOG to be reached by end of 2009. Looks like we will get there this year now. I think if the markets continue their bull run without a significant pull back, Google will hit $900 next year, but it really needs a healthy pause considering it hit $450 this summer.This company is the first one after Microsoft (MSFT) to have completely changed our lives and with the new mobile phone operating systems and partnerships, the company will surely close the market capitalization gap with Microsoft over the next couple of years.-- Faisal LaljeeFull Disclosure: I do not currently own GOOG but my position can change anytime without notice.
More About: Marches

Accenture's Cashflow and Buyback Should be Catalysts for the Stock
2007-11-05 11:26:00
Accenture, Ltd. (ACN) is a management consulting, technology services, and outsourcing company. An offspring of the company formerly known as Anderson Consulting, the company employs over 170,000 people across offices in 49 countries.In its most recently concluded quarter, Accenture clocked in record earnings and revenues. Revenues were up 29%, while earnings were up 24% for the year. The company even boosted its dividend by 20% and announced a $3 billion share buyback.Accenture generates about $2 billion a year in free cash flow, currently holds $3.3 billion in cash and has almost no short-term debt. This is what makes Accenture so unique. From a cashflow perspective, ACN is a juggernaut and while at 15 times next year's eanings, it is more expensive than Electronic Data Systems (EDS), it is definitely cheaper than outsourcing and consulting outfits like Cognizant (CTSH), Infosys (INFY) and WiPro (WIT).With a strong international exposure, the weak US dollar has not had a negative...
More About: Stock , Buyback , Accenture

Eastman Kodak Turns a Corner
2007-11-03 02:02:00
In July, I wrote that Eastman Kodak was well on its way to recovery. Their earnings yesterday, confirmed this trend. Sales of digital products increased 12% to $1.59 billion, making up almost 60% of Kodak's total revenues for the quarter. Additionall, revenues from their traditional film-based business fell 16%. Both these trends are great for their long-term success. Net income came in at $37 million compared with a year-earlier loss of $37 million, or 13 cents a share. Excluding restructuring charges (which were also lower than expected), profit came in at 45 cents a share, nearly double Wall Street's expectation of 23 cents, according to Reuters Estimates.With new products rolling out every quarter, technology improvements in their consumer products, enhancements to their commercial offerings, lower restructuring costs, and strong institutional ownership, and a good chart pattern that reflects the stock has bottomed.Since my recommendation, the stock has been dead money and bee...
More About: Corner

Crocs Could be the next Deckers
2007-11-02 14:03:00
The Croc s (CROX) quarter was definitely not worth writing home about. There were high expectations from the company, but investors were disappointed and the stock is down $35 in one day. Granted they did not crush expectations, but earnings were still good. Revenues of $256.3 million, vs. $111.3 million a year ago and earnings were 66 cents per share, vs. 27 cents a year ago. Demand in some markets were too high and Crocs could not make their product fast enough.While brand dilution is a possibility considering companies like Sketchers and Payless are selling knock offs, exclusive licensing deals from colleges and companies like Disney will keep them "unique". Moreover, new products will take some seasonality out of their earnings and overseas expansion continues to flourish.Crocs is like Deckers (DECK), another footwear manufacturer made popular by their Ugg brand shoes. That stock fell out of favor between Dec 2004 and Nov 2005, when it fell from $48 to $17 after a huge run from $...

Navteq's Purchase is Disappointing
2007-11-01 03:26:00
Garmin's (GRMN) delayed bid for Tele-Atlas confirms investor sentiment that perhaps Navteq (NVT) should have played a little hardball before agreeing to be purchased by Nokia (NOK). I am still disappointed that Navteq gave up so cheaply. They are worth more and I am still holding their shares in the hopes of a counter bid by someone like Google (GOOG). At the very minimum, shares are worth $78 so its not like one can lose money. Besides, holding it and getting Nokia for it down the road means I might be able to avoid paying taxes on my capital gains.-- Faisal LaljeeFull Disclosure: I am long NVT and NOK but my position can change anytime without notice.
More About: Purchase , Hase

Boeing's $7 billion Share Buyback Signals a Buy
2007-10-30 03:23:00
When a company announces a share buyback, it usually implies that the company's leadership believes the shares are undervalued relative to their future earnings. I won't deny, that it is also another way for insiders to inflate the earnings of the company, create a better equillibrium between supply and demand for the company's shares, and therefore, inflate the share price. Regardless of the motive, share buybacks are good for investors because the typical end result of that is that stocks move up.Boeing (BA), which has a history of buying back its own shares announced today, that it would buy back $7 billion, or roughly 9% of its current number of outstanding shares at the current price. Seasoned Boeing investors might recall that the company bought $8 billion of its own stock since 2004 and this new announcement, while having no timeline, indicates the confidence management has in the company's ability to deliver strong earnings and revenue growth over a prolonged period. Sin...
More About: Share , Buyback , Billion