THE B*A*R*R*O*N*S GAME- Pancake Edition

Discussion in 'Stocks' started by stonedinvestor, Mar 11, 2007.

  1. I am clear of mind this morning having come off a real bad two weeks of trading. This issue of Barrons has 3 or 4 ideas worthy in it:

    >Alan Abelson put his writing hat back on and came up with one of his witty columns. The only comment that leapt from the pages is Alan's assertion that Treasury Secretary Paulson said " this is the strongest economy within his memory!" This makes one wonder about Mr Paulson's memory as well as, perhaps, his drinking.

    > In streetwise column there is one good point and it is a point I have been making to people more qualified than myself... Lots of technically orientated analysts are invoking the usual pattern of " retest " of the former lows after this kind of bounce, which raises the pretzel-logic question of whether this is too widely expected to actually happen. Ok is this guy reading Elite Trader or what! Exactamondo buddy!

    > In this weeks calendar we learn a few things. Three stocks split 2 for 1> Guess which has been on a tear and is probably ready to be shorted just after it's split and Jacobs Engineering & Cooper Industries.
    Goldman and the rest of the brokerages report this week and a new rule goes into effect allowing retailers to process checks electronically as soon as they are received. That makes me think about who is making the machine that clears those checks, it's going to be one of the three or four terminal point of sale plays I'm going to call Chase business Services monday and pretend I need one for my store and see who makes it.

    > Now let's get serious there is a puff piece on one of my favorite investing personalities Sam Zell. In the article it mentions some of the new areas he is investing it. His private-equity fund has put $1 billion into South America and one of the stocks he likes...
    Homebuilder Gafisa in Brazil. Wait a minute, think back to the roundtable this was a big pick there.
    Now available on the pink sheets with a NYSE listing soon to come! GFSAY.PK. Stoney says Yea!

    > There is an interesting aside comparing CAT's stock price to DEER and noting the obvious: DEER has gone up 22% and CAT has gone down by about the same... hummm paired trade? Long CAT short DE anyone?

    >Alright here it comes folks. In 13D filings a company I already have on my radar is in there AGAIN. TWW. Terremark Worldwide. Talpa Beheer has been a persistent buyer in this stock and the stake is now 6.25 MILLION shares. another offshore fund is buying it up too. The buys took place Feb 21 to March 5th at prices ranging from
    $7.44 to $9.00.. Here is a give n' take I had with someone much smarter than me the last time I spotted Beheer in there accumulating TWW stock:
    Stonedinvestor said...
    Hi Doc. Sorry about the grammar of my last post It appears to be red wine induced. Now that I bought the boring tractor trailer play... I have been thinking more and more about TWW. I do think it is a LONG here. My reasons are EBIDA based more than real earnings for they are moving to a new facility and it's going to look bad for a while with a $20 M loan from Credit Suiss they have to account for on the books. 07' looks like EBIDA of $18 to $19 million and 08' $35 to $40 that's good growth even if they can't turn a profit. They are participating (co sponsoring actually) a trade show in Miami Switch Interoperability 07' this will have all the heavy hitters present- perhaps could drive sales or knowledge of the company. Barrons today on p 39 Tech Week shows buying by Talpa Beheer BV at $5.83 I cannot verify this but I do see Cyrte buying at $8.50-- they may be BVI as well-- I think I may rotate into TWW later this week...
    February 24, 2007 9:05 AM
    Dr. Michael Roberts said...
    Your logic is not flawed. Its just that the chart makes me a little nervous. The price is up at a point where it has bounced off before to make an amazing landing. Last year, investors were probably bullish as well at this level.
    Here is how I would play it if I were to go long this stock. Buy in as close to the 10 day moving average of 8.72 as possible. Set your stop for the 40 day moving average at 7.65. If it goes below that 40 day, then the trend has most likely reversed.
    Sell half at 10.25. Buy into the position again if it moves over 11. It will most likely break to the upside from there.
    Move up your stops each day set exactly at the 40 day moving average. If at anytime the stock violates that point then its time to liquidate entire position.
    My logic is this...your reasoning is not flawed, but we are meeting certain resistance points in regards to this stock. I say to buy and sell according to these resistance points. That may not be the most profitable perspective, but it is a safe one at that.

    >> Now we have a second round of buying at prices significantly higher than the first. The stock closed Friday @ $7.43. Just below the Doc's stop-- but we have that new round of buying to consider (and up to $9!) ....

    >> Lastly there is a full page story on Synopsys which has always been good company that I have traded before. Now I have no time to read the piece because.... PANCAKES ARE READY!!!

  2. Why long CAT? I think you know the difference b/w CAT and DE. CAT is tricky play.
  3. blast19


  4. The TRB mention in the Zell article stood out. For a company that no one wants, alot of people with deep pockets seem to be interested. 35-38 target.
  5. topdown


    A late Saturday night, lost an hours sleep due to time change, my basketball and hockey teams lost today. I am just not up to putting forth much effort into this weeks issue. (And at first glance there doesn't seem to be much there anyway).

    I'm gonna phone it in and go with OPWV from Mark Veverka's "Plugged In" column. It was also mentioned in the perjured's roundup column, so I hope to see a bounce from the positive press.
  6. CAT missed third qtr numbers slightly.
    Executives have talked down the future 07 numbers.
    CAT offers financing & insurance for it's sales.
    CAT makes truck parts and engines.
    CAT is exposed to housing market.

    ~ which of these sins has taken the stock down the most? Well as a company they seldom if ever miss earnings so mutual fund managers aren't apt to dump for that reason. The housing exposure as it relates to DE's exposure must be the reason... but wait overall exposure to housing for CAT is around 10% of sales & 50% of those sales take place OUTSIDE the US. Many of those sales are in hot economies like China and India. Last year CAT sold $800 million of it's goods to China. China will account for 10% of CAT's sales by 2010 thats's about $6 BILLION dollars. Using a blend PE and plugging in $8 to $10 in earnings yields a price for CAT of around $100.

    ~ why is DE doing so much better? Better control of debt makes DE less cyclical than CAT, a little less housing dependence. When two similar stocks diverge in such a significant way the odds are quite good you will come out on top if you place your bet with the horse currently behind.