Watching Lexmark International Inc.

Shares of LXK, Lexmark International Inc. have dropped over disappointing 3rd quarter results and a bleak outlook for the company’s near term revenue. Lexmark has failed to meet analyst estimates 3 quarters in a row. Shares of LXK are being held up by talks of a possible LBO, Leveraged Buy Out. LXK presents an interesting short opportunity with a follow up reversal play. Shares of LXK dropped almost a third, in the beginning of October, after the company lowered its 3rd quarter outlook in half. LXK is trading close to a 5 year low and about half of its one year high. If rumors of an LBO don’t pan out, I expect to see further drops in the stock price to around low $30′s or high $20′s.

Good morning, lets get started

This week I expect to see shares of TSM, Taiwan Semiconductor Manufacturing Co. Ltd. and UMC, United Microelectronics Corp. jump up. I am bullish on both semiconductors and Taiwan. The economy in Taiwan should grow at a rapid pace in 2006. 70% of the Taiwan stock exchange is made up of technology stocks. I see a broader recovery in technology stocks with semiconductor shares leading the way.

I am also watching MBAY, MediaBay Inc. and waiting for the company to release some positive PR. If the company fails to release any news in the next 2 weeks it will have a difficult time capitalizing on December’s anticipated rally. Oil is up as I had expected. If oil continues to rise, I may take the opportunity to short shares of the Airline stocks on my watchlist by mid week. I expect to see BIDU, Baidu.com Inc., and GOOG, Google Inc. rally this week. ICAD, iCAD Inc., is down this morning. I may purchase shares of the stock if it trades under $1.20.

RawGreed poll

When the poll hits 200 votes, I’ll change the poll question. If you haven’t voted please do so. So far “sometimes” is the leading answer by 39%, when asked “Do you think Jim Cramer’s Mad Money picks are useful?” After the results are out for the current poll, I’lll change the next question to “Which Brokerage do you use?” I’ll use Ameritrade/TD, Scottrade, Charles Schwab, E-Trade, and other as the choices.

RawGreed, considering additional speculative trades

This weekend I am considering several volatile stocks to trade. I have recently purchased shares of MBAY, MediaBay Inc. I believe shares will jump up once the company announces the traffic increase for www.soundsgood.com and a new partnership with MSN. I have posted my previous thoughts on MBAY with targets and my stop price. I have two other companies I am looking at that I would invest in as speculative plays. If you have been following along with my portfolio value, seen on the far right on the blog, I have enjoyed a good run up this year. Historically December has been a good month for stock gains. I am planning on using December to invest in a few high risk, high reward stocks. If the investments work out, I will enjoy great returns this year and next, if not they will help to offset my capital gains income in either 2005 or 2006.

I am currently watching BCON, Beacon Power Corporation as a reversal play and analyzing what I consider a good entry point. Beacon Power Corporation, a development stage company, engages in the design, development, configuration, and sale of products and services to support electricity grid operation. The company develops alternative sustainable energy storage and power conversion solutions that provide electric power for the renewable energy, telecommunications, distributed generation, and uninterrupted power supply markets in the United States. Shares have traded between high $1′s-low $2′s in the last 60 days. Shares of BCON have surged from .43 to $5.35 in August of this year. BCON presents a highly volatile investment opportunity. I am expecting that shares of BCON will gain along with the market if we see a rally in December. I expect to see energy prices rise in the month of December. If I purchase shares of the company I will post my entry, exit and stop prices.

I am also watching ICAD, iCAD, Inc. iCAD, Inc. The company engages in the development, engineering, manufacture, and marketing of computer aided detection (CAD) products for the early detection of breast cancer and other health-care related applications. I believe iCAD is a far more stable company than MBAY or BCON. iCAD’s primary risk comes from declining U.S. sales of film based early detection of breast cancer technology. Doctor’s prefer digital systems that provide greater imaging detail and depth. iCAD has found a strong avenue for sales of it’s film based systems. iCAD has recently announced sales for its SecondLook film-based CAD systems to The Chinese Anti-Cancer Association. Under the terms of the agreement, iCAD will provide a minimum of one hundred SecondLook film-based CAD systems over five years to the Association. The aggregate value of the order is at minimum, $2,130,000. If iCAD can capitalize on interest from China and its partnership with The Chinese Anti-Cancer Association, the company will be among the few that can ideally use the hype over China to their advantage. iCAD is solving a basic health need of the Chinese population. China represents a good opportunity for film based technology since the country has been slow to adopt the newest digital technology over high costs. The combination of iCAD and China may unearth an undervalued gem in a declining U.S. market for film based CAD early detection of breast cancer solutions. I like ICAD at under $1.30. If I purchase shares of the company I will post my entry, exit and stop prices.

I expect MBAY and BCON to be short term, 1-3 month, investment opportunities. I expect iCAD to be a short term, 6 month-1 year, investment opportunity. All three investments would be primarily based on speculation and my own due diligence. I would not advise risk adverse investors to purchase shares of any of the companies above.

Watching DLTR, Dollar Tree Stores, Inc. and DG, Dollar General Corporation

I’ve added DLTR, Dollar Tree Stores, Inc. and DG, Dollar General Corporation to my watchlist. Both companies operate discount variety stores around the country. DLTR operates approximately 2856 stores. DG operates approximately 7821 stores. I expect retail sales to be strong during the 2005 holiday season. DLTR and DG should experience some rollover as shoppers pick up small knick knacks, like wrapping paper, bows and gifts for casual friends. I like DLTR at under $22. I like DG at under $18. I would purchase shares in either as a short term investment. If I purchase shares of either company I will post a detailed analysis.

Good Morning, lets get started

This morning we opened slightly lower. I expect to see the market reverse and close up today. AAPL, Apple Computer Inc. just touched above $72. On September 23rd, 2005, when AAPL was trading at $53, I predicted that AAPL would reach $70 by the end of the year. I predicted that all time high for AAPL would be $80. I am considering shorting shares of the company if the stock reaches high $70′s-low$80′s by the end of the year. Purchasers of APPL are betting on the company’s non stop growth. I believe sales of the Nano and new video enabled iPod’s will be strong this holiday, but unsustainable in the long run. Any consumer electronics device goes through rapidly changing trends and diminishing margins. I see that manufacturers are releasing solid state and disk based mp3 players with lower prices and betting on volume sales. The iPod is equally a fashionable and functional device. When the Nano and video enabled iPod drop out of being seen as a fashionable device, APPL will likely have to drop prices in order to maintain sales levels. Investors clearly have forgotten than AAPL was trading at mid $9′s just two years ago in December of 2003. In the history of consumer electronics devices no one device category or company has been able to consistently retain margins and sales levels. Historically look at what happened to powerhouse companies like AIWA and SONY during the portable cassette and CD player days. Sony even failed to capitalize on the Walkman brand name for digital audio players. Consumer electronics change at a heartbreaking pace and Investors would do well to monitor sales trends and emerging technology. The share price of APPL could also change at a similar heartbreaking pace. I wrote an article on September 27th, 2005, covering many of my long term predictions for AAPL.

CAL, Continental Airlines Inc., AMR, AMR Corporation, LUV, Southwest Airlines Co. and JBLU, JetBlue Airways Corporation are all part of my watchlist for Airlines. Airlines have risen aggressively over the lower cost of oil. Depending how I see oil moving, I may short shares of the airlines on my watchlist.

RawGreed evening market update

Today the market closed up and I have recovered all of my losses from the beginning of the week. The market hasn’t experienced the reversal I spoke of earlier. Unless the market drops aggressively tomorrow, I am expecting that we will have a strong rally this December. Historically, December has been a strong month for stock gains.

MBAY, MediaBay Inc., volume has failed to jump up. I believe that MBAY will release news of the traffic jump for www.soundsgood.com and the partnerships the company has in place very shortly. I am guessing the company is waiting to see if traffic levels remain steady for soundsgood.com. TSM, Taiwan Semiconductor Manufacturing Co. Ltd. and UMC, United Microelectronics Corp. jumped up today. UMC is trading from far behind its one year high. If the market continues to rally, we should see UMC reach $3.25, BIDU reaching low $80′s and GOOG passing $420 tomorrow. I will short 200 shares of BIDU if the stock reaches $84 tomorrow.

DWA, DreamWorks Animation SKG Inc.

DWA, DreamWorks Animation SKG Inc., has seen it’s share price steadily fall since the company’s IPO in November of 2004. I have been watching DWA drop over poor DVD sales performance and gross box office revenue for its recent computer animated film, Wallace & Gromit: The Curse Of The Were-Rabbit. DWA is the company behind the mega hit Shrek. I like DWA at $22-$23. I expect that DWA will drop further from poor current quarter earnings. The company’s next computer animated film is Over the Hedge, slated for release in the summer of 2006. Over the Hedge shares the same use of cute computer animated animals found in Shrek and Madagascar. The computer animated quality of Madagascar was questionable. Madagascar appeared have a lack of fine details, lots of solid edges on polygons and overblown bright colors. Over the Hedge appears to use the same soft color palette and animation quality of Shrek. The consistent use of animals by DWA is a great draw for young children. I see DWA at $30 by mid 2006.

Watching Symantec Corp.

SYMC, Symantec Corp., maker of the popular Norton Antivirus, Norton Internet Security, and Norton SystemWorks is trading under $18 at the moment. Short term, I see a possible recovery to $21 by the end of the year. Long term SYMC’s prospects are questionable. I believe many of Symantec’s customers are waiting for the next desktop and corporate release of Windows, dubbed Vista by Microsoft, before upgrading to newer versions of Symantec products. Microsoft is planning to release Vista in 2006. Due to the stringent hardware requirements of Vista, end users will have to upgrade to enjoy the benefits of the new OS. Each new release of Windows has brought a surge in computer hardware sales. Vista’s release will open new OEM opportunities for utilities software makers such as SYMC. A few companies with unspent year end IT budgets may upgrade in the interim since Vista will likely go through a few service releases before being adopted into corporate use. I see one potential downside risk for companies like SYMC. Microsoft is releasing a subscription based service called OneCare Live that will incorporate antivirus, antispyware, and firewall software. You can read about the service from this NewsFactor article on Yahoo. If Microsoft were to decide to incorporate the service into Vista as a core component with no cost I would see that as a major threat to SYMC. Microsoft would do to SYMC, MFE, McAfee, Inc., and similar companies, what it did to Netscape during the browser war or Eudora during the e-mail war. I would pay close attention to Microsoft integrating OneCare Live as a free service into windows. There is no indication yet, but it is a distinct possibility. If that happens I would short shares of both SYMC and MFE. I believe both would drop on speculation that users would rather adopt a free Microsoft solution than a paid one from a third party software company.

Good Morning, lets get started

I’m waiting to see if volume will pop for MBAY, MediaBay Inc. If traffic for www.soundsgood.com proves to be unsustainable I believe there is a chance for MBAY to drop. If day traders don’t take notice of MBAY, it will be hard to capitalize on the positive PR from the increase in traffic for www.soundsgood.com. MBAY has also announced a few partnerships that should boost the company’s visibility. As one reader noted in a comment, ADBL, Audible Inc., like MediaBay, is not yet profitable. ADBL and MBAY are both trading on the future potential of the estimated $4 billion dollar audio book market. Again, I would like to let readers know that I purchased MBAY on speculation. I would not advise risk adverse investors to jump in on MBAY. The market opened strong today with my portfolio higher. I expect to see TSM, Taiwan Semiconductor Manufacturing Co. Ltd. cross $9.75 today and $10 by the end of December. TSM may settle back a bit after the morning’s action.

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