***Official*** 2012 Stock Market Thread

[IHateMyJob2004]

RIMM earnings to come out this Thursday. Dropped 7% today... Interdasting.

Rumor of a break up of the comapny. Rumor is that they are selling the hardware piece off. Which makes no sense since they are months away from the BB10

 

[SuperTomcius]

Anybody know why Qualcomm isn't doing well? It seems that they're growing EPS and sales quite well...

i would go for QUALCOMM and NVIDIA till late autumn. And short term prediction that nvidia will fall today.

 

[FelixDeCat]

Build a bear generates cash (look at free cash flow, not earnings). The problem is that only 2-5% of revenues turns into FCF.

That 2-5% of revs turning into cash is what scares me. Too easy for it to go negative.

Exactly. Free cash flow is only one measure, but the bottom line is margin and profitability and whether they are on the incline or decline.

BBW is just a momentum stock right now. Once the bubble gets popped (and it will), this will be an easy short.

The volume is so thin, someone could put a bid /ask in for 20,000 shares and move the market easy. Back in the day, I could do that.

Ironically I was in the mall the other day and I saw some BBW items in the display window of an empty store front.

Weird.

 

[Arachnotronic]

Half in, half out. Bought INTC today. At a P/E of less than 11, not even accounting for their net cash position, this is a steal.

 

[Imp]

Easing back into SU. Stabilized around $27.50 CAD. Maybe a sign of a breakout back above $30, or a huge dump to $24... Got my money on the former.

 

[mshan]

Interesting article on how oil and gasoline is supplied to various parts of the U. S. (some relevance to Canadian oil sands):

"With so much supply landlocked, Canadian oil prices are taking a serious hit. The benchmark price for Canadian heavy oil is Western Canada Select (WCS), which is currently trading at just US$59.33 per barrel. By contrast, WTI is priced at US$82.70, which means the differential is a whopping US$23.37 per barrel, or 28% higher.

Even Canadian synthetic – a partially upgraded bitumen product that has historically carried a premium to WTI – is trading at a discount to its American peer: Canadian synthetic is at US$79.13 per barrel.

It's a double-whammy differential: Canadian oil is heavy, which discounts its price; and the system to move it to suitable refineries is clogged up, creating another discount. Neither of those situations is going to change any time soon, and that means oil-sands projects may soon be on the chopping block.

The oil sands is one of the costliest oil regions in the world to develop; and with WCS prices so low, the economics behind many new oil-sands projects have become pretty weak. New oil-sands mines require a price of around US$80 per barrel to break even. If an upgrader is part of the plans, that break-even price rises to almost US$100. In-situ projects, which use wells and underground steam injection to extract oil from the sands in place, usually carry a break-even price near US$60 per barrel."

http://www.zerohedge.com/news/guest-post-oil-price-differentials-caught-between-sands-and-pipelines

One of my mutual funds* owns a large position in Chesapeake Energy and previously saw this article on fracking for gas (price of natural gas really needs to go up for the industry):

"Even if the model is off a bit, it shows that the industry has been fracking at a steep loss for years. But due to the way gas drillers account for their wells by front-loading profits, the pain has mostly shown up in their ballooning debt and their current negative operating cash flows. Hence, Chesapeake's dire situation. Drillers have shifted whenever possible from drilling for natural gas to drilling for oil, which is still highly profitable. And so, the rig count for gas wells has been heading south, from over 900 last fall to 600 last week (Baker Hughes).

Turns out, the shale gas revolution is an uneconomic activity even at much higher prices and is sustainable only for a limited time and only by blowing through loads of borrowed money. Now debt has piled up, cash flow is negative, and solvency risks are gathering on the horizon.

With money running out to drill new wells, the steep production declines inherent in all shale gas wells are oozing into P&L statements, and suddenly, all that debt that made so much sense a year or two ago is unmanageable. Assets have to be sold off in a hurry, drilling diminishes further, and a vicious cycle overtakes the false promises of yore. And production, which lags behind rig count movements, will drop, and drop steeply.

Meanwhile, the low price of gas has bent the demand curve: utilities are shifting massively from coal to gas for power generation. Their demand is eating through the record amount in storage and will clash later this year with diminishing production. It’s a classic example of how a price that is too low will spike, but only after a monumental massacre in the industry."

http://www.testosteronepit.com/home/2012/5/23/the-natural-gas-massacre-gets-bloodier.html

* Their arguments in favor of Chesapeake Energy long-term from earlier this year can be found here: http://www.longleafpartners.com/commentary_news/audio

And video clip on RIMM (one analyst's comments on sum of the parts is worth as low as $8 - $9 or $5 - $6): http://video.cnbc.com/gallery/?video=3000098797&play=1
Morningstar's analysis of RIMM says fair value is $14 (consistent with what IHMJ2004 said further up the thread), but that estimate was from 3/5/12, so don't know if Morningstar feels things have deteriorated materially from that point to now.

 

[Imp]

Yep, people now more concerned about oil sands development and its huge costs plus subsequent plowing of profits back into developments.

But... the developed world just has this insatiable thirst for oil and petroleum products. And any time there is a problem in the Middle East, oil sands stocks skyrocket. Canadian government is also pro-sands neo-con and raping/pillaging environmental regulations to expedite development right now.

 

[mshan]

Sounds like same conundrum as natural gas drillers like Chesapeake, but not so dire.

In need of greater global growth and higher oil and gas prices to thrive. But have to survive current low prices without having to fire sale everything of real value to survive long enough to get to that point later down the road.

Can't find online link to the article, but the July 2012 edition of Money Magazine has an interterview of Jeremy Grantham, who seems to agree with your thesis that natural resources will come under serious strain in future with population growth:

Q: "Are Commodities the next bubble?

A: "We live in a world where the price of resources came down steadily, and now the world has changed. You have a great mismatch between finite resources and exponential population growth. China uses 46% of all the world's coal, for heaven's sake! The global population has surged from 6 billion to 7 billion in 12 years, and is now on it's way to 9 billion. You'd better expect prices to rise.


Q: So how would you advise investing in commodities?

A: "I wouldn't touch futures, it's complicated and too unprofitable. Buy the guys who own stuff in the ground. Metal, oil, even natural gas, which is cheap now but will pick up.

Our biggest problem as a planet will be our inability to feed more than 9 billion people in 30 years' time. We have to address this. It's much more important than any stock market problems. When it comes to portfolios, my personal advice is for anyone who can, put money into forestry or farmland. Long term, you would probably never come near their returns in the stock market. In the world that I see, land is golden."


Here is a presentation of his at Morningstar conference (haven't watch it yet, so can't comment on if he rehashes same stuff as article I read):
http://www.morningstar.com/cover/videoCenter.aspx?lineup=PREMIUMVIDEO&id=557925&referid=a3470/

I guess argument against would be same as peak oil theory not coming to fruition (yet) (?)

 

[Imp]

Meh, company I've invested/speculated in has been around since the 70s. They have global operations in conventional fuels, and some longer term bitumen sites with lower costs associated with them.

They managed to get through the 2008 $30-$40/barrel "crisis", so meh. Worst case, the guberment of Canada bails them out or a Chinese firm buys them out.

 

[richardycc]

ARNA halted!

 

[rcpratt]

Arena approved. Thank god. Halted. Let's see where it ends up.

 

[rcpratt]

1:45 for ARNA.

 

[Arachnotronic]

All right, time to play hardball.

Threw another 20% of my capital at INTC today @ $25.77.

Looking for $26.5 - $27 ahead of earnings, which should do much better than what the "analysts" predict. Then expecting a run to $30+ by year's end.

 

[Imp]

Back all in. Hope it doesn't take a dump next week, or even tomorrow. Seems like most of today's losses were recovered (TSX at least) near closing.

 

[Connoisseur]

Ouch at RIMM. Down 15% after hours...

 

[IHateMyJob2004]

Ouch at RIMM. Down 15% after hours...

Down to the low $7s, mad that I didn't have a limit order in and mad that I was not home when it got that low. Tomorrow though, those jan 35s out to 2014 could be under 10 cents.

 

[Hugo Drax]

Down to the low $7s, mad that I didn't have a limit order in and mad that I was not home when it got that low. Tomorrow though, those jan 35s out to 2014 could be under 10 cents.

Be patient. You can get in at the 6's soon.Why pay more when you can buy cheaper.

 

[Arachnotronic]

Out of INTC @ $26.38. 2.2% gain on 40% of my capital in 2 days.

 

[KB]

Ouch at RIMM. Down 15% after hours...

Poor RIMM. Their new OS is already too late and delaying it further is just bad news. Despite having loads of customers still, they are shunned by the market. It will take tremendous news to get them unshunned.

http://www.psychologytoday.com/blog...102/how-cut-your-losses-when-it-s-not-working



Ford is one of the few stocks down today. We knew there would be weakness in the european markets, but North America is still doing well. Its starting to look like a good deal again. If I can find something to sell I may buy in shortly. If Ford hits $9 I will definately buy back in.

 

[Imp]

Sweet. Finished putting in all my money yesterday to absorb a 3.5% rise today. Hopefully we get a longer rally.

Oh ya, and FYI, RIM is down 19.5%, closer to 20% last I checked a few minutes ago. Remember that RIMM is a function of the Canadian priced/traded RIM, and the Canadian dollar went up over a cent today.

 

[IHateMyJob2004]

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[IHateMyJob2004]

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[Hugo Drax]

Fixed ..... people tend to apply a US issue to the world market. That's why I see opportunity in RIMM.

Not every country in the world is shunning RIMM.

Are you buying more shares today?

Curious how many shares of Rimm do you own avg price?

 

[Arachnotronic]

LOVING the action on my two riskier plays, AMD and OCZ!

 

[Imp]

Up 4.5% on average.. boo ya!