Category: Stocks

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Stocks

IPO and secondary offering: I

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I have written an article talking about why Chinese companies come to list in NYSE or Nasdaq a while ago. This is a topic warrants more than one article, amid the VISA filing for IPO and recent controversy of Chinese companies (Ping’an and Pu Fa) tried to do secondary in Shanghai. So let me talk about the reasons why companies go to capital market for money.

I remember Ken Fisher talked about the use of debt or stock for companies in terms of raising money, in his book “Only 3 questions that count“. To sum it up, a company will always look for a better way to finance its operation/growth, if the debt (borrow from banks) is available and cheap, they will do it. On the other hand, they will go with issusing stocks. He further explains why maturing companies (with low PE) finds borrowing is cheaper, and growth companies finds issuing stocks is cheaper.

China Ping an insurance IPO pic
(Picture above: CEO of China Ping’an insurance at IPO media event)

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China Stocks

Economist also believe in technical analysis?

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By technical analysis (TA), I mean those candle charts, wave theory etc. Those are techniques day traders use frequently to make small profit out of price fluctuation. Nothing against it, but I feel those techniques are not useful for long term investors. Actually from I read, Buffett also learned all those stuff before, but obviously he did not make his fortune from TA.

The interesting point is, Ba Shu Song (巴曙松), the rising Chinese economist, seems also believed in this. From his blog post 投資港股有用網站連結, he listed some TA web sites in the end.

股票教學
咩野係股票 http://hkisc.hkstock.com.hk/hkstock/investment/ch1.htm
期權教學 http://fuweb.polaris.com.hk/home/qiquan/option28/typeoneoff.htm
技術分析教學
– http://td.hkii.org/investu/c_investuindex.php
– http://www.angelibrary.com/economic/gsjs/
– http://www.metaquotes.net/
– http://www.dick.cpcs.net/stock_game/tutorial2.php#
– http://www.pcn.com.hk/education_ma.html
– http://www.moneydj.com/z/analyst/analyst1.htm

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Stocks

Two strikes on CROX

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Last two quarter earning report has dragged Crocs stock from $75 to around $25. Many analysts, bloggers, pundits, pretty-much-everybody-wears-shoes (and consequently knows the shoe business) think the stock price is reasonable now.

That is, assume Crocs can unload its massive $250 million inventory successfully. By success I mean they did not give it away to charity, or dump it to PayLessShoes.

Let’s forget the financial analysis, technical analysis for a minute, just think a shoe company attributes its very success to sophiscated supply chain management, got an F grade on it. A lot progress has made in global supply chain management in last 10 years: many great companies have cut inventory level down (think DELL?). Some Japanese car maker (Toyota) even tried Just-In-Time manufacturing (zero inventory). Oh well, one can argue they are mostly manufacturers not retailers. But Crocs has been mostly a manufacturer too.

The bottom line is Crocs got two strikes in a row, one more strike they are out.

(update Feb 25) I read this article about CROX from theStockMasters. Very funny article, but I don’t think CROX is a stock worthy of our long term portfolio.

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Stocks

Crazy market and GSIT

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Another crazy day, the market traded mostly lower today, until 3:30 PM EST, CNBC reported Ambac will announce it raised capital earlier next week. It seems everyone just can not get enough stocks since then, all the US indices reversed the downward trend and closed higher.

For me, the feeling is like “hew”, my little portfolio turned from down more than $300 to positve! Amazing. I think this (bear) market is tough for the newbies. Honestly, I have been in market for almost 5 years, and I have learned the most in last 6 months.

GSI Technology logo

GSIT: no liquidity premium
GSIT, GSI Techonolgy is a small Very Fast SRAM maker. I have held a few hundreds shares since its IPO. The stock traded heavily today. I don’t know the exact reason. It could be some insiders are selling. Or maybe some institutions are buying. GSIT is one of my disappointment last year. Initially I hope to make some quick money on its IPO. But I was too greedy and end up owning it for almost a year. The company reported two bad quarters until most recent quarter, in which it beats expectation, and issued better outlook.

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Stocks

RIM, Mindray

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Crocs broke my heart; RIM made my day.

While CROX continued his downward spiral, today Research in Motion (RIM, Nasdaq: RIMM) is up 8% on the news it will beat its forecasted subscriber growth. Now I regret I did the swing last week, in which I cashed in some gain, and reduced the number of shares (RIMM) I hold. I only have a small position of RIMM, and I did not go ahead and chase it today. Thought its exposure to US market and the slowdown of US economy is still a concern. I understand the company is diversify both geographically and productwise (from business to consumer, the Blackberry Pearl).

I decided to get some Mindray instead. As the unoffical rule says: the stock goes down after Major bought it. Yes, it did: I bought at $34.87, and it’s about 34.20 now.

Mindray will report Q4 2007 earning on 8PM EST March 5. (source)

Mindray product pic

Dial-in details for the earnings conference call are as follows:

Hong Kong: +852-3002-1672
US Toll Free: +1-800-299-9086
International: +1-617-786-2903
Passcode for all regions: Mindray

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Stocks

CROX: bull case, bear case

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I decided to take some CROX off the table. Too much controversials on the stock after yesterday’s earning report. Here are some of the bull case and bear case.

Bull case
Management is optimistic on the international expansion, and new products (jibbitz, Bite, OceanMind etc.), but which company’s management is not bullish on their company’s growth prospect?

Analysts fell the valuation is more attractive now, mostly from PE, 2008/9 growth rate point of the view.

Bear case
Revenue sequentially decline: Q4 2007 vs. Q3 2007 ($224 m vs. $256 m), this is reverse of trend compared to 06. Crocs out of fashion in the US?

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Stocks

Reading Barrons Feb 16 2008

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Starting this year I got the Barrons’ subscription from my frequent flier miles (Northwest).

Barrons cover page
(picture from charleslockwood.com)

1) Joe Rosenberg is an investment guru, and he shared his insights on various stocks from MSFT, YHOO to PFE. He likes MSFT the stock, but he does not like the decision of buying YHOO, and he thinks Baller’s decision does not make sense financially. (P. 34)

He does not like PFE at this moment. Same as yours truely 🙂

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Stocks

Tweaks for Dow Industrials

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Dow Jones Industrials Average (DJIA, Wikipedia), commonly referred as Dow Industrial Index, is widely perceived as the benchmark of the US stock market. This perception is not necessary a reflection of reality, as I said in my earlier post.

Today Dow underwent another tweak: from Feb 19 it will remove Altria (MO, today’s closing price $72.42) and Honeywell (HON, $57.64), at the same time it will add Bank of America (BAC, $42.14) and Chevron (CVX, $80.42). Since Dow is a purely price weighted, so the relative strength of Oil company as of late should help it, while the weakness of financials (BoA) will do the opposite.

Interestingly, if we add the closing price of two outgoing stocks ($120.06), vs. the new comers ($122.56), they are very close. An co-incident, or another factor considered by the creator of Dow 🙂

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Stocks

Flip flopper

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It appears Politicians are not the only flip floppers. The reason we should not follow analyst blindly.

Citigroup Global Markets analyst Jim Suva, talked about RIMM on early Feb (source: seekingalpha):

“Overall, we believe the points brought up during today’s call are highly supportive of our bull case on RIM. Concerns regarding financial services exposure have been largely debunked, in our view, and we think investors should be encouraged by what seems to be a very low replacement rate at Citi, and financial services in general…”

Mr. Suva reiterates his “buy” rating on RIM, and maintains a $140 price target.

Today, according to Barron’s, CitiGroup analyst thinks RIMM will go down significantly. Let me quote:

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Stocks

Are financial journalists real experts?

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Obviously most of them don’t know what they are talking about, accoring to Free Money Finance.

This is actually confirmed by Karen Blumenthal, the author of Grande Expectation: a year in the life of Starbucks stock. She said (before wrote the book), she has been financial journalist for more than 20 years, but she did not know what is stock split, what is earning, what is shareholder meeting etc.

Grande Expectation book cover

I read half of the book, and I’ve learned quite a bit from Karen’s learning experience 🙂