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Showing posts from February, 2011

Tech Ticker Interview Slams Sears CEO Hire

Tech Ticker's interview with Jeff Matthews completely slams the new CEO Lou D'ambrosio hired by Eddie Lampert at Sears Holdings (SHLD). The problem is that the whole interview focuses solely on SHLD as a store based retailer. That isn't the goal of this company and it completely highlights the misunderstanding of the goal by most of Wall Street.

Eddie has longed seen this company has having valuable assets including real estate and brands. The value in the retail concept is to spin off cash. In fact see the article that we just wrote last week for Seeking Alpha: Is Sears Holdings Becoming a Tech Stock of Just a Future LBO?

Maybe Mr. Matthews is correct that they need to focus on the retail store concept, but he seems delusional that spending up to $30B on the concept would the best way to go. Seriously? The company would be broke at that point. The goal is to increase shareholder value. It's not to make SHLD a top retailer that can compete with Wal-Martt.

He does make …

Covestor Webinar

Covestor.com availed me the opportunity to present my models to their audience on the 16th. Below you can view that webinar.

Would like to thank them for the opportunity. If you have any questions about their service please contact them directly. For information on investing directly via Stone Fox Capital please email me at stonefox27@ymail.com (ok, I'll get a more professional email within the next few weeks).



Opportunity is Knocking: Mark Holder from Covestor on Vimeo.

NII Holdings Delivers Strong Customer Growth

NII Holdings (NIHD) is a leading provider of mobile communications for business customers in Latin America with main operations in Brazil and Mexico. Its the operations in these two countries plus the plans to deploy 3G services in the near term in these countries that derive the main investing theme.

The stock is up some 7% today on strong results and news that subscribers have passed 9M and expect to approach 11M by the end of 2011. While the numbers were good and guidance for 2011 solid, NIHD remains a emerging market investment and hence the stock performance will largely be derived from how the sector performs and whether Latin America remains a high growth area with soaring inflation.

As far as Q4 results, NIHD seems to right inline with expectations when stripping out a $17M charge relating to prepaid Value Added Taxes. Need to listen to the conference call to see if something was said to warrant the 7% jump. All in all, the company trades at a low valuation with expected reven…

Buy This Once Hot China IPO After Selloff

ChinaCache International Holdings (CCIH) was one of the top IPOs of 2010. The company priced above the initial range at $13.9 and eventually ended up over 90% on the opening day closing at $27.15 and hitting as high as $30.70. The stock eventually peaked out at $35 over a month later on Nov 12th. So what makes the stock so appealing now?

Well, after that massive IPO jump and follow through, the stock has plunged roughly 50%. Investors are fleeing this once high flyer just 3 months after its peak. The combination of a weak China equities market in January and the resignation of the COO on February 10th has been too much for investors to risk. Ironically though the Shanghai Index has had a good February and shows good technical signs this week. Seems like the better question is why have investors fled CCIH with it now trading at its 52 week lows other then the COO resignation crash lows and below to the IPO open price?......


See the full article at Seeking Alpha.


Disclosure: Long CCIH. P…

The Journal Record Interview

Nice to get some exposure. Finally! Unfortunately you have to subscribe to read the article at this point.

TULSA – A Broken Arrow investor intends to use his successful Covestor model portfolio as a platform for starting an independent investment adviser company. Mark Holder achieved 75-percent growth in the first year of his “Opportunistic Arbitrage Model” (M:HOAB) portfolio at Covestor.com, its aggressive strategy out-earning the Standard and Poor’s 500 Index by more than three ...




http://journalrecord.com/2011/02/21/broken-arrow-investor-seeks-to-start-investment-adviser-company-finance/





Lihua Provides Strong Preliminary Numbers

Lihua International (LIWA) provided preliminary unaudited numbers yesterday that exceeded previous 2010 guidance. They also introduced 2011 guidance that basically met analyst estimates and provided for 30-35% earnings growth. Strip out cash and the stock trades for roughly 4x 2011 estimates.

LIWA is leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire.

Basically LIWA is in the sweet spot of the Chinese copper demand machine. Unfortunately though the market just doesn't respect the numbers they report. A few short sellers have done a good job in trying to scare the market though they don't appear credible.

The stock remains a attractive pick of the Opportunistic models.

2010 Preliminary results


Company expects revenue of $370.5 million, representing growth of 129% over $161.5 million in 2009.Full-year gross profit is expected to be approximately $62.1 …

Dennis Gartman on the Brent-WTI Spread

As most people have noticed or heard, there is an extreme difference between the West Texas Intermediate (WTI) crude price and Brent crude. One of the main reasons for the difference is the congestion at the WTI pricing hub in Cushing, OK. Being from Oklahoma it doesn't surprise me too much that Cushing has record inventories considering the companies have been busy building extra storage tankers in Cushing the last few years.

So if they build more storage tankers, wouldn't it naturally hold higher inventory levels then in the past? The market always seems to have issues with digesting news that should've been expected at some point. Honestly I don't fully understand the issue and it seems natural that if oil is treated better in Europe that explorers in Canada of the Gulf will eventually send the oil to where it is treated better such as Europe. 
Interesting discussion by commodity expert Dennis Gartman. It doesn't sound like shipping the oil from Cushing to Houston…

Passed the Series 65

Passed the Series 65 a few weeks back. Hopefully it won't be long before Stone Fox Capital Advisors becomes officially registered as an investment advisory in Oklahoma. All this snow in Oklahoma that has shut down school systems for the past nine days probably has helped speed up the process.

Stay tuned!

Investment Report - February 2011: Net Payout Yields

January was a solid month for this model as it beat the benchmark (2.6% versus 2.26% for the SP500). For a Risk Score 1 model the goal remains to outpace the benchmark by a slight amount each month with greatly reduced volatility from the higher risk scores.

The model intends to allow investors to sleep well at night knowing that stocks in the model gain from weakness in the markets via using their large sums of cash and profits to buyback stock and issue large dividends.

Trades
No trades were made in January which will be typical of any month especially so close to model creation in November. Its expected that stocks will remain in the model for at least 6-12 months where they will hopefully rotate out due to gains that have reduced the net payout yield below desired levels.

Top Performers
The best performing stocks for January will likely surprise most investors. Both Lockheed Martin (LMT) and Capital One Financial (COF) had gains exceeding 13%. With defense budgets in question, LMT s…

Investment Report - February 2011

January was another decent month for the market but this model struggled to keep up. After months of strong gains numerous stocks hit the wall. The model basically ended flat although during mid month the emerging market, commodity and biotech stocks struggled mightily. Fortunately though by month end several stocks rebounded and combined with two buyouts helped narrow the relative performance gap for January.

Buyouts
Two of the major developments in the model during January were the announcement of buyouts at the end of the month.

First, Verizon (VZ) announced the buyout of Terremark Worldwide (TMRK) for $19 or a 35% premium from the previous close. TMRK is a data center operator and premium cloud services provider. This deal was timely as the model was looking to reduce exposure to this stock that continues to grow by issuing debt. The buyout allowed the exit of the position at a great price much higher then expected.

Second, Alpha Natural Resources (ANR) agreed to buyout Massey Ener…

Hartford Financial CEO Sounds Positive

Hartford Financial (HIG) reported earnings that beat estimates last week yet the stock still trades considerably below its book value around $46. Analysts even expect earnings for 2011 and 2012 in the $4 range giving them a sub 8 PE. So why does the stock still trade in the $20s and not the $50s? Beats me.

Listen to the CEO, Liam McGee on the Kudlow Report on CNBC on Friday. The guy sounds very positive about the future and it clearly appears that the commercial real estate risk is behind them. Stock portfolio issues are part of the past and just about everybody dreamed up issue is overblown. Take a listen and decide for yourself.






Disclosure: Long HIG in personal accounts including Covestor accounts. 

1st Anniversary on Covestor

The Opportunistic Arbitrage model completed its first year of being available for subscription on Covestor yesterday. It seems like a long time ago that I agreed to start tracking a real portfolio on Covestor that was available to the public for real time tracking. Didn't know what to expect but its been a incredible year.

The model gained 69.16% in its first year far outpacing any of my goals. The clear goal is to outperform the SP500, but by 5,000 basis points is clearly beyond reasonable expectations. Clearly it will be difficult to repeat such a performance in year 2, but I'll definitely work hard to make the biggest gain possible while trying to keep risk reasonable.

Some of the biggest gainers were the cloud computing plays of Riverbed Tech (RVBD) and Terremark Worldwide (TMRK) that recently got a nice buyout bid from Verzion (VZ). The other big gains came from the commodity plays of Freeport McMoRan (FCX), Alpha Natural Resources (ANR), and Massey Energy (MEE). Several …