Fly Sell: $FSLR

Although I think it trades higher, I needed the money. I am out.

When I started buying GOGO at $11.5, I was researching MODN too. On paper, it’s so cheap!

The company came public and its stock ran up into the mid 20’s, amidst widespread praise and adulation from the media. However, something went awry at MODN, awfully quick, and it was reflected in their staggering earnings shortfall.

They were supposed to do 25-26 mill for the quarter, but instead did $21 mill. Analysts were pissed and threw the company under a bus. During the conference call, the CEO said it was a matter of not being able to “close deals.” He insisted that the company didn’t lose any clients and were refocused on finding a new sales manager to right the ship.

I gotta say, it sounded like a bunch of BS to me. The company guided down for the next year, not just 1 or two quarters. They went from profitability to potentially burning through $20 mill over the next 12 months.

In my estimation, the real problem is growing pains. Ironically, the company is in the business of helping life science’s companies manage their top and bottom lines more efficiently. But they managed to over-expand, and as a result, have many, many disgruntled workers leaving scathing reviews on Glassdoor.

They paint a picture of middle management anarchy run amok, something reminiscent of the movie Office Space. Upper management seems to be unable to motivate people, and as a result, performance and productivity have suffered.

None of what I said sounds good and certainly not a reason to buy the stock. However, the company has over $100 million in cash, equating to 50% of its market cap. The p/s ratio is in the league of ZNGA and is 60% cheap, when compared to other companies in the SAAS space. Providing management can right this ship, this stock will make a bee-line for $20.

If management continues to fail, I am almost certain this stock will be a feasting ground for activist shareholders, demanding change, clamoring over the strong cash backstop.

In summary, MODN sucks, but I took a position nonetheless.

Dry Bulk day rates are racing higher, most likely due to a robust Brazilian grain harvest, and of course the much lauded iron ore demand from china, which is now being sent seaworthy. It was only a matter of time before shipping rates exploded to the upside. After all, end user demand is still strong. The problem was over-capacity; but that’s been getting rectified by massive insolvency striking the shippers, forcing banks to seize assets (ships) and scrap them for their metal.

Economics 101 dictates that whoever is left standing will benefit from a new supply/demand paradigm. Also, since 2007, major innovations in fuel consumption have been made, giving the companies who own new ships a distinct advantage over those with old gas guzzlers. On average, fuel is 60% of a shippers expense.

To that end, enter BALT. They just did a capital raise and do not have any debt maturities due until 2015. They have a fleet of 9 ships, 2 of which are Capesizes. The Capes are the biggest ships and their rates are +300% over the past few months. Since BALT’s fleet is so young (3.5 years), they are fuel efficient and able to make money at a much lower rate than its peers. In other words, this is a company that will benefit from its peers going by the wayside, profiting best from a rising day rate environment most because of their capital structure and superior fleet.

If rates continue to break necks to the upside, look for material upside guidance and profits to be reported at some of your favorite dry bulkers, something that hasn’t been reported in years.

Classic Krull. Very funny.

For those of you who haven’t seen the movie Glenn Gary Glenn Ross, go youtube the Alec Baldwin speech and this will make sense to you.

Someone told me the market is on its biggest losing streak of the year. By the looks of my accounts at all time highs, I wouldn’t know it.

I am out of POWI, IMMR, EGLE and ANGI, with timing no less than you’d expect from a seasoned space alien magician.

I’m in at 110% long again. I don’t care about the risk, sitting on a +59% gain for the year. Although my gains were higher earlier, I still managed a 1% showing.

It’s all about the boats, friendo. The Dry Bulk Index is inflating and “The Fly” is sailing the seven seas like a pirate, ransacking merchants, long an egregious amount of BALT.

Top holdings MHO, BALT, NSTG, FSLR, FLTX, FFIV, CVV

Yeah, I’m up another 2% aka +60% for the year.

http://www.youtube.com/watch?v=JQYTVg2dE2o

Via Briefing:

Drybulk shipping rates rise again. Panamax pops 8.9%, capesize rises 5.2% overnight. Since Aug 12 capesize rates are up 300%
Overnight, capesize rates rose 5.2% (or $2,206/day) to $42,211/day, panamax rates rose 8.9% (or $1,144) to $13,989/day, while supramax rates rose 2.6% to $10,579/day. The overall BDI rose 5.2% (or 106 pts) to 2,127 overnight.

The Baltic Dry Index (BDI) is now up 17 out of the last 18 sessions (up 27 out of last 31 sessions).

Since August 12 (a recent low), the BDI is up 114% to 2,127 (from 996), led by capesize rates. Meanwhile, capesize drybulk ship rates are up 300% (or $31,661/day) to $42,211/day, also since Aug 12, largely driven by higher iron ore shipments to China out of Brazil and Australia. Panamax rates are up 87%, largely driven by coal activity and anticipation of a good amount of shipments from a bountiful U.S. harvest.

I sold out of hundreds of thousands of shares of EGLE for a 40% profit. I sold another 20 blocks yesterday at $7.1. The reason why I swapped EGLE for BALT is balance sheet, mate. In my opinion, thanks to the debt/eq ratio at EGLE, there is a distinct possibility that a secondary offering is just around the corner. That risk is significantly less with BALT. BALT also has exposure to Capesize rates.

Full retard to the upside.

Pardon my brevity, but I am moving rapidly through this market. I took 40% gains in EGLE and another 12% in ANGI.

On to the next one.

I added to my BALT position.

MAKO just got bought out at a 80% premium. That company sucks, yet they still caught a bid.

Heading into the final months of the year, expect mergers and acquisitions to pick up some steam and special dividends be distributed. Naturally, share buybacks will be demanded by well to do activist shareholders and the average investor richly rewarded for being patient.

American balance sheets have never been better, so keep that in mind the next time you get wild eyed and try to become a hero shorting stocks that you deem to be “bad” or overvalued. The net result will be similar to what the bozo short sellers at MAKO are seeing this morning: account balances of zero.

http://www.youtube.com/watch?v=aJ7eJm5bZ5Y