Working on Some New Ideas

I like this MAKO and WHZ here. I’m also thrilled to see MU hit new 52 week highs and a little pissed off FRO didn’t follow though today. I think JRCC has some serious legs underneath it and am in awe of TRMD, a shipper gone bezerko to the upside.

Chuck’s WNC looks good too.

And let’s not forget about the ultimate welfare stock PRSC.

Truth is, so many stocks look great at the top. That doesn’t mean this is “the top.” But humans tend to paint a rosy picture around things when times are good. I have to be mindful of my risk exposure when 52 week highs are being hit. That being said, there isn’t any evidence to suggest we will start going lower. That’s pure guess work of the amateur sort. The market has been going higher and valuations are still reasonable. From my vantage point, now is the time to make gains, for gloomier times will present themselves in the future.

I want to own IMMR, but hate chasing it here. However, it might run to $16 before resting. The problem with waiting for a stock to come down to “your price” is the fact that no one cares about “your price.” If you like a company, buy it right away and prepare to average down later.

I think I’ll heed my own advice this time around.

I’m not waiting for the redesign any longer. I just got off the phone with The Devil and will be launching his blog today. If you’ve been following his picks inside of The PPT, you know he’s been long BKS–a huge winner today.

I’m filled with surprises today, by the way. Truth be told, I haven’t been having much fun on the site in recent months. If I’m not having fun, you are certainly bored to death. The market’s been great–but as moribund and staid as checkered shorts on a golf course.

Back in the nascency of iBankCoin, there was another finance site that was just as popular, if not more. He had a great blogging presence and knew how to pick stocks as good as anyone I know. Throughout the history of iBankCoin, there have only been two sites that I tried to merge with, one being his, the other Zerohedge–before he became a blogging phenom.

This unnamed blogger that I am referring to was supposed to help me build The PPT. When I just starting building the formula for the algo, he offered advice on how to rank stocks according to its technicals, since that’s his speciality. Instead of merging with me, he went another route. As a result of going “all premium”, his blogging presence diminished–a damn shame.

The person I am referring to his Jef Kohler, The Option Addict. He will be joining the tabbed blogger ranks today, alongside “The Devil” (is it a coincidence? I think not!). What iBC needs is a little more coin, less conjecture. I want to get back to reading about actionable trading ideas on the main site. I miss it. Both of our premium services cater to trading all day; but it’s time to liven things up a bit here.

UPDATE: The Devil’s first post is up.

UPDATE II: OA post is up.

Okay, I am letting you bozos in early on this one. As you know, from time to time, I get excited about a name and do write ups, then become obsessed with the company. I trade a lot of stocks, but remain loyal to a select few. Recent names that I’ve become obsessed with are: VHC (sold at $37), YELP, TEA, GMCR and WNR.

I am pretty sure my next winner will be IMMR. The stock has been on a tear, following successful licensing deals with just about everyone in mobile, sans Apple. They are executing in a way VHC could only wish, sporting a market cap significantly less too.

They specialize in Haptic technology. They enable the crack of the baseball bat to be felt on your tablet when watching a game on MLB.

Here are their partners:

Alps
Atmel
Densitron
Laerdal
LG Electronics
Logitech
Microsoft
Nokia
Samsung
Sony
Volkswagen

What are the catalysts?

Aside from the organic growth in mobile phones and their astounding 99% gross margins, they will be in the new Sony Playstation. Since they are not in any Apple products, I suspect hype will build around the name just prior to a new product announcement. The company is profitable and will become increasingly profitable as their technology is adopted into new devices. I believe 50% of smartphones, worldwide, use their technology.

Here are some devices that have haptic technology inside.

The technology is also found in gamer video controls.

Navigation systems

The company guided up big and will likely smash EPS estimates for the foreseeable future. The numbers get crazy, as with all high growth stocks, paving a way to a $50 stock price under ideal conditions.

Here is their list of patents.

I’ll be doing a lot more work on it and welcome your feedback. I hope the stock comes in, since I don’t own it yet. I am really excited about this company and feel they are in a sweet spot that is unmatched by any small cap company–at the moment– due to their margins and diversified product offerings.

Ticker symbol IMMR

The sell off in corn is overdone, just like the sell off in poultry related stocks was overdone last year, when the shoe was on the other foot. Shares of PPC have skyrocketed in the first quarter of 2013, as predicted. But now it’s time to take the foot off that pedal and fix your sights on corn.

This great, big, fat nation lives on corn, especially of the syrup variety. Don’t let a little deflation get in the way of a bad corn crop. We are just months away from enduring horrifying locust attacks and droughts that will suck the land dry. I expect stocks like BWLD to top out soon, as corn prices begin to rise again, so will chicken wings.

Your play is very straightforward, mate. I will be buying shares of LNN, for its irrigation business. Moreover, I like BG, ANDE and maybe some MOS. But my favorite play is LNN, which has been wrongfully punished due to fears that lower corn prices would hurt their business.

Unbeknownst to the idiots playing with themselves and the money of their clients, LNN is not a play on corn, but a play on the inevitable depletion of the most precious of resources: water.

I will be buying it because idiots sold it. I will be selling it when the rivers run dry and your local bartender is making cocktails made from sand.

I am playing in the sewers today. I started a position in JRCC and added to FRO.

The most hated sectors are on fire today, from coal to nuclear to gold. Shares of WLT and CLF are on fire, helping others in the process.

Here are a few names that might follow suit.

JRCC

Beaten down shippers. My fav is FRO.

GG

PVG

ACI

ANR

TCK

BTU

CMC

MTL

X

CLF

I’m against basic materials long term. However, in the short run, some of these hated stocks might squeeze higher.

In about a week the media will be “celebrating” the one year anniversary of The Facebook IPO, the event that fleeced pikers for their coin. In my opinion, the FB ipo should be remembered as the very worst ipo in US history, crushing retail investors on a scale never seen before. The aftershocks were devastating in the social media space. Stocks like ZNGA and GRPN never recovered and people fled the sector, en masse, because it had been tainted.

Back then I was a big investor in YELP. I liked YELP because they help people make smart decisions on where to dine. Along the same vein, I like OPEN, TRIP, ANGI, TRLA, Z and LNKD.

When everyone was bailing out of the sector, these stocks were being accumulated. Truth be told, I have no regrets about selling YELP, since I was fortunate enough to sell around $27. My real anguish lies in the shares of ANGI, because I never pulled the trigger.

My custom index of social media stocks have almost doubled since last year. Have a look.

I’m not going to lecture you about missing out on an epic run or point to names that might continue to trade up. But this is a lesson we all need to remember. Just like the energy debacle post Enron or the dot com bust of 2000, when whole sectors get taken down due to bad publicity, opportunity waits in the balance. When XYZ is getting dismantled because ABC committed fraud, take a closer look at XYZ. When BP spills oil in the GOM and its shares drop like a stone, take a closer look at BP and companies affiliated with them.

There is going to be another FB ipo one day, a stock that ruins the party for everyone else. Shortly after it bombs, the media will decry foul the Twittersphere will mock anyone buying into the sector. More often than not, in my experience, money is made buying the blood of names down only because of the reputation of a peer.

Here are 6 month and 1 year returns of some of the members in my Social Networking Index.

6 month

1 year

The company is halfway retarded. I should’ve put this money into The Devil’s CLIR or PAMT play. Nonetheless, here I am sitting in a position that is +5%, less than a day away from dinging me for a cool 15%.

What went wrong?

Their biggest customer didn’t order anything for two quarters in a row. It’s pretty hard to claim they’re your biggest customer when they urinate on you like that.

Pricing for silicon on sapphire is abysmal. They need to see prices rise 25% in order to break even.

The good news is three fold.

1. I sold 30% of my position before the bell, told here and inside of The PPT. Oddly enough, before I put in orders, a trading desk called my office and asked for my stock. Apparently there was an aggressive buyer out there, for 50,000 shares, who wanted in just prior to the execution.

2. The company has $31 million in cash and no debt. They don’t expect to burn any cash next qt.

3. Silicon on Sapphire is in its nascency stages. It’s pretty hard to justify selling this stock as the LED market takes off and sapphire is being used in smartphones. That’s supposed to heat up, in earnest, during the second half.

My plan is to buy back the shares I sold today at lower prices, between $5.75-$6.00. This is a second half play and the stock could easily double if prices continue to rise, as the sapphire market expands into the smartphone space.

We keep running and running without pause. All of my friends believe the market is nearing a top. I felt May would be a very bad time for the market. However, price action has minimized my conviction for a downward reversal.

The conundrum is knowing tops happen when no one expects them.

CLIR is up today thanks to a company conference call last night that obviously attracted new buyers. Keep an eye on that stock, for it is the favourite of The Devil.

Speaking of which, he is very eager to get started on iBC. But he will not be penning missives or explaining his ideas in detail. He is paranoid about his identity and wants me to post his ideas for him, in bullet point fashion. So don’t expect to be introduced to the person called “The Devil” any time soon. For now, his top ideas will have to suffice.

After the bell are earnings from RBCN. They’ve disappointed every quarter for as long as I can remember. Expectations are very pessimistic, which might work in favor of the share price action post report. For the record, I am not enthusiastic about earnings tonight. I am in the stock for the turn in the sapphire industry, fueled by 2nd half wins at certain smartphone makers.

UPDATE: I trimmed my RBCN position by 30% and bought ARG for the $100 roll.

Companies that are in solid uptrends filing for secondary offerings, below market, are buys. We saw it two weeks ago with RLGY at $42 and GNRC today @ $37.

About a month ago, The Devil’s stock, CIMT, filed for a secondary in the low $5’s. Now look at it.

You don’t want to get in ahead of the secondary announcement of course. But if you get in after the dip, the way this market has been roaring, odds are you stand to make some easy coin.