No matter how deep I dig, no matter how entrenched I become, nature has a way of elevating me to new heights. Designed to win from day one, “The Fly” can’t help but to ascend above his peers, especially when it’s least expected. Intra-day, I am up 2.4%, thanks to the gully move in MWW (up 30% in a week). If you are wondering why the stock is up so much, go listen to the conference call. I used no charts. I didn’t need some sort of trend line to help me figure out MWW was cheap on valuation. Investing is not about short cuts. It’s not good enough to simply say “oh, gee, this stock is breaking out on the chart. Let me buy it.”
That sort of investing is reserved for rookies, no offense to some of you minor leaguers out there.
Going with the valuation theme, I dare say FORM is equally cheap, if not cheaper. When looking at their balance sheet, you will notice next to $8 in net cash. Granted, the company lost a major client and have been bleeding out for the last few quarters. However, the recovery is already underway. How do I know? Why would the company announce a $50 million share buyback last week, if business was crappy? Moreover, their second largest shareholder at 9%, Goldman Sachs, upgraded them to neutral, clearly positioning for the turn.
Finally, I believe the overall fundamentals of corporate America is terrific. As a matter of fact, if I lived in a bubble, I would have zero reasons to bet against this tape. However, there is a divergence between corporate balance sheets and main street America. When will these two immovable objects clash?
Soon.
UPDATE: I covered my shorts in AEM and SPG, a good day to take losses.
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Your insight is from the underworld … I know your secret !
The truth be told!!
Fly:
In the MWW conference call you mentioned did they mention anything about job prospects going forward. Presumably they did, yea?
Go GIANTS!
Oh and Thanks Fly for once again.. giving insight here for free. You’ve been a good teacher.
I’ve been lurking for years now, as I’m merely a piker/poser/wanker/hoser/rookie/italian, but the recent insight courtesy of The Fly been so outstanding I felt the need to post these 37kb of opinion
Love the honesty!
me too…
>>Moreover, their second largest shareholder at 9%, Goldman Sachs, upgraded them to neutral…<<
Lol… They must be looking to sell!
Clash of ROW and USA bubble boys too…..I was looking at Chicago PMI data today and thinking that each recession came around every 7 years, therefore they colored in our latest recession in gray so it’s now done so Bubble Boys see it not coming for another 7 years so they have nothing to worry about cuz it always happens that way…
Congrats on MWW.
>>>Why would the company announce a $50 million share buyback last week, if business was crappy?
One reason might be because their business is crappy and they don’t see anywhere decent to invest the capital and are instead looking to bolster their EPS.
Or they are making sooooo much coin they don’t know what to do with it, as you suspect.
Considering they are losing money, that would be a terrible place to put cash.
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