Tag Archive for longs

Upcoming Week: Some Stock Ideas Long and Short

So this week looks to be make or break for equities.. Personally, I am leaning toward the bear camp, however I feel that we will only get a strong selloff if we close under the 200 day simple moving average or 200 day exponential moving average which stands at $1258 and $1263 respectively.

If we do get a break below the 200 day moving averages, I would consider shorting the following stocks:

VHC — VernetX Holdings is a company with a billion dollar valuation which had only $17,000 in revenues last year! LOL….

CRM — 400 PE ratio… declining earnings, insiders dumping stock, looks to be iin a speculative bubble.

NFLX — Netflix can’t stream Sony movies anymore and it would not suprise me if more studios banned Netflix from streaming their expensive content for nearly a free price…

AMZN — This company has been unable to translate sales growth into profits and now that states are looking to tax this company, any successful move to tax AMZN’s sales will crush the company’s earnings and their market cap.

IWM — The Russell 2000 is overvalued by around 50% in my view and in Robert Shiller’s view: check out his interview on tech ticker:

BXP — an overvalued REIT

YNDX — an overvalued web IPO

LNKD — already discussed on Hedgephone.com a million times: way too expensive here still…

LULU — lululemming is an overvalued name.

GMCR — Sam Antar says they are cooking the books, and I agree.

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If we trade above the 200 day as we are currently, investors should look at these stocks for their long book and avoid the short side altogether:

TGT — 6X EV/EBITDA

WMT — Dirt Cheap on Free cash flow, repurchased 8% of total market cap last year…

JNJ — cheap on free cash flows, Buffett holding

KO — Buffett’s largest stock holding.

RIMM — Guidance mess annoys me, but free cash flow per share still impressive… only good for a 1-2% position in your account.

KEP — 25% of book value!

PM — People are smoking more and more in Europe

SIVR — Silver could go the way of Rare Earths and double soon.

GLD — Gold is real money, not paper fiat bubble money.

Investment Ideas For This Crazy Trading Environment

So, we have been pretty accurate recently suggesting investors go long Gold and short overvalued stocks. Right now, I feel the long PM’s short stock trade should continue to outperform. CNBC had quite a few silver bears on the air today and the metal even sold off a bit before FED speak came on the air declaring that, as Hedgephone readers already know, America owes a TON of money to seniors via Medicare and Social Security. I view Silver and Gold as your best hedge against this debt dilemma and also against more Quantitative Easing. Commodities have been weak recently other than Gold, but I think Agriculture is likely a good long term buy at these prices. Likewise, Silver is not in backwardization which should put a tailwind behind rising prices for the metal.

On the short side, I would want to be short calls or long calendar put spreads on the IWM or QQQ or select overvalued equities. I would be very aware of the technical levels in the market, including $1300 and $1310 on the S&P 500 as well as $56 and $57 on the QQQ… $2700 is a must hold level for the Nasdaq, as is $80 on the IWM… I am a bit suprised that the markets have been this resilient but I do feel we are overvalued here in general and would not want to recommend buying a long term index fund position as much as finding cheap stocks to own over the long term. KO, MCD, PEP, JNJ, RIMM, GOOG, etc… all look like good values and I will continue to update readers on my favorite longer term large cap ideas, but remember that each investor much make up his or her own mind based on their own due diligence. This site is clearly a research and idea generation hub and not a “tip” generator.

Select “cheap” and undervalued issues also look interesting and to find stocks trading below Net Current assets, investors may want to check our “Values” page as well as Oldschoolvalue.com, Cheapstocks.net, Greenbackd.com, etc… — essentially there are several companies which are now trading at prices far below their Net Current Assets minus total liabilities…

A brief list of them includes, Voxx, HAST, VII, GBR, HWG, TBAC, and several others… For disclosure, at Hedgephone we put our money where our mouth is and will be long most of the names we talk about here, including these “cigar butt” stocks…

In essence, the short side is looking decent but we would prefer selling naked At the money or above the money call options on overvalued issues such as LNKD, NFLX, YOKU, etc… etc… while investing our cash in names that trade significantly below liquidation values here… Also, stocks trading at 5X earnings are always interesting to look at and often make good longer term investments… So, keep an eye on stocks that are unreasonably cheap as valuations are incredibly bifurcated here, with leading stocks such as AMZN, OPEN, LULU, CRM, etc… trading for bubble-like multiples while several quality businesses can be purchased for 5-8X earnings and even lower multiples on free cash flows.

All the best Hedgephones and remember to do your own Due Diligence!