Playing the Options Game in RIM; Cel Sci Not Yet Trading to Its Potential 10 comments
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In "Readers Respond" I do my best to answer readers' questions, but keep in mind that my responses to these questions are my opinions and personal speculation that I have based on my own research and due diligence.
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Hi Vinny,
Hope you are well!
What do you think of RIMM options at this time? The stock has traded down, there is noise it may be a takeover candidate, it has a pipeline of products coming to market ...
Let us know when you get a chance. I was either thinking of the March or June 2010 calls.
Tks,
Lenny
VFC's Take: Always good to hear from you, Lenny. I agree with all said regarding RIMM. The pipeline is strong and I also agree that it would make for a nice takeover target, in my opinion, and playing the options game with RIMM would be the way to go for the small investor - again, in my opinion.
Blackberrys are being handed out like free candy right now, and think that strategy is going to pay off later on down the road for the company. I just purchased my own, and I don't know how I ever lived without it. I went with the Blackberry over the iPhone not only for the more affordable price, but also because I like a phone to look like a phone, but that's just my style. The point is, Blackberry is gaining market share and that could only be good for RIMM.
Personally, I wouldn't want to tie up the amount of money that it would take to bank significant returns in RIMM options at this time because I still think that there are a lot of lower-priced speculative plays still out there that could pay off either just as good as the RIMM options by the spring.
That being said, when I do play the options game, I like to go for the long options - in the case of RIMM that would be the Jan 2011 calls. I never hold an option contract to expiration - I always sell the contract beforehand - and the longer I have to play the contract the more comfortable I am in the investment. That's just my opinion.
Additionally, I also like to keep half of my contracts as the 'trading half'; since you lose everything if an option contract expires worthless, which greatly increases the risk of the investment, I always like to make sure that I'm doing my best to get on house money as quickly as possible so that if the contracts were to expire worthless, I know I'm at least break-even on the deal.
As for the RIMM options that you mentioned, the stock has traded down recently, and I don't think that the downtrend will be sustained. I believe a rebound in the stock will be in order by early next year at the latest, and that means that the option contracts will also gain in value. Therefore, I agree, a RIMM call option play right now could pay off by as early as March of next year, in my opinion.
A comment from Gillmore regarding Cel Sci (CVM)
How much is the impending news about Phase III commencement for Multikline already baked into CVM?
Gillmore Viltati
VFC's Take: Good question. In my opinion, CVM is currently trading at a price that reflects either the commencement of the Multikine Phase III trial positive developments regarding LEAPS for H1N1, but not both.
I think that the stock still has a little bit of room to move up on facility validation/Multikine Phase III. Long term investors see that news as inevitable, but new investors may jump on the bandwagon once they know that a Multikine Phase III trial is an eventuality and not just speculation. As the trial progresses and interim data comes in, the CVM share price should appreciate in value along the way - if the results are positive.
That being said, anything from the LEAPS front could instantly spike the price, and I don't think that possibility is entirely priced into the stock; if it is, then the Multikine trial is not.
Why I think that there is still some short term upside to CVM based only on the facility/Phase III news is simple: Cel Sci has garnered a whole lot of attention lately, probably more than at any other point in the company's history, and because of that, there are a whole lot of eyes watching. With all of the attention paid to Cel Sci, however, there has been a whole lot of doubt and manipulation directed at the company and its stock through some (what VFC considers to be) unscrupulous activity - and that has scared some potential investors away.
Once news develops - and it has already started to with the Johns Hopkins/LEAPS announcement - those potential investors that were swayed by the doubt can then be confident that Cel Sci is for real and will be willing to jump in.
Additionally, and I'm only speculating here, it may not take too long after the official 'opening' of the Baltimore area facility for the company to start announcing cold fill contracts. Depending on the scope/size of the contracts, that news could add value to the company and the CVM stock as well.
The wild card is LEAPS. I suspect that if the Johns Hopkins study works out, then there will be a slew of new believers who will want in at that point.
So, I do think that the plant validation/Multikine Phase III is somewhat priced in already because the long-timers know that those news items are an eventuality, but I don't think that CVM is currently trading to its potential.
For the short term, I think that we're looking at closer to $2. For the mid to long term, Cel Sci will be in great shape if either LEAPS or Multikine is successful - in my opinion. If both hit, then we're going to be sitting pretty a few years down the road.
Keep in mind that I only invest in stocks that I feel the possible rewards outweigh the risks involved. While I'm positive on CVM, each investor should conduct his or her own due diligence and come to their own conclusions about the company and its stock. It is assumed that every investment comes with inherent risk.
Disclosure: Author has no position in RIMM, VFC is long CVM.
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This article has 10 comments:
Oh, I don't know, sounds like it's on the up and up to me.
BSbuster:
Vinny's good for one a week on average. They are good reading, well thought out articles. What are you getting bent up about ?
You probably would have hurt yourself 8 months ago when the CEO was pumping CVM. He was good he could get a double on one 3 paragraph press release.
you sound desperate :)
is it because of Margin Call ?
how come you only only pump CVM "twice" today ?
and how about your other BS stock, AGEN and HEB ?
BWAHAHAHAHAHAHAHAHAAHA...
Do you believe AAPL is worried because a new iPhone "fell" from $399 to $99? I sure don't.
If you want to look at the price of a phone you have to look at the money recieved by the manufacturer, not the price "paid" upfront by the consumer.
Disclosure. Long both. Short Nokia.
On Nov 16 12:35 PM JamesApple wrote:
> Don't know much behind Rim's giving away blackberrys like free candies,
> they are lousy phones that belong in junkyards anyway. But it's
> common sense that companies that keep on giving away their products
> will go bankrupt quite soon. HTC, Samsung, Nokia, LG all make phones
> that look much more like phones than the blackberrys, and these phones
> are much higher quality and cost less than Rim blackberrys. Rim should
> be squeezed out by these competitors and go bankrupt by year 2013.
On Nov 16 12:35 PM JamesApple wrote:
> Don't know much behind Rim's giving away blackberrys like free candies,
> they are lousy phones that belong in junkyards anyway. But it's
> common sense that companies that keep on giving away their products
> will go bankrupt quite soon. HTC, Samsung, Nokia, LG all make phones
> that look much more like phones than the blackberrys, and these phones
> are much higher quality and cost less than Rim blackberrys. Rim should
> be squeezed out by these competitors and go bankrupt by year 2013.