Adam Alvarez

Long/short equity, momentum, tech, long only
Adam Alvarez
Long/short equity, momentum, tech, long only
Contributor since: 2012
In the long term, they're competitors, but right now these IPOs show growth in a previously nonexistent terrain. With so many in China still not buying online and available as potential customers, the thought also that one company is going to rake in a vast majority appears naive.
Meanwhile, the morning JD.com went public, VIPS hit its highest level in more than two months with a reading over $175. Consequently, the stock pulled back that afternoon as shares of JD pulled off from their opening high.
Since the beginning of April, shares tested the $160 level on three separate occasions and experienced at least 17 percent corrections each time. Also, since clearing that level the stock has managed to stay above that price, even testing an intraday low of $160.10 on May 23.
The accounting, as with any Chinese stock, is always a concern which is why I definitely encourage a stop loss order in this case. However, there have been no signs of fraudulent activity or erroneous accounting with this company. Also, I feel the recent IPO of JD.com and upcoming IPO of Alibaba will only add more strength and favorability towards this sector. Overall, diminishing the focus on current valuation.
I got in Twitter exactly five months after its IPO at $43. I took a big gamble and am not saying it can't continue to struggle for the full six months like Facebook and LinkedIn. However, I don't strive to get in at the exact lowest price and tend to look at more the long term picture. What's most important is having a stop loss at $38.
As for your doubts about this stock involving "calculated risk," I once felt the same way towards social media. I never bought LNKD nor FB. When LinkedIn surged its opening day, there were also many claims it was overpriced and look at all the heat Facebook took upon its disastrous IPO. Nevertheless, both stocks did the same thing in the long run. That is they not only recovered after initial pullbacks, they surged.
Are they all overvalued? Personally, I think they are. However, the same can be said for most stocks at this juncture. Maybe the fact that both LinkedIn and Facebook hit their all-time lows six months into trading is all a coincidence, but it's still very ironic.
Although I personally do not support this law, as you have successfully grasped, my intention here is not to merely bash the law. Every measure has its beneficiaries along with those groups certain to get the bad end of the deal.
If you're uninsured, sick, and can't afford to pay healthcare costs, you win. However, with that comes these insurance companies. Sure, they have more customers. I can't argue with you on that.
However, think for a minute, beyond the obvious, about what this law really does for them.
For instance, imagine going out and giving every single citizen a driver's license and letting them buy car insurance. That looks great in the beginning for the insurance companies with all their new customers, but you're not factoring in all the risks and crashes the insurance companies will be left to pay for.
In this case, you're giving or requiring people to have health insurance. Therefore, you have more people than I can count who are sick and getting tremendous discounts or free healthcare and going down to get treatment. That may sound like the morally right thing to do, but somebody has to pay for that.
For a lot of people, this law is like adding a car payment to their monthly expenditures. Maybe you can go out today and buy a new car, but not everyone can do so.
You have to also realize, as with my car insurance example, these stocks are going up because of all their new customers. However, you have to think about the future.
Can people really afford the insurance they've purchased?
What's going to happen to this law in the near term/ are healthy people signing up or just paying a penalty?
After the next presidential election, is the law getting repealed?
Depending on how long you've held shares and your risk tolerance, from looking at the chart I would personally sell CI around $89-$90. Shares have done very well and I like taking profits. If I leave some money on the table so be it. If you try to squeeze every possible cent out of a stock that you can, you'll go crazy. Trust me, I made those mistakes before.
Looking at what happened when the stock broke $80, shares faced resistance, volatility, and then after finally getting to almost $85 suffered an almost 15% pullback.
Now, with questions surrounding the effect of the healthcare law, the costs, and how many people signed up, I would assume even more volatility to come. Simply put, I don't see overwhelming positives for this sector, but I do see negatives and unanswered questions.
If the shares experience another 15% pullback, the effects of the law become clearer, or is repealed, then I may look at CI. Still, that's not short term, but a possible trade in the future.
The REITs would be a little safer, but I would be hesitant to get in those as well. Anything in any way, shape, or form dealing with healthcare I wish to avoid at this juncture. Once the dust settles and there is a greater understanding, through eventual earnings reports by the healthcare companies, of just how big of headwinds the industry faces, then perhaps the REITs may provide some opportunities. Still, patience must truly be considered a virtue in this instance.
SIRI and X are my two long term plays. Even though I like BP's stock, I do see some risk that keeps me on the sidelines. XOM, CVX, and BP have all seen earnings drops the last couple years as crude prices have stabilized somewhat. They are all expecting to see increases in earnings in 2014, but expectations don't always equate to guarantees.
As more of a conservative investor, which is probably shocking to hear considering I'm in U.S. Steel, the oil industry is also a little too volatile for my investment goals. X recently broke above resistance which is why I'm currently riding that while maintaining a tight stop loss order.
To your comment and the rest that argue the same thought, due to the company's recent actions I'm left to severely wonder if they are being taken advantage of by individuals seeking false claims. At least to the extent they argue.
Sure, there are those surely out to just strike it rich. However, from a PR standpoint, considering there have been multiple accusations BP hasn't paid up like initially agreed upon, the question must be asked whether the company is really facing such a degree of fraudulent claims.
The way the company, such as spokesperson Geoff Morrell, came out and argued, you would have thought BP was being taken advantage of to the fullest extent. However, if you look at their financial records, it shows a different story. They have beat on two of three reports this year and they recently raised their dividend to a 4.54% yield in just the last quarter (supposedly when the false claims skyrocketed).
Yes, I know this is an oil company and the industry offers high payouts, but if your company is really going through such controversy, are you going to be boosting your payouts? I would think you would strive harder to conserve cash in case you lost your case...like they did.
The bottom line is I have reason to believe through their financial data and reporting that they are not being scammed, at least not to such a noticeable degree. They are out to pay less and save the money more for themselves and shareholders. Not surprising, but unfortunate anyway.
I'm not saying BP shouldn't quibble over unsupported lawsuits. I'm asking BP to prove to me they are really facing such deceitful claims in the same way they're asking those making the claims to prove their damages. This should be a two-way street. Not just BP determining who to pay and who to reject on their own whim. To this point, the federal judge failed to see such a defense.
As a stock, I view this as a great buy. It's cheap, undervalued, and with great dividend security. As a company, though, they are leaving much to be desired.
If you're referring to me, I never wrote or analyzed RDN to any extent. I don't even follow this company???
With all due respect, I'm arguing that the company is raising prices to mask the lower revenue they are facing as a result of lower commodity prices as a whole. What this sector and, especially AKS in particular, are doing is like what a bank does when a high number of their customers default. That is charge astronomical and unreasonable fees to the paying customers in order to still tread water.
Unfortunately, whereas the bank customer has to accept the fee or experience a catastrophic hit on their credit, AK Steel and other steel companies that go along will just lose even more customers. That was why I included the steel trader's quote above because he mentions what I believe and that is those that can afford to not accept the increase will not. After all, it's not like demand is high right now.
You mentioned yourself that the increase helped the company's earnings despite the volume drop. But how long can that last? The key is the volume drop. Volume has to rise and if demand remains weak and price increases continue, then where will this company end up? I just don't see enough economic growth to indicate steel demand will surge in the next few years and to think this stock will rise even without such demand is very risky.
I do wish you luck in your position, but would encourage a stop loss at the 52-week low of $2.76 or at least within that range.
Because these chains are taking business from both fast food and casual restaurants. In the case of fast food chains, companies like Chipotle provide far better service and quality food for not that much more ($8-$15 a plate). They also provide far quicker service than casual chains where you can plan on spending probably at least an hour sitting.
These shares are currently enjoying their fair share of hype as they are continuing to grow quickly so the $328 price is probably overdone as the P/E ratio appears to indicate. However, if you really want to invest in this sector, stocks like Chipotle are your strongest bet and as long as that continues the share prices will hold.
Why do people constantly make references to the expenditures associated with the Iraq war? If you really feel that was a mistake, obviously you do, then you should be upfront pushing Congress to make drastic cuts throughout all facets.
Commodity prices are low? I think most looking at oil prices would have to disagree. Even gold, although off highs, is well above where it should be due to our near worthless, debt-ridden dollar.
Also, whatever money you may save via your low rates, you will give back via inflation. You can't have low rates for extended periods of time.
What translates into a $5.2 trillion debt is that there are no cuts whatsoever to go along with that $100 billion in infrastructure spending. We're merely being allowed to continue on the path we are on now which is full of red ink. This isn't about liberals or conservatives, this is about making some concerted effort to balance a budget and this Senate measure does not accomplish such a task.
Also, before you bash wars, remember that World War 2 was what eventually pushed our nation free from the Great Depression. The only difference was then we weren't also left to battle through indebted government programs such as Medicare and Medicaid.
Thank you for the feedback. Appreciate it.
Well, WMT, TGT and M are all getting thrashed today in trade and others such as JCP, SHLD and BBY are barely positive. I'm surely not seeing a whole lot of winners here considering the market is still up 100 points in the last two sessions even after morning weakness.
Also, you have to realize I wasn't just predicting Black Friday to be a flop. I was pointing out how many of these retailers went down last December. It used to be retailers were the best investment in December and the last couple years have shown that's no longer the case.
That's a tough call based on how much you have already lost. However, I would lean more towards taking the loss. The forecast was atrocious and shares are down another 7% today. That means they now also lack a defined support level.
If this was the result of sector wide selling I might feel differently. However, even today Nucor and Steel Dynamics are relatively flat. So the selling is remaining concentrated towards AKS which is also troubling.
They funded it earlier this year:
http://bit.ly/Ud0z96
What's to say they would suddenly reverse course and stop now?
It's true that we don't know what the rise would have been without the law. However, my personal health care costs have risen faster than they did before the bill was passed and I'm sure I'm not the only one.
STLD does have an attractive entry point at this time being near the low end of its range and also has more in the way of steady earnings than most other in the sector. It just depends on your risk tolerance. This company would not provide the risk of U.S. Steel, but it also wouldn't provide the potential returns either as the highest level this stock could probably reach given its recent history would be $20 with $15 being a more conservative estimate.
If you are in or are considering taking up a position in STLD a stop loss order at $10 would be critical.
My faith in this stock comes mostly from its holding of support, especially in the face of multiple downgrades recently. This is the fifth time in the last 12 months shares have been under $20. The previous four times shares touched no lower than $17.67 and quickly rebounded back over $20. This is a very proven and solid support that would only be broken by a very negative company report. Although possible, I feel such a report is unlikely for two reasons.
First, the company has beat on its first two quarterly reports this year and is not projected to post any further losses over the next six quarters. Although bottomline estimates have the company reporting losses the next two quarters, I feel such negativity has already been taken into consideration via the recent downward pressure on shares.
Second, U.S. Steel, unlike Nucor, pays a very modest dividend with a yield of only 1%. That makes them more able to maintain strong cash flow which is undoubtedly necessary in such a sketchy environment. One reason why Nucor recently lowered guidance while U.S. Steel has not.
I do want to still assure you this is a very risky position. I just look at the chart pattern and see a risk worth taking unlike, for instance, AK Steel. I definitely recommend a stop loss order on any trade here of at least $16. If you really worry about the risk, you may raise that to $18 as I feel that level should provide strong support as well.
I like the price you got in STLD and as long as you're willing to stay long you should be alright there. The AKS calls are a little riskier because the company's bottom line and future is rockier, but the entry price is still decent. You should be fine, but you will definitely need to be patient and realize the next few months may be difficult.
I am honestly not short either of these stocks nor do I ever short stocks in general. I just realize these stocks are hovering over levels that may prove final support and economic conditions are simply not favorable for this sector. As for X, they have missed on 6 of the past 8 earnings reports so you're taking a tremendous risk assuming earnings are going to be that great.
I was favorable towards these stocks over the past few weeks (read prior articles) because I believed short term bounces would occur. That happened. If you followed that advice, I'm just saying now would be the time to cash in. If you're long, I do believe you will make money eventually. However, you should be prepared to lose money over the next few months, at least.
Personally, I would be more favorable towards Dollar General because the PE ratio is a little better and with six times the volume and at half the price Dollar General would be less volatile should a widespread pullback hit the industry.
No, I was strongly against the auto bailouts and leniency awarded to the company's debt and I think Obama is a terrible president. I am, however, surprised and gratified that GM is working to be more fiscally responsibility and not just out to waste money and be crazy. They appear to be taking how much they spend and where they spend it seriously going forward and that's what you hope for.
Couldn't agree more-way over-hyped. See a serious possibility this company is insolvent in 10 years. Just surprised at the price tag. People are so intrigued by this stock the underwriters could sucker investors for a lot more, at least initially.
Because it illustrates their pension for appeasing shareholders outweighed their drive to further succeed and expand. They're no longer first-to-market with new ideas-why else would that be the case? Competition shouldn't have stopped all their progress. Plus, history shows companies that pay dividends underperform those that don't. Just a fact.
I'm not out to tank any stock. I would just suggest avoiding these positions due to the uncertainty hovering over their future. And you never have to worry about me bashing a stock intentionally to personally benefit and get in cheap. I wouldn't want others to rig the market like that and therefore I wouldn't either. Plus, I never buy shares under $5 due to the risky nature of such trades.
Probably around $70-$80. May not retest the $62 lows from earlier in the year, at least not this year, but should definitely experience some hard times ahead of those earnings reports and increased competition. That first quarter report in late April is what I'm looking at to really start the selling.
Down around 50 cents with meager volume and on the heels of a year's sell fest, ABAT is past being just roadkill.
I agree that there are a lot of opportunities in Chinese stocks, but all the companies you listed are trading under $1.40 a share with mediocre volume. ALN even has a daily volume of only 20,000 shares. If investors are scared of Chinese stocks such as SOHU, which they are to some extent, they'll be much more afraid of these shares which inherently contain far more risk.
You also would have been better served to advise your readers of appropriate stop loss orders with such dangerous investments.
You maybe right and you did your research, but your article tends to come across as being written by someone merely trying to pump their own shares. You must thoroughly prove that's not your objective.
Unfortunate because I believe the company has a strong foundation, but that's why I encouraged stop loss orders at $97 in case support broke.