A Princess (And Massive Profits) Coming Soon

If you live in the Los Angeles area, you may have noticed some strange advertisements for a princess coronation event. The question many will ask is - who is being crowned princess? The answer may surprise you, it's a cartoon pony named Twilight Sparkle. Suitingly, the coronation event will be hosted by the newly crowned Miss America 2013 Mallory Hagan. Olympic gold medalist Carmelita Jeter will also be attending the event. This event on February 14th 2013 symbolizes the growing popularity of the newest generation of My Little Pony. (Image from StarPulse)

Toy Sales Falling, But Not My Little Pony

So why does this matter? Hasbro Inc. (HAS) is currently the owner of the My Little Pony franchise with the currently airing and highly popular television show My Little Pony: Friendship is Magic. Hasbro has been having

TASER International, Inc. (TASR) is a developer, manufacturer, and distributor of TASER brand stun guns, recording devices for law enforcement, and even cloud-based evidence storage. Everyone knows the story of tasers, as they appear in the news nearly every week. The more interesting story lies in the company itself.

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A Sad Earnings Picture

In the third quarter of 2012, TASR reported $28.8 million in net sales and gross profits margins over 50%. Sales were up 18% compared to the same quarter in 2011. Sounds amazing right? It does until you look at net income. Net income came in at a pitiful $3.7 million, or $0.07 per share. This becomes even more pitiful when you realize the company is trading at a whopping market cap of $480 million. Suddenly that "great" quarter is looking rather wimpy. The company has bought back over 50 million

A small 15 million dollar market cap company just loves to boggle the minds of traders and investors. LiveDeal, Inc. (LIVE), according to their website, appears to be focused on mobile marketing. Unfortunately, it hasn't been too successful as it has made consistent net losses for the past three years. Not only negative net income, but negative operating income. Things appear to be rough for the company.

The stock of LIVE is fascinating and bewildering. Take a look at this one year chart.

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Confusing Trading

This stock absolutely loves to fly upward to ridiculous heights then crash back down violently. The stock has a 52-week low of $1.02 and a 52-week high of $18.58. The variance from the 52-week low to the 52-week high is over 1,700 percent. Just recently the stock began to run up again, who knows where it

This is the third and final installment of the P/E Trap series. If you are looking for Part 1, you can find it here. On September 18, I wrote Part 1 about companies that were listed as having a P/E ratio below 5 due to a one-time tax event. These P/E ratios are misleading to investors looking through stock screeners or simple valuation data. Today, I share three more of these companies.

Ford Motor Co. (F)

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According to Yahoo Finance, Ford has a P/E ratio of 2.41. Ford made 17.7 billion dollars in net income in the last four quarters. 12.2 billion of this net income was from a positive one time tax event. This is equal to roughly 68% of the earnings in the last four quarters. The P/E ratio excluding this tax event is closer to 7.2. This still appears to be an

The listed P/E ratio on stocks can often be misleading. That is especially the case for companies that have had a large positive one-time tax event. On September 18, I wrote Part 1 about companies that were listed as having a P/E ratio below 5 due to a one-time tax event. If you are looking for Part 1, you can find it here.

Today, I bring you three more:

Krispy Kreme Doughnuts, Inc. (KKD)

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According to Yahoo Finance, Krispy Kreme has a P/E of 3.5. Krispy Kreme Doughnuts made roughly 160 million in net income in the last four quarters. 137.8 million of that net income came from a positive tax event. That is equal to 87.1% of the net income. Excluding the tax event, the P/E ratio is closer to 24, which needless to say, is much larger than 3.5.

Data and chart from Yahoo Finance.

It seems too good to be true at first. You run a stock screener and find a company with a P/E under 5 trading on the U.S. markets. It has a recognizable name and a solid balance sheet. Why is it so undervalued, you ask? Many savvy investors will know the potential answers. In many cases, the reason is a tax benefit, rather than a tax expense that cuts into earnings. This is a positive factor that boosts the earnings for the company in a one time event. While the Price to Earnings (P/E) ratio is technically now much lower with the tax benefit, the earnings are misleading because that tax benefit is a one time event. Many investors who simply rely on the P/E as a measure of valuation are often disappointed and shocked when they see such a drastic decrease in net income quarter over quarter as a

There is rarely a sure bet when it comes to the markets these days. There is one institution however that appears to be handing them out on a regular basis. The National Inflation Association, which sends articles on their stock picks to subscribers and takes its own positions in the stock, is that institution. Let's take a look at the effect of their coverage on stocks and how a savvy investor can come out with some rather large profits taking advantage of these price movements.

Synacor, Inc. (SYNC)

The latest promoted stock is SYNC. The National Inflation Association, which we'll call NIA for short, managed to bring the stock from roughly 6 dollars to around 18 dollars in a matter of months. Here is the chart:

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As you can see from the chart, the stock was pushed higher at an abnormally fast rate and then came crashing

With markets once again nearing their highs it is always wise to hedge your bets. A smart investor during uncertainty will take one short position for every long position. If done correctly, this can yield a profit whether the markets fly up, crash, or remain stagnant. The trick is to choose a stock with great potential upside for the long position and to choose a stock in bad financial shape for the short. Here I will lay out my current strategy with two stocks.

The first stock I'd like to talk about is Casella Waste Systems, Inc (CWST):

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CWST makes an excellent short candidate for many reasons:

1. It is currently in a downward trend.
2. It has made a consistent net loss for the last four quarters and shows no signs of changing that soon.
3. It has a "current ratio" of less than one, meaning current