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Dave Kranzler's  Instablog

Dave Kranzler
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I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance. Currently I co-manage a precious metals and mining stock... More
My company:
Golden Returns Capital
My blog:
Investment Research Dynamics
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  • My "Huge Upside Idea" (Junior Mining Stock) Update

    The company featured in that stock report was in town for the Denver Gold Forum. I had a 1-on-1 breakfast this morning with the founder and Co-Chairman, the President/CEO and the VP of Corporate Communications.

    This Company is sitting on a massive deposit in a low-risk jurisdiction, has plenty of cash and its Preliminary Economic Analysis shows that the NPV of the project is 5.7x greater than the current market cap. It's nearly 12x greater if you subtract out the cash. The PEA assumes $1300 gold and $20 silver. Imagine the NPV of this project when gold and silver move back up to their highs in 2011…

    Furthermore, since I last visited with the Company back in June, they've identified ways to reduce the CAPEX number used in the PEA. This would further boost the NPV.

    This is a largely "de-risked" project and, with a deposit as enormous as the one this Company is sitting on, my bet is that - once the metals start moving a lot higher - it will be taken out by large mining company at a price that's several multiples higher than where it trades now.

    Finally, when I had this same breakfast last September, the founder/Co-Chair was boasting that he had purchased more stock at a lower price than any other insider. With stock the having been beaten up since mid-July, I asked him if he was planning on buying more stocks. Not only had he already added to his position this month, CEO had purchased shares yesterday and the VP was getting ready to buy more. These people are buying open market shares with their own cash (unlike homebuilder executives, who exercise compensation options and dump them immediately). I added today to the already heavily over-weighted position in the fund I manage.

    If you already purchased this report, feel confident about adding to your position. If you have not purchased this report, you can do so by clicking here: Huge Upside Idea.

    If you buy just 5,000 shares of this stock (well less than $5,000) and it goes up just a nickel, you will have already earned 10x your investment in my stock report.

    Sep 16 9:09 PM | Link | Comment!
  • Big Pop In One Of My Featured Mining Stocks

    The Company featured in my latest mining stock research report is up well over 7% this morning. It was beat up during this latest round of the Fed-driven take-down of the price gold/silver. But they released very positive news this morning and I expect more favorable news to start coming out over the next 3-4 months. Here's the link if you would like to read about this idea: Mining Stock Research Reports.

    The reason I like this stock as either a short term "swing" trade or a long term fundamental play is that 1) historically it's been a daytrader/newsletter darling and it tends to get pushed around by momentum players (which means it can be volatile); 2) it's an emerging producer in the 4th largest mining region in the world and fundamentally highly undervalued relative to the amount of gold reserves/resource it has in the ground at its four main properties. This company will be acquired eventually and the longer it takes, the price will be relative to where it is now. We own a position in the fund I co-manage and I added to that position when the stock sold-off with the sector.

    Sep 15 12:55 PM | Link | Comment!
  • The Entire Housing Market Hit A Wall In August

    "I spent well over an hour surveying the housing market in my area (south-metro Denver) and the market is flooded with homes for sale, with many mid-range ($500-$750) homes being lowered 5-10% in price and still sitting on the market. Zillow is estimating the average home listed in my area is now down 8% from original listing. This is an area that has been one of the hottest areas of Denver in the last year. Homes over $1 million are piling up like dogs under a cat stranded in a tree." - A colleague of mine who has been looking at the market as a buyer for a year

    He sent me a link to the typical home listing he is seeing: Lowered 4 Times In Last Year

    It's not just confined to Denver:

    More evidence:

    - All cash sales fall to 6-yr low in June - that's your investment buyer/flipper

    - NEW home mortgage purchase applications plunge 9% in August - that's your homebuilder home sales going down the drain, per the HOV/TOL 10-Q disclosures

    - Interest rates are moving higher, quickly - that's cuts off the remaining poor credit, FHA borrowers who borrow money to put down the required 3.5% to get taxpayer subsidized mortgages

    - Inventories are climbing, sales are hitting the wall, prices are dropping, foreclosures are going up again.

    This is 2005/2006 all over again. You can ignore reality, but you can't ignore the consequences of reality.

    My latest homebuilder short-sell idea has the potential to return at least $20,000 for every 1,000 shares sold short ($2000 per 100 shares): Homebuilder Bear Reports

    This market is hitting the wall very quickly.

    Disclosure: The author is short DHI, KBH, RYL.

    Sep 12 1:56 PM | Link | Comment!
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