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Mark Gomes
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Mark Gomes is one of the world's most experienced technology analysts, with over 20 years in the market. He is also a Masters Track & Field world record holder and U.S. Gold medalist (http://www.fasterthanforty.com/hello-world/). Currently, Mr. Gomes is the CEO of PTTResearch.com, Pipeline... More
My company:
PTT Research & Pipeline Data, LLC
My blog:
Poised To Triple
My book:
Faster Than Forty
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  • Glu Insider Transactions -- Why You Should BUY

    Investors are already pelting me with questions about the recent insider selling in GLUU shares. No offense, but 10b5-1 insider selling is almost never a reason to get frightened about a stock. In fact, if the fundamental story looks good, 105b-1 selling should be ignored…100% of the time.

    100%.

    If you go to InsiderCow, enter a ticker symbol to see the insider trading activity for the corresponding company. On the far right of each company's page, there's a column called "Details". If you click the "View" button for any transaction, the website will display the SEC document that was filed to disclose the transaction (a Form 4).

    Box 3 of the each Form 4 shows an alphabetical transaction code (a code key can be found on Wikipedia), along with a numeric code in parenthesis denoting the reason for the transaction (the numeric key code can be found at the bottom of the Form 4. If the code is (1), it means that the transaction was completed under Rule 10b5-1 of the Securities Exchange Act of 1934.

    According to Investopedia, a 10b5-1 plan enables "major holders to sell a predetermined number of shares at a predetermined time. 10b5-1 plans are used by many corporate executives in an attempt to avoid accusations of insider trading." In other words, it is basically an automatic wealth diversification program which has nothing to do with whether the company is doing well or not…a non-event.

    As Peter Lynch (one of my early Wall Street idols) once said, "There are many reasons insiders sell, but only one reason insiders buy." In other words, insider purchases are usually bullish, but in a vacuum, insider sells are meaningless data points.

    If anything, if the stock falls on such news, it's almost always a buying opportunity. That is the case here.

    In other words, the 10b5-1 selling has zero impact on my thesis or thinking on GLUU. Investors need to get used to the fact that my articles don't have an expiration date, nor does my thinking change with each silly and minor data point. Deer Hunter falling 2 spots in the rankings doesn't change the ONE most important thing about GLUU -- its new monetization platform is a major money maker.

    Thus, what I have written about GLUU will be how I feel NO MATTER WHAT HAPPENS, barring ONE exception -- if the monetization platform starts to fail. So far, the opposite has been true. The platform is performing better than I imagined.

    So, do yourselves a big favor and calm down. :)

    I only donate a certain number of hours to Seeking Alpha each week. Having to write articles like this takes time away from finding a new triple. Thus, when your confidence in one of my picks feels shaken, go back and read Tripling Your Money: Don't Get Shaken Out. Alternatively, when insiders sell, follow the instructions I provided above and confirm for yourself that the selling is just a harmless 105b-1 program at work.

    ...and yes, >sigh< if you need to hear it again:

    Shares of GLUU are still poised to triple.

    Happy New Year Everyone! :)

    April 2014 Update -- The article above was written in late December 2013. Let's see what GLUU did after all the insider selling started:

    (click to enlarge)

    As you can see, the stock went from $3.70 to $5.70, powered by an incredibly strong quarter. If you need any further proof that insider selling should be ignored, I can't help you ;)

    Now, all of that being said, notice that the stock hit the top-end of my risk/reward chart channel (the line above the stock). That was a signal to hedge your position (by selling calls, buying puts, or shorting the Russell) or take some profits off the table.

    The pullback that ensued was not a function of the insider selling (as discussed above), but rather the fact that the stock got high in its risk/reward channel at a time when the market was getting ready to pull back.

    Disclosure: I am long GLUU.

    Tags: GLUU
    Dec 28 3:15 PM | Link | 22 Comments
  • Stock Market Yellow Alert!

    This morning, results of the latest US Investor's Intelligence Sentiment Poll were released. Bullish sentiment increases to 55.7% from 53.6%, while bearish sentiment decreased to 14.4% from 15.5%. Thus, the gap between bulls and bears (which I call "net sentiment") reached 41.3%, the highest number I have seen in a long time.

    Contrary to what you might believe, this is not good news. It's a warning flag. The chart below may seem confusing, but I'll explain…

    (click to enlarge)

    This is a scatter graph of every net-sentiment data point for as far back as I could find. I combined this data with data regarding stock market returns in the 3-months following each net-sentiment data point. The results showed an inverse correlation. In other words, the more bulls (vs. bears), the more susceptible the market has been to a decline.

    The breakeven point on this graph is 32%. In other words, when bulls outnumber bears by more than 32%, the market has typically dropped in the 3-months that followed.

    As stated above, we are currently at 41.3%. According to my graph, the most likely market return over the next three months will be -1.5%. The range, however, is wide. Under these conditions, the market could rise as much as 8% or fall as much as 12%.

    Because of the great year on the market, many portfolio managers are set to receive big bonus checks. Others are playing catch-up because they haven't kept pace. Both types have an incentive to buy stocks until the New Year. The successful ones will get bigger bonuses if stocks keep rallying, while lagging managers will buy stocks, hoping to catch up. Thus, the market could keep rising until year-end. It's a big game of chicken.

    However, considering the market's recent run, a pullback appears due sometime in the next three months. It could be now or it could be later. FYI, in addition to the information I have already provided, many of my risk/reward charts are topping out. Accordingly, I am selling most of my secondary (non-favorite) investments. I am also making sure that my remaining positions are properly sized, according to my publicly-available Methodology.

    Of course, I will maintain a position in my favorite stocks (especially the ones with positive risk/reward charts). At present, my very favorite core positions are ATTU & GLUU. My favorite speculative positions are GSAT, PXLW, TPCS, & a new pick I provided to PTT Research subscribers on Tuesday.

    Barring a market correction, I expect all of my stock to be up (after all, I believe they are all "poised to triple"). In fact, even if the market falls, these positions could rise based on business momentum. Thus, at times like these, I hold my favorite stocks and simultaneously place heavy bets against the S&P 500 and the Russell 2000.

    Be careful out there.

    Disclosure: I am long ATTU, GLUU, OTCQB:GSAT, PXLW, OTCQB:TPCS.

    Tags: ATTU, GLUU, GSAT, PXLW, TPCS
    Nov 27 12:05 PM | Link | 10 Comments
  • Attunity's Shows Sharp Q3 Profit Improvement

    This is a LIVE draft of my upcoming analysis of ATTU's Q3 results. I will be adding and making changes to it as the conference call and other information unfolds. Also, I'm scheduled to speak with the management team at 11:30AM ET. Overall, I'm impressed, as you will read below...

    Here's my quick take on Attunity's (ATTU) Q3 press release:

    After digging through the Q3 release and comparing every line to its Q2 release, it's clear that some exciting things happened for ATTU this quarter.

    The company posted a bigger profit than I expected. The direct sales force is clearly not fully ramped yet, but it appears that strong partner revenue drove higher margins and much higher operating income. Operating income was up 1,000% versus Q2. Wow.

    So, ATTU's partner channel KILLED it (bullish). Gross profits vs Q2 = wow. The only weakness I see is direct sales. Revenue LOOKS light, but it really isn't. Partners take their cut BEFORE giving ATTU their share, so the mix of revenue was strong for partners (which is almost 100% profit) and light for direct sales (which is much less profitable, and therefore not as important).

    I should have explained this possibility in yesterday's preview. Mea culpa.

    In other words, EMC, HPQ, IBM, MSFT, ORCL, etc are driving business to ATTU rapidly. This is a VERY good sign and a bullish earnings release. Don't be fooled by the revenue line. All the action happened beneath it.

    I'd rate it a 100, but have to subtract 10 points for the direct sales force. Thus, I give it a 90, which is an A-. Thumbs up.

    UPDATE: The earnings call was quite bullish. My exclusive call with management was even more so. I'm busy with getting the new pick to triple ready to go out (today at 2PM ET!), but will provide details on both calls ASAP. Suffice it to say, I'm a buyer today!

    Stay tuned to PTT Research. Our next pick to triple will be announced there today!

    Disclosure: I am long ATTU.

    Tags: ATTU
    Oct 24 9:09 AM | Link | 9 Comments
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