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  • Nanometrics: Moving Up a Little Faster Than It Should? [View article]
    Hello Bob,

    Thanks again for your comment.

    My information mostly comes from company SEC filings but if you can provide a link to something more reliable I would be happy to take a look. Included with the facts is the sources including page numbers.

    I think the amount Intel MAY purchase IS exactly the point. It was in my opinion that the note to clients written about in the WSJ was the catalyst for the jump in the stock price online.wsj.com/article...

    No one including you or I knows what Intel will purchase from NANO this or next quarter(that surely would appear to be material insider knowledge not to be discussed publicly until it has been officially released). I used past filings to calculate the revenue generated from Intel from quarterly reports. Again if you have a better source I would be happy to read about it.
    In the SEC 10-Q(PDF format for page numbers) filing dated 11/12/10 for the quarter ending Oct 2, 2010:
    net revenue $44M p4
    Intel revenue 16.4% p19
    Intel revenue 20.3% (nine months ending Oct 2, 2010) p19

    Based on the 11/29/10 8-K filing with the SEC on page 6 includes the press release with BOLD TYPE as the headline "Nanometrics Announces $10 Million Share Repurchase Program" Further down as the last line of the third paragraph it includes "The Board’s primary goal in this new repurchase program is to offset
    shareholder dilution resulting from periodic grants of incentive options and restricted stock units"
    This appears to be the reason the stock has not tanked from all the insiders selling. This company is spending millions of dollars to keep the stock price propped up. Based on a closing price of 17.32 and the last 12 mos of 38 filings (100% sells) for a total of 1,156,453 shares sold NANO can expect to spend over $20 million to keep the stock propped up from insider selling(This is a company that lost $16.3 million based on the last annual report 10-Q dated 3//26/10 p24). Based on the latest last three months the stock selling by insiders has actually accelerated filings by the SEC for a total of 399,788 shares or almost 1.6 million shares annually by insiders (based on the last quarter and Fridays closing price it would take $27 million dollars to keep up with all the insider selling).
    As far as the assertion that the founders of the business Mr. Norman Coates and Mr. Vincent Coates who may be in the best position to know what the market is like are selling shares I do show many filings of sales by both. No purchases but yes many for selling. Also filings for other insiders with the latest SEC filing date of sales
    Dr. Stultz (CEO) 1/3/11
    Mr. Crawford 12/27/10
    Mr. Smith 12/9/10
    Mr. Bain 12/1/10
    Mr. Moniz 12/1/10
    Mr. Bentley 11/19/10
    Mr. Oldham 11/9/10
    Mr. Crawford 11/8/10
    Mr. Rhine 9/14/10
    I guess it's possible all these insiders sold stock even though they felt they were entering the "sweet spot" because they needed some extra cash for Christmas. I surely don't know the reasons they are all selling but it does appear that the people who know this company best all agree they should be selling the stock. I think I will remain in agreement with the insiders that the best course of action is to sell the stock too.

    Best to you sir

    RW
    Jan 17, 2011. 10:27 AM | 1 Like Like |Link to Comment
  • Nanometrics: Moving Up a Little Faster Than It Should? [View article]
    Bob,

    Thank you for taking the time and effort to read and comment.

    I believe we are on the same page if NANO did announce they are increasing their sales to Intel by 76% going forward. I think I would be looking at this stock from a different angle.

    What we have is Intel saying they are going to spend more money and a analyst report that I believe reads that NANO may benefit from this. I didn't say that Intel will be increasing their spending with NANO and believe they won't (by an order of magnitude suggested in the article giving rise to the stock price). My point was to show what they very best possible case MAY be based on what is known. That is far different than what is reality at this point.

    At the same time we have a CEO that would appear to not know about any future large increases in orders based on his recent selling of the stock and no other indication that NANO will get any orders and / or turn a profit in 2011. You do understand that the company has stated they are buying back stock in order to not have all the officer selling of the stock delute the float traded to much right? They are selling at a rate of over the average daily volume each month.
    In other words over 5% of the monthly total trading volume appears to be officers selling. Here is a link you may find informative seekingalpha.com/artic... and there are links from there. Also look at all the rule 10b-5 sales that have gone on and see what your thoughts are. I use Edgar online i-metrix.edgar-online.com/ but you can go directly to the SEC website and read all the form 4s filed.

    Stocks are cheap usually for a good reason and based on the ability for this company to provide shareholder value things will have to change before the stock is undervalued. In my opinion regardless if NANO totally fails or becomes much bigger Friday was like most stocks that have large moves on any given day more about emotion than any real change.
    The only thing you and I know at this point is that there is uncertainty in what will actually happen with revenue / profit. Buyers of NANO are betting that NANO will get something they do not have and hoping they get it. Absent news from NANO that they "close the sale" NANO I believe falls as the hype wears off.

    Respectfully,

    RW
    Jan 16, 2011. 04:14 PM | 1 Like Like |Link to Comment
  • Investing in the Chinese Yuan: World's Reserve Currency by 2030? [View article]
    I love China. I love the people that I met and the places that I have seen. Every trip I have made to China further increased my belief that a free market can provide wonderful windfalls and "rise the tide for all boats". To see people working away as much as they can with total disregard to their own comfort and being with their family is both very sad and inspiring to me.
    A study of history shows that China at one time was the largest GDP country in the world and if you include both India and China at one time they made up about 75% of the worlds GDP by themselves.
    With China growing as fast as it is and seeing how much wealth is transferring to the middle kingdom it is very easy to see why many may think they "will take over". I could say we heard this all before in the late 80s with Japan and indeed I think many of the elected officials dusted off the playbook with Japan in how to do their best with China bashing.
    China is different though. They have a huge population and they are have an equal difference in natural resources within their own territory. This can lead one to believe that there is nothing stopping China from reaching the top of the food chain. There are also some serious differences that should be noted before we all pack up our bags and move to the far east.
    There really is no meaningful constitution in China. Legislatively they can change the constitution at will and while some positive changes have taken place (I was in China when they finally passed the right to own land, but that was done so banks could loan money with the land being an asset for collateral not to provide rights to the people).
    The RMB is not currently even traded against other currencies and / or fully convertible. While it does appear that this will happen it could be 20 years before it does which would seem to be a first requirement for using it as a reserve.
    There is no real civil law system in China. Most of the judges are not even lawyers but rather political appointees. Looking at some of the fights some international companies have had gives a giant pause in the faith that as a foreigner your rights will be protected (something you will probably want if your holding their paper fiat currency)
    The great firewall of China means that markets can not be fully trusted because their is a lack of information to market participants.
    The economy is in a very real and large sense benefiting from a relatively weak RMB. Taking that away with a fully traded currency means the economy slows down and that is paramount to an elephant riding a bike that stops. The elephant needs to keep moving forward or there is going to be one very huge crash. There are currently hundreds of protests happening in China on any given day (China's official news doesn't seem to want to carry this news) due to economic problems in rural areas as well as urban protests. An economic slowdown could create a critical mass protest that could be perilous to the political power in place so unless one can believe that China will maintain it's growth with a fully convertible currency I do not see how one could see progress in the reserve currency status.

    We are already seeing fraud after fraud case with Chinese stocks and I expect we will see an acceleration in cases that the companies are reporting numbers that do not match up with reality. The primary reason in my opinion is that companies in China feel they can get away with this due to the lack of rule of law within China. I am unaware of any Chinese company executive that has received a sentence for defrauding foreigners.
    Without a doubt China is growing and their influence is growing (especially in places where they are lending money including right here). I think it's possible things could change and that the RMB could replace the greenback as the worlds reserve currency but I think there is a LOT of housekeeping and trust that China will need to do and develop in order to replace the dollar. We surely have our issues but as much as our economy is a driver of the dollars reserve status it is our rule of law and the trust others place with the US that keeps our status. When things get doubtful you see it in the dollar as money flows back to safety. China is a long way from from developing that feeling of being safe with the rest of the world.

    Full disclosure: I have a small amount of RMB and my sons are learning to speak Mandarin : o )
    Jan 16, 2011. 03:36 PM | 5 Likes Like |Link to Comment
  • Why Coinstar Is a Better Short Than Netflix [View article]
    I think your article is well done with a lot of thought put into it. I also agree with the overall outlook for CSTR and that they face a lot of headwind. To be fully disclosed I did trade (and did well )CSTR after earnings in after hours trading that day to the long side but that was based on fading panic and not on the outlook of the company.

    I was in the rental business in the 90s and believed the rental business would have about a 20 year window which appears to be a pretty good guess for back then.

    I believe for physical delivery of content that redbox may me the last one to be able to grab a chair when the music finally stops because of the low transactional cost per rental but that can only slow down the end.

    One thing that has not been noted by the author or by comment but I think is worth adding is that not all streaming content is legal / paid for. As the music recording industry painfully found out it is hard to compete with free. I am not suggesting that everyone will use illegal downloads but that it is a market force that changes the landscape. Streaming providers / content owners have to price the product in part due to this market force and that in turn accelerates the end of the physical delivery of content in my opinion.

    I also wrote an article on CSTR and absent a new product and / or a new way of monetization their current customer base I feel the best days are behind them.
    Jan 16, 2011. 02:56 PM | 1 Like Like |Link to Comment
  • Nanometrics: Moving Up a Little Faster Than It Should? [View article]
    Thank you for taking the time and effort to comment on my article.

    Unfortunately it appears that after the reading you were left with no counter points or discussion on the merits of the company and felt a desire to attack me personally.

    I would guess that few will find your comment of real value but perhaps you may be able to do some research on the company / industry that demonstrates how the valuation should be different. Indeed I welcome a healthy discussion on a stock I have interest in because I feel it furthers my knowledge as I would guess many others do as well.

    We may have a difference in opinion but I tend to give some added weight to those that have a well documented opinion and have some of their own skin in the game. Those that talk about investments (either good or bad) but don't actually have any money on the line are not as convincing to me as those that do and fully disclose what they are doing.

    Best of luck to you and if you find you have something to add that is about NANO feel free to try again.

    RW
    Jan 16, 2011. 12:53 PM | 4 Likes Like |Link to Comment
  • Molycorp Stock: Too Good to Be True? [View article]
    I will have to decline your offer of the 90 v 30 price point reached first. I no longer have an opinion on the price going forward.

    This setup was based on the non-stop press releases and hype about the company sending the stock higher at a rate that was not sustainable. Along with that the option premium (IV) kept pace and while the calls and puts were pricing in a price drop (not good when you are selling calls) the IV was still very high. This is why I shorted the calls knowing that unless the price continued to rapidly climb I would still have a gain even if the price did go higher.

    Today was also a good example of the fact that companies and stocks are two different things. The value of the company did not change up and down as much as the value of the stock did in the last few days. The price of a stock on any given day is based mostly on emotion. Something a lot of stockholders that bought the stock in the past two or three days found out today.

    FWIW, based on my experience it is more likely than not that MCP will continue down tomorrow. Maybe look to next week for MCP to regain it's footing.

    Best of luck to you
    Jan 6, 2011. 05:48 PM | 1 Like Like |Link to Comment
  • Molycorp Stock: Too Good to Be True? [View article]
    Renderus,

    You asked me to comment about China holding REEs back and backing bread instead of selling flour. I wanted to wait until I was out of MCP so that if would not appear that I am biased in my opinion. (I have no plans on a reentry as of this post)
    I think you could be right about China wanting to sell higher value goods and that may cause less REE raw material on the market. This I would agree could be bullish for other producers especially at face value. It could also be bearish too as it would appear it could be a double edge sword. I don't know enough about the industry players to know how this would play out but perhaps you may.
    I would suggest thinking about who would be the buyers (especially at premium pricing that may help MCP have over-sized profits). Will these buyers be in direct competition with any new Chinese companies producing the higher value goods? If so by how much and it could possibly drive some of the current/future buyers out of the market. The easy to understand next step is that MCP may find the new mines coming online and the customers expected landscape to change and not for the better. Things to think about for sure.
    I did exit my MCP short today. I am now flat
    Jan 6, 2011. 11:02 AM | 1 Like Like |Link to Comment
  • Molycorp Stock: Too Good to Be True? [View article]
    Renderus,

    Thank you for taking the time and thought to post a comment. It appears you have spent some time and effort to try to understand the issue at hand. I would on the face of your comment say you know more about the different mines throughout the world than I do. What I do know about and would wager is that I understand Chinese culture and business practices better than 98% of Americans. This has come from living in Asia as well as spending a lot of time in China putting business deals together. The short answer is that what China says and what China does is often very different.

    Regardless it becomes clear that you are commenting on a different subject than my article. You comments are about an industry or if you will a company. My article is about a stock and the derivatives from the stock. One mistake many make (especially industry insiders) is they don't truly understand the difference between a company and its stock. This is why companies will often do company stock buy backs at about the worst possible time.
    As such let me restate why I am short and hopefully it will become more clear. I am short MCP call options due to the IV being sky high. I believe the time decay will influence the price of the calls faster than MCP can appreciate in price. The price of the stock in my opinion has run up due to headlines and cnbc talking about the stock non stop. Once that stops the stock will quickly become forgotten about and the new money that it takes to keep it moving higher will dry up. Then when it moves down all those stop losses will kick in and those that are fast to get out maybe able to make a gain and those that hang on will wish they exited in my opinion.
    I see this happen over and over again.

    So no I am not a brave man as you suggest, I am a man that understands probability and how crowd behavior works with greed and fear. I am not guessing or hoping I am simply following the same path I follow over and over again to the point it gets boring.
    Good luck with your investment and I hope you do well with it.

    Also you may want to keep two things in mind. 1. stocks peak on good news not bad, and 2. the lockup period I believe opens on Jan 25th which will start to put a headwind on the stock about a week before and continue until any amounts that want to get sold get sold.
    Jan 4, 2011. 09:39 PM | Likes Like |Link to Comment
  • Molycorp Stock: Too Good to Be True? [View article]
    Thank you for your comment. You make some good points to think about. Lets look a little further into each point. MCP did used to provide metals but shut down due to being uncompetitive. This simple obvious factor could (and I believe highly likely) will limit profits and may in the end cause the whole mining project to shut down again (I understand its hard to imagine that with the current headlines but the news today is the fish wrap tomorrow). The white house will say they will make anything a major initiative if it appears there is political gain. Last thing the person in the White House wants to say is that they are not "working on it".(both political parties). Just like we have FEMA for emergencies I am sure they are putting together a plan. It doesn't mean it will actually help and if I am going to bet for or against the government actually helping a situation I guess I lean towards the government spending a lot but not actually doing a lot.
    Some biotech trades on potential profits years down the road (not the entire as you suggest) but there is a big difference. The biggest difference is that the gains and profits can be huge with a new medicine with patent protection. This is a business of selling a commodity and the winner is who can produce at the lowest cost (again why the mine shut down before is they could not compete)
    China curbing production, Well that is the crutch of the whole thing is it not. Here is an area that I feel I really shine in being able to calculate what will happen. Before I became a full time trader I was in the importing business and I have been to just about every major (and a lot of small ones) city in China (as well as other countries) and I am highly confident that companies will find ways to put product on the market if it is highly profitable to do so. There used to be a saying that still applies today "The emperor can't see this far" meaning the government can not stop people/companies from making money. Plus and this is really important to keep in mind, China may very well have NO plans to actually try to limit the exports. Look at what they have done for their profitability just by saying they will. If they do allow greater than announced exports they will not issue a press release, they will just quietly allow the boats to sail with product being sold at a higher price (for a while) than it would otherwise be. These are very smart people, they know what they are doing and they know they have a year to maybe two year window to push up the prices. After that they go back to the same place and drive MCP out of the mining business. So unlike a hot new medicine that has huge profit potential MCP does not have the ability to sell anything other than a commodity product that China can produce at a lower cost. This is not a receipe for profit in stocks in my opinion.
    Jan 4, 2011. 08:53 AM | 2 Likes Like |Link to Comment
  • Corinthian Colleges: The Most Important Stock to Own in 2011 [View article]
    I added into my article that the board athorized a repurchase of shares because its pointed out in the 10-Q and some consider that bullish. For me its a near non factor and not nearly as bullish as many think. While it makes for a great headline and usually gives a small short term pop in price it usually doesn't keep the price moving higher on its own.
    The main reasons I am long is the PE due to uncertainty (market hates uncertainty) the balance sheet, the change in Washington coming up after the last election, and buyout potential. There are indeed other reasons but these are the most important. A large short interest can light a fuse and send the price higher very quickly but I give that less importance (due to being a long term holder, If I was simply trading it short int would be much more important to my reason why I believe the price will go higher)

    Best to you
    Dec 31, 2010. 10:10 AM | 1 Like Like |Link to Comment
  • Gushan Environmental Energy Extends Q3 Losses on Plant Disruptions [View article]
    Interesting that this company is trading below the cash on the books (at least the amount being reported, but who knows what the actual amount is today). I think it shows the confidence the market is placing on the management of the company (zero).

    Some of these Chinese stocks are really the ultimate traps. They appear to offer a bargain, a value, a stock that may really grow. The reality is that the reported numbers may be very wrong and while they are unable to execute what they are supposed to be doing they busy buying interests in companies that do not appear to have any common industry similarities.

    Maybe better to let this one go by and look for another
    Dec 27, 2010. 09:29 AM | Likes Like |Link to Comment
  • Visa: Heads I Win, Tails I Break Even [View article]
    Thank you for your kind words,

    Dodd–Frank Wall Street Reform and Consumer Protection Act- here you can find out more about the law -en.wikipedia.org/wiki/...

    If your talking about the sell off on May 6th that was part of the overall market selling off in what is widely known as the "flash crash". The flash crash is the result of incentives to sell and/or short a stock during a market crash in combination with de-incentives to buy when a market is crashing. This comes from the markets willingness to "break" trades that are "unreasonable". As a result you are better off selling your stock even if the price of the stock has gone done greatly because if your right the stock continues down and if your wrong the trade may be broken and you get to keep the stock afterall. The opposite is true for buyers. In the case of buyers if your right about the stock being below fair value the stock trade gets broken and you lose out and if your wrong the stock may continue downward. So the smart money backs away (as was seen with many HFT and other normal liquidity providers such as myself).
    I can't say what you should do with your investment dollars and you may want to very much question the motivation of anyone (including those with lots of letters after their name) who will tell you. I can only say that I have bought and traded V and I also sold Calls against my shares as I believe the stock will go higher when the calm returns. If proven wrong I will walk away though and move to looking for another entry. Its the uncertainty that gives the stock the value and the chance to move higher in value in my opinion (as you will see in my next reply to comment)
    Dec 18, 2010. 01:54 PM | 1 Like Like |Link to Comment
  • Visa: Heads I Win, Tails I Break Even [View article]
    Well your technically correct in some ways. Yes if the amount that is being paid to V is lower than cost yes this would be "bad". But what needs to be known is the costs are what BANKS charge merchants and V only gets part of that from the banks. One would presume this would put downward pressure on the top and bottom line but I believe that has been more than priced in. With the current closing price of 67 per share V has a forward earnings PE of less than 20 and a growth rate of over 5% even if the limit was 12 cents. Add in the name brand value and I think this is a buy. There is no "if" the price is to low. The cost is a lot less and unless your a really big bank your exempt from the law. Also the largest merchants negotiate rates that are very low relative to the average.
    "if the Fed lowers credit card transactions in the same manner?" - well there is no mandate by congress to do so. I guess congress could pass and the president could sign a law but in light of the last election that appears to be something that is a near zero factor.

    There is not much to understand here with V. It was a panic throw the baby out with the bathwater sale on V and when the calm comes back and the panic goes away like it always does I believe V will retrace very nicely.

    Best to you
    Dec 17, 2010. 05:19 PM | 4 Likes Like |Link to Comment
  • Dell to Acquire Storage Solution Provider Compellent for $960 Million [View article]
    This was a great example of not blindly buying into a buyout rumor. While I will admit that its always nice to get a little lucky in a trade I was smart enough to run the numbers when the rumor started making its rounds. What I found was that some people were pricing in over 100X forward earnings to be able to make money on a buyout and no discount if it was not bought out.
    I was short around 32 when the deal was announced and while I thought DELL would move up more than 25 cents after the press release I didn't think it would be much higher.
    Like a good master carpenter measuring twice before making a cut investors must keep their heads before placing an order to buy or sell.
    Dec 14, 2010. 06:02 PM | Likes Like |Link to Comment
  • Look at iGate for a Holiday Bargain [View article]
    Well the quick answer is every investor thinks the market is wrong or why would you put your dollars at risk? Most people do get it wrong and find out the market was correct but that is a whole different conversation.

    Best to you
    Dec 2, 2010. 01:00 AM | Likes Like |Link to Comment
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