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Overriding philosophy: My orientation is that of a swing trader, intent on converting perceptions to profit. 1.Over 3 decades as a market observer and and independent trader. 2.Trained in investment banking, currently a private investor 3. I believe market volume and price interact similar to... More
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  • PLUG Power Inc. , The Forklift Manufacturer That Is Taking Over The World 3 comments
    Mar 8, 2014 10:47 PM | about stocks: PLUG, GOOG, AAPL, TSLA

    As of March 7, 2014, $Plug is a good example for learning about the stock market. It was up 30% on Friday, and up 4700% in the last 12 months.

    (The "fundamental" and 2nd, 3rd, 4th, etc. jawboning opinions are reaching new levels on internet chat rooms and I could not resist) Plug was overpoweringly controlled by bulls for the week, day and hour ending Friday March 7th. Note that $Plug's 4th quarter earnings report is scheduled for release March 13th. It is anticipated by analysts that PLUG will lose 8cents versus last year's 4th quarter of 22 cents loss.(Also note intervening variable of the stock offering at $5.7 of 3.9 million shares on March 6th. This was certainly a master stroke of investment banking for the insiders. It was almost lost in the internet chat rooms excitement,and not even mentioned by most of the article writers.)

    FYI: Sales estimate is 7.80 versus 5.9 million last 4th quarter...

    I imagine a scenario unfolding that anything less or more will give the longs and shorts rationalization for their opinions, and will intensify trading volatility and volume.

    The average holding period on Plug can be estimated by looking at the fact that it has 88 million shares outstanding (in order to gauge the intensity of trading- this is a very useful exercise- so I recommend you follow it. Using an indicator that I call call "Intensity Index"- ( tracking the percentage of outstanding stock actively traded per day, and then graphing it over time) let's review the trading in PLug:

    PLUG has 88.36 million shares as of today, according to Yahoo.com

    The last 2 months average trade was 28million/ 88 million shares outstanding =31%. (2 months = approximately 40 days of trading = approx. 40-45 days = .77 or less than 1 percent of shares traded daily.

    Last 10 days average trade was 68 million shares/88 million= 77% of shares. 77% divided by 10 days= 7.7 percent of shares traded daily.

    (I infer that the average holding period was reduced to 12.98 days. from approx. 100 days from 3 months ago to 10 days ago when Plug started making headlines)

    Friday, March 7th, 125 million shares traded; that is 125million shares/88million shares outstanding= 142% of outstanding shares traded in one day! Quite remarkable

    Since the turnover in trading was 142 % of the stock available for trading that implies that the trading average holding period is somewhere between a long of period 12 days and period of 4.5 hours.

    Quite interesting! What is changing minds and driving this stock now?

    Greed and Fear in my answer. Not much thinking going on anymore. This is Fun! Better than watching the Super Bowl blowout.

    A Separate issue about shorts: While Plug is the great happening, I am not sure what the shorts have been doing. I am unable to get accurate information on what they have done. I see that Yahoo reports 38% or 11.7 million shorts are reported as of Feb. 14th. That is old news (let me interject here that the blow-off buying up 30% on Friday could be the final short squeeze as shorts that were chasing all the way up in a panic on Friday to close out their shorts. But we can't confirm that since 125 million shares traded hands and the last short positions show only 11.7 million shares short on Feb 14th)

    1. (Owen Group at SeekingAlpha - see D.R. at seeking alpha today,has a note about Plug today, which points out that PLUG is very exposed here and expensive and not give anything new to offer to the curious - just repeating and summarizing- they seem cautious as well).

    Technical Comment

    a. Bulls took control on 2/25 at $4.60

    b. Bulls still in control Friday 3/7 at $8.27 as of close.

    Summary: No guidance.

    I intend to wait and watch my indicators showing that the bulls have run out of gas. It will be very fast and furious as bulls protect profits when the reverse comes, and it should bounce up and down for a couple of hours. Remember more jawboning will come on March 13th after the earnings release.

    Some comparative views of Fundamentals as of March 7th between Plug, Tesla, Google, and Apple

    Price to sales at this price shows that each share of Plug is trading $26 per share revenue for Plug and Plug's Profit margin is -179%. They have no earnings, they are losing money.

    Shares of Plug in 12 months are up 4,700 percent.

    STOCK/PERCENTAGE GAIN 12 MONTHS/PRICE -TOTAL REVENUE Ratio/and PROFIT MARGINS for Four Stocks for Comparison

    PLUG +4764% $26.0O -172%

    TELA 529% $15.48 -3.68%

    GOOGLE 45.2% $6.85 +21%

    AAPL 21% $2.72 +21.28%

    Of course the investment bankers would say that I am comparing apples and oranges.

    My (gulp) Opinion based on Human Species Evolution:

    Once Plug really ramps up next year to sell a Fork lift to every American Teenager that has a warehouse. their profit margins will improve. and make you lots of money. From $24 million in annual sales this year, if they can sell a forklift to every American family eventually they could far exceed Apples Revenue of over $ 200 billion in computers and I phones. Just kidding

    Seriously: To go long or Short:

    Plug reminds me reminds me of the story of the confused donkey that is traveling down the road after a long day,and sees 2 moist, yellow stacks of hay on the side of the road. Given his exhaustion and his indecision the donkey is unable to decide which haystack to satisfy his appetite with, so he just continues past, without part-taking in either opportunity.

    Meanwhile Good Luck Traders!

    _____________

    Stocks: PLUG, GOOG, AAPL, TSLA
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Comments (3)
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  • Growfast
    , contributor
    Comments (295) | Send Message
     
    PLUG seems quite extended to me. I've already gone short via puts so we'll see how these prices hold up over the course of the next month or so.

     

    $1 Bln market cap for a company generating 24MM annual revenue and not turning a profit or with even positive margin just doesn't work. If the WalMart contract were going to bring potential of several Billion in revenue over the next 5 years, that might be different.

     

    But, what a successful stock offering orchestrated in the meantime.
    9 Mar 2014, 11:25 AM Reply Like
  • MagicQuote2014
    , contributor
    Comments (76) | Send Message
     
    Author’s reply » Grow:
    aknowledging that you saw this blog.
    This has not broken yet. The one minute charts are very unreliable and the after trade as well, but it showed standard deviation flagging on the CCI which means ability of longs to drive it up further was exhausting itself.
    Rise and fall, right edge of the chart.....
    The March 8 puts at $1.00 to .90 Monday morning on PLUG looks like the short term play.
    9 Mar 2014, 04:21 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Agreed. Looks like a good trade opportunity. I got in a little early, but still think positioned properly.
    9 Mar 2014, 06:49 PM Reply Like
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