John Paulson's hedge fund Paulson & Co has doubled down on its Cadbury (CBY) stake. According to U.K. disclosures, Paulson emphatically boosted his stake in Cadbury to 2.1% of the company as he purchased 14.8 million shares at a price of 759.59 pence ($12.50) each in the U.K. market and he now owns a total of 28.5 million shares. This means he bought 112 million pounds sterling (or $187 million) worth of shares.

Cadbury, of course, was the recent subject of a bid from Kraft Foods (KFT) to take over the company. Paulson seems to be wagering that not only will a buyout happen, but it will come at a higher bid. Kraft's stock and cash offer was for 720p ($11.90) while Cadbury was trading around 763p ($12.61). Needless to say, it appears many besides Paulson think that given Cadbury's rejection of the initial bid, a higher bid is inevitable. We note that Paulson & Co is not the only prominent hedge fund in this play as Eric Mindich's Eton Park Capital had been buying shares in September for 800 pence ($13.22) each.

4:14 PM, Oct 14, 2009 --

• NYSE up 150.5 (2.1%) to 7,182.38.
• DJIA up 144.80 (+1.5%) to 10,016.
• S&P 500 up 18.83 (1.8%) to 1,092.
• Nasdaq up 32.43 (1.5%) to 2,172.

GLOBAL SENTIMENT

I always like to take a look to see what stocks are "working;" it helps me see where the money is going and what trends I am missing. I generally like to follow stocks over $5 only, but since there is a bevy of "hot money" being made in the dollar stock area, I thought I'd list those too this time around.

So below are two lists - the top one are the stocks gaining at least 50% and are over $5. The lower one are stocks gaining at least 50% and are under $5. I picked an arbitrary market capitalization floor of $300M to simply cull out the smallish caps.

Great graphic up courtesy of Good magazine where they post up the largest bankruptcies in history. They use sinking ships to illustrate their point, with Lehman Brothers by far being the largest ship of the bunch:

(click to enlarge)

I think that if you’re a professional money manager and you don’t make 100% return in 1 year starting today --- you should look into other forms of employment.

Jim Cramer is right. I’m going to stand up and shoot for 100% in 1 month with a couple stocks. All of them are set for huge gains when the mutual funds grab them at $5.

While the Russell 3,000 index is down 5.18% year to date, the average stock in the index is actually up 0.41%. Below we highlight the 30 best and worst performing stocks in the index so far in 2009.

The Providence Service Corp (PRSC) is the top performing stock in the Russell 3,000 year to date with a gain of 561%! Based on its profile, a Democratic-led government can't get any sweeter for the company:

Allow me to start off by illustrating my sentiment from January 2008 – February 2009: I hate banks and I have no idea what they are doing. I hate anything financially related.

But, I find myself not hating banks anymore. What happened? I’ve got eight leading indicators that people might be aware of but aren’t catching headlines like they should be and I’ve got four monster catalysts. What do I know? I’m only the Motley Fool’s Hottest Player going into Easter Weekend. Further, my entire college tuition is riding on the stock market.

You might have been like my friends and family in the past 6-months -- afraid to check the portfolio, afraid to accidentally see the latest Dow Jones beatdown, with an upset stomach from a depreciating portfolio of Large Caps that your broker said were a great buy two years ago. You might be in a state of denial. You might be sitting 100% cash with two years of fallout supplies packed into your basement. I challenge you to open your eyes and go hunt with me for bargains.

What sets Super Markets apart from Stock Markets is pretty straight forward. At the Super Market, a 50%-off sale draws people from across the country to line up at 4am and stampede the bargains. At the Stock Market, a 50%-off sale is like a bomb threat in an airport. There are those that make gobs of money in times when the stock market is 50%-off. The trick is not looking around for the 50%-off items, because those really aren’t the bargains anymore. There are stocks that are 95%-off in a 50%-off sale. I call this the clearance aisle. These goods are selling for less than their cost of production (book value). The trick here is differentiating ones that are high quality from those of lesser quality. I set my parameters as fairly straight forward. The companies I buy have to be profitable and growing.

By popular demand, here is the latest list of Phoenix candidates:

Brandywine Realty Trust (BDN), CapitalSource Inc (CSE), CBL & Associates Properties Inc (CBL), Century Aluminum Co (CENX), Citizens Republic Bancorp Inc (CRBC), Colonial Properties Trust (CLP), Complete Production Services Inc (CPX), Conseco Inc (CNO), Delta Petroleum Corp (DPTR), Developers Diversified Realty Corp (DDR), Domtar Corp (UFS), First Industrial Realty Trust Inc (FR), First Marblehead Corp/The (FMD), Furniture Brands International Inc (FBN), Gannett Co Inc (GCI), Genworth Financial Inc (GNW), Hercules Offshore Inc (HERO), Hovnanian Enterprises Inc (HOV), Huntsman Corp (HUN), ION Geophysical Corp (IO), iStar Financial Inc (SFI), Liz Claiborne Inc (LIZ), Manitowoc Co Inc/The (MTW), MCG Capital Corp (MCGC), MGIC Investment Corp (MTG), MGM Mirage (MGM), Pacific Sunwear Of California (PSUN), Patriot Coal Corp (PCX), Pennsylvania Real Estate Investment Trus (PEI), Petroquest Energy Inc (PQ), Popular Inc (BPOP), Quiksilver Inc (ZQK), Rex Energy Corp (REXX), Saks Inc (SKS), Sterling Financial Corp/WA (STSA), Sunstone Hotel Investors Inc (SHO), THQ Inc (THQI), Webster Financial Corp (WBS) and Zale Corp (ZLC).

I've compiled a short list of reasons why Conseco (CNO) is a good investment. For starters, the cash balance in the last 2 months has doubled:

Q4 2008 Earnings Call

March 2, 2009 10:00 am ET

With the US equity market averages either probing or breaking down through their November lows, is it time to buy Phoenix stocks? Others have picked up on that theme, with the latest being a Minyanville article on buying beaten up stocks.

With that in mind, I screened the US market for stocks with the following characteristics:

Baby Boomers may be a little further from retirement now that the stock market has tumbled, but they are still getting older.

In the United States, Baby Boomers are now all over the age of 44 and some are turning 62. They make up an estimated 25% of the population, with another 12.7% over the age of 65.

Q3 2008 Earnings Call Transcript

November 6, 2008 9:00 am ET

The PEG ratio is a widely followed fundamental indicator that divides a company's price to earnings ratio by its growth rate.  Incorporating growth rates into the valuation model gives investors a bit more perspective when analyzing a company.  An Investor looking at two companies with the same P/E ratios might gravitate towards the one with the higher growth rate, and the PEG ratio quickly helps identify these differences among stocks.

Below we highlight the three stocks in each of the ten sectors that currently have the lowest estimated PEG ratios based on next year's forecasts.  A key point here is that the numbers are based on estimates, but these PEGs are extremely low due to the big drop in share prices over the past few months.  A PEG ratio below one has historically been considered attractive for a stock, and the majority of the names below have PEGs below 0.30.  Again, these PEGs are based on estimates for 2009 that have already declined quite a bit, but many don't believe the estimates have come down nearly enough.  Even if the estimates turn out to be overstated by 50%, however, most of the PEGs below would still be well under one.  Some of the companies below will no doubt face problems over the next few quarters, but others will turn out to be great buys at these levels.

Note: Before reading this update, make sure you check out the preface to the series I'm doing on Hedge Fund 13F's here.

It's time to continue the Hedge Fund tracking series. If you've missed them, I've already covered Jeffrey Gendell's Tontine Partners, Bret Barakett's Tremblant Capital, Peter Thiel's Clarium Capital, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, Boone Pickens' BP Capital, Louis Bacon's Moore Capital Management, Paul Tudor Jones' Tudor Investment Corp, and Bruce Kovner's Caxton Associates. If you want to hear some insightful thoughts from many of the hedge fund managers listed above, head over to my post on Hedge Fund manager interviews.

Q2 2008 Earnings Call Transcript

August 12, 2008 1:00 pm ET

Amazon.com (AMZN) –Citigroup’s forecast of better-than-expected sales of its e-book reader Kindle sent shares of Amazon.com on a 10% tear to $88.66 this morning. Option traders responded with a wave of giddy and fresh action in front-month options that are due to expire on Friday. Heavy two-way traffic was observed at the August 90 calls strike, while traders also positioned readily for and against a pull back below the $85 level by Friday with volume in excess of open interest at the 80 and 85 put strikes. The August straddle is priced to reflect about 5% of Amazon.com’s share price in play between now and Friday (half the move we’ve already seen today), making this a fertile hunting ground for volatility players today.

Readers have suggested some additional tickers for me.  Here they are:

General Electric (GE), Mircosoft (MSFT), Bristol-Meyers Squibb Co. (BMY), Boeing (BA), American National Insurance Co. (ANAT), Kansas City LIfe Ins. Co. (KCLI), and Deere & Co. (DE).