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  • Citron, Thanks For A Nu Skin Buying Opportunity  [View article]
    NUS Numbers are indeed compelling for building up long position in the stock. The stock Institutional ownership is at 85.59%. That is a very high number! The average percentage of institutional ownership in Consumer Personal Products industry is 31.42% according to Fidelity Research. You would think with so much institutional ownership the stock will have less volatility, the opposite is true for this stock. The stock has a very low float and shorts are toying with it like a yo-yo. The outstanding shares are 59.9M and 7.49M of them are in shorting hands. Shorts like Citron are betting down the stock like it has killed their children. A pop, when it happens, will probably be massive. So if you have the stomach to wait and the strength of your conviction, I encourage you to build up a large position now. I am!!
    Sep 25, 2012. 10:38 AM | Likes Like |Link to Comment
  • Why QE3 Can't Work: Understanding The Liquidity Trap  [View article]
    "Where do they stand? They have no cash, no savings and no pricing power regarding their salaries" I Agree, but tell me of a way to deliver cash to consumers short of dropping it from a helicopter on their rooftops? Tax returns/cuts will just add to the deficit and will not make a dent into pushing consumer spending. Besides, any fiscal action in the near future is extremely unlikely given the political climate. We need the existing liquidity to transform to investments in business to create jobs which puts more money in the pockets of consumers to spend. Yes, they will deleverage first before they start spending which is not a bad thing, but it will start the ball rolling for the economy. Fear of inflation is a strong motivator and I don't see the Fed having a better tool.
    Sep 16, 2012. 05:19 PM | 1 Like Like |Link to Comment
  • Why QE3 Can't Work: Understanding The Liquidity Trap  [View article]
    I think what is different about QE3, which may make it work this time, is that it is more of a stick than a carrot!! the explicit language from Bernanke about tolerating inflation above 3% and making the money supply unlimited and unsterilized will induce real fear of inflation. He is saying to cash hoarders and consumer "We will devalue your cash aggressively if you don't go out and use it NOW to buy goods and services." This is explicitly directed to assets which can preserve wealth against inflation like Real Estates and Equities which create the Wealth Effect and in turn promote spending. The risk of course is creating a bubble which will most diffidently happen if this mortgage backed security purchases go out of control. However, I think Bernanke is mindful of that and thinks it is a gamble worth taking. Re-establishing confidence is kind of a Poker game, yes he is doubling down, but he could have all the cards he needs to inflate. Do you want to take that risk if you are hoarding cash?
    Sep 16, 2012. 09:18 AM | 2 Likes Like |Link to Comment
  • New iPhone Release: Avoid This Supplier  [View article]
    I am not sure that Investors are holding all the risk at all. OVTI has completed the purchase of a large patent portfolio this year and shifting its focus to high end sensors where these patents apply. The sacrifice of margin to win large orders from AAPL is a smart move to fortify the company's market share and mind share. In short, OVTI is building a foundation for growth in the sensors market which has an explosive potential. This strategy is not risk free, but it is the best one to cash in on that growth.
    Sep 10, 2012. 08:38 AM | 3 Likes Like |Link to Comment
  • Spectrum Pharmaceuticals (SPPI +2.4%) racks up a gain today after the company's board approved an increase in its stock repurchase program of up $100M, a significant boost from its previously authorized $25M.  [View news story]
    SPPI was way oversold yesterday and given their numbers in the filing the company looked in great financial shape and still growing. The street's expectations were very high and the punishment was severe. On 14% drop after the earnings, I picked up few shares. I think it was a bargain. It should come back up to $14-$15 handle in the next couple of weeks.
    Aug 10, 2012. 12:31 PM | 2 Likes Like |Link to Comment
  • Shares of Nu Skin (NUS +5.5%) are active today as Deutsche Bank's Bill Schmitz squares off on CNBC with Citron's Andrew Left over the recent allegations by Citron that NUS is violating direct selling laws in China. Left accuses the company of operating a multi-level marketing pyramid scheme, saying he knows "for a fact" that the company is in the wrong. Deutsche's Schmitz fires back, saying NUS "wrote the law" in China, and those distributors receiving commissions are also salaried. (Video[View news story]
    I have nothing against short selling bad companies, even bloated and overvalued companies that are not run well. But when short sellers go for tactics like Citron to scare off investors on questionable allegations based on 'moral' disagreement, especially when the company has been making the numbers and by many measures undervalued, I find it distasteful.
    Aug 9, 2012. 03:32 PM | Likes Like |Link to Comment
  • Rapid Chinese Growth Is Powering This Cheap, Cash Rich $5 Pharma Stock  [View article]
    I liked this stock but I cashed out back in Jun at $7 handle. I would like to get back in at $5 but the company is under pressure due to China slow down. Most of the company sales are from China and that is creating strong tail risk for their earnings. That is the reason it is trading at such a low multiple.
    Aug 8, 2012. 05:12 PM | Likes Like |Link to Comment
  • The 2 Faces Of Nu Skin  [View article]
    Thanks for the info! However, you seem to be making a moral argument against MLM and NUS and hope that China will move to enforce your moral view, fair enough! Even if the company turned a blind eye to this practice, MLM is practiced by other businesses and is legal in most countries including the USA. I see no reason to hold NUS to a more strict moral standards. I, on the other hand, am interested in finding under valued companies to invest in. I don't think the shut down scenario will happen. I will be buying on the dip.
    Aug 8, 2012. 03:41 PM | 1 Like Like |Link to Comment
  • The 2 Faces Of Nu Skin  [View article]
    My skin is in the game and I know that Citron is a heavy shorter of this company. Indeed I am counting on a pop when we get the short covering after this is resolved. The charge of MLM has been around for years and was always on investors' mind. Whether it is happening or not, I cannot say, but I know that the practice itself is very hard to enforce and control with products that are sold door-to-door. The fact of the matter is the Chinese regulators are not stupid and they will not act to kill companies just because there are allegations of MLM practice. It is not in their interest to do that for the simple reasons it will shut down a major part of their economy and puts many people out of work. Even if this flares up and becomes a PR problem, they will ask NUS to control it further and move on.
    Aug 7, 2012. 01:07 PM | Likes Like |Link to Comment
  • Unisys: A Cheap, Successful Turnaround  [View article]
    I cannot like this stock now. It has negative EPS Growth, negative Revenue Growth, negative Book value/Balance Sheet, negative Return on Invested Capital (around -34%). This makes it speculative outside my range. This is not to say it won't turn around in the next year or two, but the economy is not supportive for this company to recover soon. Will keep it under watch.
    Aug 5, 2012. 12:25 AM | 1 Like Like |Link to Comment
  • While Intel (INTC) has stopped trying to maximize CPU clock speeds in favor of adding cores and improving efficiency, IBM is still at it. The next CPU to go into IBM's system Z mainframe line will have a clock speed of 5.5 GHz., and Big Blue's Power7+ CPUs (to be used in high-end UNIX/Linux systems) will have cores that surpass 4.5 GHz. IBM's chip division is struggling, but in this case, its efforts help differentiate a profitable server/mainframe business that in turn drives lucrative services deals.   [View news story]
    I think these processors are liquid cooled and massive in terms of floor footprints. Their sale is limited to government research centers and big university. The fact is CPU raw speed follows the law of diminishing marginal returns; it is more efficient to add processor count and use distributed/parallel software than to increase each processor's speed.
    Aug 3, 2012. 07:00 PM | Likes Like |Link to Comment
  • Facebook's Challenge Isn't Adding Members, It's Monetizing Them  [View article]
    Just a reminder of the fact that the biggest attraction to FB was, and still is, its closed database to the rest of the internet (search engines, spammers, phishing etc). It is the ability of users to pick carefully who can see them and monitor their activities online. Now that this privacy promise is being reexamined for monetization, people may stop behaving naturally and reveal their own attributes on FB. You may even see an increase in fake identities or incomplete profiles being created more than in the past. You will see more people browsing for information than putting in their own. This will render FB of little added value to the usual Cookie based ad businesses such as Google/Amazon/etc. Indeed, FB's murky privacy promise will backfire and tie its hands even further. The advantage it once had over Google will fade very quickly.
    Jul 28, 2012. 10:15 AM | 1 Like Like |Link to Comment
  • Strong Signs Apple Investors Are Naively Pricing In Robust iPhone 5 Sales  [View article]
    Actually the writer has a point about the high expectations built into the price for iPhone5, but I disagree that investors are ignoring the macro slowdown in all the major smartphone markets. In fact, I think if the fear for a major global slowdown was not factored in, AAPL's price will be in the high $600 or more based on the growth attributes of the company. Other growth stocks with less robust fundamentals and cash trade closer to 30-40 multiples while AAPL is currently trades at 14. I don't know if there will be a repeat for the 4S cycle, but I know that AAPL owns a very powerful set of technologies and have the business muscles to protect them while spreading their products to untapped regions of the world who are just started to deploy wireless high speed internet. This will keep AAPL dominant for few more years.
    Jul 27, 2012. 05:57 PM | 2 Likes Like |Link to Comment
  • Dip Brings Out Best In Nike  [View article]
    Analysts keep disappointing when it comes to estimating earnings. I think NKE has over performed given the global slowdown which was telegraphed from multiple sources. The slow inventory turnover should have been expected since it is the first gauge for slowing consumer spending. NKE seems to have the right plan in place to clear that inventory quickly by not increasing their gross margins as aggressively as they always have. So what is the take away? The so called 'miss' on EPS was a product of unrealistic expectations. Revenue growth was impressive. This dip is a time to accumulate. Remember the Olympics coming up which will be a strong catalyst. I recommend buying ahead of that.
    Jun 29, 2012. 09:13 AM | 1 Like Like |Link to Comment
  • 3 Reasons Why Apple's Next Move Will Likely Surprise Shorts And Longs  [View article]
    What I got from this article is that AAPL is consolidating and may have a big move soon when there is a catalyst which is possibly iPhone 5 in the fall. Well, one thing I know is that AAPL is considered one of the safest places to park money for institutional investors, Hedge or Mutual funds alike. The sell off from the high of $640 is simply profit taking, weak hands, and trend followers being shaken out. I do not anticipate another sell off even if the market takes a dive on macro issues. Other than +/- 2% fluctuations near term, the 6 months probability is high for a move up.
    Jun 25, 2012. 09:15 AM | 6 Likes Like |Link to Comment