Seeking Alpha

rogerlig

rogerlig
Send Message
View as an RSS Feed
View rogerlig's Comments BY TICKER:
Latest  |  Highest rated
  • The Worst Is Possibly Over For Alcoa [View article]
    Finally, now that the RTI shares are converted, this *is* the time to buy AA, while it's under $10. The shorting of AA has already been done by the arbitragers. The shares of AA received by RTI holders will quickly be sold, then clear sailing.

    The buying, short covering, and the underlying fundamentals will now dominate price action. I've been bearish all the way down, but I think the bottom is in.

    Long AA (finally)
    Jul 27, 2015. 02:33 PM | Likes Like |Link to Comment
  • AT&T details closure of DirecTV deal [View news story]
    My guess would be that a lot of AT & T was sold short, with the expectation that the short positions would be covered by the new shares used to acquire DTV. A lot of former DTV owners will just sell their AT & T, too.

    If I'm right, after an initial fall in the stock price of T, this overhang will be out of the way, and T should return to the upper $30s. It may *already* be out of the way, if the DTV owners sold short already.
    Jul 25, 2015. 10:20 AM | Likes Like |Link to Comment
  • Alcoa: The Earnings Reporter Edition [View article]
    The trading is bothersome, though. It looks very much like a test of $10 is coming, soon (just 3/8 away, now). If $10 doesn't hold, the next support is $8.
    Jul 17, 2015. 10:31 AM | 1 Like Like |Link to Comment
  • Philip Morris: Solid Quarter Ex-Currencies [View article]
    Sunshine123,

    I think we're mostly income oriented investors. A price rise would cause noisome option calls, nobody (here) needs that. The only good call, is one that expires worthless to the buyer :-)
    Jul 17, 2015. 10:28 AM | 3 Likes Like |Link to Comment
  • The Worst Is Possibly Over For Alcoa [View article]
    Even AA is predicting a surplus of aluminum, this year. It's difficult to see how price can rise a whole lot, under those conditions.

    We'll hope AA can differentiate enough that they're not closely tied to the world price. GM seems not to be doing all that well, but F seeks okay for now.

    I think the stock is heading for single digits, or at least recent trading leads me to think so. If that's the case, and $10 doesn't hold, there's a risk down to $8 or so.
    Jul 17, 2015. 10:25 AM | Likes Like |Link to Comment
  • Philip Morris: Solid Quarter Ex-Currencies [View article]
    Sideways stocks, with nice dividends and overpriced call options, are exactly what I'm looking for (I live only on the dividend and option premium income). PM fits my needs nicely. PM works well in the low 80s, or less.

    Used carefully, 10% per year income isn't hard to achieve. Sure beats bonds.
    Jul 16, 2015. 04:14 PM | 2 Likes Like |Link to Comment
  • The Worst Is Possibly Over For Alcoa [View article]
    The most meaningful strike price, is the one closest to the current stock price. I kind of assumed that was a 'given'. Sorry if it wasn't.
    Jul 16, 2015. 04:02 PM | Likes Like |Link to Comment
  • The Worst Is Possibly Over For Alcoa [View article]
    No, look at open interest in Jan 2017 10s. Open calls, 25,000. Open puts, 45,000. The 10 strike is the closest to the current price.
    Jul 16, 2015. 03:56 PM | Likes Like |Link to Comment
  • Alcoa Is Undervalued [View article]
    Skaterdude,

    My guess is that what he's saying, is that a lot of customers have already bought aluminum via futures contracts, at a much lower price. They'll just wait to take delivery when the contract expires (the futures contact is the 'derivative', in this case).

    So that demand is already filled, at a price set long ago. He's implying that the price of aluminum will be higher in the spot market, later.

    This may be true. Or it may not, depending on future supply. If China continues to export heavily, the spot market price might not recover.

    The 'Say's Law' logic (previously) is that enough supply will eventually create demand for the product (aluminum). Of course, that logic depends a lot on future spot price, too, as well as lack of competition. You can come to your own conclusions on this kind of analysis. Say's Law kind of went out with Keynes, in the '30s.
    Jul 16, 2015. 09:27 AM | Likes Like |Link to Comment
  • Alcoa: The Earnings Reporter Edition [View article]
    Anytime AA would like to stop declining, would be okay with me (long AA). At the current rate, single digit prices are just 50ยข per share away from that.

    I think China is a net exporter of aluminum. Is this not the case?

    AA may be a small fish in a very big pond. I'm very disappointed, even after the 2Q conference call. It just keeps falling, falling...
    Jul 15, 2015. 03:57 PM | Likes Like |Link to Comment
  • Alcoa: Why I Don't Expect A Turnaround [View article]
    Keep in mind that China is producing for social (full employment) reasons, and not motivated by profit, here. That could go on forever. They're not playing in the same ball park, as is AA, or even by the same rules.
    Jul 15, 2015. 11:20 AM | Likes Like |Link to Comment
  • The Worst Is Possibly Over For Alcoa [View article]
    We must be looking at different figures. Open Jan 10 (strike price of 10) 2017 puts is almost 25,000. Open interest in the same call is 12,500. Looks very much, to me, like two puts per call, at least at that price, the nearest strike price (in 2017) to the current price.

    The option premiums in AA are quite low, indicating a lack of expectation of movement in either direction. This make call option selling (without some offsetting dividend) unattractive to me; even more so, put sales.

    A bull case can be made for AA, but it's kind of far out (5 years, maybe). I agree with you that a lot of good things *could* happen. The fact that the stock continues to drop, even in rising markets, makes me think I'm one of the few seeing these 'good things' (the alternative answer is that everyone sees them, and they're already discounted in the current price).

    I like the micromill thing, more for current cost reduction than future applications (autos will be hurt by rising interest rates, too). Just not enough to add to my current small position in AA.

    I mean, we have an S&P 5 star CTL out there, paying 7% (and indicating strongly that they intend to keep paying). I think I'll buy that, and sell calls instead. I've kind of lost my enthusiasm for commodity plays (even if we don't consider AA one of these, the rest of the world does). Their 'days' may have been back in the 50s and 60s. History hasn't been kind to AA, which make you wonder if the future will be, either.

    I do wish AA luck. I like aluminum, enough for it to have been my employer for many years.
    Jul 15, 2015. 10:57 AM | Likes Like |Link to Comment
  • The Worst Is Possibly Over For Alcoa [View article]
    I found the $14 number in your own post:

    "But Roger, your real problem is that it will be $14-15 stock by then" (discussing the price five years from now). That's my *real* problem? I think I have more significant ones than that, concerning AA.

    I have this little, irritating tendency to prefer stocks showing some kind of rise in the not-too-distant past. In AA, I find a stock that's the same price as it was twenty years ago (inflation adjusted, maybe 20% lower). This means that money invested then, under the same assumptions today, is worth 20% less now, than it was then. That concerns me.

    I find a stock off 20% YTD.

    The thing is, I just can't get away from this notion that if the stock has a future as great as AA's is presented to be, then it should be rising, now. AA is not.

    AA's projections and outlook aren't a whole lot different from what they were, in that far-distant past. And let's not forget the Cramer was bullish on the 'old' GM, at $25. One year later, it was in receivership.

    I readily concede that a bull case can be made for AA; despite your previous allegations, I do know at least a little (rather than nothing, as you so clearly stated, insultingly so).

    Why, then, is this bull case not being reflected (at least a little) in YTD price action, in AA? Current price action?

    Would you please explain to this old know-nothing, why AA is off so badly so far this year? I'd really like your take on this. It would put my mind at ease, if it's reasonable. Does this usually happen with stocks with outstanding prospects? Does such a firm have *ten times* (yes, check it) more open put options, than call options (check Jan 17)?
    Jul 14, 2015. 05:24 PM | 1 Like Like |Link to Comment
  • The Worst Is Possibly Over For Alcoa [View article]
    My real problems is that an $11 stock, that's $14 five years from now (while paying no dividend) isn't of interest to me, or probably to you, either.
    Jul 14, 2015. 03:06 PM | 1 Like Like |Link to Comment
  • Alcoa Performing Strongly Despite Low Aluminum Prices [View article]
    If by derivatives, (I assume) you mean options, there are twice as many open put options, at the current price, than there are calls, even out to 2017. That will have to change substantially before I go even more long, than I am now. I'm short Jan 13 calls, and I'd like very much to have them exercised.

    If you're talking about futures on the metal itself, that's great, but I'm interested much more in the stock price, obviously.
    Jul 14, 2015. 12:06 PM | Likes Like |Link to Comment
COMMENTS STATS
53 Comments
87 Likes