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Teacher with a part time job that allows me to spend a lot of time grading papers and learning about stocks and the stock market. Self taught on everything..except the teacher gig, went to NYU for that. Live on the beach in the northeast and living the dream, except for the working part, and I'm... More
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learningthemarket.blogspot.com
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  • analyzing $wdc
    $wdc filed its 10-k form with the sec last week.  This is what I was waiting for, the first step in my analyzation of $wdc. I was  loving it until the last line that stated the company's revenue is expected to be relatively flat with the June quarter due to lower than historical demand growth rates and competitive pricing conditions.  Isn't this $intc and $csco problem too. 

    I went back to their charts and found that the 52 week low is 23.52 and we are almost there.  There is a target price of 37.82.  Big money is to be had once this stock takes off, but I'm not the type of person to put my money into a stock that's going to take a few months to start taking off.  I want to make money NOW.

    The current price is below the 50 day and 100 day moving averages.  So this is the plan.  I'm going to wait for the next earnings report and see if their 4th quarter will be more optimistic.  I'm also going to put in a trigger alert that will tell me when the 10 day moving average postively crosses over the 50 day moving average.  I'll consider pulling the trigger when one of those two things happen.  I think this is a good company, but I'm not tieing up what little money I have for investing in a non moving stock, even if I think the returns will be great further down the road.  I will wait.

     Here is the quick summary of $wdc from Edgaronline.

    Fiscal 2010 Overview

    In 2010, our net revenue increased by 32% to $9.8 billion on hard drive shipments of 194 million units as compared to $7.5 billion and 146 million units, respectively, in 2009. In 2010, 64% of our hard drive net revenue was derived from non-desktop markets, including notebook computers, CE products, enterprise applications, and WD-branded product sales, as compared to 62% in 2009. Hard drive average selling price ("ASP") decreased to $50 in 2010 from $51 in 2009. Gross margin percentage increased to 24.4% in 2010 from 17.9% in 2009. Operating income increased by $1.0 billion to $1.5 billion in 2010. Operating income was $519 million in 2009, which included a $14 million in-process research and development charge related to the acquisition of SiliconSystems, Inc. ("SiliconSystems"), $112 million of restructuring charges and an $18 million gain on the sale of assets from our substrate manufacturing facility in Sarawak, Malaysia. As a percentage of net revenue, operating income was 15.5% in 2010 compared to 7.0% in 2009. Net income in 2010 was $1.4 billion, or $5.93 per diluted share, compared to $470 million, or $2.08 per diluted share, in 2009.

    On June 30, 2010, we acquired the facilities, equipment, intellectual property and working capital of the magnetic media sputtering operations of Hoya Corporation and Hoya Magnetics Singapore Pte. Ltd. ("Hoya"). The acquisition is intended to augment our existing magnetic media operations, strengthening our ability to meet anticipated growth in demand for hard drives. The cost of the acquisition was approximately $233 million and was funded with available cash.

    For the September quarter, we expect our revenue to be relatively flat with the June quarter as a result of lower than historical demand growth rates and competitive pricing conditions.

    End of summary

     

    Aug 14 9:57 PM | Link | Comment!
  • Looking ahead

    I'm always looking for the next trade, but not a daily or weekly trade.  I do it quarterly.  In April of 2010, I started looking at positions that would make me a profit during the summer,  My catalyst was going to be July earnings.  All I needed was a pullback in May and/or June.  Boy, did I ever get that.  It almost felt like I was magic.  I finished buying all my positions that I had researched starting in April by July 3.  My thinking was that traders would get out of equities by July 3 because it was a long weekend and anything can happen during the long weekend.  So on July 3 I bought my last and most expensive stock position with my bulk summer (teacher) check, GS.  My hope was that beginning July 7 things would start getting better as earnings came in.  There were a few bumps and potholes in the road, but overall, I think most of us are doing well. 

    The S & P just passed a technical, whatever that means, of 1100.  From what I understand based on experts' posts is that if we can get past 1100 and make it to 1130, the bears will have to cover their shorts and a spike in the market will happen.  I have no idea how anyone comes up with those numbers, but I love the internet, and I guess I don't have to know how to come up with 1100 as the magical number, I just need to know what to do when it happens.  If it happens, and the earnings reports of my current positions are positive, then I'm going longer that I originally planned.  The original plan was to be out by Aug 6.  If we hit 1130 by 8/6 then I'm going to keep going until the 13th and keep reevaluating week to week until I need money.

    At the same time I'm looking ahead to 3rd quarter earnings.  Another bonus, mid-term elections.  Here's what I learned about mid-term elections and the stock market; according to Marshall Nickles of Pepperdine University the first two years of a president's term is not the best time to be in the stock market, but that the last two years are very productive.  And he showed charts that were simple to read.  I got it.  Apparently, lots of people seem to like the paper Nickles wrote in 2004 and are beginning to reference it now.  So according to trend, 2009 and 2010 are supposed to suck, and by 2011 things should start getting better.  Why? Because the incumbent party wants a happy voter and they usually "prop" up the stock market.  I would  read his paper and see for youself. 

    gbr.pepperdine.edu/043/stocks.html

    After you're done reading, google his name and see how many times this paper is referenced.  A lot and I think it will be referenced more and more as we get closer to mid term elections.  But I still have questions.  Should I get positioned right before the mid-term election in October (remember, it is earnings season again.) or do I wait for what some people are predicting will be the massive sell-off before the end of the year due to the rise of the capital gains tax expected to take effect 1/11?  That would mean I either get positioned for earnings in October, sell off quickly, and then buy back at the bottom again at the end of December or I go to cash after this technical of 1100 is done making me money off bear shorts and wait until the end of December.  As always, more research is needed and I'll let you know.  But as always, I would love some educational input.



    Disclosure: long gs
    Jul 25 2:00 PM | Link | Comment!
  • Ford strategy

    Having a strategy is key to running with stocks.  When I first started "playing" the stock market I didn't have one and made a lot of mistakes.  I still make mistakes and I don't know everything.  So I'm here.
    My latest strategy is very simple.  I study stocks and decide on a few that I like, and then I wait for a pullback and I buy.  I sell leading into earnings when the market rallys.  I've made some good money on this move.  I bought Ford during a pullback July 09 and sold it into this quarters earnings with an over 100 percent profit.  I did make a few mistakes on this one.
    1. I only bought 100 shares...which made selling calls not worth the money as I have a TD Ameritrade account and it costs me $10 to sell the call and another $10 if I want to buy the call.  But in my defense, I only had $3k when I opened the account.
    2. I didn't have an exit strategy.  If I did I would have sold them during the first quarter earnings and sold them for $14.
    3. I should have bought more when shares dropped to the low $10's.  I liked the stock, so during the latest tank why didn't I buy more?

    My next strategy for Ford is to hopefully buy during the next pullback if the earnings report tomorrow sounds good for the year.  I'm looking to get back in at about $10.50ish and will set a trigger alert after the earnings report.  And I hope to buy more than 100 shares.


     



    Disclosure: Sold positions
    Tags: F, stocks, finance
    Jul 22 11:22 AM | Link | Comment!
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