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867046

867046
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  • With Chesapeake's McClendon, It's Not Just Personal [View article]
    CHK is bad on so many levels with it's poor corporate and poor management. It's amazing with the focus on waste in government, that the private sector gets a pass on outrageous examples such as CHK. Also rarely quantified by stock mavens is the impact of a poor CEO on employee morale and thus the value of the company.

    CHK is essentially a poorly run natural gas ETF with a very high expense ratio. CHK is also an example of one advantage of being a retail investor, in that it is easy to exit a bad position quickly whereas there are limited options when you hold 20% of the float.

    In a time where it's possible to think about bottom feeding off of oil and gas stocks in general, anticipating a stock pop from the CEO getting fired is not a good investment thesis.
    Jun 27 07:12 AM | 3 Likes Like |Link to Comment
  • As Boeing (BA) reduces R&D spending and ramps up production to meet a record backlog, its free cash flow could reach $18B in 2012-14. That, analysts hope, should give it plenty of money to return to shareholders, although EarlyBird's Alex Hamilton says the looming defense cuts mean Boeing should hold on to its cash.  [View news story]
    Boeing needs to hold on to it's cash.

    Defense will most likely get cut and Boeing needs use it's cash to expand it's space and UAV businesses either internally or through acquisition. If they really wanted to be sneaky, they could get back into the fighter business by working on unmanned concepts. DoD might be receptive given how far behind schedule and over budget the F-35 is.
    Jun 26 01:49 PM | Likes Like |Link to Comment
  • Consumers may enjoy the extra $10 or $20 in their pockets thanks to falling gasoline prices, but the slide in crude oil and other commodities is nothing to celebrate. It's a reaction to slowing economies, which makes for an odd leap of logic when one tries to argue that falling commodity prices will help boost those same economies. Does saving a few bucks at the gas pump really make you any richer?  [View news story]
    The irony is that the SA dividend crowd would view carving out an additional $20/week out of their holdings a serious matter.

    Whereas some of the SA crowd here views the average Joe getting an additional 20 bucks/week as inconsequential.
    Jun 25 12:39 PM | Likes Like |Link to Comment
  • Is Arena's Share Price Too High? [View article]
    I can't be as sanguine about this article as some of the posters.

    To make it easy, lets say Friday's closing price was $10. So in this article the claim is that if the drug doesn't pass this go around, the stock goes to $5. If it does pass, the stock goes to $11. To put this numerically in a simple model, $10 = 11X - 5(1 - X), where X is the chance of a pass. So what the article estimates imply is that the stock has around a 94% chance of passing.

    The market disagrees with the artice on a couple of points. Right now VVUS has a $2.64 billion dollar valuation. In the Cliff notes version of VVUS vs ARNA let's say VVUS has a riskier profile and will probably have a more restricted label but patients will lose more weight if they survive. So let's say they are roughly equal and conclude that the market cap for ARNA should be equal to VVUS's. Well that means a $14.67 price for ARNA right now!

    The market probably thinks that a 94% chance of passing is too high. Crudely if you think on Friday that at $10 the stock is fairly priced and has an 80% chance of passing, and goes to $5 if no pass, this still gives a pop to $14 on passing.

    I find it hard to believe that ARNA will be $5 - $7 before Wed. This would be a market inefficiency because it would price it @ 50% of what VVUS is worth right now.

    Finally for all the whining regarding Friday, we need to look at the market internals. With ARNA going down further relative to VVUS we can try to deduce a couple of things. As an ARNA long, it's difficult to make any case that ARNA should be undervalued to VVUS. If by Friday's action someone thinks ARNA's price is too high, then VVUS has to be even more mispriced.
    Jun 24 08:06 PM | 4 Likes Like |Link to Comment
  • Sell Arena Pharmaceuticals And Step To The Sidelines [View article]
    For those that want to delve into the minutia of the ARNA dump, go to the NASDAQ website where NASDAQ will list out all the trades. The critical time was from about 9:35:40 to 9:35:50. One will see that there wasn't a big dump but a huge blizzard of small trades. This is to be compared to the majority of brokers that retail traders use which guarantee no more than 1 second delay in execution.
    Jun 23 02:25 PM | 2 Likes Like |Link to Comment
  • Consumers may enjoy the extra $10 or $20 in their pockets thanks to falling gasoline prices, but the slide in crude oil and other commodities is nothing to celebrate. It's a reaction to slowing economies, which makes for an odd leap of logic when one tries to argue that falling commodity prices will help boost those same economies. Does saving a few bucks at the gas pump really make you any richer?  [View news story]
    Another SA ironyfest. On one hand people are making light of the additional savings from lower oil prices and on the other hand we have the financial gravity of the incessant discussions from the SA dividend crowd on how to eek out more pennies from their portfolios.
    Jun 23 02:18 PM | Likes Like |Link to Comment
  • Sell Arena Pharmaceuticals And Step To The Sidelines [View article]
    The logical conundrum in your reply is that you would prefer to write a SA article rather than profit from your own trading expertise.
    Jun 22 11:08 AM | 2 Likes Like |Link to Comment
  • Sell Arena Pharmaceuticals And Step To The Sidelines [View article]
    This article is frankly crap. Your discussion of ARNA vs VVUS is superficial at best. No matter if one agrees or disagrees with a SA article, the excellent articles at least come with some tightly reasoned trading advice. So, if the author truly believed there would be a "bear raid", why didn't he either:

    1) Go short.

    2) Purchase a pile of short term puts.

    3) Sold calls with high IV.

    Either strategy could be rules based in case of a bear dump.

    Whatever this dump was, it's a market inefficiency that the retail ARNA bull can exploit because of lowered option prices or cheaper shares.

    The author could have packed the "content" of this article into a 140 character market watch blurb instead.
    Jun 22 11:00 AM | Likes Like |Link to Comment
  • What's Up With Dendreon And Medivation Today? [View article]
    Ted,

    With more and more patients undergoing treatment with Provenge, how often will the survival data/statistics get refreshed?
    Jun 21 12:36 PM | Likes Like |Link to Comment
  • During his presentation at the Business Roundtable, Boeing (BA) CEO Jim McNerney says the regulatory environment is worse than ever, and U.S. companies face more barriers to growth than at any time in his long career as a businessman. “It’s different today. The attitude is different,” McNerney says. As examples, McNerney cites lengthy holdups at the FDA for approval of medical devices and resistance at the EPA to new energy projects involving fossil fuels.  [View news story]
    Mr. McNerney's comments are highly ironic. With involvement in space, military aircraft, and UAV's, Mr. McNerney's company gets lots of government programs with a guaranteed 15% profit margin. To further compound Boeing's recent stupidity, as the home team they had the USAF tanker contract locked up without having to hire people away from the USAF, thus wasting tons of government dollars by forcing a recompete of the contract..

    These days airline manufacturers are treated by most countries that have them as almost like state owned companies in that lots of government support is thrown at them through direct and indirect means, BA is no exception. BA is treated by DoD and the US government as a TBTF national security asset in that tons of government programs are thrown at it. If I were Mr. McNerney, I would focus on getting the 787 Dreamliner delivered on schedule and focus on operational execution and procurement ethics.
    Jun 20 08:11 PM | Likes Like |Link to Comment
  • What's Up With Dendreon And Medivation Today? [View article]
    Since the cost of Provenge is a fundamental issue to a bear case for DNDN, I'm really surprised that DNDN isn't throwing more effort at bringing in either consultants or permanent staff in the areas of industrial engineering or biomedical manufacturing expertise to try to lower the manufacturing cost of Provenge. If the long term plan is for DNDN to be successful and to attack other cancers, it would seem like lowering COGS would be a high priority. If management doesn't seem to think that the above is worth while, at least make an effort to see if some pharma has the expertise to attack COGS from another direction and come to some accommodation. It's not sexy but DNDN cutting their COGS by say 20%, would be a major game changer.
    Jun 19 01:27 PM | Likes Like |Link to Comment
  • U.S. job openings in April totaled 3.4M, down from 3.7M in Machr, the Labor Department reports. Job openings decreased for total non-farm, private and government as well as in manufacturing, professional and business services, and state and local government.  [View news story]
    It's logically possible that this is a good result. It would be useful to know the breakout of federal, state, and local government employment opening declines. Another item probably not separately tracked is defense contractor openings.
    Jun 19 10:17 AM | Likes Like |Link to Comment
  • The FDIC shut down three more banks this week, marking the 29th, 30th, and 31st bank failures of the year. The Farmers Bank of Lynchburg in Lynchburg, Tennessee, Security Exchange Bank in Marietta, Georgia, and Putnam State Bank, in Palatka, Florida were all shuts down. The total cost of the three closures to the FDIC: $100M.  [View news story]
    More red state welfare.
    Jun 15 10:25 PM | 2 Likes Like |Link to Comment
  • Open the car door HAL: The technology to have cars drive themselves is within reach, as automakers grapple with how far to take the loss of driver control. Computing power and sensor technology has advanced past the point of just providing alerts or parking cars, with Google already testing self-driving cars on real roads. A question for interested firms such as GM, F, BAMXY.PK, TM, and VLKAY.PK is how to avoid huge liability with insurance responsibility presumably passing on from drivers to manufacturers. [View news story]
    Despite the whinging from the accountant crowd, there is an obvious immediate market for this technology, senior drivers. In fact you could imagine insurance companies either requiring partially or fully assisted autodriving autos for seniors. Insurance company could incentivize this with premium reductions or just insurability. Licenses would denote what level of automation would be required similar to denoting that eyeglasses are required .

    Another immediate market would be teenage drivers, where in this case some sort of assisted driver technology car could be constrained to within some performance envelope.

    The last immediate market would be medical special conditions such as epilepsy. All of the above could be incentivized by the ability to obtain insurance at a reasonable cost.
    Jun 14 01:00 PM | Likes Like |Link to Comment
  • Senators MIA At JPMorgan 'Roast'? Regulation Is DOA [View article]
    It's ironic that China is afraid of openness.
    Jun 14 12:43 PM | Likes Like |Link to Comment
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