Favourite current stock ideas.

[kagame]

the only stock that exists in my world is Shanda Interactive (SNDA)

I was thinking about CDE and HRAY. But I have bills and all I do in poker nowadays is take beats. No way am I selling shares of Shanda to buy CDE or HRAY.

I had some AAPL and I sold it at $90. So dumb. Had some GOOG and I sold at $320. Dumber.

Ride the momentum.

[DcifrThs]

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I'm liking BBBB as well. However, I'm not a fan of negative earnings.

THe January '08 option with a strike of 45 is priced at $3.60. May use that as a low stakes gamble imstead of actually buying the stock (it's a speculative stock in a shakey market).

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mrbaseball and THE HUN have mentioned that buying outright options isn't optimal since you can offset some of that cost by selling farther OTM options.

id love it if they can chime in here and answer some questions as this is a good test case:

first off, how would you execute a long view via options ?

if it isn't a simple outright, can we go through the marginal decrease in upside gain by selling options at different strike prices?

i'd love to get a test case of this [img]/images/graemlins/smile.gif[/img]

thanks guys,
Barron

[Shoe]

GNK

[mrbaseball]

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mrbaseball and THE HUN have mentioned that buying outright options isn't optimal since you can offset some of that cost by selling farther OTM options.


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Here's my 2 cents. He is suggesting basically buying an ATM option which can be a decent strategy if you get your move. Personally I prefer spreads which have some advantages as well as some negatives.

If you buy BBBB Jan 09 45 calls at 3.60 you need an 8%+ upmove just to break even by Jan 09. If you get your 8% sooner these will go up nicely though. If you get 25% by Jan 09 you party! So the question that you have to wrestle with is what is your target and when? If you think you get a 10% move by Jan 09 a 45/50/55 butterfly would be way better. But if you get that big move and blow through the butterfly you wanna kill yourself.

On the plus side spreads are cheaper and pay off way better on a reasonable target (if you hit it). On the downside spreads shoot at targets and miss really strong moves that eclipse them.

If BBBB goes down you lose with either strategy. If it grinds up to the 48-52 area the spread scores big and the outright breaks even to slight winner. If the stock blows through 55 the spread sucks and the outright hits a homerun. So it all depends on what kind of move you are expecting. The probability of the spread being good is far greater than the outright. But when the outright is good it's way good. The outright can hit a homerun but strikes out a lot.

[imaptone]

I recently purchased SA at $19.5 on June 19th. Today it trades at ~$26. This is a Canadian gold miner who by the end of the year is estimated to have 45 million ounces of gold in the ground. With a market cap of 901 Mill it make s the gold in the ground worth roughly $20/ ounce. I don't know what gold in the ground is worth , but the stock has had a good run in the last month. It was a $3.25 a share stock 2 years ago, and it chart looks pretty good. I would caution that after it's last couple weeks I won't buy more until it has time to digest it 25% run up.

[sylar]

for anyone who has been in vegas recently, LodgeNet (LNET) is signing up vegas casinos to deliver PPV and on-demand content to them, quickly providing some of the most robust and comprehensive TV/HD/internet packages. this is huge, as hotel business is getting larger and larger. LNET also has a huge presence overseas, and while they are not alone, they hold a rather impressive technological edge over their direct competitors. their most serious competitors are cable companies that swoop into hotels, but hotel accounts are usually rather small for the likes of DirectTV and TW and cable is likely to deal with LNET, selling its channels, rather than delivering the content to each individual property.

another great point, is the LNET sales contracts include revenue sharing with the hotel. that is any time you want to watch lesbians, boxing, or the newest bruce willis flick while in vegas, LNET gets $5-$10. other companies may charge the hotel only for the installation, and give up any revenue that the hotel generates. finally, LNET is broadening their reach into hospitals, broadband internet service in each room, HD content. this makes their offerings very convenient for the hotel/hospital.

from financial standpoint, their annual revenue has been growing at steady 5% rate for the past 5 years. the period of expansion that we are anticipating should bump this growth upwards of 60% given larger penetration of the Las Vegas and hospitals market. moreover, in 2006 FY they've reached into black, which is a great positive that allows them to aggressively reinvest into expansion. of course, their actual income is peanuts right now, so they are a high P/E, low operating margin business. however, their gross and EBITDA margins handily beat industry averages that will result in great returns on growth. i was not able to find their book value, but they do have over $300M in liabilities, most of which is long-term debt. this is a pretty big minus from the investor's POV and classifies them as a high-risk investment.

another word about being in the black in 2007, UBS analysts expects LNET to take one another round of financing in 2007 and 2008 for growth, while lowering their estimated EPS for the next two years almost two dollars (putting them way negative). that opinion has not yet been confirmed by others who cover the stock, and analysts' EPS estimates have a $2 range right now. all of them are expecting almost 80% revenue growth starting in 2007Q2, and if the company delivers, will revise their 2008 revenue growth up from projected 20%. EPS figures will depend on how aggressive the company will invest into expansion.

my 6 month (12-31-2007) price target $50, boosted by the growth that's finally here. on an off-chance that they are in the black for the second year in a row, the stock could easily break $60.

recent headlines

LodgeNet Selected by Venetian Casino Resorts to Deliver Interactive... - 11 Jul 2007
Maintenance Program targets hotel internet access service. - 6 Jul 2007
LodgeNet launches preventive maintenance program, exhibits at HITEC - 29 Jun 2007
LodgeNet Featuring Turn-Key High Definition TV Solution With EasyHD... - 25 Jun 2007
Lodgenet Entertainment "buy," estimates reduced - 20 Jun 2007

http://finance.google.com/finance?q=LNET

[gringo]

Latest purchase" ITT (water play) -- Long term buy

I added more EWA (austrailian ETF) -- this has been great for past Year+.

I have 5-6 Oil and Oil service plays. I live in san antonio and lately bought into 2 companies that have not been fantastic, but are finely showing some life in past 2 months ABP -- abraxas and PDC --pioneer (maybe a takeover candidate --good balance sheet).

For spec -- i thought i would buy a little bit of PTEK also. Seems like a good idea. I didn t get to see the HU match at wsop demonstrating it. Nevertheless, will give it a small shot.

[gonebroke2]

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I recently purchased SA at $19.5 on June 19th. Today it trades at ~$26. This is a Canadian gold miner who by the end of the year is estimated to have 45 million ounces of gold in the ground. With a market cap of 901 Mill it make s the gold in the ground worth roughly $20/ ounce. I don't know what gold in the ground is worth , but the stock has had a good run in the last month. It was a $3.25 a share stock 2 years ago, and it chart looks pretty good. I would caution that after it's last couple weeks I won't buy more until it has time to digest it 25% run up.

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Gold in the ground is meaningless unless you factor in costs of extracting and producing it. Low cost gold producers get a premium in the market and hence my favorite stock right now is GORO.OB. It costs them less than $100 to extract each ounce of gold which will lead to a tidy profit at todays prices of 660 ounce. Tight share structure and one of the best management teams in the business. Should be producing 70k oz gold by 08 and 100k by 2010. Looking for a target of $20 by 2010. Stock has been a 4 banger already and will be a 5+ banger from current levels. If they increase their reserves and gold continues to go up (which I think it will), then a 10 banger from current levels is possible.

[Shoe]

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GNK

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This stock just keeps soaring. Unreal.

[tomek322]

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Gold in the ground is meaningless unless you factor in costs of extracting and producing it.

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Speaking of gold in the ground, any of you guys know anything about RBY. They have had a string of PR's from land acquisition, to sample core results. I am on the sideline and was wondering if this may be worth picking up? Is there any way to predict what it will cost them to extract the gold?

EDIT: To anyone with a better knowledge of gold, is the reports of gold reported from their sample cores large or small?