First good idea

[Scorpion Man]

Krishan and I think we have found our first juicy stock idea since we have been working together. Very leveraged company, so not for the faint of heart...but we think its at least a double.

I am not posting any details yet. I am simply giving the forum a heads up so people can understand the background when/if we decide to talk about it more...we believe they will put up a pretty bad first quarter. Difficult call is whether to buy before or after this event...current conclusion is I have about 20% of my position on now, rest will happen post Q1 call in a couple weeks.

I strongly am considering making this equivalent to my largest current position or larger. We may visit the company in the next couple months.

Jump in, Krishan, if you think there is anything else to say now.

[Evan]

I guess this could be a good thread but you leave something to be desired here. Maybe you could talk about how you found the company, why you like it, why you decided to buy 20% now....anything?

I'm not really sure what anyone else can add to this besides "hope to hear more" kind of things.

[Scorpion Man]

[ QUOTE ]
I guess this could be a good thread but you leave something to be desired here. Maybe you could talk about how you found the company, why you like it, why you decided to buy 20% now....anything?

I'm not really sure what anyone else can add to this besides "hope to hear more" kind of things.

[/ QUOTE ]

This was meant as more of a preview. I am not going to talk about the stock yet because I have a lot still to buy and it is not super liquid (although not wildly illiquid like some of the ideas I have seen here which literally don't trade).

My main goal was to get it out there now, explain that we actually think a miss is coming, explain our strategy going into the call...I do this to avoid looking like a Monday morning qback later.

The 20% worked like this...a friend suggested this idea...I bot a modest position as a starter because it sounded interesting...then we got worried because the short term read sorta ugly and upon further investigating with my friend's primary source, realized that even that guy thought the stock was not a buy ahead of the Q. So I was pissed I even bot the starter. We then spent over an hour with CFO on the phone and both came away saying this is the one.

BUT Q1 sounded ugly. They have signalled this to some extent, but it is very difficult to guage the market's reaction to the actual release. On the one hand, it is hard to imagine the stock going up on this bad a release. ON the other hand, it is possible that people who understand the situation well are taking the same approach I am and we could be surprised by the reaction.

In addition, the amount of stock I want to buy is not trivial compared to the average daily volume of this stock. Actually, as I write this and look at the daily volume I am seriously considering buying more before the earnings, even though I don't expect them to be good, because there are many days where my appetite would equate ot 5x the daily volume. This is a very tough call from a trading standpoint.

That said, anticipating Desert Cat's commentary, this should be a good idea whether I handle the trading well or not. It's just one aspect of trying to maximize the profitability of the investment.

[Evan]

[ QUOTE ]
I do this to avoid looking like a Monday morning qback later.

[/ QUOTE ]

I know that. I'm just saying there's not much here now other than you saying you're buying a stock. Okay, cool.

[wiseheart]

What percentage of your investments is going to go into this stock?

Is Q1 just historically a bad quarter for this company? If not, why are you confident that this bad quarter isn't going to negatively affect the company, is it a short-term trade off for long term profit kind of thing?

[Scorpion Man]

[ QUOTE ]
What percentage of your investments is going to go into this stock?

Is Q1 just historically a bad quarter for this company? If not, why are you confident that this bad quarter isn't going to negatively affect the company, is it a short-term trade off for long term profit kind of thing?

[/ QUOTE ]

I am considering around 10% of the $s I control for this investment....that is large for me, as I run with about 30 stocks (which is too many, but that is a different discussion).

Q1 is seasonally weak, but it is bad even taking out that effect. There are some specific macro reason that the Q is poor...but we believe there are specific, controllable opportunities for the company to create value - both in operations and in the capital structure.

It is a fairly steady business with macro exposure to public works, commercial and industrial capital spending. I am not 100% sure what you are asking, but its not really a tradeoff, just a bad Q for some idiosyncratic reasons that do not seem to be relevant to a two year view of the company's future (or even a 6 month view).

[Groty]

Why are you pumping the stock before the confeence call? I unerstand your motivations, but really, [censored] you.

[icetonez]

[ QUOTE ]
Why are you pumping the stock before the confeence call? I unerstand your motivations, but really, [censored] you.

[/ QUOTE ]

Are you serious? That is my genuine opinion. Lol at anyone making decisions based on my conjectures (that is I bought my first stock this summer). Secondly, I actually hope the stock doesn't spike tomorrow. I sold half my shares last week and want to buy back in at a lower price.

[Jimbo]

[ QUOTE ]
Why are you pumping the stock before the confeence call? I unerstand your motivations, but really, [censored] you.

[/ QUOTE ]

Te conference call has been rescheduled for 8AM EST on Wednesday morning from Thursday afternoon so unless you trade in the pre-market why do you care?

1-800-6421687 ID# 23652784

Full Disclosure: I don't own this stock and will never buy any (too illiquid for my taste). NILE is about the least liquid stock I feel comfortable trading.


Jimbo

[icetonez]

I guess it was obvious to some that the miss was more significant than the refi. I bought back in just now at $5.62.