Kuch's Picks

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Kuch's Picks

Post  jkucher on Wed Jan 05, 2011 10:23 pm

Gentlemen, I've been watching and holding Citi Bank for a long time now and waiting for it to take off. I'm already up 60%, but I think now is the time for a big decision. 4th Quarter results will be out soon and this will be a tell tale sign if this bank is going to make it or not. It's trading at 4.97 now and can't break the $5 mark. The bank has been losing money for a while now. But the subprime problems are settling down and it's very possible it can turn around fast.

There is a lot of speculation on this stock and I think it may be a good place to try or play around with some options trading. I'm thinking about buying an option with a strike price of $5.50 with a call date of February for $0.06 Also, I was thinking of hedging my bet with a put. If the stock tanks due to poor earnings it's $0.06 for a put option with a strike price of $4.5 for February. So as long as the stock moves more than $1 in either direction, it should be worth it.

I was also looking at NEM. Neo Material Tech. They are one of the few companies that mine the materials used to make magnets and all the metals used in Electronics. hard drives, weapons systems. Very popular stuff. But it's already gone up from $5.5 to $7.87 and now I'm not so sure of the China Commodities boom. Also, China has started cutting off or putting export limits on a lot of these materials and this has driven the prices up. China is now the main supplier of these metals and they are limiting or cutting off exports. So this is probably why NEM has gained so much market share so fast.

Let me know your comments.

Ciao

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Re: Kuch's Picks

Post  Max on Thu Jan 06, 2011 1:21 am

Hey Kuch, happy new year!

Don't know about Citibank. I think it is probably time to do a fresh analysis on it and see what the numbers say. I have a feeling we haven't finished with the loan loss provisions (so I have to keep my book value estimate conservative), but at the same time, I feel it might be oversold considering improving fundamentals. It is hard to evaluate this stock based on past information, since they have sold off a lot of assets, and are really a shadow of the former Citibank. The stock price moving $1 = $30B change in valuation. I don't think it is likely to see that much movement within 2-3 months on a fundamentals basis, but I guess a little taste of earnings can start speculators bidding up the price.

I will also run an analysis on NEM as well to see what the balance sheet looks like.

I am interested to hear some more of your Blue Chip picks.

Max
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Potash & Fertilizer

Post  jkucher on Sun Jan 16, 2011 9:53 pm

Gentlemen,

Consensus seems to be that the market is recovering and with that, I think we're going to see two things happen. Food prices are going to go up and oil prices are going to go up. So I think we should try to find the best junior fertilizer company and junior oil producer with the most potential gain for the year. I've started to look at a couple of Fertilizer companies. The big players are too expensive and I'm afraid there might be limited gains here. They are Potash of Sask, Potash One, Agrium, Mosiac, and that's all I know of.

Junior players are
MAA.TO
Western Potash WPX.V
IC Potash ICP.V
Amazon Mining AMZ.V
Allana Potash AAA.V
Encanto Potash EPO.V
Passport Potash PPI.V

My plan is to try to find to the best of the 7. I think Potash prices are going to recover and it's a good time to get into to one of these or even a major player. Sorta same thing with Oil, it will probably hit $100 by the end of year.

Anyone else have any plans? I'm also thinking I might buy more Bank of America, Alcoa and some Manulife. ProSep I think will be a good long term play.

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Re: Kuch's Picks

Post  lukera on Sun Jan 16, 2011 10:15 pm

I watched the boat go by last week with AAA.v

After this news release nothing really moved, giving everone ample time to buy in...I did not:

Allana Potash Intersects Highest Grade Potash Mineralization to Date
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Re: Kuch's Picks

Post  Max on Tue Jan 18, 2011 10:49 am

Checked the recent Citibank release. Book value is pretty much $0 (in fact, it can be less than that depending on how much faith is put in the asset #s). Earnings are $0.31 per share, but I don't know if that will increase or decrease in the years to come (50/50 probability either way).

I don't see a lot to love at the moment, but looking longer term, at least they are positive on earnings now, and if that trend continues, we could see a significant recovery in the next few years. Unfortunately, with interest rates still artificially at all time lows and poised to rise, I think their loan loss provisions are going to continue to increase. Right now the loss provisions are approx 6% of total loan balances.

I have done a post on Manulife somewhere, which I liked a lot around $13, but not so sure at current price.

I also did an analysis on Alcoa saying that I didn't like it, but since the stock has risen about 50% since then I don't know how much value my analysis has.

Max
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Re: Kuch's Picks

Post  Max on Wed Jan 19, 2011 2:16 am

Make a quick financial analysis of Kuch's best of 7. Based on the following very simple comparison, I would say MMA and WPX are the least risky. Doesn't necessarily mean they will be the most rewarding. All have negative earnings. All comes down to resource estimates and potential.

SymbolCA:MMACA:WPXCA:ICPCA:AMZCA:AAACA:EPOCA:PPI
Price0.31.351.668.30.990.50.34
Book0.10.40.210.260.140.10.03
Price:Book3.083.387.8131.587.074.8913.11

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in on Neo?

Post  aaronrwatts on Wed Aug 17, 2011 8:09 pm

did you get in on NEo, and still in? watched a guy on BNN tonight about NEO and he sold it well... one of top picks of course.

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Re: Kuch's Picks

Post  Max on Wed Aug 17, 2011 9:28 pm

I traded it a few times, for some quick profits. It is a pretty good mix if risk/reward, but overall, I like the rare earth market for the cell phone screens angle. Fundamental wise:

Price = 3x book value (book value in resource stock is generally not the best measure)
Currently 30% higher than the median of the 52 week high and 52 week low (have to consider that 52 week low was less than $4, so don't put too much into this #)
Current Earnings per share = less than 10% annual return on investment (based on past earnings, its future earnings that count)

Missed the last run up from $7.50 or so to $9, since I have all my money tied up in RIM and ECA.

If the earnings fall, the stock price doesn't have anything else to support it. However, if earnings rise, the stock will continue to climb dramatically along with earnings.

Max
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