Change is in the air over at RealMoney. In the February issue of the RealMoney newsletter, we highlight:
- January in review.
- Four new contributors have joined, including analysts, investmentmanagers, traders and more!
- Five top ideas this past month from RM newsletters.
- New site redesign reduces advertising clutter and increases contentabove the fold.
- Now get video from Jim Cramer first! Subscribers get exclusiveaccess for 48 hours to Jim trading ideas.
- RM Equity Ratings Product -- a limited offer of 100 equity researchreports for free!
- Now live -- a sleeker and faster stock quotes page.
- RealMoney Mobile -- Coming soon!
Read on for more details or
click here for a free trial!
January 2009 Highlights
January not only marked the beginning of a new year but also allowedinvestors to put to rest a difficult 2008. Of course, this doesn'terase the chaos of 2008 and its fundamental, technical and psychologicaleffect on the markets.
We recognize this and to continue to add quality contributors and content to the site, as well as offer calls from our stable of
- Added four new professional contributors (bios below).
- Introduced a new article highlighting five top Columnist Conversationposts during the day
- Rolled out a site design change to make content more accessible
- Fewer ads!
- Now live on the site -- our Quotes Center. One reader said: "I would just like to commend the site developers on the new and easier to navigate 'Get Quotes' service." Get more data, faster, so you can make better trades.
February Agenda Items
Here's what we have planned for February:
- At RealMoney TV, subscribers will getexclusive access for 48 hours to videos by our contributors. For a limited time, we will be adding the Equity Ratings product to the site and offer free equity reports on the top 100 searched tickers on TheStreet.com and RealMoney.
- RealMoney Mobile will be rolled out at the end of the month, automatically delivering the latest from RealMoney to your mobile device. For more information, click here.
We have added several contributors who will offeractionable trading ideas, short analysis of investable ideas, briefcommentary of earnings/economic releases and much more.
, managing director in institutional sales for
, left the trading floor of the NYSE after a 25-year career thatstarted as a runner and ended as a floor official for
. He has served on several boards and prominent committeesof the NYSE.
Kenny is a frequent commentator on CNBC, CNNfn, Phoenix TV and BloombergTV and Radio. Since his departure from the trading floor inNovember 2006, he has appeared on Fox Business Channel, been the subjectof a documentary for Japan Broadcasting and has become a source for theAssociated Press, Reuters and Bloomberg print. His "Daily Thoughts" memogoes out to some of the most prominent asset managers on Wall Street andpeople of influence in media.
Kenny also serves as Knight Equities' face to the media and is asked tospeak at a wide variety of forums around the country. He has a bachelor's degree from Warren Wilson College.
is CEO and chief investment officer for
, which he founded in 1971. He is a recognized expert in theareas of international investing and economics.
Guild has been written and spoken about economic issues for more than 30years and has been widely quoted in world media. He supervises theinvestment and research functions at Guild Investment Management. Heholds a bachelor's degree in economics and an MBA with highest honors.
has more than 15 years of trading, portfolio management andrisk management experience. In 2005, he became involved in asset-basedlending as an investor and adviser to
CFA Capital Partners
, a leadingreal estate bridge-financing syndication firm. He has consulted withseveral large global and hedge funds aboutto the analysis, risk management and selection of hedge fund managers orsecurity selection for their portfolios.
Acos/Apogee Fund Management
and its affiliates in2003, and through 2006 comanaged its portfolio of both offshore anddomestic entities, focusing on statistical arbitrage and equitymarket-neutral investment strategies. Glassman was a founding partner ofRiverside Asset Management, where from 1998 to 2002 he established astatistical arbitrage team, managed a $100 million market-neutralportfolio and comanaged a $300 million portfolio. Also during that period, he was also a portfolio manager at
, focusing on equity market-neutral strategies.
Before joining Schonfeld Securities,Glassman was a vice president at
from 1992 to 1998, where he was a founding member of a team that managed a half-billion market-neutral and risk arbitrage portfolio and was responsible for the$100 million equity market-neutral portfolio.
Glassman has a bachelor's degree and an MBA in finance from the SternSchool of Business at New York University, where he was a Stern Scholarand in the honors accelerated program.
is an analyst and independent trader who providesconsulting-based research on the technology sector for investment funds.He believes that by focusing solely on technology companies, investorsreap the reward of corporate business process streamlining and theadoption of new consumer goods.
Eller has 13 years experience generating technology investment ideas forbuy- and sell-side institutions, including
CreditSuisse First Boston
, as well as two hedge funds. He has a degree incomputer science from Bryant University.
Five Top Plays From RealMoney Contributors
We have selected five investment ideas from our stable of newsletters.
Action Alerts Plus:
Jim Cramer bought 100 shares of
around $42 and 100 shares of
at about $48.
"My restrictions have been lifted. I am going to add 100 shares of BP around $42 and 100 shares of COP at about $48. I remain underweight the energy group but believethat oil prices are in the process of bottoming, and these two high-quality, diversified oil plays are well positioned for the long term. I expect earnings to be soft for the 4th quarter given the macro environment and the weak commodity prices, but BP now yields close to 8% and it is at an attractive buy point. Conoco has already released its bad news last week, and the stock is also a good price under $50 to add." --
Jim Cramer, Jan. 27, 2009
Adam Feuerstein is believes that shares of
"The hype over the company's stem-cell drug has reachedridiculous levels, especially considering Geron's ignominious trackrecord in drug development while burning through large piles of cash.Geron shares jumped $1.88, or 26%, to $7.09 on Friday after the companyannounced that the Food and Drug Administration (FDA) had finally givenapproval for the company to begin human clinical studies of a new drugderived from embryonic stem cells. Geron plans to begin a phase I safetystudy of the drug, GRNOPC1, in patients with spinal cord injury.Ultimately, Geron's hope is that GRNOPC1 will prove to be an effectivetherapy by migrating to the spinal cord and growing new nerve cells oreven repairing damaged nerve cells, allowing paralyzed patients to walkagain. Making a bet against the potential for stem cells to transformmedicine and improve the lives of seriously sick or injured patients mayseem a bit like being against moms, apple pie and baseball. But this short call is a knock against Geron, not stem cells.
"Geron is a master at playing the stem-cell hype game. Friday'sannouncement was heralded in a big
New York Times
article, and thenthe CEO held a conference call before going on CNBC. The lifting offederal funding restrictions for embryonic stem-cell research byPresident Barack Obama only added to the frenzy. But Geron now sports amarket cap of $561 million with little to show for it. Previous effortsby the company to develop anti-aging therapies, cancer vaccines andcancer drugs have all disappointed, especially when compared to thepromises made by Geron's management. Neither Geron's track record northe fact that its risky stem-cell drug is entering a small phase Isafety study warrant such a rich a market cap. When the headlinesdisappear and the momentum-fueled daytraders move on, Geron's stockprice will contract. At one point Friday, Geron was up 60%, so some ofthe fizz has already fizzled.
"And don't be surprised to see Geron try and raise money on this news,either. The company has used a short-term run in its stock price to cashout before. That's nearly always a recipe for stock-price deflation.So where does Geron deserve to trade? Until the company can come throughwith meaningful clinical data on anything, I wouldn't think the stock isworth much more than its cash on hand, which was about $165 million atthe end of 2008 -- the company's current burn rate is about $13 millionper quarter. Call that $2-$3 a share. The stock price may not fall thatlow, especially since stem-cell buzz won't abate anytime soon. Soperhaps a more realistic valuation is around the $5 level, which iswhere Geron was trading before Friday's big stem-cell trialannouncement." --
Adam Feuerstein, Jan. 26, 2009
Stocks Under $10:
Frank Curzio is buying shares of
"After you read this Alert, we will initiate a new position in health care nameMylan (MYL:Nasdaq) with 250 shares. The stock was recently trading at$10.50, and we believe the company has high price-appreciation potentialin the long-term based on synergies from its acquisition of Merck KGaA,its promising pipeline and the huge amount of patent expirations in theindustry in the years ahead.
"Mylan is the third largest generic drug company in the world followingits $6.6 billion acquisition of Merck KGaA in May 2007. The acquisitionwas a perfect fit, creating a global player with access to growingmarkets in Europe, Australia and Asia to complement its solid footing inthe U.S. However, the fit seemed perfect for other companies as well,and Mylan was forced to pay a much higher price for the acquisition,which diluted its shares and also increased its debt considerably, nowstanding at roughly $5 billion.
"Shares of Mylan were trading around $22 when the deal was firstannounced but quickly headed south as the credit crisis took centerstage and investors understandably grew more concerned about the debt.Mylan has about $650 million in cash (which easily covers short-termdebt of $287 million), successfully refinanced its $750 million creditrevolver to $575 million in convertible notes (which pay 3.75% andmature in 2015), and is expected to realize $300 million in costsynergies from the acquisition.
"Mylan trades at roughly seven times 2010 earnings per share, which is ahuge discount to its historical median of 17 times and also a 30%discount to its industry peers. Also, earnings are expected to grow morethan 30% annually over the next three years while revenue is expected totop $5.45 billion in 2010, according to consensus estimates." --
FrankCurzio, Jan. 23, 2009
The Daily Swing Trade:
Alan Farley is looking at
"Visa (V) dropped to an all-time low at $44 in October and tested that level inNovember. The subsequent bounce failed at 50-day EMA resistance, withthe price rolling over and dropping through the low about one week ago.The stock has been moving sideways since that time, with relativestrength now rising slowly. This positive action indicates we could belooking at a failed breakout and 2B buy signal. The stock could jumpquickly to $50 in a few expansion bars above the six-day basing pattern.However, the jury is still out and downside follow through is stillpossible. Given the equally weighted risks and rewards, this is a goodstock to pull up on your trading screens and wait until the market showsits hand with a clean break of the sideways pattern." --
Alan FarleyJan. 27, 2009
Nails on the Numbers:
Lenny Dykstra is buying calls on
"Sometimes you have to choose between two potentialwinners. And sometimes one of them slips through your fingers, as theBraves found out last week when 20-year veteran pitcher John Smoltz saidyes to the Boston Red Sox.
"I also have to pick between two potential winners today. I likeconglomerates General Electric (GE:NYSE) and United Technologies(UTX:NYSE). Both have paid off beautifully for me in the past. UnitedTechnologies won five times in 2008 for a total of $6,000, while GeneralElectric paid off terrifically, ringing the register four times in 2008for a total of $15,650. Today, I'm going with General Electric.The two stocks are fairly comparable. Shares of United Technologies nowtrade at 10.6 times 2009 earnings per share, while General Electric'sforward P/E is 10.7. But General Electric's shares have been knockeddown 60% since their April 2 high of $38.52, making this a goodopportunity. Shares of United Technologies have gone in the oppositedirection lately, climbing 17.5% from a low of $43.22 in late November,which gave me opportunities to cash in my open positions.Now, I see General Electric's 21-day moving average closing in on its50-day average over the past month, briefly surpassing it last week.General Electric's current ratio -- or current assets relative to itsliabilities -- of 1.9 is stronger than United Technologies', which is1.2.
"General Electric has a price-to-book (P/B) ratio of 1.4, which isslightly below the average for the iShares Russell 3000 Index (IWV) of1.5 -- but is still at a premium. General Electric has a negativeprice-to-earnings-to-growth (PEG) ratio, which is not uncommon thisyear.
"The media, financial services and energy infrastructure conglomerate hasno directly comparable competitors. Shares in electronics giants Siemens(SI:NYSE) and Koninklijke Philips Electronics (PHG:NYSE) have taken abeating over the past year. Siemens shares are down 58%, while Philips'are off 54%.
"United Technologies' return on equity (ROE) of 22.3% is heftier thanGeneral Electric's, which as been at 18.7% for the past 12 months. ButGeneral Electric's ROE outperforms its electronics competitors. Siemens'ROE was 6.1% for the same period and a negative 18% for the most recentquarter. Philips' ROE was 15.9% for the past 12 months. For the firstthree quarters of 2008, General Electric generated free cash flow of$7.5 billion after paying dividends totaling $9.3 billion. I will placea deep-in-the-money (DITM) call on General Electric and hope it deliversquickly, although I'm giving the position two years to reach the finishline. I will buy 10 contracts of the January 2011 $12.50 calls (VGEAV),paying $4.50 or better. This means I will commit up to $4,500 to theposition." --
Lenny Dykstra, Jan 13, 2009
While we look forward to keeping you up to date on all that is happening at
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This article was written by a staff member of RealMoney.com.