The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today. To see all that RealMoney offers, click here for a free trial. 1. KOL vs. UNG
By Don Dion
6:44 a.m. EST Not all energy ETFs are created equal. Gas prices are falling as supply swamps the market, but demand for coal continues to rise. The oversupply of global gas is predicted to last until 2015 while coal demand is predicted to rise about 2% until 2030, according to the International Energy Agency. Coal is the backbone of global energy and it will continue to benefit from demand in emerging markets like China. Consider the Market Vectors Coal ( KOL) ETF rather than the U.S. Natural Gas ( UNG) ETF to play this long-term trend between these two commodities. No positions.
2. Skystar Bio-Pharmaceutical Continues to Deliver
By Ephraim Fields
8:31 a.m. EST Yesterday, Skystar Bio-Pharmaceutical ( SKBI) announced strong third-quarter results, with revenue up 27% and non-GAAP EPS of 61 cents, well above the analysts' consensus estimate of 42 cents. Today the company completed a 2-for-1 stock split, which will increase the stock's liquidity. Also helping the stock is that Rodman & Renshaw increased its earnings estimates for the company. Rodman is now projecting adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be $11.8 million in 2009 and $18.0 million in 2010, which means that at $11 per share, the stock is trading at very attractive multiples of 5.2 times adjusted 2009 estimated EBITDA and 3.4 times adjusted 2010 estimated EBITDA estimates. Rodman is now projecting adjusted net income to be $9.5 million in 2009 and $15.3 million in 2010, which means that the stock is trading at 8.1 times adjusted 2009 estimated net income and 5.0 times adjusted 2010 estimated net income. These net income multiples are relatively low for a company such as Skystar but are even lower when you consider that the company has over $2.30 per share of cash on its books. While the stock has traded up significantly since I first mentioned it last month, I remain very bullish on the stock. (Note that as a result of the stock split, the stock is temporarily trading under the ticker SKBID.) Long SKBI.
3. A Short in a Long World
By Alan Farley
8:48 a.m. EST Electronic Arts ( ERTS) is caught in a major downtrend, with video game and hardware sales falling at their fastest rate in years. Whether game saturation, pirating or the weak economy are to blame for the decline, the younger generation is sitting on their hands and refusing to buy, except for the most popular sequels. ERTS never recovered from the credit meltdown plunge to 14.24. It topped out in June in the low 20s and rolled over, in a slow decline that ended in September near support at 17.50. The stock has failed to rally off that level in the last two months, pointing to a possible breakdown that might test the bear market low prior to year's end. Annotated chart here. No positions.
4. Home Improvement Tell?
By Robert Marcin
10:18 a.m. EST Last spring there was a huge push by the bulls for the home improvement trade. Buy the stocks because consumers will paint this and plant that. How easy this is. Yet, with the market rallying strongly since the spring, the sector has hardly participated, with Home Depot ( HD) and Lowe's ( LOW) flat or down since then. Is there any info in this soft cyclical lack of participation? I think so. Many retailers have huge short interest, these don't. No short covering rally here. Valuations are mediocre and fundamentals poor. No reason for the mutual funds to buy these yet. Too big for hedgies to play catch upside with, so no panic buy here. If there was a durable consumer recovery in the works, wouldn't these world-class companies have sniffed it out and been participating heartily? I believe so. This dog ain't barking. We all know Goldman ( GS) and Apple ( AAPL) are great short-term indicators. Yet the lack of participation by the broad-based home improvement retailers is something to watch. No positions.
5. TLT and F: take profits
By Kristen Koh Goldstein
11:53 a.m. EST
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