- how to invest in Groupon;
- why buying Nucor is a no-brainer; and
- what people don't understand about recent earnings.
Get Your Groupon and Get Out Posted at 4:30 p.m. EDT on Friday, Oct. 21. Do you invest in Groupon now that it has shown some profitability? Do you think that this is, after all, a fantastic long-term play? The answer is, who cares? Get in. Get out. > > Bull or Bear? Vote in Our Poll I believe that Groupon, which is looking at an initial offering price of $16 to $18 per share, will go up a couple of more bucks and then stop. But I think the stock will double when it starts trading and gets more than a $30 billion valuation. Then you have to go -- preferably in the first five days. So, why bother? First, the bears in the media have been switching sides. That's a sure sign they know it is going to pop and they want to wait until after the pop so they aren't ridiculed. Second, before this morning's filing insiders were going to sell -- but not in the new filing. That's huge. It will give this thing some legs. No matter what the criticisms have been about accounting or silly offerings (like 92% off on laser-hair removal that I seem to get every day), the company soldiers on and is able to tell a profitable story, regardless of coming competition. So, take some down. And then skedaddle when the critics return to hammer it.
This One's Easy -- Just Buy It Posted at 7:04 a.m. EDT on Friday, Oct. 21. Occasionally a stock comes along that's easy. Nucor ( NUE) is that kind of stock. The company reported a terrific quarter, showing great growth at a time when every other steel company has had its head handed to it. The balance sheet is its best in years. Its exports, while small, are starting to spurt. The raw costs are coming down as the bidding-up of scrap subsides.
The Earnings Are Fine Posted at 6:14 a.m. EDT on Thursday, Oct. 20. The rumbles are in. I am getting them from all over the place: It is a bad earnings season. "They aren't coming in as I thought they would," someone said to me last night at dinner. "These earnings are really nothing to write home about," someone emailed me as I was on the way home. Guy in the hall: "Jim, you are too bullish about earnings." Wait a second. The earnings are fine! It's the stocks that are bad. That's right, all the stocks with good earnings have had a monster move here, and I have to tell you that I don't even care what they say, the stocks won't work. In fact, I want to make a bold prediction. Let's use a really good company for the test: Honeywell ( HON). The company reports on Friday. Street is looking for a buck and I figure it comes in at $1.02 a share. I think Dave Cote, the terrific CEO, will say that the five-year plan is intact and that the climate control and materials and aerospace businesses are all enjoying the better part of their cycles.