Super Stock Blog

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Month: November 2014

AIG is a Great Long-Term Investment

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On November 25, 2014

In Super Stock

As you noticed in my blog, I often do buy and sell out of the same stock within the same year.  I often try to sell a year ahead to reduce the tax capital gains.  If you are looking at a great stock to do play long-term and that means you wish to invest, I recommend looking at AIG.  It did do poorly in the recession and they went to the brink of bankruptcy before being rescued by the US Government.

However, they are now poised in a path to grow and profit.  The stock chart shows this growth and it will continue to do great in many years to come.  Another great way to play is to use the AIG Warrants.  It’s a leveraged bet that will also do well.

I own both AIG Warrants and AIG.

Sprint Update

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On November 20, 2014

In Super Stock

It has been a while since I posted in my blog.  FYI, I sold Sprint in June while it was in the mid-9s.  I don’t want anyone to take an investment and continue to hold thinking that I still own it.  I still think it is a great stock but there is a lot of competition.  The Softbank Mr. Son will do everything in his power to make Sprint a strong player in the US Market.  I think he will succeed but it will take too much time and there are so many great investments out there.

 

Ocwen is a Deep Value Play

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On November 19, 2014

In Super Stock

On Friday, Ocwen Financial (OCN) took a nose-dive of 8.93% as they lost the loan deal with Wells Fargo.  They have dropped from a high of $60 to reaching $20 in one years time.  I would not have expected this company to continue to drop so much but with a price of $20 there is much pessimism priced into the stock.  They are going to do buybacks and they also have Seth Klarman who has bought large purchases in the third quarter.  Leon Cooperman sold out of his position though.

What are the risk?

They had a huge miss on earnings the past quarter and they also have substantial misses on the past 3 earning releases.  The company has fallen dramatically since the second quarter earnings.  The management repurchased 5.3 million shares at an average price of $29.92.  This is 50% higher than the current price of the stock. They also purchased 2 million additional stock at $23.63.  Management thinks their stock is too cheap and I wouldn’t doubt that they repurchase more in the future.

Why should I buy?

William Erbey is a really good CEO.  There is a lot of negative news priced into the stock right now.  If the company settles with regulations, there is a good chance that the price will rise significantly.  Also, if they continue to go the course, their stock should just go up because its priced as if its going to go to worse climate.

This is actually pretty risky but if there is a bottoming it might be a good play to make!  I would recommend watching for now!

Investing in Drug Companies

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On November 15, 2014

In Super Stock

Investing in pharmaceutical companies are always risky.   Most of these companies are not making money but if they have one drug that works well, they can easily be bought out or make all the royalties back from their research and development.  It’s better if these companies already have a partnership with one of the behemoth drug companies that can help give them money and sponsor their drugs.

The company I’m talking about is Theravance (THRX).  Seth Klarman owns a majority of this company in his portfolio.  His basis is much higher than the current price of the stock.  It has hit weakness the past couple of quarters but there has been really good guidance going forward and growth should happen in 2015 and 2016.  GlaxoSmithKline recently purchased 832,456 shares of Theravance costing them a total of $12,786,524.16.  With such a large purchase, they are really betting on their drugs and I assume they eventually would like to buy them out.

This is a risky place but if THRX does well, it could be a great benefit to the stockholders.

Ford F-150 means Big Stock Move Up!

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On November 11, 2014

In Super Stock

Ford has started production on their new F-150 aluminum truck.  This is their best seller vehicle and this is poised to bring their stock back up.  There has been a lot of bearish pricing in the stock this year since they have not hit their numbers and their guidance has been down.  The reason is they are investing in the future.  They have spend lots of money on their new models and they are willing to sacrifice short-term gains for future growth.  This actually worked to their advantage.  Not only has gas price decreased significantly since the start of the year but customers still have aging cars that need to be salvaged.

They are in great position for 2015 and their stock is in a great position to be purchased!  Even if the stock doesn’t move at all, you still get a nice 3.5% dividend to be patient.  Try doing that in a money market account or CD.  You are paid to be patient.

Remember they still have a great line of vehicles coming out for 2015 including the Ford Mustang, C-MAX, Escort, and more.  I recommend getting in while its low.

Disclosure: I own F for the long-term potential gain.

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