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dcsilver (91.41)

Who shall live, and who shall die? (SIRI, LTS, RAD, and ETFC)

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August 19, 2009 – Comments (4) | RELATED TICKERS: SIRI , LTS , ETFC

 

I love me my debt ridden penny stocks.  Always have, always will. Outsized gains or bankruptcy is my motto.  Not a bad time to be investing with that strategy in mind. So with that, let’s take a look at some stocks:

 

SIRI – Cash for clunkers is a success. GM/Ford are ramping up production for the end of the year. The doomsday scenario of March 2009 has passed.  The bad loan terms of 15% are over.  Customers are leaving (bad), prices are rising (good), and the era of Howard Stern is almost over (bad).  That being said, this stock was beat to within an inch of its life.  Recovery and better days are ahead. 

 

BOLD PREDICTION = $.75 by the end of September.

 

LTS – Ladenburg Thalmann Financial Services – Is this stock a goner? Insiders are buying at $.50.  I bought in at $.60. If they survive, and they seem to be attracting top talent, then this stock is going to have outsized returns.  If the recession continues for a year, find your local judge and declare bankruptcy.

 

BOLD PREDICTION =$.95 by the end of December.

 

RAD – Rite Aid, Rite Aid, Rite Aid… What can I say.  Insiders were buying at $1.00 and I missed it.  I made a play for RAD at $1.75 and never stocked up at $.25.  My mistake.  They appear to have put their death bed issues aside, fixed their financing issues, and will survive and thrive. That being said, if the recession continues to rear its ugly head, some profit taking and short selling based on the massive debt is going to drag this stock down.

 

BOLD PREDICTION =$1.10 by the end of September.

 

ETFC – Oh Citadel, what have you done?  I loved this stock.  The Fool loved this stock.  CAPS loved this stock.  The Citadel did not.  It filed an announcement that it was going to sell 120,000,000 shares.  That is not a strong indication that the Citadel thinks this stock is a winner.  I bought at $1.20 and sold at $1.40. If the biggest investor and debt hold is leaving you at the alter, I’m no smarter.  I dumped this loser.

 

BOLD PREDICTION =$.80 by the end of December.

4 Comments – Post Your Own

#1) On August 19, 2009 at 7:06 PM, streetflame (99.81) wrote:

I somewhat agree. ETFC looks bad to me, but I would wait to see $2 before slapping a red thumb on.  RAD has passed the biggest danger and deserves to trade roughly this high, but will probably muddle along.  SIRI I think you are a bit too optimistic.  I would not buy or short any of these, the risk/reward is just not there for me.

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#2) On August 20, 2009 at 8:13 AM, dcsilver (91.41) wrote:

Streetflame -

ETFC to $2 I think is a pipe dream with Citadel liquidating their shares.  At some point, ETFC is going to be sub $1 and will get a dead cat bounce when TD Ameritrade buys their E-Trade brokerage business.  The bounce might be to $2 a share, but I don't know.  It might also be the $1.20 floor Citadel set in thier public filing.

SIRI has some problems, I admit it.  Still, I think they are going survive and thrive.  Despite the massive dilution, I still think long-term, the stock will break $1. 

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#3) On August 23, 2009 at 2:22 AM, castilloelmorro (42.66) wrote:

NOT !

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#4) On August 23, 2009 at 2:52 AM, Tacomatight (65.43) wrote:

A contrarian point of view on ETFC: They have the best online trading platform. I use TDAmeritrade also, and there is no comparison, TDAmeritrade is for old men to look at their balance once a month, E-Trade is for active traders. I'm in at  1.40 something(should have pulled the trigger a 1.00). I think long-term this stock will be a winner. After reading your post though, I'll take another look.

SIRI will be a winner. Their stock at .05 cents was good for the company and their management-very humbling. I think they have finally realized that to survive they can't just put all their hopes into Howard Stern and car subscribers. I think the eventual demise of Howard from SIRI will be very positive as that used to be a major selling point for them. I'm of the age that should be one of his followers but I always thought he was a punk and not funny.

Howard Stern appeals to 14-18 year old boys who usually don't have the money to buy brand new cars. They also don't pay for radio and most of his original listeners are in their 30's now (pee-pee humor loses it's luster after a certain age). If they can make satellite radio easily accesible and cheap they will have a real winner. I live abroad now and would love to have it, if I wasn't gouged by the price and could just hook my ipod(or hopefully another player) into my stereo.

Thanks(this has been my (.02),

Taco

 

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