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mikecart1 (98.79)

I Ain't Scurred

Recs

8

May 05, 2011 – Comments (6) | RELATED TICKERS: WWE , SHAW.DL , SNE

I'm going to get to the point why I am not scared or surprised by the earnings reports and their stock changes this past week or so.  Let's get to it!

STOCKS

Aeropostale - ARO - Let's get serious.  If you didn't see this coming, you haven't been paying attention.  I wear Aeropostale but not recently.  I'm one of the millions of customers waiting on that discount email to come out.  I'm waiting to buy their supposedly $20 shorts for $15 or less.  Why should I or anyone pay retail?  If they send 2-3 emails a week discussing a "sale", then what is the real value of their merchandise anyways?  The stock dropped over 15% today because they found out their same-store earnings declined nearly 8% this past quarter vs. an increase of 8% last year.  That is a 16% swing.  Perhaps they should stop with the sales and just sell clothes at their "discounted" prices.  People aren't buying their regular prices anymore.

Timberland - TBL - Another company that is going for the 'Clearance Model' of selling.  Who is going to pay retail for these boots?  Their Classic is like $160 retail.  No one is buying that when I can wait for the 20-30% coupon, get free shipping, and then find a shoe in the clearance section.  I just bought some new Timbs last month for about $80 - over $50 from retail price.  This stock fell over 30% today on unexpectedly lower income of $0.35 a share.

WWE - WWE - In order to be politically correct, I called World Wrestling Entertainment by its predictable future name.  Since they don't do wrestling anymore on the shows and Vince doesn't want to call what they do wrestling, what is it?  I'll tell you what it is.  It is a tanking entertainment/drama show that is more political than the White House itself.  Is there a reason why Randy Orton had to take the title from Christian less than 2 days after winning the title?  How does that make sense.  Is there a reason to waste an hour of Raw a couple of weeks ago by drafting John Cena from Raw to Smackdown and then back to Raw in the same show?  Is there a reason to waste 30+ minutes at the end of this past week's show to bow down to the Rock?  Vince you suck.  Also I find it hilarious how you finally figured out you had to cut your dividend.  I ain't scurred though.  Sooner or later someone behind the scenes will figure out what to do and WWE will be up to $15.  The only question is when?

TRENDS

There are comeback stories in the making if you know where to look.  In following BP's 2010, nuclear companies will soon follow for 2011.  Of these are companies that provide uranium (the fuel of modern day and upcoming nuclear power plants) like URRE and DNN.  Of the majors are companies like Shaw Group (SHAW) and General Electric (GE).  The trend of Shaw's comeback is already seen as you can see how it tanked from over $41/share to around $32/share after the Japan accident.  Today it is nearly $38/share and rising.  These gains are about as easy as it gets if you turn off CNN and pay attention to the facts.  You might wonder why the fuel companies are dropping again.  Well there are many reasons but just look at the big picture.  How confident are you that nuclear power will be around the next few decades?  I am.  But then again I work in the industry hehe.

Sony (SNE) has taken a slight hit recently due to the fact that 1 hacker was able to destroy a network of nearly 20 million users.  However, if you think big, you may be on something here.  Across the internet it has been stated that users are willing to PAY for the service now.  I guess the fact popped in their head that paying a few dollars a month vs. having your identity stolen is not so bad after all.  If you look at the 10 year chart for Sony you will see that they have generally been around $35-40/share.  That is WITH their free Playstation Network service.  If the stock goes up a little when the network gets back up AND if they decide to change the policy with a pay-for-subscription cost, this could be additional revenue that will send the stock up even higher.  I see easily a $5/share increase from today and possibly $10-15/share increase in the next couple of years as the Playstation 4 gets released with hopefully a better run network.

SLEEPERS

Here are some stocks I think are wild cards and have a good chance of going up under the radar.  Sirius (SIRI) which I have owned for some time will continue to go up.  I tend to match it with NFLX since they are both somewhat similar industries and both companies generally own a large % of their respected industries.  If NFLX is worth $12 billion in market cap, I generally feel that SIRI should be close or follow a similar ratio from today ($8.4 billion).  SIRI can easily go to $3/share in the near future.

McDonald's.  Sadly against my wishes this producer of some of the nastiest food on the planet continues to take over local areas and continues to dominate in sales.  Drive-thru lines are always packed morning to night and obesity ain't slowing down anytime soon.  I really got in touch with how powerful this company is earlier this week when I was at a cross section and saw a car go through in front of me with some fat lady eating a Big Mac while driving.  Her need to eat this item was so important that she had to do it while driving.  MCD is the new JNJ and I won't be surprised if it is $100+/share in under 2 years.

MGM.  If there is some order to the stock market, then this must go up.  If LVS and other casino stocks can go up on speculation, then so can MGM.  It's losses continue to narrow and it somewhat reminds me of that other stock that lost money quarter after quarter before turning a profit - SIRI.  Sirius lost over $5 billion in 2008 and finally made a profit of $43 million at the end of 2010.  Is MGM the next SIRI in the making?  I say so!

Rite-Aid (RAD).  This is a long-shot but so was SIRI and LVS back in 2009.  The increases are small but they are there.  1% same-store increase is an increase afterall.  For a company that hit nearly $50/share during the 2000 bubble, at $1.xx, there isn't much more room for Rite-Aid to fall at this point.

DEAD

Wendy's - there is no hope for this trash of a restaurant.  Bad food.  Zero progress.  Just destroy it already!

 

6 Comments – Post Your Own

#1) On May 05, 2011 at 3:59 PM, catoismymotor (< 20) wrote:

I miss the Wendy's of ten years ago. The burgers were gooood. Now they are greasy, make me feel bad.

I like your POV on these companies. I'm not into retail so it is good to gain some insight now again into that world from someone that has done their homework.

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#2) On May 05, 2011 at 4:18 PM, mikecart1 (98.79) wrote:

I've been following clothing companies for the past few years since I'm one of those dudes that is into clothes lol.  Anyways, I could have predicted the Aeropostale trend for months now.  In fact, I may have in one of my previous blogs.  When a company keeps putting out sales every week or every few days they have effectively de-valued their product.  You are basically telling customers, our shirts aren't really $20 but $15. etc.

And Wendy's yeah they suck.  Even the buildings they have left aren't appealing.  That off brown/burnt red siding and out-dated layout does not get me in the mood to eat their junk.  And that whole "sea salt on fries" campaign they got going on is just pathetic.

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#3) On May 05, 2011 at 4:32 PM, selfdestruct2 (26.96) wrote:

I agree that Uranium will make a comeback. Any thoughts on UEC ?

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#4) On May 05, 2011 at 4:37 PM, mikecart1 (98.79) wrote:

Any nuclear play right now or should I say the upper tier of uranium suppliers and the main nuclear power plant makers are safe bets long-term.  Our company took a slight hit from Japan but that didn't stop interest or demand - just delayed it a little.  Nuclear power is not going away because it is still one of the best solutions for the energy needs of the world.  People might wonder about running out of energy needs but in fact the US is our biggest customer for one of our next-generation designs.

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#5) On May 11, 2011 at 3:16 PM, firetiger77 (34.66) wrote:

+1 rec for the story about the fat lady eating the big mac. (okay, so technically it's for the point you made with the story)

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#6) On May 11, 2011 at 3:40 PM, mikecart1 (98.79) wrote:

#5)

Haha.  Sometimes if you pay attention to the surroundings like Jim Cramer says, you can do pretty well at investing.  That is a big reason why I have made so much on stocks like MO.  LIke MCD, I don't purchase the actual product.  However, everywhere I see people are smoking.  Lung cancer what?  At my company we have designated smoking areas outside.  From 7am to 7pm these places are packed.  They resemble bus stops but are covered a little more.  I guess it is getting the 2nd hand smoke in case you didn't inhale a nice whiff originally.  As long as these places are packed when I walk by everyday, MO will continue to rise - and has. :D

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