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Issuing a STRONG BUY rating on GTN...

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October 08, 2009 – Comments (22) | RELATED TICKERS: GTN

GTN, Gray Television Inc., at $2.18 will be going through the $3 mark in 30 days or less (a minimum 37% return in 30 days).

Here are the resons for my recommendation:

1. GTN is a media stock, and media stocks are HOT (as suggested in this post)

2. Reason #2 will be given in the comment #1 (see comments below)

3. GTN's closing price on 9/2/09 was $2.96. On 10/5/09 it was $2.01, which means GTN has already had a nice pullback of 32% (just enough to shake off week buyers / people with a sensible stomach).

4. GTN just started going back up (and I wouldn't be surprised if it has a 20% one-day-jump within the next 3 trading days).

5. I first bought GTN on 9/4/09 at $0.95, and I'm buying again tomorrow morning as the market opens (and so far I've been rarely wrong).

6. I was even willing to bet on GTN's low end price:

#13) On October 06, 2009 at 11:54 PM, dragonLZ (98.83) wrote:

I'm sticking my neck out today on GTN (again):

I say that GTN, with today's closing price of $2.18 (only 18 cents over $2), will not see it's closing price fall below $2 within the next 3 years or more (including never).

p.s. As a bonus, I'll also say that GTN will be going through the $3 mark in 30 days or less.

Dead serious.

 

Disclaimer: Investing in cheap stocks of unprofitable companies is a risky business. I'm not recommending this stock to you. This recommendation is just for my satisfaction (to be able to post this in few weeks as "I told you so". As a part of this disclaimer I'll post UltraLong's pitch on his red thumb of GTN - I hope he won't mind):

Pitch by: ultralong 9/22/09 3:17 AM

Seriously, I don't know what the hell you people are looking at when you are rating Gray Television. 800 million dollars in debt???? 800M???? The interest payments alone are going to kill this company. They can't turn a profit, they have revenue being driven down 25% this year alone....just let them die. Get it over with, take em out back, bury them next to Old Yeller and be done with it. Seriously, you're excited to buy something with a CCC credit rating? You know what rating comes next after CCC? Bankruptcy.....

 

22 Comments – Post Your Own

#1) On October 08, 2009 at 7:11 PM, dragonLZ (99.31) wrote:

#26) On October 02, 2009 at 1:07 AM, dragonLZ (98.81) wrote:

It is ridiculous how good of a stock GTN is (in my mind, of course):

It started going upon 8/25/09 when it went up from 0.47 to 0.70. A 49% jump? Volume that day 2.6 million (one of the highest one-day volumes ever for GTN up until that day).

The next day, GTN goes up from 0.70 to 0.96 (37% jump) on 10.1 million volume - highest ever in GTN's history.

On 9/8/09, GTN jumps from 1.06 to 1.19 (12%) on 5 mil volume.

On 9/18/09, jumps from 1.66 to 2.65 - 60% jump on 4 mil volume.

The next day, on 9/19/09, GTN jumps another 11% on 7.6 volume.

Just to put it in perspective: During the year of 2003, 2004, 2005, 2006, 2007, 2008, and first half of 2009, GTN's average monthly volume (number of shares traded for a whole month) was 3-4 milion shares.

Now, GTN shares trade 4+ mil shares in a day (let me repeat that: in one day), and on those high volume days GTN usually goes up.

Let's now take a look at the sell-off that started on 9/23/09 (after GTN was up 530% in 4 weeks):

On 9/23/09, GTN was down 11.5%. Volume: 1.9 million.

On 9/24/09, down 10%. Volume: 2.1 million. 

On 9/30/09, down 8%. Volume: 785 thou (less than 1 mil).

On 10/1/09 (today), down 7%. Volume: 1.3 million.

 

I hope you noticed the pattern: When GTN goes up, volume is huge, 4 mil and up. When it goes down, 2 mil or less.

What does that mean for us: There is much, much more buyers than sellers (even after a 500% run in 4 weeks, and even after the market started going down on 9/23/09).

There were also many more up days for GTN during these past 6 weeks than down days.

And one more very important thing: Today, at $2.16, GTN is still up 360% from its 8/24/09 price of $0.47 (and 8/24 was just 6 weeks ago).

Now, the questions are: If GTN really is such a dog as a lot of Fools think, why GTN didn't fall to its old sub-$1 levels yet? Why the people who bought this stock in 7 or 10 mils are now seling in 1 or 2 mils volume? Why they are not dumping it like crazy. Shouldn't they be protecting their 360% profit? 

And the answer is only one: They are taking some profits (some, thus low volume), which is completely normal after the 500% gain (and after the market has turned lower), but they are not getting out completely because they expect to make much more money on GTN in the future.

It is as simple as that. Take  a look at any other huge winner and you will se the same volume-and-price story behind it.

And that' all I had to say about GTN. Time will tell...

OK, one more thing: Go GTN!

p.s. For those who haven't seen it yet: The volume story is here.  

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#2) On October 08, 2009 at 7:13 PM, dare1182 (< 20) wrote:

dragonlz

I hope its another one of your awesome picks.. Im in.

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#3) On October 08, 2009 at 7:32 PM, QwertyHero (< 20) wrote:

Read In Scooby-Doo Voice:

Ris Ruys Razy!!!   

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#4) On October 08, 2009 at 8:03 PM, ChrisGraley (29.69) wrote:

Hey the guy's finally got a reason for recommending something!

While I do appreciate the effort that you made to give an explanation, unless you are a very short term trader and not an investor, you will lose your shirt on Gray Television.

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#5) On October 08, 2009 at 9:02 PM, UltraContrarian (31.39) wrote:

Eventually we will revert to the mean and terrible companies will stop outperforming good ones.  Technical strategies that work now will not work very well after that inflection point.

You may be right about the short term action but I'm pretty sure GTN will see the underside of $2 within the next 3 years.

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#6) On October 08, 2009 at 9:14 PM, ozzfan1317 (80.45) wrote:

I suggest when it hits 3 b ucks take your profits and run. Long term they are probably still doomed.

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#7) On October 08, 2009 at 11:57 PM, dragonLZ (99.31) wrote:

OK, maybe I'm pushing it a little bit by saying GTN won't be back below $2 in 3Y or so (even though I still firmly stand behind my claim), but just so you all know: GTN is a long term play.

Let me put it this way: GTN will reach $10 before it reaches $1.

How's that?

p.s. This claim in #28 is still valid too:

#28) On September 05, 2009 at 4:30 PM, dragonLZ (98.63) wrote:

GTN, 400 shares at $.95 (speculative, but high hopes). IMO, might be $10+ stock in 12+ months, $4- $5 short term.

 

 

#54) On September 11, 2009 at 12:02 AM, dragonLZ (98.97) wrote:

p.s. Haven't you noticed I like media stocks right now. Like them a lot. I own GCI in RL (bought around $3), MNI (one of my 40%-up-the-next-day stocks, and intend to buy more as I think it's making a move to $3+, then some more), and I just recently added GTN.

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#8) On October 09, 2009 at 12:49 AM, TMFUltraLong (99.95) wrote:

I still can't believe you're bullish on this hunk of junk. Isn't it dead yet?

UltraLong

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#9) On October 09, 2009 at 12:54 AM, dragonLZ (99.31) wrote:

UL, I have 3 letters for you: NCT.

When GTN gets to $3 in a matter of days, I promise I'll explain to you what that means... :)

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#10) On October 09, 2009 at 1:16 AM, TMFUltraLong (99.95) wrote:

Newcastle? You really do like near-bankrupt companies, don't you?

UltraLong

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#11) On October 09, 2009 at 1:34 AM, dragonLZ (99.31) wrote:

Yes on NCT (I'll explain what I meant by it when the time comes).

No, on the second question. I don't like any companies (not profitable ones and not near-bankrupt ones) , but I do like promising stocks...(there is a difference between a company and its stock).

p.s. MW's portfolio now has a rating of 95 (yesterday it was 92). Not bad in a little over a month, I think... :)

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#12) On October 09, 2009 at 2:33 AM, bluebare (31.73) wrote:

Hi,

I won't be doing a lot of posting at CAPS until I earn some points and credibility but I've gotten enough excellent ideas in the short time I've been here that I feel obliged to honor the spirit of the CAPS community and throw in two cents worth of amateur analysis for consideration.

To express my gratitude for the valuable insights I've gained from folks like you, here are three alternative picks to GTN that a new kid in the neighborhood thinks are worth looking into.  A simple formula found all of these--First, I was looking at a couple hundred companies with PEs under 10 and ROE over 20.  The second screen of about 50 companies meeting a tighter PE/ROE screen was a personal judgment about which offer what I consider to be terrific products in large markets. In this regard, a China-leaning bias is evident in the selections.  Finally, I scanned the companies data sheets to figure out "Why the low value here?" and found that each is a good company that encountered some unique but surmountable crisis-related dynamics that they all barely SURVIVED by recently garnering fresh investment.  I consider that to be a strong indicator of potential success in credit-tight times. When I happen on big money making moves in well-established companies like these when they're at record lows and/or can catch the low lowside of fresh dilution in a strong company's stock, I have generally found it rewarding to follow on with a few peanuts as quickly as possible. IMHO, these experienced firms are bottomed out, flush with new cash, and will, as a result of their near-death experience and new life, be strong late bloomers in the green shoots movement.    

For these reasons, I recently put a little real money in CPC, UWBK, and WH.  Specifically I urge you to look at UWBK CAPS profile.  One star. Not a positive word or green thumb in site.  It is my well-meaning gift to those gathered here to quietly share the first green thumb in many a moon to appear on this undiscovered gem with you.

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#13) On October 09, 2009 at 4:15 AM, TMFUltraLong (99.95) wrote:

Pretty much I'd peg your "stock screener" on nothing more than

1) find sub $5 stock with larger volume than normal

2) hope for a gap or breakout of trading range

3) rsi over 70....jump aboard

4) pray no one notices this has X (where X represents a relatively large number) times more debt than cash on hand so I can exit in 7 days after suckers have thrown their money into this company

5) laugh when company goes belly up with debt

Isn't that about it? =)

UltraLong

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#14) On October 09, 2009 at 12:12 PM, alexpaz (29.05) wrote:

Ultra, 

He's only been on here for 3 months, give the kid a break ;)

 

I call him the "Miss Cleo" of the stock picking world.

 

-Alex 

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#15) On October 09, 2009 at 5:53 PM, beginningfool09 (< 20) wrote:

I just bought some shares of GTN today at $2.16, partly to test your theory.

I was checking how the day ended just now and saw that GTN is up 65% after hours!! Does anyone know why?

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#16) On October 09, 2009 at 6:01 PM, portefeuille (99.61) wrote:

Does anyone know why?

At 16:03 pm 100 shares were traded at $2.49 and 100 shares were traded at $3.50 (see here).

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#17) On October 09, 2009 at 6:03 PM, portefeuille (99.61) wrote:

which again shows that it is usually a good idea to place a limit order in "after hours trading", if you want to participate in "after hours trading".

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#18) On October 10, 2009 at 2:07 AM, dragonLZ (99.31) wrote:

Did anyone notice that MNI, which was mentioned in my comment # 7 (see above), was up 20% today?

In the same comment from 9/11/09, I said MNI is making a move to $3.

Today, MNI is at $3.17 (33% gain since 9/11/09)... 

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#19) On October 10, 2009 at 2:55 AM, MDGiz (< 20) wrote:

Yes Dragon right again!  UltraLong that #13 was funny, hey if it works use it... Bluebare, the money you are using must be money you are willing to lose, but hoping to win.  I have done it and did it recently.  That type of investing is a gamble unless you know something "inside" or get some early news.  Thats why its speculating...I love this site and all its members...I will stay where I am at in the market, I am praying that it doesnt pullback for the next few weeks, I am hoping to make a bit more money, traling stops on everything!!! 

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#20) On October 15, 2009 at 6:47 AM, dragonLZ (99.31) wrote:

MNI is at $4.02 (up 50% during the last 5 trading days).

It is reporting earnings this morning...

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#21) On October 15, 2009 at 6:49 AM, dragonLZ (99.31) wrote:

Update on my 50%Portfolio is here.

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#22) On October 15, 2009 at 4:26 PM, dragonLZ (99.31) wrote:

Update on GTN is here.

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