Saturday, February 26, 2011

Buffett's Successor Revealed (NYSE: BRK.A, BRK.B)

For those who have already had the opportunity to get through the 2010 Letter to Shareholders by Warren Buffett, it is obvious that a plan to his succession is clearly taking shape. It has made sense for him that there will have to be a split for his position in the coming years and there has been great mystery as to who will be in charge of investment decisions when Buffett retires.

As he had already officially revealed in October 2010, it seems that the position of chief investment officer will be split into many persons and the first person to be nominated for the task is former hedge fund manager Todd Anthony Combs. As Berkshire Hathaway revealed results for 2010, he went into great lengths to explain his choice of manager, as this person is relatively unknown to the financial markets.

Here is what Warren Buffet had to say about Todd Combs in his 2010 Letter:


Four years ago, I told you that we needed to add one or more younger investment managers to carry on when Charlie, Lou and I weren’t around. At that time we had multiple outstanding candidates immediately available for my CEO job (as we do now), but we did not have backup in the investment area. 
It’s easy to identify many investment managers with great recent records. But past results, though important, do not suffice when prospective performance is being judged. How the record has been achieved is crucial, as is the  manager’s understanding of – and sensitivity to – risk (which in no way should be measured by beta, the choice of too many academics). In respect to the risk criterion, we were looking for someone with a hard-to-evaluate skill: the ability to anticipate the effects of economic scenarios not previously observed. Finally, we wanted someone who would regard working for Berkshire as far more than a job.
When Charlie and I met Todd Combs, we knew he fit our requirements. Todd, as was the case with Lou, will be paid a salary plus a contingent payment based on his performance relative to the S&P. We have arrangements in place for deferrals and carryforwards that will prevent see-saw performance being met by undeserved payments. The hedge-fund world has witnessed some terrible behavior by general partners who have received huge payouts on the upside and who then, when bad results occurred, have walked away rich, with their limited partners losing back their earlier gains. Sometimes these same general partners thereafter quickly started another fund so that they could immediately participate in future profits without having to overcome their past losses. Investors who put money with such managers should be labeled patsies, not partners.
As long as I am CEO, I will continue to manage the great majority of Berkshire’s holdings, both bonds and equities. Todd initially will manage funds in the range of one to three billion dollars, an amount he can reset annually. His focus will be equities but he is not restricted to that form of investment. (Fund consultants like to require style boxes such as “long-short,” “macro,” “international equities.” At Berkshire our only style box is “smart.”)
Over time, we may add one or two investment managers if we find the right individuals. Should we do that, we will probably have 80% of each manager’s performance compensation be dependent on his or her own portfolio and 20% on that of the other manager(s). We want a compensation system that pays off big for individual success but that also fosters cooperation, not competition. 
When Charlie and I are no longer around, our investment manager(s) will have responsibility for the entire portfolio in a manner then set by the CEO and Board of Directors. Because good investors bring a useful perspective to the purchase of businesses, we would expect them to be consulted – but not to have a vote – on the wisdom of possible acquisitions. In the end, of course, the Board will make the call on any major acquisition.
One footnote: When we issued a press release about Todd’s joining us, a number of commentators pointed out that he was “little-known” and expressed puzzlement that we didn’t seek a “big-name.” I wonder how many of them would have known of Lou in 1979, Ajit in 1985, or, for that matter, Charlie in 1959. Our goal was to find a 2-year-old Secretariat, not a 10-year-old Seabiscuit. (Whoops – that may not be the smartest metaphor for an 80-year-old CEO to use.)
He hints that there will probably other managers added to the team and even a compensation structure already in place. The investment results of Berkshire Hathaway's equity portfolio will therefore present the performance of Todd Combs.


Another interesting part of his letter is the update on the equity put contracts that Berkshire Hathaway carries in his books.


You can access his full letter here.

Tuesday, February 22, 2011

Chinacast Education Corporation (NASDAQ: CAST) Q1 2011 Price Target

Recent price: 7.02$
P/E Ratio: 18.02
3 Months Target Price: 7.75$

Company Description
Established in 1999, ChinaCast Education Corporation is a leading for-profit, post-secondary education and e-learning services provider in China. The Company provides post-secondary degree and diploma programs through its three fully accredited universities: The Foreign Trade and Business College of Chongqing Normal University located in Chongqing; Lijiang College of Guangxi Normal University located in Guilin; and Hubei Industrial University Business College located in Wuhan. These universities offer four year and three year, career-oriented bachelor's degree and diploma programs in business, finance, economics, law, IT, engineering, hospitality and tourism management, advertising, language studies, art and music.

The Company also provides e-learning services to post-secondary institutions, K-12 schools, government agencies and corporate enterprises via its nationwide satellite broadband network. These services include interactive distance learning applications, multimedia education content delivery and vocational training courses.


Confidence Margins
Strong resistance $7.99 (+14%)
Light resistance $7.77 (+11%)
Light support $6.50 (-7%)
Strong support $5.80 (-17%)

Recommendation
Because of rumors related to complex transaction the company entered with the objective of acquiring new schools, the company's stock saw a large increase in the daily trading volume.
The silence in the following days did nothing to ease the fears of investors. On February 14th, the company's Chairman and CEO, Ron Chan issued short a statement explaining these transactions following questions by an analyst. The statement seemed to provide enough information to reduce uncertainty and this a certainly a great entry point for traders considering acquiring shares of Chinacast Education Corporation.

Entry strategy
For the cautious investor:
Buy the stock for 7.25$ or less but stay informed for coming developments and most importantly, the light support if the stock comes to pass across it.

For the risk-taking trader:
A position in the June 2011 7.50$ call option will yield a satisfactory return to investors, they can be acquired for about 70$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 7.75$, or keep it until 7.90$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 7.75$, 7.90 if you are more bullish. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

NxStage Medical Inc (NASDAQ: NXTM) Q1 2011 Price Target

Recent price: 22.58$
P/E Ratio: -
3 Months Target Price: 24$

Company Description
NxStage Medical, Inc. (NXTM) is a medical device company that develops, manufactures and markets products for the treatment of kidney failure, fluid overload and related blood treatments and procedures. Its product, the NxStage System One (System One), was designed to satisfy an unmet clinical need for a system that can deliver the therapeutic flexibility and clinical benefits associated with traditional dialysis machines in a smaller, portable form that can be used by healthcare professionals and trained lay users alike in a range of settings, including patient homes, as well as more traditional care settings, such as hospitals and dialysis clinics. NxStage markets the System One to dialysis clinics for chronic hemodialysis treatment, providing clinics with access to a developing market, the home hemodialysis market and the ability to expand their patient base by adding home-based patients without adding clinic infrastructure.


Confidence Margins
Strong resistance $27.12 (+20%)
Light resistance $24.48 (+8%)
Light support $20.05 (-11%)
Strong support $18.95 (-16%)

Recommendation
NxStage Medical saw it's stock price plunge a few weeks after it released it's fourth quarter and full year results. They seemed disappointing until the company provided guidance for the year 2011. There seems to be quite some upside left in this company until the next quarterly filing.

Entry strategy
For the cautious investor:
Buy the stock for 23$ or less and keep the light support on check as it will indicate a stronger downtrend if the stock gets to go lower.

For the risk-taking trader:
A position in NxStage Medical that seems very promising is the June 2011 22.50$ call options. They can be purchased for about 310$ per contract. The bid-ask spread is pretty high so it would be wise to place a bid slightly higher than the current one so not to overpay this position.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 24$, or keep it until 27$ if it climbs passed the light resistance and your own analysis is more bullish.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 24$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

China Mobile Ltd (NYSE: CHL) Q1 2011 Price Target

Recent price: 47.66$
P/E Ratio: 10.86
3 Months Target Price: 51$

Company Description
According to Reuters, China Mobile Limited, incorporated on September 3, 1997, provides a range of mobile telecommunications services in all 31 provinces in China, autonomous regions and directly administered municipalities in Mainland China, as well as in the Hong Kong Special Administrative Region of the People’s Republic of China. Its businesses primarily consist of voice business and value-added business. As of April 30, 2010, the Company’s total number of customers reached approximately 544.2 million. As of April 30, 2010, China Mobile Communications Corporation (CMCC) owned 74.22% equity interest in the Company through intermediate holding companies. China Mobile Limited offers mobile telecommunications services principally using the global system for mobile communications (GSM) standard. Beginning from January 7, 2009, it also offers mobile telecommunications services using the time division-synchronous code division multiple access (TD-SCDMA) standard. The Company operates its third-generation (3G) business based on a core mobile telecommunications network that is shared by both its second generation (2G) and 3G businesses and TD-SCDMA wireless network capacity leased from CMCC.


Confidence Margins
Strong resistance $54.70 (+15%)
Light resistance $51.22 (+7%)
Light support $47.00 (-1%)
Strong support $45.60 (-4%)

Recommendation
This giant telecom company saw it's stock price drop sharply in the recent weeks for no apparent reason. This is also a great entry point for traders pondering a log term position in the company. With a dividend yield of close to 4% at current prices, this will be a position that will pay to wait. The light support is pretty close, so this is a position to watch closely.

Entry strategy
For the cautious investor:
Buy the stock for 48$ or less.

For the risk-taking trader:
A position in the June 2011 50$ call option will yield a satisfactory return to investors who will take advantage from then, they can be acquired for about 100$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 51$, or keep it until 54$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 51$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

Thursday, February 17, 2011

Vertro Inc (NASDAQ: VTRO) Q1 2011 Price Target

Recent price: 4.10$
P/E Ratio: 15.45
3 Months Target Price: 5.50$

Company Description
Vertro, Inc. is an Internet company that owns and operates the ALOT product portfolio. Through ALOT, consumers can discover apps which they can display through three specific products: ALOT Appbar, ALOT Toolbar and ALOT Home. These apps are developed in-house and by third party app developers and are designed to enhance the way people interact with content online. ALOT has millions of users across its product portfolio. Together these users conduct high-volumes of type-in-search queries, which are monetized through third-party search and content agreements.


Confidence Margins
Strong resistance $7.25 (+77%)
Light resistance $5.43 (+32%)
Light support $2.74 (-33%)
Strong support $1.69 (-59%)

Recommendation
This is a pretty well known scenario. The company reports a quarter that fell short of what analyst's were expecting. fortunately for investors, those falls from the stock price tend to overshoot and dramatize the situation. There tends to be a rally as people digest the news and the information on Vertro Inc. leads us to think that it is also the case for this company. The company might also be considered a value play as their financial situation improves and if one intends to hold it for the long run.

Entry strategy
For the cautious investor:
Buy the stock for 4.50$ or less.

For the risk-taking trader:
As this company doesn't have any option contracts outstanding, the best thing to do here is to follow the same strategy as the cautious investor. A good way to take advantage of this stock might be to use some margin, although the use of debt is not a good idea in our view and with such potential returns, there should be no need for that.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 5.50$, or keep it until 6.50$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour, the supports are very close to one another and if the stock breaks through them, this could be devastating. The second support should be seen as an exit point.

For the risk-taking trader:
Same strategy as the cautious investor.

XenoPort, Inc. (NASDAQ:XNPT) Q1 2011 Price Target

Recent price: 7.40$
P/E Ratio: -
3 Months Target Price: 9.50$

Company Description
XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body’s natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. 

XenoPort is developing its lead product candidate in collaboration with Astellas Pharma Inc. and GlaxoSmithKline. XenoPort’s product candidates are being studied for the potential treatment of restless legs syndrome, gastroesophageal reflux disease, neuropathic pain, spasticity and Parkinson’s disease.


Confidence Margins
Strong resistance $11.82 (+60%)
Light resistance $9.68 (+31%)
Light support $7.13 (-4%)
Strong support $5.66 (-24%)

Recommendation
This company has seen quite some ups and downs in it's stock price. But the recent slump coming into the release of it's fourth quarter and year0end statements has had no particular reason. This leads us to think that XenoPort Inc. is undervalued from a technical standpoint. 

Entry strategy
For the cautious investor:
Buy the stock for 8$ or less.

For the risk-taking trader:
The June 2011 8$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 255$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 9.50$, or keep it until 11$ if you are more bullish in your own analysis. Look forward to sell the stock if it goes under the light support.

For the risk-taking trader:
The contracts should be kept until the underlying reaches 9.55$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

EnerNOC, Inc. (NASDAQ: ENOC) Q1 2011 Price Target

Recent price: 19.30$
P/E Ratio: 38.59
3 Months Target Price: 31$

Company Description
According to their SEC Filings, EnerNOC unlocks the full value of energy management for our utility and commercial, institutional, and industrial (C&I) customers by reducing real-time demand for electricity, increasing energy efficiency, improving energy supply transparency in competitive markets, and mitigating emissions. They accomplish this by delivering world-class energy management applications including DemandSMART™, comprehensive demand response; EfficiencySMART™, data-driven energy efficiency; SupplySMART™, energy price and risk management; and CarbonSMART™, enterprise carbon management. Their Network Operations Center (NOC) continuously supports these applications across thousands of C&I customer sites throughout the world. Working with more than 100 utilities and grid operators globally, they deliver energy, ancillary services, and carbon mitigation resources that provide cost-effective alternatives to investments in traditional power generation, transmission, and distribution.


Confidence Margins
Strong resistance $36.75 (+90%)
Light resistance $31.49 (+63%)
Light support $17.65 (-9%)
Strong support $16.00 (-17%)

Recommendation
This company has seen it's share of drama over the last weeks. First, it has face scrutiny over it's operations and the way it charges it's clients and just a couple of days later, the company releases it's quarterly statements with results that beat analyst's expectations but with a guidance that failed to stop the stock from falling further. This is a great entry point.

Entry strategy
For the cautious investor:
Buy the stock for 21$ or less.

For the risk-taking trader:
The June 2011 20$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 255$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 31$, or keep it until 35$ if you are more bullish in your own analysis. The stock just broke one of it's support at 19.50$, so this position is to be monitored if if goes lower, in that case The light support should be seen as an exit point.

For the risk-taking trader:
The contracts should be kept until the underlying reaches 31$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

Wednesday, February 16, 2011

Jim Chuong's 2010 Letter to Partners

A couple weeks ago, I came out with an article depicting the performance of the stock portfolio of Canadian value investor Jim Chuong for the past decade. With a lot of humility, he attributed his outstanding 2010 57% performance to just sitting there and watching his portfolio rise. Here are of his own words:

The return I achieved in 2010 is not repeatable, should not be considered a reflection of my investment skill and, if anything, foreshadows a very bad 2011 for me.
In fact, in 2010, aside from picking up a small handful of shares in The Buckle, my activity was non-existent. Readers should expect inactivity in the face of rising prices. For me, it makes no sense to buy at increasingly higher prices. In fact, it appears more profitable to start looking in areas where prices are declining or, even better, have collapsed.
This year my letter will be short because nothing happened – everything rose in price and I sat dumbfounded - gawking at all the businesses that I was suddenly priced out of.

He his very modest indeed and as many will have guessed, his task has not been so easy. In his 2010 letter, he explains his views about investing and the method he uses to find attractive stocks for his portfolio.

He talks about the effect of diversification and asset allocation. He shines the light on the reason why many companies decided ti distribute a special dividend in 2010. As a value investor he shuns companies that have debt on their balance sheets and he gives a lengthy argument to support his view.

He also candidly compares poker to investing in a very light way. And reminds us of the effect of taxes on different ways to earns money, ranging from earned income to dividends.

He also insists on the importance of retirement and what it implies for any person facing the dilemma of immediate gratification versus long term wealth. He thankfully ends with a description of the performance of his portfolio, and the companies in it.
Here are his holdings at the end of 2010:

Company
% of Portfolio
Fossil (NASDAQ: FOSL)
K-Swiss (NASDAQ: KSWS)
49.5%
14.6%
The Buckle (NYSE: BKE)
12.0%
Columbia Sportswear (NASDAQ: COLM)
8.8%
American Eagle (NYSE: AEO)
6.6%
Berkshire Hathaway (NYSE: BRK.B)
6.4%
Cash
2.1%
General Employment (AMEX: JOB)
0.1%

You can access his full letter and his insights right on his website.

Sierra Wireless, Inc. (NASDAQ:SWIR, TSE:SW) Q1 2011 Target Price

Recent price: 10.96$
P/E Ratio: -
3 Months Target Price: 15$

Company Description
Sierra Wireless, Inc. (Sierra Wireless) provides wireless wide solutions for the mobile computing and machine-to-machine (M2M) markets. The Company develops and markets a range of products that include wireless modems for mobile computers, embedded modules and software for original equipment manufacturers (OEMs), intelligent wireless gateway solutions for industrial, commercial and public safety applications and a platform for delivering device management and end-to-end application services. Sierra Wireless also offers professional services to OEM customers during their product development and launch process in wireless design, software, integration and certification to provide built-in wireless connectivity for mobile computing devices and M2M solutions. Its products, services and solutions connect people, their mobile computers and machines to wireless voice and mobile broadband networks around the world.


Confidence Margins
Strong resistance $16.50 (+51%)
Light resistance $15.52 (+42%)
Light support $10.78 (-2%)
Strong support $10.25 (-6%)

Recommendation
Sierra Wireless gave a very poor guidance to analysts and the investment community in general. What can be notice is that the company has already suffered much of the downside it could handle, assuming the company performs at least in the range of the guidance provided by the management, there should be a slow and gradual raise in the stock price that will yield good results for investors.

Entry strategy
For the cautious investor:
Buy the stock for 12$ or less.


For the risk-taking trader:
The June 2011 12$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 80$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 15$, or keep it until 16.50$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour, the supports are very close to one another and if the stock breaks through them, this could be devastating. The second support should be seen as an exit point.


For the risk-taking trader:
The contracts should be kept until the underlying reaches 15$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

Tekelec (NASDAQ:TKLC) Q1 2011 Target Price

Recent price: 8.47$
P/E Ratio: 38.91
3 Months Target Price: 13$

Company Description
According to their website, Tekelec is found at the heart of most global networks, Tekelec’s market-leading, mission-critical, high-performance network solutions enable the secure and instant delivery of calls and text messages for more than one billion mobile and fixed-line subscribers. The company’s session management solutions allow telecom operators to manage the diverse applications, devices, technologies and protocols, across existing and evolving networks, to meet the demands of today’s consumer. Tekelec uniquely ensures telecom operators have a clear migration path to SIP-based IP networks, and whatever comes next, with the flexibility to deploy solutions at a pace dictated by their business needs.


Confidence Margins
Strong resistance $14.55 (+72%)
Light resistance $13.28 (+57%)
Light support $8.25 (-3%)
Strong support $7.96 (-6%)


Recommendation
Tekelec gave a very poor guidance to analysts and the investment community in general. What can be notice is that the company has already suffered much of the downside it could handle, assuming the company performs at least in the range of the guidance provided by the management, there should be a slow and gradual raise in the stock price that will yield good results for investors.

Entry strategy
For the cautious investor:
Buy the stock for 9$ or less.


For the risk-taking trader:
The May 2011 10$$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 40$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 13$, or keep it until 54$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.


For the risk-taking trader:
The contracts should be kept until the underlying reaches around 13$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

Akamai Technologies, Inc. (NASDAQ:AKAM) Q1 2011 Price Target

Recent price: 42.95$
P/E Ratio: 47.57
3 Months Target Price: 52$

Company Description
According do the invetor's relations section of their website, Akamai® provides market-leading, cloud-based services for optimizing Web and mobile content and applications, online HD video, and secure e-commerce. Combining highly-distributed, energy-efficient computing with intelligent software, Akamai’s global platform is transforming the cloud into a more viable place to inform, entertain, advertise, transact and collaborate. Akamai is committed to delivering superior, sustained value to its shareholders.


Confidence Margins
Strong resistance $54.65 (+27%)
Light resistance $52.72 (+23%)
Light support $39.90 (-7%)
Strong support $36.69 (-15%)


Recommendation
Even if the company provided strong quarterly earnings, they proved to be very disappointing for the analysts who were on the conference call. Adding to their slump was that CISCO, a bellwether for the technology industry, came with very disappointing quarterly results for the same quarter. This temporary downturn presents investors with a great buying opportunity.

Entry strategy
For the cautious investor:
Buy the stock for 44$ or less.


For the risk-taking trader:
The May 2011 43$$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 390$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 52$, or keep it until 54$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.


For the risk-taking trader:
The contracts should be kept until the underlying reaches around 52$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Monday, February 14, 2011

Orbitz Worldwide, Inc. (NYSE:OWW) Q1 2011 Analysis

Recent price: 4.26$
P/E Ratio: -
3 month Target Price: 6.00$

Company Description
Orbitz Worldwide, Inc. is a global online travel company that uses technology to enable leisure and business travelers to search for and book a range of travel products and services. Its brand portfolio includes Orbitz, CheapTickets, The Away Network, and Orbitz for Business in the Americas; ebookers in Europe; and HotelClub and RatesToGo based in Sydney, Australia. 


The Company provides customers with the ability to book a set of travel products and services from suppliers worldwide, including air travel, hotels, vacation packages, car rentals, cruises, travel insurance and destination services, such as ground transportation, event tickets and tours.



Confidence Margins
Strong resistance $7.01 (+65%)
Light resistance $6.50 (+53%)
Light support $4.22 (-1%)
Strong support $3.56 (-16%)

Recommendation
This traveling company that has been unfairly punished by its investors because a similar company in the industry, Expedia Inc. reported a poor fourth quarter 2010 results. Even if they are similar, it there seems to be reasons to think that the company did not fare as bad as it's counterpart. This will prove to be a very profitable trade because it has already seen much of the downside.

Entry strategy
For the cautious investor:
Buy the stock for 4.50$ or less.

For the risk-taking trader:
Buy the 5.00$ May 2011 out of the money call options for about 40$ a contract.
This position will require the investor to keep an eye on his portfolio to make sure he doesn’t endure any unplanned losses. The support levels imply a mild possibility for the stock to reach them. One might consider selling if the stock gets close to it's light resistance by the time they issue their quarterly statement.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 6.00$, or keep it until about 6.50$ if you are very bullish.

For the risk-taking trader:
These options are currently undervalued because investors assume that there should not be much movement upwards for this stock. Sell them if the stock reaches the same levels as in the case of the cautious investor.

Joe’s Jeans, Inc (NASDAQ: JOEZ) Q1 2011 Analysis

Recent price: 1.12$
P/E Ratio: 29.30
3 month Target Price: 2.00$

Company Description
Joe's Jeans Inc. ("Joe's") designs, sources and distributes its Joe's® and Joe's Jeans™ branded apparel products to over 1,200 retail doors in the U.S. and abroad. With its competitive advantages and industry expertise in denim-wear and denim-related products, Joe's produces one of the most recognized and sought-after premium denim brands in the world. Joe's products are designed internally and sourced to specification from suppliers primarily located in the U.S., Mexico and Morocco. Finished goods are then distributed directly to Joe's customers from its distribution center in Los Angeles. Joe's maintains third party showrooms in New York and Los Angeles to showcase its Joe's® and Joe's Jeans™ products for its customers. Joe's has recently has opened a branch office in Paris to distribute its products in Europe.


Confidence Margins
Strong resistance  $3.60 (+221%)
Light resistance  $2.17 (+94%)
Light support  $1.00 (-11%)
Strong support  $0.63 (-44%)

Recommendation
Because of poor quarterly and year-end results, JOEZ has been punished by its investors in the means of a huge oversell. The RSI just got over the oversold position and the MACD has bottomed. Investors were anxiously waiting for the final results of the company and they proved very disappointing. This seems to be the bottom and now might be the right time to buy for the coming quarter.

Entry strategy
For the cautious investor:
Buy the stock for 1.30$ or less.

For the risk-taking trader:
Since there are no option contracts for this stock, the suggested strategy is to use your margin to leverage the position of the cautious investor.
There needs to be a close attention paid to this position. It has a great potential profit, but the downside is still pretty high.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 2.00$, or keep it until 3.00$ if you are very bullish.

For the risk-taking trader:
Same as the cautious investor. However, one needs to keep an eye on the position to make sure not to incur large losses should the position turn sour.

Vical Incorporated (NASDAQ:VICL) Q1 2011 Analysis

Recent price: 1.74$
P/E Ratio: -
3 months Target Price: 2.25$

Company Description
Vical Incorporated researches and develops biopharmaceutical products based on its deoxyribonucleic acid (DNA) delivery technologies for the prevention and treatment of serious or life-threatening diseases. The Company has five active independent clinical and preclinical development programs in the areas of infectious disease and cancer, including a fully enrolled Phase III clinical trial using the Company’s Allovectin-7 immunotherapeutic in patients with metastatic melanoma; a fully enrolled Phase II clinical trial using TransVax, its cytomegalovirus (CMV), therapeutic DNA vaccine; completed Phase I clinical trials using its Hemagglutinin Type 5 and Neuraminidase Type 1 pandemic influenza DNA vaccine formulated with its Vaxfectin adjuvant; a preclinical program using its H1N1 pandemic influenza DNA vaccine formulated with its Vaxfectin adjuvant, and a preclinical program using its CyMVectin prophylactic vaccine formulated with its Vaxfectin adjuvant.


Confidence Margins
Strong resistance $4.05 (+133%)
Light resistance $2.33 (+34%)
Light support $1.70 (-2%)
Strong support $1.48 (-15%)

Recommendation
Vical corporation saw it's stock price plunge because of an ill timed public offering of common shares. The company decided to issue 15 million shares at a price of 2.25$ and accordingly, the stock price went to those levels. Although the share issuance provoked some dilution, it is certain that a drop of nearly 50% in the stock price is far from the recent value of the company. Except for the recent quarterly results, there has been no material change to the operations of the company, which leads to think that there is a lot of upside left in this stock.

Entry strategy
For the cautious investor:
The best thing to do here is suggested to initiatiate a long position. The stock should be acquired for less than 1.80$.

For the risk-taking trader:
The June 2011 2.50$ call option contract seems to be the right position to take, they can be acquired for 30$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 2.30$, or keep it until 3$ if the stock crosses the light resistance level.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 2.30, as for the cautious investor.