Reminiscences of a Stockblogger

Nov 11

Week 123: Lot’s of Volatility

Portfolio Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Recent Developments

The third quarter earnings season is shaping up a lot like the second. Lots of volatility, lots of disappointment, and dramatic falls followed by recoveries.

I think its a symptom of our malaise. Things just aren’t that good. Yet stocks are juiced by all the money sloshing around. So you get this dynamic during earnings where numbers come out and aren’t that good, which leads to a steep sell-off in the stock because the current price can’t be justified based on the earnings and outlook. But then the liquidity effect kicks in, arresting the decline, changing the momentum on its head, and sending the stock back up. Read more

Nov 9

5 Comments

The other VoIP Play I added: magicJack (CALL)

While I was investigating Vonage I was introduced to their competitor magicJack by an acquaintance on twitter. Interestingly, in the process of talking me into magicJack he talked himself out of his own position. Let this serve as foreshadowing that this is not an investment without its warts.

The Positives

magicJack, like Vonage, provides voice over IP for telephone services for consumers. magicJack sells a little dongle like device that plugs into the USB port of your computer. You plug in the device, plug in your phone to the other end, and are off to the races. The company is best known for the incessent commercials they have pummeled at people for years. They also have a mobile app available on Android and the iPhone that allows you to make free long-distance and international calls as long as you are connected to Wifi.

magicJack has an enterprise value of about $250 million, comprised entirely of its market capitalization less $45 million of cash. In the first 6 months of the year the company generated a little over $21 million of cash, which puts the stock at an attractive 6x Enterprise Value to Free Cash Flow. If you step back to prior years, free cash flow generation as per the balance sheet was even stronger. The company has also been able to grow its customer base over the last few years, though this growth has tapered off some in the first half of 2013. A new device was launched in June that should provide a boost to growth, with the extent of that boost likely determining the stocks price in the short run. Read more

Oct 28

7 Comments

A Starter Position in Glacier Media (GVC.to)

This is the last of a series of posts I’ve written over the weekend discussing a number of changes to my portfolio over the last two weeks.

Why I took a position in Glacier

While I love it when my stocks go up, it can be frustrating when they go up before I have a chance to talk about them. I bought a starter position in Glacier last week. Here is the buy for my practice portfolio:

I had been planning to say something about Glacier but I wanted to spend a little more time on both the name and the sector to make sure it was indeed a stock I wanted to hold before talking about it. I’m still trying to get comfortable with this whole newsprint theme and Glacier has a few warts on it that I’m still not completely sure about.

However I waited too long. On Friday the stock jumped 10% and closed the day at $1.45 per share.

I have no idea why the stock popped. I thought for sure someone on BNN must have recommended it, but I scoured their on-line videos and found nothing. Who knows, maybe someone said something at a conference or a presentation. We will probably never know. Read more

Oct 27

2 Comments

Scaling back on Rock Energy

Third short post summarizing some recent portfolio moves. First two are here and here.

Thoughts on Rock

Every once in a while you luck out and get in just ahead of the crowd. It doesn’t happen very often; usually you have to wait months before an idea begins to play out (ie. my extended comatose with Extendicare). So when it does happen quickly, you have to enjoy it.

I first bought Rock back in August in the $1.60’s. I added to it in the $1.80’s and again in the $1.90’s. Two months later its sitting at $3.35 and has been as high as $3.70. That’s quite a move.

Nevertheless, the biggest thing that has happened to the stock between then and now are people waking up to it being cheap (I am told that Keith Schaefer for one, a newsletter writer, has apparently said some positive things about the stock). And that gives me pause. Read more