Stony's Saturday Reader*

S

stonedinvestor

What a great week that was! FUN. In a word that's what the market has ceased to be lately. I can barely stand to watch it, much less invest in it. Yet rotation is the game and at some point even the most paralyzed of fools has to see a value or a reason to invest somewhere. But where.

Take Me Away Calgon! CCC Best chart in the NYSE.
Competitor Pall PLL is down quite a bit 45-35 yet Calgon continues to build and break out what's up? Add a nice Avonandale upgrade and PT of $19 to an already beautiful chart. This filtration play has found a new market in mercury. Hurray.

Sirf. Sure it could go to straight to $5 it could also be in the Google phone and go straight to $15. I am thinking this HAS to be one of the most tasty take outs in tech right now... lets be honest- selling channels got stuffed for xmas and inventory levels are high; GPS stocks have been smacked but they are still in everything and coming into phones in a big way... Sirf Technology' lost half of its value last Tuesday, following an ugly quarterly report . I'm looking at it. After all Broadcom, NXP and Atheros are all making acquisitions in the sector.

With Tuesday's selloff, Sirf, the No.1 independent GPS player, is more affordable than ever.

"It does put them in play more," says Craig Berger, an analyst at Friedman, Billings, Ramsey, who describes Sirf as the crown jewel of GPS chips.

Six weeks ago, Sirf had a roughly $1.5 billion market cap, making the firm a more expensive acquisition target than the slew of smaller, private GPS firms that exist, according to analysts.

With Tuesday's selloff though, Sirf's market value has now shrunk to $441 million. Whether that's cheap enough to draw a takeover bid remains to be seen.

SYNA (The Touch people) & CREE should form the base of any new portfolio.

We are due for a few things this week folks. One, a realization that maybe we are jumping the gun with the full out recession talk and two maybe we have overshot to the downside. Honestly I fear there is hyper inflation around the corner that will kill all of this but the proof of a recession is just not showing up. More likely a 0% growth Jan and then a rebound that is then fueled by this economic stimulus plan...And if the next jobs number is halfway decent, if the unemployment rate ticks down a tick... we rally hard.

The last economic report that tanked us so into the down 4% for the week murk was it ISM? I forget, but now of course I'm hearing chatter the dolts calibrated the numbers differently this time so look for a better number there and a readjust next time it rolls around. With a long stretch between fed meetings and the dollar strengthening, bonds selling off, things are shaping up good for a bottom having been put in place this past dreadful past week. It's not so much price action or volume (it wasn't there) but sentiment. Perhaps I'd call it a psychological bottom. Some sectors like retail went up on bad news which we like and as well these HUGE 20% down earnings when you ex out financials become up 10% so.... there is a big swath of value out there somewhere.

My street sources tell me there was some real buying going on when the market blipped up now and then not just short covering, some funds are taking shots at certain stocks, so should we.

The charts aere scary though so be careful, one that I came across in researching Calgon was Pall (also a rumored takeout candidate with Calgon) it's fallen into big support on a two year chart and for the amount of upside it offers, it also boasts greater downside protection than say taking a stab at ATI...

Now of course you heard about the Botox situation not a big deal, small subsector of Hollywood starlets can't breath- who cares? Of course it sent me into a fevorish competitor search and one tiny company I came across I hesitate to mention because of it's average trading volume of 105K and a market cap of $43 mil... but it is the onlyy FDA approved alternative to Botox and there is a ton of insider buying going way back including a large block at $6; the stock is now $2.70. Now with these news driven events you always wait to see if the breakout is real, can volume pick up several days north of 400K? But with the knowledge that it's a longshot, double or nothing , nothing being nothing sort of set up... I give you ARTE to do some DD on.

In the same sector sort of is Cryolife, a company I owned way back in the day, artificial skin graphs have now given way to human heart valves, I have to re-familiarize myself with the whole story and Cryolife's technology now, there used to be a lot of pigs involved which was a bit of a dna turnoff, they have probably moved past that... this is a name to research this week CRY.

10 Stock watch list : All Interesting Charts
EMKR
NYMX
WAVE
LXU
PTEC
BEBE
EFOI
GHDX
SIGM
PLL

4 Buys:
CCC
SIRF
SYNA
CREE

~ stoney
 
Warrior I like the way you think. I own CHDX in several accounts it is truly one of the great stocks. I must say I bet ya China roars out of the Lunar year and this CHDX goes even higher. I've done several round trips and have a CB of between $27 and $29.... what happens now is having been burned a few times I get jumpy and sell out on the next pop and it continues on. I try not to frontrun on stocks I talk about- hey buy this I'm up nice! I hate that- I'll throw out names I'm frustratingly break even on- (WAVE)- but you are right on about CHDX!
~ stoney
 
EMKR looks like it could be the new momo player into the 20's if it breaks to a new high. the problem with these types is they tend to disappoint when reporting earnings.
 
Yes, my friend luckily EMKR reported last week. The fact that the stock could miss on rev and hold all it's recent gains in the face of a down 4% market is a very telling tell indeed. Management was aggressive about 2008. ~ stoney
 
Any foray into the GPS space finds one at some time looking at Garmin. Wonder if that could pop this week too? NotableCalls highlighted this MS note-

Morgan Stanley is yet again out positive on Garmin (NASDAQ:GRMN) saying they believe that Garmin can rally from oversold levels, potentially reaching $80-85 near term. NAVTEQ results should be positive for Garmin as NVT saw revenue upside driven by PND volumes (NVT provides almost all of Garmin’s maps). Garmin has traded down almost 9% since SiRF reported worse than expected results and is down 35% YTD.

Firm says they believe that NVT provides a better read on Garmin’s 4Q07 results than SiRF as SiRF is facing several company specific issues regarding weakness at other customers and in its newly acquired Centrality business.

Notablecalls: This is now the 2nd time Morgan Stanley has called for a rally in GRMN. The stock is currently trading around $63 and I suspect we will get the bounce the firm is talking about in the N-T. The PND space has too many bears eyeballing it and that's always a good sign.

Note that MSCO has been a bear on GRMN for quite a while and only recently turned positive.

> This could be the kind of situation a couple hundred shares GRMN might hedge nicely a takeover SIRF bet as the research tilts towards a Naveteq/GRMN relationship.... and says SIRF's problems are co specific...> While we are at this we might as well look at NVT too...~ stoney
 
Did Nokia buy NVT? Did that go through? The stk is way high it must have... well that turns attention to NOK...

Nomura securities analyst-

“Nokia has evolved into a new beast,” he writes. “Rivals have been contemptuously swept to one side, leaving Nokia as the undisputed king of the the jungle. With a 1-2 year lead in many areas crucial to success in mobile phones, Nokia’s status as the handset gorilla deserves recognition in our valuation…the shares are cheaper than they were one year ago as estimates have risen by more than the share price.”

Windsor contends that Nokia “is now so far ahead of its competitors that there is very little that they can do to catch up in the short-to-medium term.” He notes that market share has broke 40%, “and is likely to keep growing,” although at a slower rate than 2007. He says Motorola’s (MOT) meltdown means only Samsung and Sony Ericsson (SNE, ERIC) will offer Nokia any real challenges in 2008.

Despite the upgrade, Nokia Friday was off 98 cents at $35.50..... and there she sits today...
hummmmmm. Less Risk same upside potential... Did they swallow navteq though? I'm not seeing the completion of that.stoney
 
This often happens I start one place and end up somewhere else, it's a healthy investing mantra, follow your research drift. But this deal is just about to go through.. in Europe anyway-
HELSINKI, Feb 7 (Reuters) -Nokia (NOK1V.HE: Quote, Profile, Research), the world's top cellphone maker, will file within two weeks documents to win European regulatory approval of its $8.1 billion acquisition of Navteq (NVT.N: Quote, Profile, Research), the U.S. digital mapping firm said.

"Completion of the merger is subject to the receipt of European regulatory approval. Nokia is expected to file its Form CO with the European Commission within the next one to two weeks," Navteq said in a statement.

Form CO is the technical term for the notification, describing in detail all the information required.

The takeover was cleared in December by the Committee on Foreign Investments in the United States, Navteq said.

Nokia expects the deal -- part of its major shift towards Internet services -- to be closed this quarter.

The European Commission has 25 working days after a deal is filed to review it. Most mergers win approval. (Reporting by Tarmo Virki)

>> So that could be a pop right there in the near future for nokia and i don't think these guys are done buying. I have a hunch they might make a splashy Facebook bid too; managment is very smart at NOK they know they must adapt a bit here while still aggressively going for the low end customer with the cells-- some in house GPS love from NVT couldn't hurt... maybe it's the herb today but I'm drifting conservative in the research as the afternoon wanes and wondering about NOK now... and it had a nice Friday to boot... ~stoney
 
thats a done deal stoney. SIRF is company specific however,with the holidays over and the consumer retrenching,GRMN may not be a scheap as they look. in my opinion,the space to invest/trade is the agricultural plays: AGU-MOS-POT-CG-TRA-TNH. these are holding up well but drop fast and furiously. in fact,the only bull market left is AG plays. the bulk shippers atrted to move a bit but one has to be careful with them as well.
 
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