Boy, did I hit the nail on the head. Shorts covered another almost 865,000 more shares in the two weeks ending 3-31-09. I suspect they covered even more from 4-01-09 to 4-8-09 before earnings release. We now have only half the short interest from 12-31-08 and about a third from six months ago. This is why we didn't get a bigger short squeeze yesterday. The smart money is confirming again it is time to buy PBY. DaninFW
Pep Boys-Manny, Moe & Jack (The) ( PBY) Short Interest
Pep Boys-Manny, Moe & Jack (The)NYSE
Settlement Date Short Interest Avg Daily Share Volume Days To Cover
3/31/2009 3,314,865 637,348 5.201028
3/13/2009 4,179,647 553,750 7.547895
2/27/2009 4,444,552 502,160 8.850868
2/13/2009 5,526,930 362,501 15.246661
1/30/2009 6,152,012 559,166 11.002121
1/15/2009 6,929,501 548,268 12.638894
12/31/2008 6,648,039 660,346 10.067509
the fundamental reason for a move is the macro situation that we will be in a long protracted period of slow growth. Look at Japan its been in a rut for many years.
Subsequentley the weather for new car purchases won't change for several years if ever. The days of 16 million units sold are gone and won't return for many years. Now we have 50% less new cars contending with PBYs busniness plan. Its business plan is starting to rev and its early in the cycle. It will last for at least 3 years IMHO.
Right now if we look at ORLY with a price/book of slightly over 2. AAP over 3, MNRO pushing 3 and AZO infinite we should expect that if PBY executes they get a simliar valuation to these other companies. That mean we should achieve at least ORLYs price/book of slightly over 2. That means a triple of the price from this level or around $20 a share. The wildcard is that these valuations will also escalate if the S&P hold or moves up from this level. Subsequently PBY could achieve a $30 print as the rising tide lifts all boats. PBY hit this level in the early 90s inflation unadjusted. Therefore a reasonable price target would be between $20 and $30 a share over the next couple of years.
Not a Chart guy but looking back at the charts PBY has broken 200 MA several times after a protracted declines
Feb 2001 prior low 3.85 to a peak 18.35 a gain of 476%
May 2003 prior low 6.69 to a peak 27.47 a gain of 410%
Sept2006 prior low 11.08to a peak 22.56 a gain of 203%
Picking the prior lows would be impossible but buys after crossing 200 MA would still have returned significant gains
A couple retests occurred after crossing MA but not by much followed by large gains.
I did not account for earnings and market conditions
but made another observation Spring seems to be a common factor in share price appreciation ...Hmmmmm?
Possible explanation ..Backyard mechanics that don't have access to garages put off car maintenance till the weather warms. I see a very strong MA cross pattern that resembles the feb 2001 MA cross, with New Car sales in the tank , My guestimate share price a year from now could be $31.00
Just my opinion , hoping my last month and a half's luck continues I'm up 110% . Good luck longs
In answering your question about the pullback, I rsponded with the previous message first as it is the main factor at present. Almost 700,000 shares got distributed on 4-03-09. We don't know when they were actually received by new owners I have zero doubts most if not all will be or were dumped. These owners wanted cash and got PIK instead. If any of them had second thoughts and asked their broker, they would have found everyone had a hold or sale alert on them. I estimate that several hundred thousand were sold yesterday from the distributions. We might easily have broken $7 otherwise and held. The $6.91 is also a tough resistance. The morning action was inetersting yesterday. Someone ended up selling almost 100,000 shares at $6.30 which caused others that saw the large block to sell at $6.29. I figure this 150,000 +/- shares alone kept the price down 20-25 cents based on how fast it moved to $5.50. It only took about 30,000 shares to move it from $6.30 to $6.50.......About 30 minutes before close, the stock was at $6.41 and then the next trade was 40,000 at $6.45 so someone was buying large blocks which bodes well for Monday. I expect to see several upgrades next week and I wish I knew more about the investor meetings. I view these as two major positives and the one negative with distributions. I don't believe they are done selling so they will unload as it moves up. I am going out on a limb but I wouldn't be surprised to see a gap up above $7 at the open. There have also been many articles today about autoparts companies in general all in a very positive light. Great for the sector. DaninFW
The sad thing is Pirate and Barrington keep throwing shareholders a curve and effecting the stock price. One reason shorts hammered this stock is they knew the two hedge funds were going to have to either sell or dstribute PBY shares as investors bailed their funds and did redemptions. They were smart. They also sense that run is almost over. I really thought it was behind us. I blame the BOD's for not taking action. They should have authorized a share buyback months ago and been ready to re-purchase. It would have been far smarter if the COBhad gone to the other directors and said "buy them or I have to distribute them." The company would have gotten a good deal, wall street would have been impressed by their action as it would have been smart, below book value, etc.
This gets done all the time. I used to own 2% of the outstanding shares of a company called Pacer Technology which is famous for their Super Glue. It became a conflict of interest so I called the CFO, asked if they would buy them at the previous day's close and we finalized the deal that evening. The CFO called on the phone all the BOD's to get their approval. The next morning the money was wired to my account. I wish we had a BOD's that had a clue and a concern for shareholders. I sent an e-mail to investor relations at PBY corporate HQ yesterday morning with a request for info on the investor meetings next week. As of 8:17 P.M. central time I still have no response. That's over 36 hours. I hope they take care of their customers better than that. DaninFW
I am mainly invested in bonds at present in about 80+ companies for diversification. I am retired and now do this for a living (quite well I might add). Needless to say, I study those companies almost as much as PBY. I also own a few hundred thousand face of PBY bonds. I say this only for disclosure. I have nearly a seven figure investment at present in PBY and intend to ride to $10+......I will re-evaluate at that time. Needless to say, I have made a few hundred thousand on PBY lately. I have never thought it appropriate to discuss other stocks on a message board unless industry related. Thanks. DaninFW