OK - So we got through the holiday season, LOTS of sales, strong revenues, earnings way above expections, an even stronger balance sheet, and the share price has virtually not moved at all.
What do we do with these tired, neglected shares?
The fundamentals are strong - and M & A activity is likely to be robust in 2013 with cheap money here to stay as long as Ben is willing to keep buying treasuries and printing money.
I've got a substantial position here. I'm not going to daytrade it. Not going to get cute scalping a few bucks on a sudden rise intending to buy them back the next day.
I'm going to hold 'em.
And it wouldn't surprise me to switch on this blasted computer some morning and see the shares trading frantically at higher levels, because the company IS that strong and opportunities are ripe for either MAT or HAS to swoop in here or institutions decide it's safe to bring the share price to fair valuation. Or private equity could announce they're wanting to buy.
At that point I'll not be chasing the shares, just smiling.
Joe...I value your opinion, but I also like making money. Which is why I'm in stocks to begin with. I'm long LF still....but I'm not married to any stock in my portfolio. I was way too overweight (over 40%) and for the first time in 3 months...I actually made some money in LF. I could have just taken out 20% and put all of it into some other stock that isn't covered up with shorts. Instead of trying to stay with LF and swing trade some of it. Still have the swing portion in from yesterday and as long as LF doesn't go down, I will leave it alone. I won't chase the shares when they go up one or even two dollars...I AGREE that some fine wonderful day they will go up....when they do the 20% I'm leaving in and NOT touching will make me happy and by that time I will have already made the equivalent of whatever I missed with the rest. I'm still sticking with the frog. And it wouldnt suprise me if MAT and/or HAS made an offer or if LF just kept climbing right now. The fundamentals are still excellent and I'm still a fan of the frog. GLTA longs
Buy,Buy,Buy...exactly right...I usually don't get to that large of a percentage in any one stock. But I have been in LF for a while now and I kept adding on dips. I needed to scale back anyway. I'm still in long at 20%. I haven't "jumped ship" nor do I intend to. After all the crazy twists and turns in this stock, I'm going to be around when this frog finally leaps up! LOL
You're essentially right, but look at a one year chart on NCT vs LF. Then notice the disparity between the institutional ownership in them. This company is attracting a lot of professional interest, and coincidentally moves very unnaturally. Someone is taking a meat cleaver to LF. When you have a large position in LF you have to be comfortable with someone messing with your money at this point. The company's underlying performance has no impact on the share price. This stock instead moves like Frankenstein getting hooked up to electricity. If it weren't for the massive short interest, I'd say that it's very difficult to know what's going to happen in the next year, even with continued earnings outperformance. The short position almost assures a squeeze this year I would think though. I would say after Q1 earnings but after Q4 earnings short assault maybe they double down again, but eventually they have to release the spring. Professionals would be would need to find a new hustle if they don't know that LF could quite reasonably post positive earnings this Q1. So unless these 14 mil shares short are all private individuals, at least a little of the short interest is going to cover before earnings. I lightened up a little bit, but I'm pretty committed on this one. It's #$%$ me off so far, especially that I sold that low, but I'm in it right and I think that it's being prepped for a breakout.
I don't think the comparison between institutional ownsership in NCT and LF is valid. The percentage of institutional ownership in LF is pretty average for a company its size. It's NCT's institutional ownership that is atypical. LF's % of institutional ownership is 82%. HAS is 97. MAT is 91.
It's not the long side that is whipsawing the stock. The shorts are the only thing keeping the stock down (and I'm sure almost all the short positition probably consists of one or a very small few institutions). I'm amazed watching the stock trade sometimes. At the end of yesterday the volume on the ASK was a few hundred thousand shares. I'm 95% sure it was just the shorts trying to prevent the stock from moving up any more than it did.
My guess is Q1 will have minimal impact on the short position unless LF comes out with staggering numbers. If they increased their short position after the great numbers over the holidays I'm assuming they've resigned themselves to waiting it out till after the 2013 holiday season.
I have pretty strong confidence that their sales will remain strong, so I'm willing to wait it out. I've learned to hold strong to my convicitions. In fact watching CNBC this morning they flashed up a stock (CYH) that I held in '09 and bought what was in hindsight almost the perfect time. I was sure the stock was cheap, but in the end I got nervous because of the price action and dumped it. Today it's trading at more than double that price.
BTW mishashid - Normally I would never recommend dumping 40% of your portfolio in one stock, although I do admit to putting almost 100% of my portfolio in one stock after the crash in 2000. Then again I didn't have too much money back in those days so if I lost it all it certainly wouldn't have been the end of the world.
John you in NCT too? It's my biggest holding and I own at avg of $6.56...Every time i got a bonus at work for the last 2 years I bought NCT with it...I am VERY happy now...nearly 2x my bonus and I get a dividend...here's to good things after the split!