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KCG Holdings, Inc. Message Board

  • catnphx catnphx Dec 23, 2009 10:10 PM Flag

    My Thoughts on NITE ... Confused!!

    For the record, I got into NITE on 12/18 for 1,500 shares @ $14.41. I loved the oversold price but I'm torn at trading it for a quick pop when it reaches the $16-$17 range (which I believe will happen in the next few weeks) or letting the fundamentals play out. I'm traditionally a value investor and consider NITE to fit that bill.

    Technically, it's at the bottom of the long term multi-year trend (and it's bounced nicely, as it usually has in the past). It's below it's 50 and 200 day moving averages, which will provide significant resistance. Additionally, it's 3 year trend hit bottom and bounced. It seems to have respect for the charts. Looking at the charts from 1 year or sooner, it get's much more confusing. The only thing I can say is it, again, respected the bottom it hit in March and bounced nicely. Either NITE is in a trading range OR it's bouncing before it retests the bottom and eventually breaks through.

    Fundamentally, NITE is priced very well when compared to it's earnings of a few years ago. Granted, that means nothing if the earnings will eventually go down. Margins have thinned from days past but that doesn't mean that aren't still respectable. The regulatory environment is the X Factor right now and could have significant impact to NITE. The question is ... How much of the regulatory environment is already factored into the price of NITE?

    1 year or less shows choppy waters and you defintely don't want to overpay for NITE unless you feel comfortable with the regulatory, revenue and margin questions. But at $15, this looks like it is worth the risk. It might have a trading range until these questions are answered and it might be worth trading NITE until the answers come.

    Anyway, just wanted to put my thoughts down ... I'm sure I'll add to them as things become more clear. But right now, I'm happy to be in at $14.41 but unsure how to play NITE as the price goes up short-term.

    I welcome other thoughts.

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    • Well, it's almost decision time for me (and I assume many others). My expected $16-$17 price target in three weeks is coming up next week and the question still remains ... hold through earnings or clear the trade. If this reaches it's $17.52 200 day moving average prior to earnings, I'd have a 21% gain in 3 weeks ... that's hard to pass up. Of course, better than expected earnings could pop this higher than that ... thus the difficult decision.

      I wrote in another post of the trading volume in the S&P 500 and how this might positively impact earnings. Could be worth holding through earnings.

    • NITE blows moose cock.

    • my opinion is knite has almost 5 dollars in cash and virtually no debt... I will take my chances... i think 23 was too optimistic, howevever, i think $14 this overdone.. we are not talking about a company with mounds of debt.. they could earn over $2 easily in 2011 and $3 in 2012... I like stocks when they are beaten down and the fundamentals are still intact...remember book value is 12.55...

    • this discussion can go round and round, i think we could both be right(or we could both be wrong). it depends on what you call long term. my guess is by this time next year that NITE will be just fine.

    • Any stock that has been broken as badly as this one has will not likely just turn on a dime and rally back to its previous levels. It will take a long time with lots of work needing to be done. $16 or $17 is certainly possible but the $20's are not likely to be seen for a long time.

    • nothing's ever that certain. by the time all is clear most of the easy upside may have been realized. if volatility and volumes pickup from end of year slowdown, self clearing benefits start gradually showing, and options MM starts to gain traction, European stock MM picks up and Asian investment turns from negative to positive contributions then you could see scale from knight's model build momemtum. that doesn't consider FX, fixed income or any of the other initiatives.

      if you wait until the earning reflect this it may be a bit too late to make some decent return.

    • All the issues that have been raised, coupled with a bad quarter have combined to kill the stock. It has every right to snap back here but even the bulls must admit that there are a lot of crosscurrents impacting this stock. Once they are resolved (or at least an end is in sight), the stock might have some upside but nothing meaningful until then. It remains dead money.

    • If you are really looking for some thoughts and not to flame an honest opinion, here goes:

      You are probably OK buying at that level. Looks like there is some support there. But I am not sure that the very negative regulatory environment is priced into the stock. Don't forget, this stock was crushed (probably over-done) off its last earnings statement. It had just made new highs, looked like it was off to the races with $25 in sight and then it fell apart. It has every right to snap-back a few points after that debacle. However, the trading environment is not good. Trading volume is down for everyone (lots of stories in the WSJ on the subject). Margins for NITE are very tight as they trade lots of low-priced stocks with narrow spreads. Dark pools and flash trading are in the regulatory cross-hairs (NITE is a big player in both). A transaction tax is also being kicked around in Congress. Joyce has said they are making big investments overseas and in new technology but admits they will not pay off for 2-3 years. With $4/shr in cash and little debt there is definitely some value there. But, it is hard to imagine that any logical acquirer would take a run at it now (that was not the case 6+ months ago as it was a logical target). At $6-$9 a takeover would be compelling. All in all, this stock is probably a sell on any further strength. It is definitely a trade in this environment and not a long-term play. It will be a long time before it see $22+ again. That's my take on it and I've been trading this one for a long time now.

      • 2 Replies to pmoishe
      • I've done some reading on the subject of dark pools and flash trading but haven't seen anything that accurately describes what the repercussions are if these two items would either be heavily regulated or done away with.

        Any insights on the impact to the markets (not just NITE) if these regulations went into law?

      • marduk1@ymail.com marduk1 Dec 24, 2009 12:01 AM Flag

        this stock will never see 6 or 9, and 15 is a very attractive price plus premium for a takeover. there wont be a trabsaction tax, wall street owns the politicians and its bs grandstanding. forget regulation too, if you think the street will let govt restrict their crooked ways, youre being too naive. Post your short and at least try to appear objective. See you at 17 next week.

 
KCG
9.94+0.15(+1.53%)Apr 17 4:07 PMEDT

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