When you have a story stock such as CMLS, a retail broker can and will make the sale very easily. The broker really doesn't care much about fundamentals, just profit, (as I) so the buying momentum starts. Media Funds will follow. Shorts should clear out soon.
CMLS is a great turn around 'story' because by being the biggest and having a new credit partner, can synergize the business to take over other stations easily, while they are on the cheap and struggling. I think the election year advertising is the main driver being campaign spending (highly contested) is projected to be 70% over the normal cycle. This is how they found a creditor (and by stripping expenses too). Things can only get better from these levels.
>> In a few weeks the sector reports will begin to roll out. We will know then.
You're not doing your homework; We ALREADY know!! If you keep up with the industry trade periodicals, you would realize that ad pacings are accelerating RAPIDLY, and ad revenues are going to be up in the double digits in the 2nd half of this year...and possibly in the 2nd quarter even.
I like to short stocks that are LONG TERM UNDERVALUED, not merely stocks that, in your opinion in this case, have "popped too far too fast." If the fundamental valuation is reasonable, from a long term perspective, at $5, I think you're playing with fire.
Sure, it could correct back to $4.00-4.24 this week. But it could just as easily "keep going," and go to $6-7. Will you double or triple up your short position, in that case? Or capitulate and get out?
In looking at potential for earnings again, I think the most likely scenario is something on the order of 70-80 cents this year, but if they get back 2/3 or more of the revenue they lost in 2008, which is certainly possible considering this is a strong politcal year, then we might be looking at more like 80-90 cents. And that's a fully taxed number! Does that really make the stock "overpriced" at $5? You DO realize that management tried to take this private at $11+, a few years ago, do you not?
Which profits are you talking about?
The $5.17 loss per share in 2007?
The $8.71 loss per share in 2008?
The $3.13 loss per share in 2009?
Or the loss in the quarter to come?
Which levels are you talking about? The price 6 weeks ago or the hyper inflated hyped up price today? Give me a good story stock? I think that line came from Micheal Douglas in Wall Street.
SmarTrend identified an Uptrend for Cumulus Media (NASDAQ: CMLS) on January 19, 2010 at $2.50. In approximately 3 months, Cumulus Media has returned 99.2% as of today's recent price of $4.98.
Cumulus Media is currently above its 50-day moving average of $3.09 and above its 200-day moving average of $2.14. Look for these moving averages to climb to confirm the company's upward momentum.
Past performance can indicate future gains.
As long as things improve and a story is good, a stock will increase in price.
The story is good,CMLS has been forced to be lean and mean and has cut the dead weight.
Creditors and partners don't get behind a business unless it can prove it has a profit model.
It is funny but every stock Barron's is bearish on is up, this is the trend. Short at your own peril.