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Axion International Holdings, Inc. Message Board

  • rtjohnston rtjohnston Jul 8, 1999 3:36 PM Flag

    Close to being overbought

    I'm glad that we're "taking a breather" today.
    Let things calm down and catch our breath for a
    while. The last runup we saw also saw us drop pretty
    dramatically. Hope this time is different. (for all us longs!!)

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    • It took a bit of searching, but I found
      it!

      Zardoz, you should look at the link in Mikebert's message
      #3414 (to which I am replying here to make it easy to
      link to). He looked at cash flow and its relationship
      to sales. I think you might find it
      interesting.

      I notice that even with your numbers, they reversed
      in 1998. I suspect that we need to redo you analysis
      (sales growth vs. receivables growth) on a quarterly
      basis to get a better handle on the recent trend. 1998
      numbers are too old to be useful, especially when they
      show improvement (one year does not make a trend) in
      the most recent year.

    • Yep, 22 sounded good at 28 or so.
      Then, as it
      rapidly approached 22, and with TL's admonishment
      regarding 19, I decided to wait until it broke 20.

      I
      think TL has a better idea of the low point than he's
      letting on.

      This stock doesn't follow market
      trends. It is heavily manipulated. I've got a hunch it
      will go below 19. How much lower I wouldn't venture
      guess, but the manipulators will pull the plug on the
      down trend when they see a window created for a 10
      point gain.

      So, yes, this is a good time to buy,
      but a better time to buy lies in the very near
      future.

      Company fundamentals have nothing whatsoever to do with
      the behaviour of this stock!

      -mairez

    • I disagree about this being a "very long term
      bargain". This stock goes up and goes down. How far do you
      think it will go? Teens? Single digits? I doubt it with
      ANLT's growth profile and projected PE of 13 or less.
      This is a buying opportunity. You might do a little
      better; who knows? You noted that 22 could be a good
      reentry point in a previous post. What are you going to
      do now that its there? I'm interested to know why
      you think this company is going to keep on tanking.

    • A *very* long term bargain.

      -mairez

    • Back in at just over 22 today. Looks like a long/short term bargain however you cut it.

    • oranges.

      Original topic of discussion:
      Selling short vs the box for whatever reason. This
      year-next year no different consequence except for type of
      capital gain tax liability if the transaction is closed
      out at a profit and what year the tax liability is
      incurred. The application of the KISS priciple is what
      should only be used ie: a short sale is first and
      foremost a sale.

      In ANY sale shares must be
      delivered to the buyer.
      In a short sale vs the box any
      shares but the ones you own MUST be delivered to the
      buyer. Now you must borrow shares.
      Once you have sold
      shares short against the box your original purchase
      under goes no change whatsoever until such time as you
      deliver those shares out in place of the borrowed shares.
      You then have a constructed sale.
      If your position
      at the time you shorted vs the box was held less
      than 12 months until the time factor passes the 12
      month holding period to quallify as long term any gain
      you establish by closing the short position with YOUR
      shares will be a short term gain. This year next year
      whatever. The key factor is not the year but how long you
      have held your long position.

      depending on what
      the stock does after you have established your short
      position will determine what choices you have to make.
      Example: Bot 100 shares ANLT November 23, 1998 at 25 1/2(
      prices are for example not actual as of that date)Sold
      100 shares ANLT Short vs box January 25, 1999. Locked
      in profit 10 points. If you choose to close out this
      position by delivering your stock you will have a short
      term tax liability on a $1000 gain. You can if you
      believe that ANLT will not trade higher than
      35 1/2
      between now and November 24th, 1999, continue to stay
      short and after the close of business on Nov. 24th
      instruct your broker to deliver your shares, sold at 35
      1/2 and close out your position for a long term
      capital gain of $1000.

      What would happen if ANLT
      drops to $20 before Nov. 24th, 1999, and you felt that
      is about as low as the stock is going and could over
      the next few months rally back up near $30. You could
      cover your short sale by buying 100 shares in the open
      market and delivering those out to the buyer. Now you
      have established a short term capital gain of $1500.
      You also now have a paper loss of $550 on your
      original purchase, and your original purchase remains
      intact with no tax liablility.

      Where are getting
      confused is in thinking you a have a swap of equal or like
      asset and there is none. If you were to buy additional
      shares of ANLT at any time you would have to declare
      that those shares are to be applied to your short
      position otherwise they will appear in your regular
      account. A short position has a separate designation at
      your broker which is simply called a short account and
      must be carried as a margin account. The shares you
      shorted vs the box believe it or not could have been
      purchased in a cash account and remain as a holding in your
      cash account until you instruct your broker
      otherwise.

      There may be some confusion with wash sales in the
      example you gave me of a constructive sale. There you
      have to deal with equivilants and comparable or like
      securites. Sell a stock short and cover your position at a
      loss and then establish a new position in the same
      stock or comparable stock in less than 30 day and you
      have created a wash sale and cannot use the loss for
      tax purposes.

      In the case of ANLT you cannot
      enter into any kind of swap since there are only common
      shares to trade and there you would not be
      able to
      swap anything. You would have either covered you short
      by one of the above examples none of which would
      jeopardize your tax benefits, except in the last
      example.

      Well meaning people sometimes get carried away,
      especially when it comes to applying tax rulings and
      appropriating them to the right case.

    • I don't mean to drag this out, but I really want
      to understand the issues and the tax law here. Your
      understanding/knowledge would be greatly appreciated.

      According to
      the post I am replying to (to make for easy
      reference), If I own a financial asset (such as ANLT stock)
      and if I have a gain on my holding, then 1)if I sell
      ANLT stock short (i.e. borrow shares in the market and
      deliver those shares instead of my own), or 2) if I enter
      into some kind of swap directly related to ANLT which
      effectively neutralizes my exposure to ANLT, or 3) if I enter
      into a forward contract to deliver ANLT stock some
      time down the road, then the IRS will deem the trade a
      constructive sale of my original ANLT stock for tax purposes.



      There are certain exceptions, such as a case where I
      want to roll a gain into the next year. In this case,
      I could avoid the "constructive sale treatment" as
      long as 1) I reversed my short sale during the first
      days of my fiscal year (essentially re-exposing myself
      to market movements), 2) I continued to hold my
      original ANLT stock for at least 60 days after I reversed
      the short sale, and 3)I was completely exposed to the
      price movements in ANLT stock during those 60
      days.

      In other words, I can lock in gains over a year end,
      as long as I lift the "hedge" and reexpose myself to
      the market movements of the asset in question in the
      following months.

      Is this a correct interpretation?


      If so, then I can see that there would be times when
      shorting against the box might be
      advantageous.

      Corrections appreciated.

    • It is rediculous. Unless longs take their stock out of circulation, this kind of crap is going to continue.

    • this message is to all the shorts out there like
      Matador Capital. I am curious as to why such a terrible
      outlook on ANLT. In the past, the short reasons were
      1)DSO's, 2) rapidly shrinking backog, 3) % of completion
      accounting and a few others. All 3 of these have been put to
      rest in the last 2 quarters.

      What is it that
      attracts the shorts? I honestly am curious.

    • No Problemo

      That would be much more acceptable than having it fall to 19 3/4 after I bought it at 31 1/2!

      -mairez

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