I'm speaking from personal experience. I did not put money aside for capital gains taxes and I sold on the exact same days as Gordon to raise money to pay them. I'm not going to keep that much cash in a money market fund earning 2% when I can put it to work for me. Gordon could very easily have made $3 million last year. It was an excellent year in the market and if I could have such an amazing year in the market as I did, anybody can. It's from my own personal experience that makes me believe he sold for taxes...until you've lived through having to raise that much cash in such a short period of time, it may not register for you what he was doing.
In fact, isn't it strange that the market went into a freefall heading into April 15th tax deadline when lots of investors were FORCED to sell to raise cash and the market STOPPED falling right after the deadline? Not coincidental in my book.
We will never know the real reason he sold but I strongly believe if there was a systemic problem with the company OR earnings wouldn't be great (even though the quarter still isn't over yet) that David Gordon would have sold along with his brother. Both the Gordon brothers have sold on the very same day in the past when they felt the stock price had gotten ahead of itself and that's NOT what happened this time.
Back to my original point. Coffee prices fell 25% from their peak in a 1 week period of time 4 weeks ago. JVA has fallen about the same amount from it's peak. Using charts, I have finally found what appears to be a correlation between JVA and coffee and judging from that chart alone, JVA will start heading back up starting next week and reclaim it's recent highs within about a month.
The story I posted is more important than the others because this was a report from an importer following a physical tour of the area. They estimate 35% crop damage in the largest growing region and beyond that, the beans from the early harvest are of poor quality. This will result in further dipping into inventory levels which already are at 16 month lows (as of 2 weeks ago) and inventory is certainly headed lower.
In the past, JVA has had a difficult time making money when coffee prices rose because they fell just as quickly. That creates havoc with their hedging. This time, however, I expect coffee prices to rise high and more importantly, STAY high for an extended period of time. That is because the drought caused damage to the trees that will take years to recover as they have a lot less flowers and branches so future harvests will be lower for a long time. That is why I expect JVA's revenue and earnings to be elevated for an extensive period of time unlike in the past.
MXC is being tweeted heavily, Pete Najarian was on CNBC and said to buy oil companies. MXC is being tweeted as an 800K float and profitable company. MXC could explode, especialy if natural gas prices make another run. And it looks like it will. Nat gas prices rose 4.5% on Friday alone and technically the MACD is just about to cross into positive and price above the 50DMA has just been reclaimed. Could be the tensions in Russa/Ukraine but if my read on natural has prices is correct, then MXC is about to have another run to $11+.
By Marvin G. Perez Apr 17, 2014 5:10 PM ET
Coffee futures surged 8.1 percent, the most in six weeks, as concerns mounted that crop losses from a drought will increase in Brazil, the world’s biggest producer and exporter.
Crop losses may rise as high as 35 percent in southern Minas Gerais, the leading state producer in Brazil, Christian Wolthers, the president of Wolthers Douque, an importer in Fort Lauderdale, Florida, said following a tour of the region. Drought damage has expanded, and beans in the early harvest are low quality, said Carlos Paulino da Costa, the head of Cooxupe, Brazil’s largest cooperative.
This year, futures have soared 84 percent, the most among 24 raw materials in the Standard & Poor’s GSCI Spot Index. The rally in the premium arabica beans may boost costs for companies including Starbucks Corp. and J.M. Smucker Co. the maker of Folgers, the top-selling U.S. brand. Industry estimates for the 2014 crop range from 40.1 million bags to 56.5 million, compared to more than 60 million in November.
“The market rose after the reports from Douque and Cooxupe,” said Luiz Eduardo de Paula, the owner of H. Commcor, a Sao Paulo-based brokerage. “If the worst estimates come true, prices could rise above $3,” he said, without giving a timetable.
I decided to compare the weekly charts for both JVA and COFFEE and put them side by side. Without going into a lot of details, JVA's chart is mimicking COFFEE's chart almost perfectly, except it is lagging coffee's chart by 4 weeks. If this continues, then JVA should go back to $8.50 in 4 weeks which would bring us back to where coffee is today.
Details: COFFEE had a tremendous run, rising from $1.15 to $2.10 almost in a straight line before it pulled back significantly to $1.70...paused a couple of weeks, and now is back over $2.00. JVA has done a similar thing, it rose from $5 to $8.50 then had a significant pullback to the $6.70's.
It's actually pretty scary how similar the charts are, except JVA has a 4 week lag. Assuming the similarity continues, using COFFEE's chart as a crystal ball, then JVA will climb for the next 4 weeks back to $8.50. That would make JVA's chart look almost exactly like where coffee is today.
You can see it for yourselves. Put up the weekly coffee price chart next to JVA's weekly chart and you will see exactly how eerily similar it is and how JVA is lagging coffee's chart by 4 weeks. Here is the current coffee chart, I have annotated the deep fall which has also happened to JVA.
Here is the value. This comes a week ago from a commodity market analyst for hedgers and investors.
"The coffee market in my view is in the beginning stages of what could be the greatest bull market of all time that could very well reach bubble levels in the $4/pound to $6/pound area before it is all over with. The market continues to be in denial over the catastrophic nature of what has happened to the coffee crop in Brazil. Ridiculous reports of a crop north of 50 million bags are misguided."
Now here's what JVA management just said after reporting a surprisingly high profit with coffee at $1.20:
"With coffee prices now on the rise again, we believe the combination of higher commodity prices along with continued growth in our overall business should result in increased revenues."
Those looking at the recent insider sale and fearing the worst forget that the insider's brother, the COO, did NOT sell any shares and knows every bit about the company as his brother. Also, for argument's sake, the insider sale did occur on the very last day a stock sale could be made in order to settle by the April 15 tax deadline.
Also recall that JVA rose from $5 to $35 in 4 months when coffee spiked to $3 in 2011. Imagine what it could do if the analyst above is correct and there's a coffee shortage resulting in coffee prices north of $4.
Any close above $5.18 and it could be off to the races. Here is that magical 10 year consolidation chart that shows the breakout is almost here.
Both the common and warrants have much heavier than normal volume and a price breakout. Even more impressive realizing the long-term shareholders have been selling at higher prices and those shares are being taken out.
Something happened Monday night/Tuesday morning, some trigger went off that hasn't been made public yet. This could be a similar merger agreement that PDO made when their stock had a nice run for weeks before the news became public, and then continued to rise after the agreement was announced. Just speculation, the Ranger well could also be a real gusher or the quarter ended in March could be outstanding.
Whatever the news is, I'm sure it's worth waiting for. Judging from the trading of both the common and especially the warrants, it must be excellent news.
You forgot to say "sell sell sell $4.50 is coming". That has been your only contribution, don't break your streak.
Coffee prices have escalated above $3 only 2 times in the past 20 years. Back in 2011 (when JVA traded in the $30's), and in 1997. 1997, coincidentally or not, happens to be the last time the world experienced a "Super El Nino". Scientists have said the temperature rise in the Pacific is alarming and are drawing comparisons to the Super El Nino in 1997-98. Not only is an El Nino becoming very likely, it is forecast to be a bad one.
This may be bullish for coffee but there will be impact to all sort of agricultural products and commodities if it comes to pass.
Note: I am not pumping JVA. It is a fact that coffee prices have only superspiked twice in the last 20 years and one of those years happened to be when a Super El Nino hit. I am merely suggesting that coffee prices could go extremely high later this year due to global weather conditions.
$6.90. Still looks like a solid bullish pattern forming at the bottom. The stock with a pretty similar 4 day chart to JVA was EGLE which had it's DOJI yesterday and went up about 8% today. JVA opened at $6.91 and closed at $6.90 so it's almost a perfect close.
That would be an emphatic DOJI right on the 50 DMA, an exclamation point that it will start to go back up. And, the gap has been filled. Let's see how it closes but I really want to see $6.91 exactly.
By the way, the coffee ETN JO fell 6% today which I attribute to Goldman Sachs' comments so they can get their clients into coffee cheaper. You can blame me for coffee falling too. I can handle it.
I first posted to buy JVA on March 10th when it was $6.30 and even with the pullback, it is still outperforming the overall Nasdaq index during that time. In 2011, JVA rose from $4 to $8 in 3 days and pulled all the way back to $5 before it superspiked. If you don't like volatility then you shouldn't invest in a momentum stock with only 6 million shares and has a history of being attacked by short sellers.
I'm sure if JVA goes back up I won't get any thanks from you. Just your blame. You can always put me on ignore.
He's an insider, he still has to report stock sales. Even the guy that had only 1,100 shares and recently sold 1,000 of them had to file with the SEC.
What he will NOT have to file is another SC 13D since he dropped under the 5% threshold.
But something unusual happened today. Premarket trading and at higher prices, premarket bids were coming in above yesterday's close. Then during normal trading, both the common and warrants traded on (relatively) heavy volume. It could be great earnings. Though they won't be announced until mid May, the quarter ended March 31st so they should have a good idea about earnings. We also now know the BOD heard a proposal from Stephens back in the November timeframe, supposedly about a merger/buyout/privatization/acquisition.
Whatever happened today, there was definitely increased activity on the buy side for as yet not public information. The drilling of the well was announced yesterday morning and didn't generate as much trading interest as "something" did today.