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Key Tronic Corp. Message Board

commandor58 73 posts  |  Last Activity: 1 hour 4 minutes ago Member since: Dec 7, 2005
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  • Reply to

    Euro-zone stuff

    by commandor58 Jul 11, 2014 12:58 PM
    commandor58 commandor58 1 hour 4 minutes ago Flag

    Today, 7/31, the "market" cares about what is going on-especially as it relates to Euro-zone issues. With the Spanish 5 yr yielding 1.11% vs the US's at 1.77%, Euro-zone bonds in general are way over valued. Yields need to go up 50-100 basis points, before "normalcy" returns. At this time, the ECB will have to initiate QE as increasing interest rates or falling bond prices wipe out bank equity as they takes losses on their portfolios. Also, Euro-zone banks have huge loan "assets" in Russia, so sanctions and a slowing to negative economy increase the odds some of those loans go bad-hurting Euro-zone banks.

    Bottom line, I liken 2014 to 1987. Stocks turned down in Aug (1987) drip, drip, drip lower until the final blowoff selling climax in Oct. I can see the same in 2014, with stocks down 10-20% off the highs with the last 5-10% in a few days in Oct. Other that playing small ball, not a buyer of size until the "situations" are bad enough so induce easing by central banks-QE by the ECB and the FED would be the best backstops.

  • commandor58 by commandor58 Jul 30, 2014 10:27 AM Flag

    Revenues a little soft, guidance for the 3rd Q a little soft-I see no reason to buy more at this time. The "tell" will be how PCTI reacts if the broader averages move down. If it does, I'd be a buyer again in the $7.00 area.

  • Reply to

    Restarted a position in QLGC today at $9.50

    by bodybag2006 Jul 25, 2014 1:52 PM
    commandor58 commandor58 Jul 28, 2014 6:02 PM Flag

    Actually under another "topic" I posted that there has been some research that gold discoveries of recoverable grade, in the last 15 years, has been running about 50% of production. The implication is that in coming years, gold production will start to decline-the last several years have been around 2800 tonnes/year. Some research has projected the decline will start in 2015, other research in 2016. But, in my view, with discoveries so far below production for such a long time, it suggests that gold production, when it does start its decline, that decline will last years and perhaps be down 25-50% from the 2800 tonnes/year level. Less supply will mean higher prices, perhaps significantly so if the world financial system comes under stress in any of its various forms.

  • Reply to

    PBOC and ECB's game of "Chicken"

    by commandor58 May 16, 2014 11:38 AM
    commandor58 commandor58 Jul 27, 2014 6:10 PM Flag

    In recent months, the PBOC has blinked as they have eased in many different ways to add liquidity to help stimulate the Chinese economy.

    Also, read someone else's research as it pertains to gold. In the last 15 years, gold discovery has run about 50% of production. Implication? Production has been about 2800 tonnes/year the last 3-4 years, but with replacement running at about 50% of production, then production will soon start to fall. I've read some research it will start to fall in 2015, other research says production won't fall until 2016. But, given the dynamics of production vs discovery the last 15 years, gold production will fall off in the coming years, and will continue lower for perhaps a decade as it take years to bring a mine on-line. Less supply will mean higher prices.

  • Reply to

    CCRN taking on a lot of debt to get bigger.

    by commandor58 Jun 4, 2014 1:50 PM
    commandor58 commandor58 Jul 25, 2014 2:51 PM Flag

    A trend, nationwide, in emergency rooms, will keep me from buying AHS or CCRN for the many Qs perhaps years to come future.

    ERs have been putting in observation rooms, adjacent to the ERs to watch patients rather than admit them "upstairs" to the hospital. Many of these patients will be fine to go home in a few hours, rather then be admitted. As a consequence, hospitals incur lower admissions and need less floor nurses. Perhaps CCRN and AHS will be able weather this trend and be able to adjust, but I am seeing more geographical locations where nurses are having a tough time getting jobs. So, growth for these "temp" companies will be harder to come by if full-time nurses themselves are having trouble finding work.

  • Reply to

    Restarted a position in QLGC today at $9.50

    by bodybag2006 Jul 25, 2014 1:52 PM
    commandor58 commandor58 Jul 25, 2014 2:33 PM Flag

    A couple of minutes ago, I just got some at $9.36. In the CC, mgt stated that the INTC's next server chip, Grantley, coming out in the 3rd Q would be beneficial for their business as it would start a server upgrade cycle. MLNX, which had good numbers and guidance, mgt also stated that Grantley would be good for their business. QLGC, was a little soft for the Sept Q guidance, which was my concern going into the June Q's CC, but under $9.50 QLGC is cheap. Now, if the market does sell off, which is my expectation, then QLGC could back down under $9.00, then they it would become a table pounding buy.

    Because QLGC used most of its NA cash to buy the Broadcom business, they don't have alot of NA cash to buy back stock currently. But, after the Sept Q, they should be in a position to start buying back stock in the 4th calender Q of this year or at the latest the 1st Q of 2015. Ultimately, if the world doesn't fall apart in 2015 or the 1stH of 2016, I'm looking for QLGC to get to the mid teens by then.

  • Reply to

    Euro-zone stuff

    by commandor58 Jul 11, 2014 12:58 PM
    commandor58 commandor58 Jul 24, 2014 3:43 PM Flag

    Eastern Ukraine is the new Sudatenland with Putin as Hitler and Merkel as Chamberlin.

  • Reply to

    Commandor ? on FCF

    by gmleon77 Jul 17, 2014 11:05 AM
    commandor58 commandor58 Jul 21, 2014 5:50 PM Flag

    Treasury curve the flattest since 2/09 at 158 basis points comparing the 5yr (1.68%) vs the 30yr(3.26%)-not good for bank earnings.

    W/R to the larger view as it pertains to central banks, I'm not a buyer of stocks until they ease further-providing a "liquidity put" to stocks. Specifically:
    1)FED goes from tapering, with the risk of raising rates earlier than the current consensus-because of higher than expected inflation numbers and lower U3 unemployment-back to easing mode by tapering their taper or starting a new QE program
    2)ECB goes into full QE mode to combat "credit engine" contraction that still plagues the Euro-zone
    3)Talk of BOE increasing rates subsides-weaker macro-econ data needed vs the strong numbers recently
    4)BOJ continues current path
    6)PBOC, which is now currently easing, through loan programs and reduced reserve requirements eases further buy further reducing RR and lowering interest rates.

    If I can get 3 or 4 of the above 5 to move in an "easing" direction, then stocks will be worth playing the upside. Until then, the reward/risk does not suit me as the flat treasury curve and the German 10yr near all time lows suggest very sluggish macro-econ data is coming and hence sales and earnings growth estimates, for the S&P 500, may not be attained.

  • Reply to

    more excuses and delays

    by a_happy_poet Jul 17, 2014 5:16 PM
    commandor58 commandor58 Jul 18, 2014 2:54 PM Flag

    If mgt, successfully integrates CDR, current price is cheap.

  • Reply to

    more excuses and delays

    by a_happy_poet Jul 17, 2014 5:16 PM
    commandor58 commandor58 Jul 18, 2014 11:26 AM Flag

    KTCC has had two large customers that have been shrinking recently-SMT and IGT. Outside of that, it appears from CCs that they have been successful winning new business, but it hasn't come on board fast enough or been sufficiently large enough to cover the shortfalls of those two clients. Otherwise they have been running their business quite well-operationally.

    This deal solves their ultimate problem in that, if immediately accretive as mgt states, then the upside sales opportunities from:
    1)Capturing a greater % of the product beyond CDR's PCB part of it
    2)Capturing, from CDR's clients, some of their high volume business after establishing credibility with those clients

    In essence, KTCC has rich selling opportunities for years by "working" CDR's existing clients for more business, so they don't have to rely on winning new business as much. The risk is operational, which KTCC has an excellent track record of. If it all works out, KTCC could be earning $.40/share by the March Q or June Q of next year.

  • Reply to

    Commandor ? on FCF

    by gmleon77 Jul 17, 2014 11:05 AM
    commandor58 commandor58 Jul 17, 2014 12:02 PM Flag

    Yes, I like regional banks if/when we get an "event" that causes a sell off, which morphs into a mini panic "grab for liquidity"-resulting in central banks initiating QE, in the case of the ECB and the FED taper their tapering or initiating a new QE program.

    In other words, I am buying little until there is a significant market sell off and more QE by central banks as a response. Otherwise, stock prices are way to high for me to play the "buy the pulback" game or buy the "sector out of favor" game.

    Obvious new today suggests that either the Russians shot down a passenger jet or their Ukrainian proxies shot the plane down with equipment given to them by the Russians.

  • Reply to

    Commander QLGC

    by gulleyj56 May 1, 2014 6:29 PM
    commandor58 commandor58 Jul 16, 2014 1:38 PM Flag

    QLGC, which may have a June Q issue because of soft hardware tech spending, may become a very good buy later the year with results improving in calender 2015. Why? INTC has a new server chip coming out in the 3rd Q, which will lead to an upgrade cycle in 2015(6)-which should be good for QLGC and ELX. Today Jeffries upgraded MLNX based on the next server upgrade cycle.

    If QLGC has poor June and Sept Q's, the stock could trade down to around $9.00. At that price and at that time, 4thQ of 2014, QLGC would be a table pounding buy.

  • Reply to

    Euro-zone stuff

    by commandor58 Jul 11, 2014 12:58 PM
    commandor58 commandor58 Jul 15, 2014 3:17 PM Flag

    W/R to Japan, with their 10-yr at .54% and the latest CPI up 3.7% y/y, the real yield is a record low of negative 3.16%. As we all know, debt to GDP is over 250%, worse than even Greece. Japan's real interest rate should be positive 1-2%-at a minimum. So what is happening? The carry trade out of Japan-Japanese buyers are buying US and Euro-zone bonds because there is nothing to buy in Japan.

    This is a situation that cannot pass the test of time. It will blow up! It is just a question of when. When that happens, all liquid markets will experience a sell off as Japanese will sell what they have overseas and repatriate money back to Japan. Selling will beget selling in a self-reinforcing negative loop until central banks reinstate or increase QE programs. With negative real rates in the US, UK and Japan-debt servicing will get harder and harder as negative real rates must move positive as total debt and inflation move higher.

  • Reply to

    Calling the Top of the stock market

    by commandor58 Jun 19, 2014 12:18 PM
    commandor58 commandor58 Jul 12, 2014 12:09 PM Flag

    I forgot to post at the time, but an indicator of market tops in the past 30 years have been buyouts of securities firms and/or money mgt firms. They tend to be worth the most near market tops as assets under mgt are at multi-year highs as well as optimism.

    Flying under the radar was the sale of Russell Investments by Northwestern Mutual Life to the London Stock Exchange on 6/27 for $2.7 billion. Usually markets "top" within 30 days of such deals. Also, Barclays is selling its index business as well. So, the "top", consistent with past market tops, is within 30 days of the 6/27 Russell deal or within 30 days of so of the Barclays deal, when it is done-which will be soon-they are a reflection of human bahavior which has its cycles of greed and fear.

    For the upcoming week, I expect a relief rally early in the week as the Portugal issues fade from memory, but will prove to be a good opportunity to sell into strength as new and other continuing issues will come to light inducing more net selling.

  • Reply to

    Euro-zone stuff

    by commandor58 Jul 11, 2014 12:58 PM
    commandor58 commandor58 Jul 11, 2014 2:45 PM Flag

    I also find curious is that the Ukraine is fighting a war with "Western" money-it own tax revenues in decline, is getting aid through the IMF and other sources. Russian backed separatists, or course, are getting aid from Russia. The current situation is not sustainable, as it is a new cold war, now gone hot, through Ukraine proxies. I don't expect Russia to back down, while Western countries and their financial institutions are weak and can't afford a drawn out war. Ukraine still has not paid their NG bill to Gazprom, so Russia can afford to wait until fall when the weather gets cold-to extort whatever "solution" they want after countries, dependent of Gazprom gas, get panicky on how they are going to solve their heating problems.

    Again, it is my view, an "event" political or economic, will spark a sell off of enough magnitude to start a selling begets selling negative loop into a "grab for liquidity" until central banks start or reintroduce QE and others easing programs to inject enough liquidity to stabilize markets. Deflation will become the pervasive fear, so these programs will have to last to get inflation back to targets. Gold/silver should do the best during this time period as interest rates will be low with injections of liquidity by central banks will be high.

  • Reply to

    Euro-zone stuff

    by commandor58 Jul 11, 2014 12:58 PM
    commandor58 commandor58 Jul 11, 2014 1:36 PM Flag

    PCTI has been the only one in recent weeks, other than buying some gold/silver stocks back in early June.

  • commandor58 by commandor58 Jul 11, 2014 12:58 PM Flag

    Like a broken record, I have been wary of Euro-zone frailties for months as I views recent sovereign bond markets rallies as a bubble with QE money, from the US and Japan, seeking relatively higher yields while fundamentals have improved little. One could easily argue the fundamentals have got much worse as debt outstanding has increased, as budget deficits continue at high levels (greater than 3% of GDPs), while the ability to service is worse as GDP growth is flat to slightly up.

    We got a "warning shot" with the Portugal Bank problem, that sent markets down hard and fast-letting us know that markets are a mile wide, but only an inch deep. I believe Portugal is only the tip of the iceberg as sovereign bonds are way over-valued, banks are under capitalized, markets are thin and macro-econ fundamentals are flat.

    Going back to 2007, Bear Stearns had two SIVs blow up, which was a 6 month warning that real estate markets were going to blow up in 2008. Whether Portugal is a 6 month "warning" or some other time frame, I think an event will happen to set up a grab for liquidity before the end of the year.

    Still looking to harvest gains, raise cash, only be a selective buyer when the "market" gives me an absolute "bargain" and wait for that "event(s)" to create many bargains. There will be bargains as central bank policy responses will be more QE or other easing programs to keep many countries, institutions, etc from collapsing from the inability to service debts because of losses from the "grab for liquidity".

  • Reply to

    Stock Action

    by commandor58 Jul 8, 2014 3:58 PM
    commandor58 commandor58 Jul 9, 2014 2:14 PM Flag

    Yes, bought "trading" shares that had sold last week.

  • commandor58 by commandor58 Jul 8, 2014 3:58 PM Flag

    From $7 to $8.50, back down to around $7.50 in a few days on bigger than average volume suggests a few things:
    1)A fling for 5%+ should be forthcoming in days
    2)Pullback from $8.50 should be close to finishing as it is about a 62% Finbinacci retracement level
    3)Press release for earnings date, without warning would suggest sales/earnings recovery is starting in the June Q and to accelerate in the 3rd and 4thQs.

  • Reply to

    M2 money supply, M1 money velocity and loans

    by commandor58 Jul 4, 2014 12:55 PM
    commandor58 commandor58 Jul 8, 2014 11:47 AM Flag

    2nd "warning shot across the bow" today from the comments of Mohammed El-Erian w/r to liquidity in his comments that investment banks, due to regulation, are holding less inventory of many types of securities so when other large players go to sell or buy there is less liquidity in the market, so efforts to more large $ amounts of securities cannot be done unless their is a large price change vs historical norms.

    My concerns that there could be an "event" financial or otherwise that could cause a sell-off followed by a grab for liquidity as many financial market players are over levered. Lack of inventory by market makers and lack of confidence in governments set up a scenario that stocks could sell off hard, in a short period of time, should an event occur.

    Certainly, BO's regulatory minions war against banks, both US and European, is not a good backdrop for them to increase their market making activities, but do just the opposite. Probabilities of a "liquidity grab", later in the year, are increasing.

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