ddls
11 years ago
Facebook Inc (FB): 3 Reasons Why You Should Sell or Short The Stock
March 6th, 2013Goto commentsLeave a comment
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BillionairesPortfolio.com: As a former Portfolio Manager of a top performing $1.2 Billion dollar Hedge Fund, I still love to short short stocks or buy put options on a stock when I see a great set up. It’s exciting to be a contrarian and go against what everyone else is doing plus it can be extremely profitable, and a great way to hedge your current portfolio.
Right now there is a perfect set up to short Facebook Inc or sell your Facebook stock for 3 reasons:
1) Smart Money: The Top Billionaire Hedge Fund Tiger Global, a $7 Billion long short technology based hedge fund, sold all of its stake in Facebook Inc last quarter even though it was one of the largest holders in the stock, both Pre IPO and Post IPO.
Have you ever wondered how billionaires continue to get RICHER, while the rest of the world is struggling?
"I study billionaires for a living. To be more specific, I study how these investors generate such huge and consistent profits in the stock markets -- year-in and year-out.
2) Valuation: The stock is extremely overvalued on any financial metric, it has a price to sales ratio of 12 that’s more than twice Google Inc’s Price to Sales Ratio of 5.5., and Google as we know is one of the most profitable companies in the world, is a Market Leader with a Dominant Competitive Advantage and its actually profitable, Facebook is not.
3) Performance and Facebook’s Relative Strength: This one you can’t ignore. Even as the Stock Market has rallied to new highs in the the last three months Facebook’s stock been has flat to down. This is a very important indicator which many of the best hedge funds and biggest mutual funds use to compare stocks to invest in. (By the way its been the real reason why all the biggest Growth Mutual Funds have been buying Google Inc and Selling Apple Inc.
It’s called Relative Strength, and it’s a concept which compares one stock’s performance to an index or another stock over a certain period of time. The reason its such an important indicator is that is shows you what stocks are participating in a Bull Market Rally, like the one we are in now, and what stocks are flat or down. Stocks like Facebook ($FB) that are not going up when the market is rallying are stocks that institutions and hedge funds are not buying, meaning there is no real money flowing into these stocks. So what happens with stocks with negative money flow is when the rally stops, and the market sells off, stocks like Facebook ($FB), get sold quickly and hard.
To put Facebook’s recent performance in perspective, The S&P 500 is up 9.3% over the last 3 months, while Facebook is actually down -1.4%. During this huge rally in stocks which has taken the Dow to record highs and the S&P 500 to almost double digit returns, none of the smart money or institutions have been buying Facebook ($FB), since Facebook has not participated the stock is actually down over more than 1% during this most recent rally, and when the market starts to correct, this will mean Facebook will be one of the first stocks to sell off and sell off hard.
I study what Billionaire’s are buying and selling and they are telling me Facebook is a SELL.
*GoVols*
16 years ago
Thanks Bill, I almost bought ERS back when Bolt Technology took off like a rocket. It's been a year or more since, but I always pull up a quote and check in. Its seems to me that, like you said, this stock may be under priced at the present time as there is no excitement in trading it right now. I'm thinking bout really digging and see if there is value here. Another stock that might be a good long play is GTF. They have recently recieved FDA approval for their mainstream product and are climbing one more obstacle. I'm all in on a pink right now(shoot me) and have to wait another few weeks, but then I'll need to move on. Thanks again for the info, I'll try to do some DD and get back to you : )
expat7
16 years ago
Hey Sonar,
I haven't looked closely at ERS for about half a year.
There are two points I would check out in more detail:
1.) According to SEC filings ERS has had a very close relationship with Hulett Aluminium Pty (of South Africa) over e years and has regularly been importing over half of there aluminium from them.
Last time I took a glance there was some announcement that Hulett was reviewing its relationship with ERS. If I remember correctly, no decision were to be made within a 12 month period.....but it came across as an indication that there relationship may very well be coming to an end imho.
That is already probably reflected in the current pps.
2.) Assuming ERS hasn't drastically changed it's business operations in the last 7 or 8 months, with some minor exception it is basically an aluminum 'import' and sales company.
The weakening of the USD has probably been a disadvantage to it. That combined with US economic slowdown would probably offer poor guidance for them (actually they have historically been very poor communicators with shareholders - there may be no kind of guidance other than what the have to disclose in the 10K.)
Finally, as you have probably already seen, they have poor liquidity in volume..........but a very tiny float that sometimes really moves that pps nicely up and down (hard to get shares to short on the downside though).
In a fast market downturn, ERS pps offers the possibility of dropping much more than it reasonably should. That may offer nice opportunities for short term trades. all imho of course.
ERS is still on my radar, but I need to catch up on the most recent Filing/pr's/articles.
If you find anything interesting, would appreciate if you can post it here.
GL bro!
br,
Bill
expat7
17 years ago
Alcoa Offers to Buy Alcan in $27B Deal
May 07. 2007 7:03AM
Alcoa Offers to Buy Alcan in $27B Deal
The Associated Press
Advertisement
Alcoa Inc. is making an unsolicited offer for Canadian aluminum rival Alcan Inc. worth nearly $27 billion after failing to reach a negotiated deal in almost two years of private talks.
Alcoa said the proposed cash-and-stock deal would create a premier diversified global aluminum company which could grow faster than the two companies could on their own.
The combined company, with 188,000 employees in 67 countries, would have had revenue last year of $54 billion and earnings before interest, taxes, depreciation and amortization of $9.5 billion.
The company sees annual costs savings of about $1 billion pretax from its proposed combination with Alcan in the third year after the close.
The company is offering a combination of cash and stock that it said was worth $73.25 for each Alcan share, a 20 percent premium to Alcan's closing price Friday of $61.03 and a 32 percent premium to Alcan's average closing price over the last 30 trading days.
The bid includes $58.60 a share in cash and 0.4108 of an Alcoa share for each shares of Montreal-based Alcan.
With about 367 million shares outstanding, that values Alcan at nearly $27 billion. Alcoa said debt being assumed would boost the total value of the deal to $33 billion.
Alcoa said in announcing the offer on Monday that the companies have been in talks to do a deal for almost two years, including merger talks at the board level last fall. Alcoa decided to take its offer directly to shareholders due to the companies' inability to reach a negotiated deal.
Alcoa expects to begin its offer on Tuesday.
http://www.houmatoday.com/apps/pbcs.dll/article?AID=/20070507/APF/705071337
expat7
17 years ago
Wall Street Journal: Aloca, Other Aluminum Companies May Be Targets for Acquisitions
February 13, 2007
Aloca, Other Aluminum Companies May Be Targets for Acquisitions
By Patrick Barta and Paul Glader
Word Count: 1,009 | Companies Featured in This Article: BHP Billiton, Rio Tinto, Alcoa, Alcan
Big aluminum companies may be next in line for consolidation as mining conglomerates scour the globe for acquisition targets.
Speculation is building that BHP Billiton Ltd., Rio Tinto PLC or another major mining giant could bid to buy one of the world's aluminum heavyweights, particularly Pittsburgh-based Alcoa Inc. or Alcan Inc. of Montreal.
Doing so would allow BHP or Rio Tinto to consolidate its position in the growing aluminum market, while preventing competitors from snatching up the few remaining blue-chip players at a time of accelerating consolidation in the natural-resources sector.
Speculation about a possible transaction involving Alcoa sent the ...
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http://online.wsj.com/preview_login.html?url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB1171390243371...
expat7
17 years ago
Aluminum Use Growing In 'Thriving' Auto Industry:
Aluminum Use Growing In 'Thriving' Auto Industry
Dow Jones
January 30, 2007: 09:31 AM EST
SCOTTSDALE, Ariz. -(Dow Jones)- The global auto industry as a whole remains robust -- despite some of the problems of Detroit automakers -- and the use of aluminum continues to grow in the manufacture of cars and light trucks.
That was a reoccurring theme Monday during a Platts Aluminum Symposium 2007 panel discussion as speakers assessed the impact of the auto industry on the aluminum market.
The health of the global auto sector is of keen interest to those in the aluminum business since the metal is now regarded as the second-most highly used material in motor vehicles.
The mainstream press for months now has been full of stories about the financial plight of U.S. car manufacturers. But their lost market share has been picked up by other companies, most notably Toyota Motor Corp. (TM) Overall car sales also remain historically strong, speakers said.
"There has been a tendency to think the industry is not doing that well. However, the industry is thriving," said Tom Libby, senior director of industry analysis for Power Information Network, a division of J.D. Power and Associates.
He pointed out that U.S. light-vehicle sales have exceeded 16.5 million units for eight years in a row.
Libby listed a series of trends within the industry, such as Toyota's U.S. share climbing above 15% from below 8% in 1996, and one of every three new vehicles in 2006 being equipped with a four-cylinder engine, up "substantially" from just a couple of years ago. But overall, he said, his firm anticipates total 2007 U.S. car sales will remain around the 16.5 million level and will eventually climb to the 18 million area in eight or nine years.
Kevin Moore, a General Motors Corp. (GM) executive involved with global aluminum purchasing, said any ideas that the auto industry is stagnant are " misconceptions." He described the industry as a $1.5 trillion business growing 6% per year.
Back in 1999, the global market was some 53 million cars and light trucks. " That was quite a number at the time," he said. However, this rose to 67 million in 2006, said Moore. Industry observers look for 78 million units by 2010, he later added.
Another of the panelists -- Audubon Metals President and General Manager Jim Butkus -- said the auto industry is growing rapidly in China, with 7.2 million units sold in 2006. The country could become the world's largest auto market somewhere between 2015 and 2020, he said.
He pointed out that this growth has occurred even though Chinese incomes are still low compared to much of the world, but they will grow. "The potential in China is phenomenal," he said.
Meanwhile, Moore explained, use of aluminum in vehicles has grown for a number of reasons -- to make cars lightweight and thus more fuel-efficient -- plus the metal is considered corrosion-resistant with good strength and stiffness that holds up in crashes. Use of the metal in cars has grown steadily in the last 30 years, trailing only medium- and high-strength steel, he said.
Bruce Warshauer, president and chief executive of Wabash Alloys, said fuel economy in vehicles has increased 61% over the last 30 years, and use of aluminum is a key reason. Much of the growth in aluminum use in new vehicles over the next half decade will be substitution of the metal for cast iron in engine blocks, he reported.
The Cadillac Escalade sport-utility vehicle, with aluminum wheels, uses 492 pounds of aluminum, Moore reported. General Motors' aluminum content per vehicle averages 340 pounds, compared to 415 for medium- and high-strength steel, he said.
"Aluminum content in automotive will continue to grow, said John Groustra, senior managing director of Conway MacKenzie & Dunleavy, a financial adviser for auto suppliers.
A Ducker Worldwidestudy shows that 48.2% of the aluminum used in cars is put into engines, he said. Some of the other main uses include the undercarriage, or suspension, 19.2%; driveline such as transmission cases, 16.8%; and wheels, 6.2% .
-By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com
(END) Dow Jones Newswires
01-30-07 0931ET
Copyright (c) 2007 Dow Jones & Company, Inc.
http://money.cnn.com/news/newsfeeds/articles/djf500/200701300931DOWJONESDJONLINE000486_FORTUNE5.htm
expat7
17 years ago
Ryerson (RYI) pps Has Risen 38.8% Since Nov. 24, 2006:
3 month chart:
http://stockcharts.com/c-sc/sc?s=RYI&p=D&b=5&g=0&i=t39049556380&r=3340
NOTE: Ryerson is Empire Resources' largest single customer accounting for between 14 and 16% of ERS's total sales over recent history.
This can be seen by looking at ERS' 2005 10K under 'Customers'
regarding Ryerson and then comparing those figures with the figures in prior and subsequent 10Q's
http://www.sec.gov/Archives/edgar/data/1019272/000095011706001504/a41665.htm
Although Ryerson is involved with several metals and carbon, as considerable part of their income is derived from 'aluminum products':
The following table shows our percentage of sales by major product lines for the three and nine months ended September 30, 2006 and 2005, respectively:
Percentage of Sales
Three Months Ended
September 30, Nine Months Ended
September 30,
Product Line
2006 2005 2006 2005
Stainless and aluminum
55 % 51 % 53 % 51 %
Carbon flat rolled
25 25 25 25
Fabrication and carbon plate
8 10 9 10
Bars, tubing and structurals
7 9 8 10
Other
5 5 5 4
Total
100 % 100 % 100 % 100 %
expat7
17 years ago
Hulett Aluminum:
3 month old article, but of some significance:
Hulett Aluminium to Expand Capacity for High Value Products - Media Release – 12 October 2006
12 October 2006
Media Release – 12 October 2006
Hulett Aluminium to Expand Capacity for High Value Products
Tongaat-Hulett, Anglo American and the Industrial Development Corporation have given approval to proceed with a R950 million expansion project at Hulett Aluminium. This follows Tongaat-Hulett’s announcement earlier this year of its plans to unbundle and list Hulett Aluminium on the JSE Limited, thereby establishing two attractive, focused investment vehicles and creating the opportunity for BEE shareholding in both entities. BEE shareholding is expected to be introduced at the level of 25% in Tongaat-Hulett and 15% in Hulett Aluminium when the unbundling and listing takes place in 2007.
Tongaat-Hulett CEO Peter Staude said, “The expansion of Hulett Aluminium reflects the confidence of its shareholders that further value can be unlocked from the current base. This investment follows the R2,4 billion (US dollar 550 million) Rolled Products Expansion Project that came on stream in November 2000. This enabled Hulett Aluminium to grow its Rolled Products annual sales volumes from a position of some 50 000 tons, exporting less than 10% of its capacity to 3 countries to one where in the month of August its annualised sales exceeded 200 000 tons. Hulett Aluminium now exports in excess of 70% of its output to more than 50 countries. The company has achieved recognition in establishing itself as a leading global producer of high margin, technologically demanding products, inter alia winning the overall State President’s Award for Export Achievement and the MTN/Business Day Technology Top 100 Award.”
“This project is another major milestone in the growth of our business,” says Alan Fourie, Managing Director of Hulett Aluminium. "The expansion of the Pietermaritzburg facility will increase rolled products capacity by 20% to 250 000 tons per annum. The project entails the installation of additional state of the art foil rolling and plate equipment, continuous casters and upgrades to existing rolling mills. The project focuses on further enhancing the product mix, where 58% of the capital will be spent. This will result in increased sales of high margin products, especially light gauge foil and heat treated plate. Hulett Aluminium expects to maintain its profitable growth from existing operations over the next two years, followed by the benefits of the project coming on stream in 2009. This will enable Hulett Aluminium to continue unlocking value by further enhancing sales mix, growing volumes and reducing unit costs.”
http://www.hulettsaluminium.com/showarticle.asp?NewsId=18
ENDS
Issued by: Tongaat-Hulett
12 October 2006
Contact:
Zaf Mahomed (032) 439 4067
Richard Jacob (033) 395 6425
expat7
17 years ago
Consumer Sentiment Jumps to 3-yr High
This is good for aluminum Industry:
WRAPUP 1-US early Jan consumer sentiment jumps to 3-yr high
Fri Jan 19, 2007 10:55am ET143
By Richard Leong
NEW YORK, Jan 19 (Reuters) - U.S. consumer sentiment improved more than expected to a three-year high in January, propelled by falling gasoline prices and a favorable view of personal finances and the economy, a survey showed on Friday.
The preliminary January reading on sentiment by the Reuters/University of Michigan Surveys of Consumers rose to 98.0 from 91.7 at the end of December.
This was the highest since 103.80 in January 2004 and well above the 92.5 median forecast of analysts polled by Reuters.
"Consumers reported more favorable assessments of their personal finances and anticipated a higher rate of economic growth," said Richard Curtin, director of consumer surveys at the University of Michigan, in a statement.
Stocks pared losses and the dollar rose in reaction to the surprisingly strong consumer data. However, bond prices fell as traders scaled back their expectations of the Federal Reserve trimming official interest rates in the first half of 2007.
"This was a nice upside surprise that continues the run of generally favorable U.S. data that have tempered concerns about the health of the economy. This will further put to rest the notion of an early Fed rate cut," said Alex Beuzelin, senior market analyst at Ruesch International in Washington, DC.
The surveys' gauge of current consumer conditions was 112.5 against a final December reading of 108.1, while its measure of consumer expectations was 88.7 versus 81.2. Continued...
http://today.reuters.com/news/articleinvesting.aspx?type=economicNews&storyID=2007-01-19T155542Z...
© Reuters 2007. All Rights Reserved.
expat7
17 years ago
Imbali (ERS EU Distributor) looks to have had an excellent 2006:
Imbali started in February 2005. It is experiencing substantial growth:
"Whereas in the beginning, most of our customers were situated in Germany thanks to the experience of Ed Brinkmann and Oliva Dohmann, we now serve customers also in Belgium, Netherlands, France, Italy, Sweden, Denmark, Austria, Czech Republic, Spain,
Switzerland."
Additionally the EU market was strong in 2006:
"Whereas 2005 was a tough year, 2006 is characterized by a strong market."
http://www.imbalimetals.com/index.cfm?p=about
http://www.imbalimetals.com/pressreleases/HulettsGatewayToEurope.pdf
It also seems most likely that the significant relationship with Hulett continues to be strong and well as it has always been.
If not already familiar with the ERS / Imabali / Hulett relationship, looking at ERS's last 10-Q will give some introduction:
http://www.sec.gov/Archives/edgar/data/1019272/000095011706004706/a45262.htm
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