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Lloyds plc & Fauquier Banshares

I like Fauquier Banshares (FBSS) below $15, it only has an ADV of 1000 shares so be careful bidding. Lloyds Banking Group plc (LYG) at $7.25 is a good buy. My target for both is $25-$28 range.

September 17, 2009

Downgrading CSTR & Potential Cut of COST

Personally I thought the idea of people paying to use coin counting machines was insane. But I was wrong. They put those Coinstar (CSTR) machines in and the people came. There were lines at the supermarket to use it. I couldn’t believe it. But that was then. The “change” must have run out. I haven’t seen one of those machines used in some time. Coinstar does have other machines and an investment in Red Box, but the easy money days of counting change appear to be over.

Costco (COST) saw decreased sales this quarter and missed their numbers, but the real reason I may downgrade — they are starting a trial at two NYC area stores to accept food stamps. Costco, because it charges a membership fee, is like an oasis in the urban jungle. If they start accepting food stamps, it will make it no different than any other large city retailer, think Target or K-Mart.

Mr. Gioia points to the Costco on Vernon Boulevard in Long Island City, Queens, in his district. First opened in 1996, the store is within walking distance for nearly 30,000 residents of three public housing projects: the Queensbridge, Ravenswood and Astoria Homes. “Why Doesn’t Costco Accept Food Stamps?”New York Times, November 11, 2008.

How could anyone not want to shop with them? One of Costco’s reason for never applying to sell food stamps is the $50 yearly fee. Considering the government uses debit cards for the food stamp program so that recipients aren’t shamed, they will probably cover the cost of the membership.

May 28, 2009

Gold

With the advent of commodity based ETFs and their growth in popularity, gold now has the opportunity to be treated in the same manner as a tech stock.

Investment in gold is nearing 50% of all gold consumption, and one third of that is ETFs. The price of gold has been kind to ETFs. And ETFs have been kind to the price of gold. Investors invest in ETFs as the price of gold climbs. With gold showing recent weakness, I believe that we will begin to see investors “profit take” thus forcing ETFs to divest ….. divest …. liquidate ….. cash markets will have to absorb this inventory.

The skew on the puts currently reflects anticipation of increasing implied volatility. If the spot price continues breaking through levels of support look for an increase in implied volatility in gold ETF put options across all months.

March 4, 2009

United Bankshares Inc.

Just buy it. UBSI @ $15.32
CEO said forget the TARP funds.
CEO is a West Virginian who just bought more stock than he makes in a year.

February 19, 2009

Corns and Beans

Long 9 Sep Corn @ 377¼
vs.
Short 4 Sep Beans @ 860¾

February 18, 2009

MS vs. GS ~ the spread

Long 5 MS @ $20.00
Short 1 GS @ $80.00
Taken off now results in a net of $23.25 in the cash register. Cha-ching.

January 12, 2009

Fairfax Financial (FFH)

Price Target: $220

Position closed March 5, 2009: $220.00

January 7, 2009

Time to Buy

It’s always time to buy something, but what (is it time to buy now)?

Here’s what I like:

Genuine Parts Company (GPC) $37.35 – - 39¢ quarterly dividend
Equitable Resources Inc. (EQT) $32.20 – - 22¢ quarterly dividend
Olin Corp. (OLN) $16.95 – - 20¢ quarterly dividend

And here’s one I love:

BP Plc. (BP) $45.25 – - 84¢ quarterly dividend (this is almost a 7.5% dividend folks)

All have healthy dividends, strong stable balance sheets, and room for growth.

December 30, 2008

The Spread

Morgan Stanley: $16.00
Goldman Sachs: $73.00

The spread we bought for a credit of $3.25 is now at $7.00

November 10, 2008

The Art of the Spread – MS vs. GS

Long 5 shares of Morgan Stanley(MS) @ $26.25
vs.
Short 1 share of Goldman Sachs(GS) @ $134.50
Net cost: – $3.25
Can’t sell stock? Buy a deep put or sell a deep call for the GS leg.

September 25, 2008

Upgrades / Downgrades

Coca-Cola (KO) – Sell ($53.39)
Chesapeke Energy (CHK) – Buy ($38.57)
Alliance Resource Partners (ARLP) – Buy ($33.57)
Joy Global (JOYG) – Buy ($51.55)
Goldman Sachs (GS) – Sell ($108.00)
Morgan Stanley (MS) – Buy ($22.55)
Fifth Third (FITB) – Buy ($15.96)

I have my own research methods. Don’t ask.

September 19, 2008