The Proficient Investor

Shares of Crocs Inc (crox) is moving higher today closer to its 52 week high. Ive been a bull on this shoe maker for the better part of two quarters. The company is seeing increased sales both here in the US and in foreign markets. Margins are high as management is able to streamline their operations very smoothly.

I think the stock can hit and surpass their 52 week high of $59.57 amid shorts running for cover as we get closer to their quarterly earnings release. Many believe this company is a fad, but i disagree as the company so far has come out with new and innovative products. Shorts beware, Crocs could mirror action in Amazon last week.
*Disclosure: Long shares of Crocs

The overall markets are expected to continue their hot streak this upcoming week. Investors are well positioned for further gains as corporate earnings season continues. However watch for key economic data to dampen the mood on the street.

The most important event on the economic calendar will come out on Friday, and that is the job numbers. We have come off a week in where economic growth slowed in the recent quarter. Last friday GDP figures showed the US economy grew at a much slower pace than was forecasted by economists. GDP came in at 1.3% below the consensus estimate of 1.8%

Investors may use that as a signal for profit taking. I myself am a bear, and also believe we need a big correction in the near term. It will be key to watch the price of oil as it once again nears $67/barrel. News of a foiled terrorist plot in Saudi Arabia made crude jump over a dollar a barrel towards the last hour of trading on Friday. I am a firm believer in rising energy prices in the upcoming quarters and years.

I will be looking at some key earnings this week. I own NYMEX holdings (nmx) as I think the company can impress the street with their numbers. Pricing power is huge for this exchange . P&G is also expected to report this week, the dollar will drive this company to earn recored profits in my mind. Overall earnings should continue impress, but I would warn investors to undergo a gut check and make sure they are comfortable with what they own at this time, a hard and swift correction can occur at any time.

From Seeking Alpha’s Wall Street Breakfast today:

Several new developments in the options backdating scandal at Apple Inc. have occurred simultaneously: the SEC has declined to sanction Apple because of its “swift, extensive, and extraordinary cooperation” with the investigation; it has filed charges against Apple’s former General Counsel Nancy Heinen; it filed and immediately settled a suit with Apple’s former CFO Fred Anderson; and Anderson issued a statement claiming he warned CEO Steve Jobs in 2001 that Apple would have to take a charge for its backdated option grants — a charge it did not take. Read the rest of this entry »

Forex? What is it, anyway?

The market

The currency trading (FOREX) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover. (click here to read full market background by Easy-Forexâ„¢).

Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That’s all.

How does one profit in Forex?

Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.

The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forexâ„¢ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of “your” pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.

Moreover, you cannot lose more than your “margin”! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.

You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don’t have to physically possess certain currencies in order to perform “buy” or “sell” with them.

How do I start?

Register (Easy-Forexâ„¢ offers the simplest and quickest registration process, no obligation); deposit your first trading “margin” amount (credit cards are welcome, only by Easy-Forexâ„¢); start trading.

It can’t be simpler or easier than that. Need help? We’ll provide you with 1-on-1 training and service, as much as necessary (Easy-Forexâ„¢ offers real people service, live, in your own language).

How do I trade Forex?

You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the “margin” (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).

Before you finally activate the deal, you can still “freeze” it for a few seconds. That enables you to either change the terms, or accept it as is, or altogether regret the whole idea. The “freeze” feature is a unique service by Easy-Forexâ„¢.

When your Forex deal is running (you hold an “open position”), you can monitor its status and check scenarios online, whenever you wish. You may change some terms in the deal, or close it (and cash the profit, if any, or minimize the loss, if any). Moreover, Easy-Forexâ„¢ lets you determine a “take-profit” rate, with which the deal will close automatically for you, when and if such rate occurs in the market. Meaning: you do not have to stay near your computer when you hold open positions.

Want to know more? Want to get on-line training? Register here (simple, quick, no obligation), we’ll be glad to guide you, every step of the way.

Good luck!

Forex trading involves substantial risk of loss, and may not be suitable for everyone.

The first week of this earning season is just about at a close and investors showed caution today in light of good reports coming out from all over.

BofA upgraded online dvd distributor Netflix(NFLX) from sell to neutral even though lowered guidance had taken shares down mid week from a healthy rally the month prior.   Still, the stock ended the day down $.19 cents at $21.51.

Canadian mining company Crystallex filed the final prospectus for their stock offering of common shares today with the stock ending even at $3.78.

In the financial sector, AMTD ended down $.10 cents at $15.63 after announcing earlier in the week a lowered guidance for 2007 based on customer trading revenue which accounts for about 40% of total revenue for the online discount broker.  E*Trade announced similar results and was trading down as well.

Overall there is genuine hesitation on the part of investors to put anything more on the table.  Weak housing data and a weaker dollar are contributing to a slowdown in not only trading but consumer sentiment.

It’s not all bad everywhere though, Coke (KO) was up despite cries and protest from consumers at the latest board of directors meeting.   The Cheesecake Factory (CAKE) was up $.10 cents at $25.89 and announces earnings on April 24th.  Chip maker Intel Corp. (INTC) ended the day up $.48 cents as rival AMD announced it wouldn’t shy away from a private equity deal if “it made sense for the company.”

The winning strategy here is to pick and choose wisely and it’s ok to sit on a cash position in this situation.  Cash is king as they say.

From Tomorrow’s News Today:

JPMorgan Chase & Co.’s (JPM) net income surged 55% in the first quarter as a recordbreaking
performance by its investment bank made up for sluggish results in its retail banking
and credit card divisions.

JPMorgan also boosted its quarterly dividend by 12%, the first hike in six years, responding
to many months of clamoring from investors. The bank’s shares soared more than 4% to $52.26,
reaching their highest level since February 2001.

JPMorgan — the No. 3 U.S. bank by market value — reported net income of $4.79 billion,
or $1.34 a share, compared with $3.08 billion, or 86 cents a share, a year earlier. The latest
results include a gain of 11 cents per share from an accounting change. Revenue jumped 25% to
$18.97 billion.

The performance easily eclipsed Wall Street’s predictions, which called for earnings of $1.02
a share on revenue of $16.9 billion. The results are “a confidence boost,” said Credit Suisse analyst
Susan Roth Katzke.

Netflix(NFLX) announced that in Q1 they nearly doubled revenue but slightly lowered guidance based on subscriber data for 2007. The stock then dropped $2 and has since gained some ground.

This is absurd. The drop you see here is just profit taking. I don’t think the lowered guidance will impact the core business Netflix has and with the addition of their movie download service rolling out this year they should see an increase in rentals which ultimately can lead to more subscribers as word of mouth increases.

What investors missed in this announcement is that Netflix is buying back shares throughout 2007. That should tell you the company isn’t worried about their business and is in fact going to be acquring shares from the public at a discount on investor panic. This means the street is putting this stock on sale and you should double up your position if you can. I still think this is a $35 stock and it deserves an even higher multiple than it has now.

Conversely, with Blockbuster’s (BBI) CEO stepping down at the end of the year, the sub-$10 stock is a dog and I think you should stay away from it. Blockbuster was up $.01 in intraday trading.

Shares of TD Ameritrade plunged $1.15 at the open today on lowered guidance and reports that “For the three months ended March 31, Ameritrade’s (AMTD, Trade ) profit fell to $141 million, or 23 cents a share, from $172.8 million, or 30 cents a share in the year-ago period.”

Ameritrade lowered guidance for 2007 saying it “now expects 2007 earnings of 92 cents a share to $1.08 a share, compared to the Wall Street target of $1.09 a share. Earlier, Ameritrade said it expected earnings of $1.10 a share for the year. ”

Source: Marketwatch

I own shares in this stock and the performance over the last year is just staggering. This decline started in the winter of 2005 when AMTD announced a special dividend to shareholders of $6 a share. Subsequently the price of the stock corrected itself from $26 down to $20 to compensate for the dividend. Shortly after began a huge selloff which brought the stock to the point it is at now. Unlike other investors I am in this one for the long term and I believe it has the depth to come back from this. I always like when Wall Street puts a stock on sale and this one certainly is. The only question you have to ask yourself is can you take the pain of seeing your stocks in the red long enough to realize the gain later. Most investors can’t. Hold on to this one and buy it on a dip.

In a rare turn of events, Microsoft is now asking the DOJ to look into the new google deal for possible antitrust violations.  Concerned that Google will corner the market in advertisement delivery, Microsoft and AT&T claim the deal requires “close review and scrutiny”, arguing also that the deal “would hurt competition in the fast-growing market for advertising on the Web and raises questions about how much personal information would be collected by Google.”

I don’t think much will come of this since there are many many alternatives to Google in terms of advertising.  Just because Google  may be the big fish in the water, doesn’t men it’s the only fish.

This request for investigation likely stems from the fact that Microsoft, Yahoo and Time Warner lost the bidding war to acquire Double-Click.

Once again, companies that are struggling are trying to blame their faults on others.  Yahoo has been in trouble for a long time with declining sales and shrinking readership.

Read the full story here

Google (GOOG) is up $1.10 at $475.37
AT&T (ATT)  is up $.02 at $25.12
Yahoo (YHOO) is up $.45 at $32.06

at the time of this publication, i had no positions in any stocks mentioned.

In an article at Yahoo! News about the resurgence in popularity of 1980s coin-op products, Chuck E Cheese (NYSE:CEC - news) is mentioned in the article and it got me thinking. Chuck E Cheese was started by Atari founder Nolan Bushnell.

Here’s a guy who started possibly one of the greatest game making companies ever. He really paved the way for other companies and I think we all remember owning at Atari at some point in our early childhood. Retro, if you hadn’t noticed is cool. The 1980s are sought for the nostalgia. What I see happening is a new generation of adults turned parents that used to go to the arcades after school to feed quarters into Gauntlet hour after hour, now wanting to introduce those games to their kids. Sure the graphics aren’t eye-popping 3D, but they have an addictive factor not found in today’s games. Take one of my favorites, “Track and Field”. This game is so unforgiving that teens in the day figured out tricky ways to make that runner go faster by either using a butter knife across the run buttons and flicking the light side so the heavy end would automatically press the other button, or by hitting each of the buttons sequentially with three fingers like you were tapping on the table. With the former, Arcade owners fashioned plastic rings around the buttons that were the same height to stop those butter knife wielding gamers.

Arcades of late have suffered a mass of closing centers and dwindling audiences. I live in a beach town and the local amusement park is almost completely supported during the summer months when beach goers flock to the area to soak up sun and rides. It is then that the arcade gets the most play. What I have noticed lately however is the lack of really good fun games. Sure you have every variety of the dance-dance revolution type game, but where are the addictive quarter-pumping games now? Well, they are back in the retro section. Yep we have a dedicated area for the retro games. Only problem is, most of them are the originals…which means they are beat up, screens that barely work and sometimes the machines just swallow your quarters. So if there is a resurgence in the popularity of retro games, let’s hope there is a want to also fix them.

In terms of investing ideas. I think CEC might be a good one. Since August ‘06, CEC has moved from 29 and change to the low 40s. I don’t think it’s done yet. At about 10% growth and trading at just over 20 times earnings, I think it’s fair value which means a good long term investment. I think you wait for a pullback to 40 and then pull the trigger. Upside I see a quick 5 points, could be another 10 if the summer plays out right.