the multiple stock folios continue to out perform their respective benchmarks by two to four times while the 2faced folios floundered this week:
a. large cap folio of 49 stocks: +0.51% today, +10.38% since 2013/03/05 vs. spy benchmark +2.34%.
b. small cap folio of 49 stocks: +1.16% today, +16.24% since 2013/03/05 vs. iwm benchmark +5.96%.
c. nano cap folio of 18 stocks:-2.32% today, +16.68% since 2013/03/15 vs. iwm benchmark +4.26%.
d. small cap B folio of 49 stocks: +0.90% today, +9.28% since 2013/03/10 vs. iwm benchmark +3.31%.
e. large cap B folio:+1.30% today, +8.68% since 2013/03/29 vs. spy benchmark +4.30%.
$DEXO, from forbes.com:
What’s The Story With Dex Media And Why Is It So Darn Cheap?
“The following is a guest post by George Schultze, founder of Schultze Asset Management LLC, an alternative investment firm founded in 1998 that manages $231 million in assets and specializes in distressed securities. Mr. Schultze is author of The Art of Vulture Investing: Adventures in Distressed Securities Management (Wiley Finance, 2012).
Dex Media is an advertising company formed when the two main firms in the domestic yellow pages industry, SuperMedia (SPMD) and Dex One (DEXO), merged. Although just recently listed under ticker symbol DXM, the company has a rich operating history – to wit, SPMD had been in business for over 125 years prior to the merger while DEXO is no spring chicken either (it was founded in 1841). Dex Media a fantastic example of an extremely cheap value oriented stock with substantial upside potential.
Most people know that yellow page print advertising is a very mature business in light of today’s internet information flow available in nearly ubiquitous form. Nevertheless, both of Dex Media’s operating companies had successfully started to transition their businesses – from traditional print-based yellow page advertising over to higher margin online and digital offerings. In fact, even before their merger, each of these companies already considered themselves “premier partners” with Google GOOG +1% on account of the huge amount of daily usage traffic they drove to that company’s website. Going forward, their combination brings additional internet traffic synergies as well as important local business content to Google.
Pro forma for the merger, the combined company generated $460 MM in nicely growing digital revenues, out of $2.6 BN in total, during 2012. Although the remaining print business is in a steady state of decline, the combined businesses generated good cash flow with attractive EBITDA margins of over 41% in the quarter ended March 31, 2013. Additionally, this business requires very little capital investment – for the quarter just ended, the combined companies only spent $5.6 MM in capital expenditures. This compared with over $239 MM in cash flow as measured by adjusted EBITDA.
As we’ve witnessed in other industries experiencing secular change (such as the newspaper industry and the plain old wire line phone industry), the primary challenge for DXM’s management is to continue transitioning the business as quickly as possible, while maintaining a sharp focus on reducing legacy operating costs. Of course, managing change in an industry like this is never easy. Even so, the merger of these two firms through joint bankruptcy proceedings gives the combined entity a major head start towards achieving these goals.
Interestingly, the combination was also designed to preserve approximately $1.8 billion in net operating loss carryforwards (“NOLs) and other tax assets previously owned by DEXO. As a result, the combined entity will see substantially-reduced corporate taxes going forward on account of these assets. In fact, the tax asset owned by DEXO prior to the merger also helped justify the uneven 60%/40% equity split (instead of an even 50%/50% deal).
Today, management projects that the new company (DXM) will achieve $150-175 MM in synergies by eliminating excess overhead, IT, sales, and digital/print costs. In addition, it expects to benefit from a larger scale (through increased purchasing power/ad presence), increased offerings, tax benefits, and better cash flow/deleveraging opportunities going forward…”
the small cap folio from 2013/03/058:
friday, AFTER MARKET UPDATE, 2013/05/10
A. SHORT TERM INDICATORS/SYSTEMS:
1. elliott PSTT: BUY, unchanged – still on BUY signal upon thursday’s, 2013/04/25, close at 1580 or better. the PSTT is the most heavily weighted indicator for signaling a change in weekly to monthly wave counts and trend changes.
2. qqq indicator: +7, down 1. BUY signal since tuesday, 4/23.prior short was as of wed., 2013/04/17. on a scale of -10 to +10 , need a 0 to sell ………and -6 to short. +6 is a buy and remains a buy until 0 is triggered; 0 is neutral. heavily weighs momentum in unison with smart buyer activity.
a -6 remains a short until a neutral 0 is triggered).
3. smart money indicator: +3 , down 1, remains neutral as of 2013/04/17. flipped to a BUY signal on wed., 2013/04/09. a -8, once triggered is usually a sell and remains so until a +7 is triggered.
4. May monthly 2faced longs: +0.72% today,+ 1.59% since 2013/05/01 vs. +2.34% for spy long benchmark.
system holds for an entire month.
5. May monthly 2faced shorts: -0.78% loss today, +0.90% since 2013/05/01 vs. spy short benchmark -2.34%.
6. weekly 2faced longs: +0.76% today, +3.06% since 2013/05/06 vs. spy long benchmark +1.26%.
system holds longs for a full week.
7. weekly 2faced shorts: +0% profit today, -1.87% loss since 2013/05/06 vs. spy short benchmark -2.04%.
i also use the weekly 2faced stocks as day trading candidates.
8. large cap folio of 49 stocks: +0.51% today, +10.38% since 2013/03/05 vs. spy benchmark +2.34%.
9. small cap folio of 49 stocks: +1.16% today, +16.24% since 2013/03/05 vs. iwm benchmark +5.96%.
10. nano cap folio of 18 stocks:-2.32% today, +16.68% since 2013/03/15 vs. iwm benchmark +4.26%.
11. small cap B folio of 49 stocks: +0.90% today, +9.28% since 2013/03/10 vs. iwm benchmark +3.31%.
12. large cap B folio:+1.30% today, +8.68% since 2013/03/29 vs. spy benchmark +4.30%.
today’s benchmarks: $SPY +0.33%, $IWM +0.76%, $TNA +2.58%, $AAPL -0.83%.
B. LONG TERM INDICATORS:
heaven/hell crash indicator: is at +8 as of fri.,2013/05/10,a solid BUY; unchanged since last friday’s +8. next update will be on 2013/05/17. a rare -10 signals a 2008 type of crash. currently there are no signs of an upcoming crash. an extremely bullish +10 is very positive for the next several days to weeks for the stock market.
this indicator is more valuable as a crash indicator; i make sure i am heavily short at a -10.
all other long term indicators remain on a BUY.
medium term “PSTT” remains on a BUY.
unchanged from thursday: 95% invested: 10.0% short, 85% long into close. multiple stock folios will remain fully invested with tza or short tna as a hedge if necessary.
see blog for today’s trade details.
D. MISCELLANEOUS COMMENTS:
i am still waiting for a good set up for adding more of $XIDE and $SNFCA. there were many good performers today in the various long folios. i will likely stop trading the weekly 2faced shorts but continue posting the selected stocks.
conservative profit goal for the weekly 2faced folio of longs and shorts will be 1% per week after commissions, that would be about a 67% return compounded over 52 weeks at a minimum it continues working for me, i remain cautious as the 2faced neutral strategy systems are still in testing phase.
the heavily weighed short term “PSTT” is now on a buy signal having closed above spx 1580.on 4/25.
E. new trading system – the sparrow: ( to be updated next week).
the following stocks are to be purchased or sold short in the new sparrow folio, a 1% allocation of each: no changes from friday.
SYMBOL BUY STOP/SHORT STOP, SELL AND REVERSE STOP
1. CZR Caesars Entertainment Corporation long from 13.99 after, stopped out of 13.72 short.
2. AMRI Albany Molecular Research Inc. long@ 10.51.
3. NFLX Netflix, Inc. . no signal.
4. ANGI Angie’s List, Inc. long form @20.37. stop and reverse is 19.41
5. PBYI Puma Biotechnology, Inc. short from 30.66.
6. FRGI Fiesta Restaurant Group, Inc. long from 27.80.
7. SNTS Santarus, Inc. now long from 16.54. stop and reverse raised to 16.89, take profits @20.71 on 1/2 (taken on tuesday 5/6).
8. PRO PROS Holdings, Inc. long from 27.30.
9. MGAM Multimedia Games Inc. long from 21.41, taking half profits at friday open and raising stop to 21.41.
10. AAPL Apple Inc. long from 444.00. stop raised to 444.00.
the stop and reverse for shorting same stock for easy following is 20% below entry. the stops and reverse will usually be raised within one day of entry on longs and lowered on shorts. i sell 1/2 of position upon a 20% profit or so and at that point adjust stop to break even on remaining half position. 80% of time we will be taking profits before reverse stop is hit.
i trade the sparrow system differently by adjusting sell stops throughout the day but the method using the 20% stop is the easiest way to follow.
this system also shorts the same stocks at overbought levels.
average trade lasts two to three weeks and compounds profits.
this system is always in the market, either long or short. that is why a protective stop is referred as the “stop and reverse”. protective stops and reverse stops are the same, once i am stopped out of a long position i also open a short position at the stop price. all stocks are optionable and shortable.
see the “ABOUT” section of the blog for more detailed descriptions of the use of all the above indicators and different trading portfolios.
follow the comments section of blog for regular indicator and trade updates usually prepared on a regular basis usually prior to opening bell.
summary:1700 spx is next target with a possible pullback to 1600 first.