Testicular Fortitude

[brewer12345]

MOVI has done nothing but plunge for weeks. It is painful to watch, but I don't think there is really anything wrong with the business. I jumped in for some more shares today, since I think that the business is absurdly cheap. The short interestt is now 1/3 or more of the float, so the slightest bit of good news is likely to set off a bit of a panic. I wouldn't suggest that anyone put more than play money into the stock, even though I am in for a good bit of folding money.

It is mentally and emotionally difficult to step into the breach when investing, but it usually yields the highest returns.

 

[retire@40]

I just dabble in individual stocks, but I don't see anything I like about MOVI.

I just bought some Apollo Investment Corp. (AINV) the other day at 19 and change. That stock has potential and it pays a nice dividend.

Maybe we should start an ER stock watch thread.

 

[REWahoo]

Just curious about the name of this thread. For the females dabbling in individual stocks, should the title be "ovarian fortitude'? 8)

 

[azanon]

Mail order DVD is in (think netflix). Everything else is out.

I hate to see you continue to lose. I've tried to tell you this once to no avail.

Azanon

 

[brewer12345]

I just dabble in individual stocks, but I don't see anything I like about MOVI.

I just bought some Apollo Investment Corp. (AINV) the other day at 19 and change.  That stock has potential and it pays a nice dividend.

Maybe we should start an ER stock watch thread.

Difference of opinion is what makes a market.  Companies with good management in a hated/out of fashion industry and a business that is basically OK are usually a good buy.  Having said that, I would not touch BBI with a stick.

 

[brewer12345]

Mail order DVD is in (think netflix).  Everything else is out. 

I hate to see you continue to lose.   I've tried to tell you this once to no avail.

Azanon

NFLX is and will always remain a niche player. They cannot offer the instant gratification that a drive-up movie rental place can. Simple as that.

As for telling me, let's just say that I have made an awful lot of money by ignoring what the man on the street says/thinks.

 

[wildcat]

Hanging low after my small HNR purchase a few months back. I don't see too many deals. Waiting for the Pitney Bowe's spin-off. Guy mentioned Eagle in Barron's this past week.

 

[Danny]

MOVI has done nothing but plunge for weeks. It is painful to watch, but I don't think there is really anything wrong with the business. I jumped in for some more shares today, since I think that the business is absurdly cheap. It is mentally and emotionally difficult to step into the breach when investing, but it usually yields the highest returns.

Brewman - Be careful don't put too many eggs in this one. Lily is worried about you putting to much into MOVI
S&P cuts Movie Gallery ratings
4:16p EDT September 12, 2005 (Reuters)
Sept 12 - Standard & Poor's Ratings Services lowered its ratings on Movie Gallery Inc. , including its corporate credit rating to 'B' from 'B+'. The outlook is negative.
"The downgrade reflects our growing concern that the company's operating results will continue to be pressured by poor performance of movies at the box office," said Standard & Poor's credit analyst Diane Shand. Movie attendance in the U.S. dropped 17% in the second quarter, and declines have persisted through the end of August. A movie's performance in the rental market is highly correlated with its performance at the theaters. Fundamentals in the rental industry have been weak since 2002 due to the elimination of the exclusive movie release rental time window as a result of the format change to DVD from VHS. Rental industry sales have declined about 2% annually for the past three years but have dropped at a high-single digit rate thus far in 2005 due to poor product. Additional factors may include increased video on demand of recently released films and a DVD market saturated with both feature films and TV series. Movie Gallery reported weak second quarter results. Given current industry trends, Standard & Poor's believes operating performance will be pressured over the next few quarters and credit protection measures will deteriorate.

 

[haha]

As for telling me, let's just say that I have made an awful lot of money by ignoring what the man on the street says/thinks.

No one should presume to tell you what to do. I won't.

Though I will say that the chart looks horrible, at a time when secondary stocks as a class are quite strong. Also, the short interest is troubling. While you are certainly correct that it can light a rocket once a stock moves up, it is also true that short sellers as a class are often well informed professionals.

Ha

 

[Sheryl]

I am feeling really good about KMG, which I bought in the mid 50's last fall. I sold 33 shares for 85 or so in their buy-back offer in May.

Now I wish I hadn't, as it's at 93 and I'm wondering if this is a false "Katrina" peak or if it's going to keep on going...

I'm also wondering if I should replace my 33 shares to get back to an even lot, or just ride it out.... It hurts to buy something for 93 that I could have had for 73 recently!

 

[Nords]

MOVI has done nothing but plunge for weeks. 

I hate being early to the party.

But just from the technical indicators it's grossly oversold and time to buy. We'll see how things look tomorrow... and next week... and next month... and next year...

 

[lazyday]

Hang in there, Brewer. Saw your earlier post on this, and it makes sense to me. If I weren't so lazy, and relatively uninterested in value stocks today, I might do a little due dilligance & put a little $ in myself.

I'm surprised people aren't more positive, as so many posters (in general) like value stocks. Find another dozen deeply depressed stocks that seem underpriced even considering their risk, and you've got a value fund without an expense ratio.

I don't pick stocks, but have been thinking about it a little... if there's parts of the market I want that indexes don't reach well, and I don't want to pay an E/R, I may need to do some stockpicking.

 

[uncledrz]

I am feeling really good about KMG, which I bought in the mid 50's last fall.  I sold 33 shares for 85 or so in their buy-back offer in May. 

Now I wish I hadn't, as it's at 93 and I'm wondering if this is a false "Katrina" peak or if it's going to keep on going...

I'm also wondering if I should replace my 33 shares to get back to an even lot, or just ride it out....  It hurts to buy something for 93 that I could have had for 73 recently!

Sheryl
I don't give advise on individual stocks because your plan and goals may be very different than mine, OTOH, a profit is a profit, a winner is a winner, and if you keep doing it enough, you'll come out on top on any plan.
Each time you buy and sell a stock is like taking a breath. Once you exhale (sell), its in the past, don't worry about it, and only be concerned with the next breath (stock or other purchase, etc.)

Uncledrz

 

[brewer12345]

Also, the short interest is troubling. While you are certainly correct that it can light a rocket once a stock moves up, it is also true that short sellers as a class are often well informed professionals.

Ha

Ha, I have a very mixed feeling about short interest. On one hand, I agree with you that short sellers are usually well-educated professionals and usually are smarter than the average bear. OTOH, I have seen shorts do some awfully stupid things. For example, I cannot fathom why anyone would willingly pile onto a stock where short interest is already a large percentage of the float, especially when the company is actively buying back stock or otherwise aiming cannons at the shorts. Check out PPD for example, which was and is a favorite short target. I also don't get why shorts wouldn't cover once the stock price has plunged. PLMD and NLS were heavily shorted, the stocks crashed and the short interest hung on or actually increased. Surprise, surprise, both stocks rebounded (PLMD hit another all time high a couple days ago), which must surely have blown out most or all of the shorts' profits.

So I do look carefully when I see a huge short interest, but I have seen shorts make big mistakes in the past and it has been pretty profitable. I think I see the same thing with MOVI. If I were short MOVI, I would think long and hard about taking my profits here before the rest of the shorts decided to cover.

 

[Spanky]

Since stock is of interest, how about GDT? JNJ is still interested in buying GDT for $76 per share and the stock is sitting at $70.

 

[Danny]

I'm not looking for homers in this market, all I ask for are singles and an extra base hit once in a while - I guarantee TGT will be a double...by 2010

Mail order DVD is in (think netflix). Everything else is out.

I just converted to Netflix...deep catalog and no trips to get and return at Blockbuster.

 

[Sheryl]

Sheryl
I don't give advise on individual stocks because your plan and goals may be very different than mine, OTOH, a profit is a profit, a winner is a winner, and if you keep doing it enough, you'll come out on top on any plan.
Each time you buy and sell a stock is like taking a breath.  Once you exhale (sell), its in the past, don't worry about it, and only be concerned with the next breath (stock or other purchase, etc.)

Uncledrz

Thanks Uncle - that is good advice. I have been very "lucky," or skilled or careful so far in my stock selections. Probably because I just don't have enough time on my hands to research so I only buy things I'm very comfortable with. MMM has been my big long term success so far.

 

[brewer12345]

Welll, after 24 hours of wondering if I threw good money after bad, it looks like "jumping into the breach" is going to pay off. MOVI released a PR that indicated a not-unreasonable same store sales guidance range and said that they will get $50 million in merger synergies by next year. With 32 million shares out, that is a lot of merger-related juice. Stock is up 4+% in the after hours market. Plus there are another 9+ million shares short...

 

[Danny]

Good for you Brew - you do have big intestinals or is it testiculars...
Is this a quickie or a longie?

 

[brewer12345]

Good for you Brew - you do have big intestinals or is it testiculars...
Is this a quickie or a longie?

Probably both. I'm trying hard to work on my sell discipline, plus there will likely be some attractive stuff available to buy in the next month or so. Thus, I would be happy to lose some of my shares at 20 or so, some at 25-27, and the rest north of 30.

 

[vinhmen]

MOVI released a PR that indicated a not-unreasonable same store sales guidance range and said that they will get $50 million in merger synergies by next year. 

When CEOs starts spouting off about "merger synergies," that's usually a sign to run for the exits.

 

[brewer12345]

When CEOs starts spouting off about "merger synergies," that's usually a sign to run for the exits.

Hmmmm, maybe before the deal is done, that's the case. After the deal is done? I think its a different story. The guy owns a quarter of the company, so no way does he want to upset the apple cart.

 

[JPatrick]

Welll, after 24 hours of wondering if I threw good money after bad, it looks like "jumping into the breach" is going to pay off.  MOVI released a PR that indicated a not-unreasonable same store sales guidance range and said that they will get $50 million in merger synergies by next year.  With 32 million shares out, that is a lot of merger-related juice.  Stock is up 4+% in the after hours market.  Plus there are another 9+ million shares short...

It is questionable that this sort of, good news can over come the negatives. My own thought is that the shorts may very well overcome the longs.  The encouraging afterhours trade looked up, but weak.
I'd be careful here, think Krispy Kreme.
I'm now monitoring for a blow off move down at which time I may do some options work as I did several years ago with this stock.
Good Luck

 

[TromboneAl]

Here are some thoughts on the problems with video rental stores:

First Problem: Online Delivery

At some point soon, someone will figure out how to make online delivery of videos work.  Technically it is feasible right now.  The only things to work out are the property rights issues and perhaps some logistical issues.

Once that happens, viewing a video just means going to a web site, choosing from every movie ever made, with instant access to reviews, etc., and clicking the download button.   You may have to wait a few hours -- that is you may have to choose your videos ahead of time.

Netflix and Blockbuster are working on implementing this.

When this happens, brick and mortar rental stores will become obsolete overnight.  I predict that in five years, there will be no video rental outlets.

Second problem: TIVO.

Since we got our TIVO-like digital video recorder (Panasonic, no monthly fee), we haven't rented any videos.  We used to rent plenty.  Instead, every week or so I bring up the display of upcoming movies and click on each one I want to record.  I only have basic cable, and still record 4 movies per week.  I just went and checked: we currently have 8 movies stacked up to watch when we get a chance.  

There will always be houses without Internet or cable or TIVOs, but probably not enough to support video rental stores.

 

[vinhmen]

Hmmmm, maybe before the deal is done, that's the case.  After the deal is done?  I think its a different story.  The guy owns a quarter of the company, so no way does he want to upset the apple cart.

I was being glib, but my point is beware company PRs that herald synergy or some other nebulous concept over hard numbers and facts.  If growth, income or market share prospects were favorable you bet they'd let us know.  Remember all the 'synergy' trumpeted for AOL/Time Warner ...