HMY has taken a bit of a beating as of late, most recently from a George Kesarios in his article, Mining Stocks to Avoid over on Seeking Alpha. It’s not usually a good thing when your holdings get mentioned over there. At least not when my holdings get mentioned over there since they do typically upset the apple (or gold, or battery) cart when they start writing. I can’t say that I can take issue with George’s assessment. Heck, look at the long term chart and you will see a decline in price over the past several years. But what I still see fundamentally is a company showing positive earnings per share and real cash in the form of dividends (I’m not a huge dividend investor, but it’s nice to be “paid to wait”) It has a price to earnings ratio of 10 and that usually tells me that it’s not overpriced – I try to stick with a P/E below 20.
Kesarios states that he believes that Harmony Gold, along with others, failed to cash in on the huge run up in gold pricing (and look at their long term chart – he’s kinda right) and gold is going to completely collapse soon. Whether the gold hoarders or doomsday preppers are done collecting all the gold they ever want is hard to say. Look around. There are so many places here that are buying gold that we could be at the top of the bubble – Warren Buffet says be fearful when others are greedy – or we could be at the start of another run.
I’m holding 300 shares of HMY. I’m expecting the price to go to $7.20 as I posted before, but if it doesn’t happen within the next two to three months it will be time to start looking at selling the calls. Enough calls over enough time recoups the investment and produces a little bit of cash flow, but it also means I’m holding these for a year. I don’t see a total melt down of this stock like happened with ABAT, but one can clearly see an article on Seeking Alpha gets read by a lot of people and prices are definitely affected when they beat it with their keyboards.
I have HMY in my account. Yes I will be holding it until I get the $7.20 price, decide that I can’t wait any more and adjust my price, or collect call premiums for the next year or so. Don’t copy me, you could do just as poorly. This is what I’m doing in my own account. This is for entertainment and educational purposes only. Do your own research and due diligence.
Comments Off on All That Glitters
ABAT filed form 8-K, basically a supplemental or informational filing stating that NASDAQ is taking steps to delist ABAT.
The main reasons stated are:
- Listing Rule 5250(a). The notice states that the Company failed to provide information requested by NASDAQ, specifically cash confirmations from the banks holding the Company’s funds prepared in the presence of personnel employed by the Company’s independent audit firm.
- Listing Rule 5250(c)(1). The notice states that the Company failed to file its Quarterly Report on Form 10-Q for the period ended September 30, 2011.
ABAT does appear to have filed a notice that its September 30, 2011 10-Q would be late. And they have filed a number of late 10-Qs without apparent repercussion.
So what’s different this time? According the this recent letter to shareholders it is the short sellers, the lawyers and a complicit NASDAQ (for believing the articles on Seeking Alpha). The stress of asking for cash balances at the banks has caused top level defections, according to the Chairman, of the CFO and the Controller. Is Chinese culture so different from ours that the Chairman’s claims have merit? Could be. It could also be that there is no cash to verify – which would be bad for all shareholders. ABAT had to meet all the NASDAQ requirements for initial listing on the exchange. NASDAQ had the duty to verify the submitted information and listed ABAT on the exchange. Now the deadline of November 30 looms large.
Disclaimer: I’m holding my shares as I currently have no alternative. I’m not recommending this or any other stock – this is merely a peak into my own behavior.
This reinforces my personal rule that not all my account be tied up in a single stock.
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ABAT has responded to the Variant Research posting that appeared on Seeking Alpha. In the point by point rebuttal, ABAT takes on each allegation made by the short sellers. It also appears that three law firms have filed class action suits against ABAT, although from the initial filings none appears to have acquired their “lead plaintiff”.
For its part, Seeking Alpha has posted a new damning story questioning a $20 million acquisition.
ABAT is up around 14% this morning.
Disclaimer: I still hold shares in ABAT. I have not purchased or sold shares since this story began to unfold, primarily due to having all cash previously allocated. I am still interested in “averaging down” my basis if the opportunity arises. I’m not recommending or selling any stocks.
Comments Off on ABAT Charged Up
I bought 500 shares of ABAT on 3/28. This morning the stock fell off the cliff. This is another Chinese company that is getting hammered on Seeking Alpha. I don’t know if the analysis is right or wrong. I do know that it’s hit my shares for over a 20% loss this morning. I have done OK with ABAT since I started trading it in 2009. I don’t have any problem holding this stock long term through a temporary bashing. Not sure how long this slam might last or if it will Enron on me. So far my inclination is to hold – even through the roller coaster – average my price down like I wrote about with INTC last year if it gets low enough and still looks like a decent stock (to me) and come out on the other end, a little older, a little wiser, and preferably a little wealthier.
Disclaimer: I do own shares of ABAT. I’m not suggesting that you transact in any way with ABAT – that’s on you if you do.
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DEER fires a legal salvo at “Alfred Little” the Seeking Alpha blogger that DEER claims is illegally manipulating DEER’s price in order to profit from the subsequent price drop.
Disclaimer: I did not buy, sell or short DEER, I’m just a sideline observer.
Comments Off on The DEER Shoots Back
I run a simplistic stock screener in my TDAmeritrade account to look for stocks that I might be interested in buying – usually with the goal of selling at a higher price in a short to medium term time frame1. Recently, DEER popped up on my screener as falling within the price and value criteria. Looking at the chart, the price fell straight off a cliff within the past few days. DEER is a small appliances company in China, where the market for small appliances is potentially huge. This is the beginnings of an interesting dance between what might be termed investigative investors and a publicly traded company.
The first volley appears to have been fired by “Alfred Little” over at Seeking Alpha. He alleges that that Deer overpaid for land use contracts and that his attempts to confirm the contracts actually exists were in vain. He believes that massive fraud may be taking place at Deer and it’s time to bet on the downside. For its part, Deer alleges that Alfred Little is engaging in internet rumor mongering in an illegal attempt to drive the price down and take advantage the the huge price drop in a massive short collusion. In management’s defense, they have made significant purchases recently (and at $11.00 per share)
Bloggers seem to be today’s version of Geraldo Rivera sneaking into a mental health facility or, dare I say it, deep throat. A tiny kernel of truth sometimes exists. A blogger, an investigative investor, may stumble upon something that makes sense to them – heck read some of my posts, you’ll see I’m sure about what I believe whether it’s right or wrong. The tug-of-war that was started just days ago by Alfred Little may just end up being one blogger’s attempt to make a fast buck using the internet rumor machine or he could be cracking open the next Enron. Unlike Enron, though, there is insider buying, so I remain neutral on the whole affair.
It will be interesting to sit here, on my hands buying my own adjudged good buys, and see how this plays out.
- My dominant, but not only, trading style is to buy channel trading stocks
Disclaimer: I am not suggesting you buy, short, sell, run options on or otherwise transact in any way in DEER. If you do, it’s your own money on the line.
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Three attorney firms have announced they are “investigating” claims brought to light on SeekingAlpha: Rosen, Kahn Swick & Foti, LLC and Bernstein Liebhard LLP
These guys are the ones who might recover any losses from shareholders through a class action suit. This is way faster than anything on the DEER front. Makes one wonder if there is something to the claims after all.
I don’t know the writer of the story, but I just rode a mini flash crash today. 40% is a pretty hefty hit, maybe too much to be realistic yet. It will be interesting to watch – and maybe just a bit painful. If you had been watching this stock today you could have grabbed it below $2.00 per share and rode it up to $2.15 for a tidy profit. If you had shorted at the opening bell, you would have even more. SeekingAlpha is definitely influential, and at least for today (even if it is a self-fulfilling prophecy) they were right to be short.
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