Rob's Lobs

[Rob]

IMCL Held Up Better Than I Expected

ImClone (IMCL) held up today better than I expected it to, which tells me these prices are already rock-bottom. I will continue to hold my unhedged long position. Looking forward to good pipeline news in the 4th quarter. Ladies and gentlemen, ImClone is cheap, even without a pipeline.

[New-born baby]

ImClone (IMCL) held up today better than I expected it to, which tells me these prices are already rock-bottom. I will continue to hold my unhedged long position. Looking forward to good pipeline news in the 4th quarter. Ladies and gentlemen, ImClone is cheap, even without a pipeline.

IMCL held up very, very nicely today. I think that perhaps we saw the bottom at $27.80. If you bought some LEAPs, you probably will do well. I left it alone. In any case, IMCL has put in a triple bottom and things are looking up as long as $27.80 holds.

[spikefader]

Hi guys. IMCL is an interesting chart. My humble take is that it's vulnerable to fall to 10.00 support. I'll hold this short bias while ever it's below 35.47.

[Rob]

Xyratex (XRTX)

Friends, Romans, Countrymen,

Xyratex (XRTX) reports earnings after the bell today. It's a very risky play, because this thing's liable to move BIG time one way or the other. If it blasts off to the upside, it wouldn't surprise me to see it move up as much as 20-30% by around 10:00 tomorrow. The price in recent months has been under severe selling pressure and may well be far below its true value. The consensus is that they will report $0.51 earnings. I'm interested to see what transpires. I'm thinking of playing a strangle but haven't decided yet.

I'm firmly of the belief that digital storage is going to be a hot industry for the next year or more, and Xyratex looks like a good play in that space.

[Rob]

XTRX Strangle

OK I've never played an options strangle before, so in this instance I'm just experimenting with it.

I only bought one contract of each. One Oct $20 call (TQRJD) @ 0.85 and one Oct $17.50 put (TQRVW) @ 1.00 on XRTX.

If it works out I'll do a little more experimentation before I start risking more serious bucks.

[Rob]

XRTX -- A Little Background Info In the Form of a Late News Story

Xyratex expands data storage operations in Asia

Posted : 13 Sep 2006
Xyratex, a spinoff in 1994 from IBM's data storage and manufacturing operations, has acquired Jastam Trading Co. Ltd of Tokyo, Japan, for about $1.5 million. Xyratex is a developer of enterprise and data storage process technology.


The new company, to be called Xyratex Japan Ltd, is expected to provide about $1.5 million in revenues per quarter. This new subsidiary supports Xyratex's strategy to expand its storage infrastructure and storage and network systems into the Asia-Pacific market, said Xyratex. Former Jastam president and founder, Tamio Mori, will serve as general manager for Xyratex Japan Ltd.

Xyratex says the Japanese market is a driving force in the storage infrastructure industry, producing about 30 percent of global hard disk drive units, 50 percent of media units, 57 percent of substrate units and 55 percent of head units.

The aim is to combine Xyratex's expertise in high-volume disk drive test, servo writing and automated media cleaning, test and handling technologies with Jastam's experience as a regionally-based trading company in the region.

The new company will also provide sales and support for Xyratex's range of storage and network systems, including the RAID subsystems.

Satoru Doi, director of sales and marketing, will lead Xyratex's Storage and Network Systems division in Japan, building on the strong presence Xyratex has developed in the region. Current customers include NEC Corp., MIC Associates Inc. and Thymos TechnoLogic Corp.
- John Walko
EE Times Europe

[Rob]

XRTX and Fibonacci #'s

Chart

XTRX

The range between $12.50 and $33.63 is $21.13 or 169.04%.

23.6% retracement: $28.64
38.2% retracement: $25.56
50.0% retracement: $23.07
61.8% retracement: $20.57
76.2% retracement: $17.53

XTRX

The range between $33.63 and $17.56 is ($16.07) or -47.78%.

23.6% retracement: $21.35
38.2% retracement: $23.70
50.0% retracement: $25.60
61.8% retracement: $27.49
76.2% retracement: $29.81

On the first retracement, note how close it came to the 76.2% number—within 3 cents.

If that turns out to be the bottom, then according to Fibonacci theory, the numbers in the 2nd group should be the near-term resistance levels.

These numbers were generated using Rob's Handy Fibonacci Tool.

[Rob]

XRTX Update

Xyratex (XRTX) reports earnings after the bell today. It's a very risky play, because this thing's liable to move BIG time one way or the other. If it blasts off to the upside, it wouldn't surprise me to see it move up as much as 20-30% by around 10:00 tomorrow. The price in recent months has been under severe selling pressure and may well be far below its true value. The consensus is that they will report $0.51 earnings.

They blew the earnings estimate out of the water, reporting $0.60 (GAAP). Unfortunately it looks as though some traders were looking for a lot more than that. As a result no "blast off" occurred in either direction, but it is moving nicely to the upside this morning, just more slowly than I had hoped. At this point it looks like I may hang onto those Oct. 17.50 puts, and they may expire worthless. If the stock acts as I suspect it will, I should be able to turn a net profit on those Oct. 20.00 calls.

[peanuts]

Ebay

Rob, I found the following chart commentary back at the end of July, but I didn't want to post it right away. This is from a regular at stockcharts, a Dr. Joe, that seems to be pretty good at technical analysis. Anyway, I figured that I should maybe post this now as EBAY looks to be at a pivotal price point. What do you think about this guy's comments?

[Rob]

What do you think about this guy's comments?

It's obvious EBAY found fundamental support where this guy showed no technical support existed. At the time of that chart EBAY was already way oversold and a great buy for anyone who doesn't have time to babysit their portfolio during every minute the market is open. As it turns out, someone could have made a couple bucks shorting it, provided they covered near the bottom, but who can call bottoms with any regularity? Right now EBAY appears to be finding support at the simple 50-day, and I expect it to eventually head north to the low-to-mid 40s, barring any major, negative news events.

[New-born baby]

Calling all the FA experts . . . Calling all the FA experts . . .

Rob, and all the FA experts who dwell in HUGEland:

What saith ya'll about AOB?

And COGO?

And Jiesen, you .ob expert you, any comments about CXTI.OB?

I'd like to know . . . I've got an inquiring mind . . . .

[billyjoe]

Newborn,
I say AOB is an IBD stiff and a turkey. IBD has been touting it in "best under $10 stocks" for nearly nine months now and it continues to stink up the joint. Do you really trust those herb sales figures from China ?

COGO is a different story. With a strong record of growth and earnings increases and a recent upwards revision of guidance , it appreciated from about 5.50 to 16.70 in a one year period , then went down to 10.00 and has made a nice 40+ % rebound since early July. I would have done well to buy this when it was on my under $10 list in January.

------------billyjoe

[jiesen]

...

And Jiesen, you .ob expert you, any comments about CXTI.OB?

I'd like to know . . . I've got an inquiring mind . . . .

Well, as anything with "china" and "tech" in the name, I'd be at least a bit cautious about this one. The income and balance sheet #'s look pretty good, though. Now what is it these guys do?

from:

http://biz.yahoo.com/e/060814/cxti.ob10-q.html

"The Company enters into long-term fixed-price contracts to provide system integration services, namely to design and develop customer specific information technology systems. Revenue is recognized under the percentage-of-completion method in accordance with the American Institute of Certified Public Accountants Statement of Position 81-1 "Accounting for Performance of Construction-Type and Certain Production-Type Contracts"."

interesting...

[Rob]

Aob & Cogo

What saith ya'll about AOB? And COGO?

American Oriental Bioengineering (AOB):

Without having done much reading on the company, a cursory look at their revenue growth makes the 15.51 P/E look like a good value. The $340 million market cap tends to suggest a higher degree of risk, which probably is why the P/E is what it is. It definitely invites further due diligence.

Comtech Group (COGO):

At 14.49, Comtech has a much higher P/E at 36.23. It's got a little more earnings history than AOB, but both are fairly young. Again, I've done virtually no study at all on the company or their products, but the revenue growth thus far looks very healthy and quite steady. As long as that pattern holds, a higher P/E may be justifiable. Comtech's market cap is also relatively small, at $469 million.

[New-born baby]

Thanks to all you FA posters/question

Rob, Jiesen, BillyJoe:

Thanks for the help!

These companies are paying an American company $12,000 per month to promote their stock.

QUESTION: would you buy either stock in a "buy and hold" portfolio?