Month: February 2016

SW, Sierra Wireless, update

Hamilton

SW feb 6 2016

This one we got wrong. It looked as if a 5 wave sequence was complete back in Nov. at around $19. In retrospect the action from that point on has the looks of a triangle. Given its size it does not fit well with the notion that it is a 4th wave in the 5th. More likely it is a 4th of the entire move. It has already travelled far enough but could continue to the trend line at around $14. By that time it will have lost 76%. If this is going to be a much larger A-B-C than that is already more than enough and the thing should bounce.

Alternatively, if the count is completely wrong, then we are probably looking at a double zig-zag correction which should in any case be complete not far from here.

The fundamentals were mixed with a larger top line but also a larger loss, but not one of large proportions. Stocks normally do not fly straight into the ground at this speed and normally there is a good bounce before the crash, if that is going to happen. It is now more of a buy then it was a few weeks ago.

MG, Magna update

Hamilton

The usual then , 12th May 2015, and now charts;

mg may 12 2015 smg feb 6 2016

Roughly a year ago we were toying with the idea that we were looking at a series of 4-5 at the top, indicating that the end was, at the very least, near. We advised that one should bail.

In retrospect we suspect, but still are not sure, that this may be a diagonal, almost always a 5th wave and therefore near the end. The difference is not entirely academic as the diagonal or wedge has a clear minimum target of $40 and we are not even there yet.

In any event, if you live in the Newmarket/Aurora area and are talking to your neighbour, you can tell him that you sold the stock at $68 following this blog and have saved 1/3 of your money since then. If he asks you if the blog is expensive, just tell him it is for free, at least for now.

Magna has had declining oil and a rising US$ going for it. It has more cash than debt and its payout ratio is below 20%. There is nothing not to like, even the HQ in Aurora look more like a replica of Versailles than your typical auto company factory box. But it is in a cyclical business. Ultimately we do expect it to go below $40, perhaps as far as $20.

And then there is that sure kiss of death;

A number of brokerages have recently commented on MG. TD Securities upgraded Magna International from a “hold” rating to a “buy” rating and dropped their target price for the stock from C$59.00 to C$57.00 in a report on Friday, November 6th. RBC Capital lifted their target price on Magna International from C$88.00 to C$91.00 and gave the stock an “outperform” rating in a report on Friday, January 15th.

Did they forget the silly mantra of the industry, “you cannot time the market”?

News from the windy city.

Hamilton

Chicago Stock Exchange Says It’s Being Sold to Chinese-Led Group

 

After having lived in Chicago for a number of years, and working in the financial sector, I had no idea that Chicago even had a stock exchange. Apparently it has existed for quite some time , since 1882, and does about 5% of all trades in the US. No doubt the new owners have a lot of expertise to bring to the table.

LNKD update

Hamilton

Then, July 31, 2015, and now charts as usual;

LNKD july 31 2015lnkd feb 5 2016

Today you can tell your neighbour that you saved yourself $67 or 35% in just one day even before the opening. If he asks how tell him you read and follow this blog. If he then asks if it is expensive, tell him it is free, at least for now.

By the way; from the G&M

Of the 44 analysts surveyed by Reuters Estimates that cover LinkedIn Corp, the consensus rating is a buy. The rating changed on January 11, 2016 when it was upgraded from a hold.

Some things never change. At the time the stock was already down $80 or so from the peak of $276, had no earnings, a beta of 1.66 and so on. Break the line and there is only hot air.

The count works better as a large A-B-C, in fact the count shown has to be wrong if the top is where we think it is, in Feb. of 2015.