EXPEZ & PRZ
We just went through 2 weeks of hell.
During this two weeks, NASDAQ lost all of its 2006 gains and now we are in the red. But, just like the nature, after a storm there is a sun shine. And I saw the sun come up yesterday.
If you look carefully, this down turn has created many bargains among stocks. Some stocks were killed with no mercy (we want to pick these up). Capitalism (free market) is vicious. It is very efficient to praise winners and kill the loosers. The problem is that sometimes (actually many times) the market over reacts (over adjusting) and this creates opportunities. As I have told you last few days, let's go shopping!
I have bought two securities today (notice I did not say stocks).
They are EXPEZ and PRZ - and this is why:
EXPEZ: is a warrant that entitles you to buy Expedia (EXPE) stock for $11.56/sh until Feb 4th 2009. Expedia is now at $14 and EXPEZ is at $4.5. If Expedia goes to $21 (+50%) then the warrant EXPEZ will probably trade at $10 (+120%). So, is Expedia a bargain now? I think so. Will the stock EXPE go up to $21 from current $14 within a year? Yes and Yes. Can EXPE go down further before it goes up? Yes, it is very possible. So, basically you are telling me that if the stock goes up 50% then my warrant will go up 120%? Coorrrrect!
PRZ: PainCare Holdings, Inc., through its subsidiaries, provides pain relief solutions in North America. In addition, the company owns and operates nine ambulatory surgery centers. PainCare Holdings was founded in 1984 and is based in Orlando, Florida. Now, this is a bargain as well. However, PRZ still has to produce 2005 year-end financial and the 1st quarter 2006 numbers too. This is the reason why the stock is down so much. The unknown. What will the numbers say? Are they hiding anything? Obviously, this is not for the conservative guys. I just think that it has a good risk/reward ratio at this point. By the way, the CEO recently said that they are expecting about $85 million in revenue and about $0.21 per share in earnings. Since I paid $1.44/sh, I am paying this growing company at less than 7 times 2006 earnings and less than 1 times revenue. Pretty good value I'd say. If it goes lower (assuming no fraud), I will add more. This is another double in 12 months. You watch.
The reason I did not go into more details in Expedia (EXPE) is that you all know about the company. I also assume that you all know how to look it up in Yahoo.Finance.com to confirm what I have said. I think the above two items are good values.
Please realize: the better the value of a stock, the worse the stock looks and feels. If it looked good and promising, it would not be selling at the price you are looking at. Just remember that.
P.S: June is an important month for us. There will be many news regarding our stocks. RICK will probably announce good monthly numbers / BTYH will have some news regarding the spinoff of its ambulance division / IDWD will be delivering the special dividend to us / PRZ will come up with the necessary financials / MATK will announce a new business deal ( I hope).
During this two weeks, NASDAQ lost all of its 2006 gains and now we are in the red. But, just like the nature, after a storm there is a sun shine. And I saw the sun come up yesterday.
If you look carefully, this down turn has created many bargains among stocks. Some stocks were killed with no mercy (we want to pick these up). Capitalism (free market) is vicious. It is very efficient to praise winners and kill the loosers. The problem is that sometimes (actually many times) the market over reacts (over adjusting) and this creates opportunities. As I have told you last few days, let's go shopping!
I have bought two securities today (notice I did not say stocks).
They are EXPEZ and PRZ - and this is why:
EXPEZ: is a warrant that entitles you to buy Expedia (EXPE) stock for $11.56/sh until Feb 4th 2009. Expedia is now at $14 and EXPEZ is at $4.5. If Expedia goes to $21 (+50%) then the warrant EXPEZ will probably trade at $10 (+120%). So, is Expedia a bargain now? I think so. Will the stock EXPE go up to $21 from current $14 within a year? Yes and Yes. Can EXPE go down further before it goes up? Yes, it is very possible. So, basically you are telling me that if the stock goes up 50% then my warrant will go up 120%? Coorrrrect!
PRZ: PainCare Holdings, Inc., through its subsidiaries, provides pain relief solutions in North America. In addition, the company owns and operates nine ambulatory surgery centers. PainCare Holdings was founded in 1984 and is based in Orlando, Florida. Now, this is a bargain as well. However, PRZ still has to produce 2005 year-end financial and the 1st quarter 2006 numbers too. This is the reason why the stock is down so much. The unknown. What will the numbers say? Are they hiding anything? Obviously, this is not for the conservative guys. I just think that it has a good risk/reward ratio at this point. By the way, the CEO recently said that they are expecting about $85 million in revenue and about $0.21 per share in earnings. Since I paid $1.44/sh, I am paying this growing company at less than 7 times 2006 earnings and less than 1 times revenue. Pretty good value I'd say. If it goes lower (assuming no fraud), I will add more. This is another double in 12 months. You watch.
The reason I did not go into more details in Expedia (EXPE) is that you all know about the company. I also assume that you all know how to look it up in Yahoo.Finance.com to confirm what I have said. I think the above two items are good values.
Please realize: the better the value of a stock, the worse the stock looks and feels. If it looked good and promising, it would not be selling at the price you are looking at. Just remember that.
P.S: June is an important month for us. There will be many news regarding our stocks. RICK will probably announce good monthly numbers / BTYH will have some news regarding the spinoff of its ambulance division / IDWD will be delivering the special dividend to us / PRZ will come up with the necessary financials / MATK will announce a new business deal ( I hope).
posted by Jaewoo | 11:45 PM
2 Comments:
Jaewoo:
I got to check out EXPE in details. It is priced attractively.
My concern: its business is not as competitive as Orbitz and Priceline. I shop travel product online often, but never uses Expedia.
we are on the road, in cleveland tonight. Like this city, quiet and grand.
Siyu
if you ever visit Cleveland, recommend this hotel, a perfect combination of contemporary room and historic architect.
http://cleveland.hyatt.com/hyatt/hotels/index.jsp
Siyu:
Agree. I have never bought a ticket from Expedia. But there are many who obviously do tons of business with EXPE. The warrant EXPEZ is a no brainer at this price or lower. Buy if you have $ and about 1 year time horizon.
Wishing you a safe trip!
All the best:
Thanks for the kind words. I will definately visit you.
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