Bad Toys: BTYH
So, I have been on pain medication for a week now.
I am basically on a liquid only diet (too much pain to chew). Drinking water is a pianful process believe it or not. But it is getting better - I should be back to "normal" by next week. As soon as I can chew and eat food, I am getting me a juicy steak & a big lobster. There is a famous steak house called " Uncle Jack's" near my house (rated five star I mind you). They know steaks. I prefer T-bone to a filet and I have to have creamed-spinich. I also prefer mashed sweet potato to a regular potato. Coffee is my favorite drink. And I always have some kind of desert. Hopefully, this will help you to know what & how I like my steaks. Hint. Hint.
The market will be taking a breather next week. It will not affect our investment portfolios all that much but for active traders, next week will present some quick trading opportunities. Volatility will return in a big way. The basic thesis has not changed: keep adding to our holdings for higher prices later.
BTYH: This has been our worst performer in the portfolio thus far. Over this weekend, I had to decide whether to hold or sell Bad Toys Holdings. Went over the financials and various news and technicals regarding this stock. And I have came down with a final conclusion: I am buying more at this price. At around $0.60 per share, it represents value. It can easily double within a year. My rules are simple: if I find an investment with potential "double" within 2-3 years, it is a buy. If it has potential to double in a year or two then, it is a "must buy". BTYH is a "must buy" then. This stock is falling because it desparately needs to refinance its debt holdings. These debts were incurred in aquiring the ambulartory business. Because this is a small company ($14 million market cap now) it is having some difficulties in getting loans with decent terms. But this will be done eventually one way or another. BTYH can always seek private financing using equity but the CEO does not wish to dilute shares using equity at these low levels (smart). Remember that the CEO, Mr. Nunan owns over a third of the company (over 8,000,000 shares) while receiving less than $80K in salary annually. So here is my final analysis:
1. I am willing to bet that Mr. Nunan will do whatever necessary to get this financing done.
2. This is a company with over $45,000,000 in sales
3. It is very profitable with EPS of $0.22/share
4. Current PE ratio is 3 (can you believe it?)
5. Shareholders equity has been going up every quarter
6. Once financing is complete, it will split into two companies
7. Worst case: the company will be sold at higher price than now
8. POSITIVE cash flow every quarter!
9. Technically, it is near the bottom.
Bottom line: I will be buying (currently Acetrader owns 20,000 shares) 10-20k shares next week to average down my cost. I will let you know when the trade excutes.
For my trading account, I have fully accumulated JNPR short position as of last Friday. I now carry 5,000 short JNPR at $17.31 and 800 of QID shares. Monday will be interesting....
Both of the above positions will be cleared within the next week. I will keep you informed.
P.S: Did you all see RICK move on Friday?
I am basically on a liquid only diet (too much pain to chew). Drinking water is a pianful process believe it or not. But it is getting better - I should be back to "normal" by next week. As soon as I can chew and eat food, I am getting me a juicy steak & a big lobster. There is a famous steak house called " Uncle Jack's" near my house (rated five star I mind you). They know steaks. I prefer T-bone to a filet and I have to have creamed-spinich. I also prefer mashed sweet potato to a regular potato. Coffee is my favorite drink. And I always have some kind of desert. Hopefully, this will help you to know what & how I like my steaks. Hint. Hint.
The market will be taking a breather next week. It will not affect our investment portfolios all that much but for active traders, next week will present some quick trading opportunities. Volatility will return in a big way. The basic thesis has not changed: keep adding to our holdings for higher prices later.
BTYH: This has been our worst performer in the portfolio thus far. Over this weekend, I had to decide whether to hold or sell Bad Toys Holdings. Went over the financials and various news and technicals regarding this stock. And I have came down with a final conclusion: I am buying more at this price. At around $0.60 per share, it represents value. It can easily double within a year. My rules are simple: if I find an investment with potential "double" within 2-3 years, it is a buy. If it has potential to double in a year or two then, it is a "must buy". BTYH is a "must buy" then. This stock is falling because it desparately needs to refinance its debt holdings. These debts were incurred in aquiring the ambulartory business. Because this is a small company ($14 million market cap now) it is having some difficulties in getting loans with decent terms. But this will be done eventually one way or another. BTYH can always seek private financing using equity but the CEO does not wish to dilute shares using equity at these low levels (smart). Remember that the CEO, Mr. Nunan owns over a third of the company (over 8,000,000 shares) while receiving less than $80K in salary annually. So here is my final analysis:
1. I am willing to bet that Mr. Nunan will do whatever necessary to get this financing done.
2. This is a company with over $45,000,000 in sales
3. It is very profitable with EPS of $0.22/share
4. Current PE ratio is 3 (can you believe it?)
5. Shareholders equity has been going up every quarter
6. Once financing is complete, it will split into two companies
7. Worst case: the company will be sold at higher price than now
8. POSITIVE cash flow every quarter!
9. Technically, it is near the bottom.
Bottom line: I will be buying (currently Acetrader owns 20,000 shares) 10-20k shares next week to average down my cost. I will let you know when the trade excutes.
For my trading account, I have fully accumulated JNPR short position as of last Friday. I now carry 5,000 short JNPR at $17.31 and 800 of QID shares. Monday will be interesting....
Both of the above positions will be cleared within the next week. I will keep you informed.
P.S: Did you all see RICK move on Friday?
posted by Jaewoo | 7:27 PM
5 Comments:
Iners
Interesting that you use QID...so illiquid...you'll get hammered when you close the position! Why no use LEAPS or FUTURES?
What are your thoughts on IDWD?
@Anonymous (#3)
I asked for Jaewoo's thoughts about IDWD at this point and he answered it in the comments section of the previous blog entry.
-Jo
XMSR seems to be heading down pretty convincingly. Thoughts?
Post a Comment
<< Home