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Stock Bargaining while drunk: I bought Sigma Design(SIGM), Glaxosmithkline (GSK), Idearc (IAR) and Trina Solar TSL June 15, 2008

Posted by deminvest in investment.
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What happens when an online trader is drunk?

I found out there is one more risk for Proletarian investors: trading when drunk:

yesterday I had a few drinks with an old friend, got home, I switched on my Laptop and I started to see a bright World full of amazing opportunities for a super genius investor like ( drunkeness does that).

By my strategy I was supposed to buy just one stock and invest $ 1000 in June. This is what I did:

1. I bought 60 SIGM @ 16.95 each, spending $ 1017. Sigma Design is a chip maker specialized in consumer entertaining electronics. Sigma Design has really bargain level stock price and plenty of cash in its coffer:

Trailing P/E (ttm, intraday):7.01amazingly low

Forward P/E (fye 02-Feb-10) 1:7.31as above

Qtrly Revenue Growth (yoy):57.90% very nice

Qtrly Earnings Growth (yoy):-13.10% only dark spot

Total Cash:137.98M with a Market Cap (intraday):471.68M is really amazing. More than a quarter of what I paid for SIGM, was nice plain cash.

2. I bought 25 GSK @$42.37 spending $1059. Glaxosmithkline is a large pharmaceutical producer. Drugs are items on which people don’t try to save money, even when the economy is bad. I also read that Warren Buffet owns some GSK. Numbers are nice:

Trailing P/E:11.84 . Very honest price

Forward P/E ((full year ending 31-Dec-09) :10.28, which is OK

Qtrly Revenue Growth (yoy):1.70%, not very exciting

Qtrly Earnings Growth (yoy):-13.70%, hopefully will get better

Forward Annual Dividend Yield:5.00%, I love juicy dividends by strong companies like Glaxosmithkline

3. I bought 275 IAR@$3.629 Idearc spending $998 . It is a company in the old business of printing Yellow Pages ans White Pages. I haven’t looked at those old fashioned big dusty books for years, but maybe some people still prefer to use them rather than Goggle. Anyway IAR looks like a huge total bargain. It is very risky because the company has e debt of $9 Billion, three times its annual revenues. Let’s look at numbers now. They are very attractive because stockprice went down 90% in 9 months, even though revenues and earning didn’t deteriorate during that time:

Trailing P/E (ttm, intraday):1.23 Yea, one point twenty three. Amazingly low

Forward P/E ((full year ending 31-Dec-09):1.69 One point 69. A little higher than 1.23, but still the best bargain I ever saw on Wall Street

Qtrly Revenue Growth (yoy):-4.50% . No big deal

Qtrly Earnings Growth (yoy):7.80% . Excellent for such underpriced company.

4. I bought 45 TSL@$37.80 spending $1,701.00. Trina Solar is a Chinese solar panels producer that has been enjoying explosive growth since it went public last year. Last year I did buy TSL shares then I sold part of them gaining free TSL shares. June results for Trina solar beat expectations and its numbers are outstanding. A drunkard investor cannot, by any mean, resist those numbers:

Trailing P/E: 22.38, honestly cheap

Forward P/E (full year ending 31-Dec-09): 9.37 an absolute bargain.

Qtrly Revenue Growth (yoy):183.60% wonderful!

Qtrly Earnings Growth (yoy):170.70% fantastic!

Overall I spent $4775 instead of the $1000 I was supposed to spend. This is wrong because only by buying the same amount every month, I can be sure to buy near minimums. Now I can only hope economy and stockmarkets will recover from now on.

Comments»

1. Sig POS - June 15, 2008

Good entry point on Sigma Designs (SIGM). If you really want a good laugh (while drunk or even sober)… listen to the Q1 and Q2 conference calls. The CEO can barely speak English… do yourself a favor and listen to it for a few chuckles.

2. Kevin - June 15, 2008

They need a breathalyser on telephones and laptops to protect against those of us that like to drink.

3. deminvest - June 16, 2008

@ Kevin

I’d definitely buy stock of a company producing breathalysers for telephones and laptops!

@ Sig POS,

I listen http://www.earnings.com/company.asp?ticker=SIGM&coid=110380&client=cb#

I have strong suspitions that he may show at conference calls drunk too!

4. deminvest - June 16, 2008

@ Kevin

I’d definitely buy stock of a company producing breathalysers for telephones and laptops!

@ Sig POS,

I listen http://www.earnings.com/company.asp?ticker=SIGM&coid=110380&client=cb#

I have strong suspicions that he may show at conference calls drunk too!

5. RL - June 16, 2008

MMM they surely look like good invesments to me, specially TSL ( I also recently bought some). Sometimes we need something to give us the courage to do what we think we should. Maybe alcohol makes it for you.

6. seshdotcom - June 16, 2008

Yeah I Agree they Require a breathalyser on telephones and laptops to protect against those of us that like to drink.And My name is http://www.seshdotcom.wordpress.com

7. seshdotcom - June 16, 2008

My name is sesha I write a Lot of Business http://www.seshdotcom.wordpress.com

8. Stephanie Hobbs - June 17, 2008

Good news, in 2007 US consumers referenced the print Yellow Pages 13.4 billion times (hmmm, looking for liquor stores???) and Idearc has SuperPages.com, as well as some great distribution deals. Check our site for more info on the YP industry.

9. deminvest - June 18, 2008

thanks for the data Stephanie.

Nonetheless, my IAR shares lost -4.31% of their value in two sessions… We’ll see what happens in the longer run.

10. RnS - June 20, 2008

Hurray for drunken DemInvest! They look like lovely picks, and I envy that you could buy them all🙂

Let’s see how they perform, all the best!

11. RnS - June 20, 2008

Was LOLing at the cartoon, too😀

12. deminvest - June 21, 2008

Thanks for your optimism Rns!

13. Steve (Technical Analyst) - August 4, 2008

I don’t know if you care much about technical analysis, but in the interests of starting a conversation with a fellow investment blogger, I went ahead and posted my analysis of these trades on my blog.

In summary:

SIGM:
looks bullish the a short term target of $26

GSK:
A little bit questionable, but if it breaks the symmetrical continuation triangle, look for a continued uptrend int he stock. I posted high and low targets in my post just in case.

deminvest let me know what you think. I like your review of the fundamentals and think it would be interesting to discuss trades and combine our skills.

-Steve

14. deminvest - August 5, 2008

Steve,

your tech analysis skills would be very useful for my trades. You could help me a lot on timing my investments better. I don’t know anything about tech analysis and I will happy to receive your help.

I’ll add your well done Blog to my Blog Roll. I hope that some Google ranking will spill from my old Blog to your young one.

Only I should warn you that I’m quite lazy, so my posts and my answers will not be fast like yours.

Thanks for your kind proposal, which I’m happy to accept.

Jack


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