Latest Updates on the trades. COP, CAT, APA, MS, KOG

Initiated COP on Monday at around $86.5

Still looking for a better pull back in CAT to get in. OR did we miss that boat. Our order is lurking around 83 and change.

Bought a full position in APA on Monday at $85.2. Look at this article from one of the street.com writers. Guided to me from one of the stockpickr friends. This is a wonderful piece of work by Jubak

Sold off Morgan Stanley on Monday just below $73. Will start a fresh position after the sub prime clouds clear. Please stay away from financials at least for till the mid next week. DOn’t jump in even if you see a little upside from these level before the mid next week. That may be the OE expirations effect.

A major KOG limit order went off today, which I actually thought would never go off. (Was I lucky here….Looks so at least for today) The limit BUY order at $4.37 where the 14-3 day stochastic stalls went off today and the stock took off since then. Look for a good upside in the coming days. KOG position completed. Not buying even if it drops a little more. I guess this is the bottom. Did you get a chance to look at the conference information?I still stand by the initial comment that KOG is a stock that is worth more! Don’t press the panic button, please.

Rick, Diana, Alan, Kishore, Henry, Vishwa, Lee, Sandeep, Prashanth and Andrew hopefully you checked your email in the weekend and placed limit orders for APA, COP, KOG and MS. All the three would have gone by now. Congratulations. The next plays will be on GOOG, CXW, NYX and CAT.

On the earnings play we are not playing earnings on Google tomorrow, we’ll be looking to get rid of the few we own tomorrow on any upside. Do you recollect when we bought them? Our average is around 500. But we own only 50% of the position we wanted to buy.:(

Your Adarsh.

Speculation on NYSE’s stock price post acquisition.

The market has been on a spree on the M/A activity. Many speculations, many rumors running through the whole market. One of those comes from the Exchanges sector.

New York Stock Exchange acquired Euronext lately and has been on a tear DOWN in the stock price since early this year. It seems to have found the bottom at around $73, nearly a 30% drop from it’s year high. The lower stock prices, bullish comments from some street gurus and analysts, and a smooth integration news with record trade volumes on the merged NYSE-EUR (NYX) gave the stock a little squeeze and boost since the last fortnight. We have speculation going on here with Thain looking to dig into futures.

This lets traders speculate on the stock price going forward. Many opine that paying a premium actually diminishes the acquirers value in stock price. but is it always true? Here is my opinion. Please feel free to comment.

Paying a premium doesn’t matter. Acquisitions automatically involve premiums. It is kinda intrinsic. Can you recall an acquisition without any premium. If the market now values NYX at 83…that will be taking into consideration that we’ll be paying to NMX or ICE or whatever for that matter. We do not have debt at all. In fact we have cash. It is no wrong that we use that for an acquisition. There may be a slight drop in the stock price but that shouldn’t be big.
Can you recall any analyst or any body from a big firm saying that an acquisition will be a negative? It was just individual investors speculaing that there would be a drop to 65’s 60’s etc. I don’t say that we won’t have a drop. But that won’t be a 10-15%. We are not going to drop back to those 75 levels, IF we acquire. May be we’ll drop if the fundas change. The street just recognised what it has been doing with NYX, after it watched CME-BOT merger.
Let us see it with the earnings :
If we acquire NMX :
Our 2008 EPS would be :
NYX - $3.37 (which will be revised more than once in my view after analysts recognise what exactly Euronext brings to NYSE)
and
NMX - $3.65
The total would be more than $7.
Give it a P/E of 30. What do we have here ? A stock at 210.
But let me tell you that not one exchange is trading at a P/E of 30 now. The lowest is 33 and the highest I could find was around 65.
Take the average and apply that for NYX (for sure I think we’ll have a name change 49 P/E would give us 49 * 7 $301 by the end of 2008.
If we acquire ICE our earnings in 2008 would be ICE - 4.93
Total EPS 8.4
A P/E of 30 places us at $252 and a P/E of 40 places us at $336. Don’t even calculate where the 49 P/E would take us !
That’s consolidation.
All these prices take in that we go through the consolidation without any hiccups. This is only true if the integrations go smooth.
Note: All EPS estimates are taken from BOA Investment Services as of 7/13/2007.

Hope this helps.
Thanks,
Your Adarsh
www.youradu.wordpress.com.

Success repeated…brings joy repeatedly

Our core position NYX is playing well this week. It’s next major resistance is at $84, which should be broken this week.

Our latest buy Medicinova at $8.39 yesterday i.e 7/10/2007 has already started paying off.

Did you buy Morgan Staney today at my recomendation. Here is my reco.

Place trades around 69. 69.8 offers good support. Should be the
bottom. We are at a 13 week low of $69.71.
Next resistances at
$70.56 $71.53 $73.24 $75.24(major) $77.82 (major)
Load up MS here.

Our limit order with Heelys at $28.11 went off today. Our trade position averages at $25.3. That gives us a 11% profit in 8 days. We just took a snitzel off the table and will be backing up the truck on a down day like yesterday…if we have any at all in the coming week.

KOG paid off in a day

CXW is taking a small dip. Wait untill the technicals recover and the squeeze starts. Lets buy on that oppurtunity down here.

Congratulations and Good Luck

Your Adarsh.

If I were Thain (as of this moment)

I know I’ll call many of my friends here o critisize me with this
post.
Many would say I’m wrong. But just read on.
If I were Thain at this moment. I’ld go ahead and throw a
very competitive bid for NMX and acquire them. Let the market digest
the news, let the shorts ride NYX for the short term. The way NYX is
doing now gives shorts more time, to take the stock lower on the
speculation that we’ll be acquiring ICE/NMX. Why not just do it and
give the shorts less time? Let them take it to lower 70 may be higher
60’s I’m not concerned coz everybody will applaud Thain (me) as soon
as 1st quarter 2008 or a bit later, as soon as NYX realises the
potential of the two huge acquisitions we made. Hope Thain does it asap.

Not freaking out, but I think we are giving shorts time to
gobble our share, just speculating the news, which they’ld relish
until we report a great quarter and tehn give us a big BIG BIGGER
squeeze. I don’t care even if we miss the quarter results owing to the
acquisition costs which should be less, considering that both NMX and
NYX are pretty near, cutting miscelleneous costs (yya I know but
that’s a chunk too)

Moreover, it was good to hear that things with Euronext
are working out quite well as planned and we are not having any
problems there. It’s high time we gobble NYX and change our name to
GLOBAL STOCK EXCHANGE. (Dreaming about the GSE like the World Bank) :-o

Ideal Buy: Buy NYX after the acquisition. Mind you it’ll trade side ways till the next quarter earnings for sure.

Buy NMX and ICE for that upside on the bid. As of now take NMX and buy ICE considering the ICE- CME-BOT deal.

Adarsh owns NMX, ICE and NYX as of today.

*NYMEX is a buy here!!!

yya I’m a little late…three trading sessions late… But NYMEX - NMX can get almost as high as $155-$160, if someone expresses interest in it… and if there is a bid fight the sort of one going on between CME, BOT, and ICE, then we ride higher.

I was just a little suspicious of the rising 10 year (fingers crossed) which may slow down the MA activity, but the market has dropped enough taking off that effect from play now .

Short term : Play it for that 15 -20 Bucks each share.

Today’s closing price : 139.80

Good Luck to ya all.

Adarsh does not hold NMX as of 6/14/07

Plans to get a bunch on 15th, and wait for a RED day, which we at youradu, LOVE.