JO,
I don't trade stocks, so I can't speak to the float or liquidity - I don't really understand that part of things. But from a purely technical viewpoint, I would not buy this stock.
Jo, fair comment. However, if ( as I know you favour P&V ) you study volume as a component of trade selection, then these two are rather crucial to any volume analysis you may wish to apply.
Technical traders can't help but notice that the price has just fallen through the demand line that has not previously been breached in the last 4 years. The last bar of the monthly chart shows the price bar expanding downward on lower volume. No herd of bears even chasing it, and it's still going down like a rock. This shows that those who want to enter long (or to close out a short position) are withholding their support and waiting because they think the price will go lower still and they will get a better bargain.
There has been a deep pullback on this stock.
The reason being that the Annual earnings from 2004 totaled $9.13
This is hugely down from earnings of earnings in the $40 region, late comers, possibly some technical trend traders, got badly caught out and are, or have sold.
Earnings have rebounded in Q1 to $35 / share.
There was a very good fundamental reason for the drop in earnings, and it was found in cashflow, of an expansion of the asset base using earned surplus, retained earnings, and new debt, hence the massive drop in EPS.
As ROGUE has already pointed out, there is no "SHORT INTREST"
I have never seen this.
I believe as ROGUE has suggested, that there is no stock borrow available.
Even then, it will take a major amount of volume to turn this around. Everyone who bought this during the last 8 months is in pain, and the price action shows that they are starting to bail out.
Yes and no.
I agree with the latecomers are hurting, no doubt.
As to volume to turn this around, I think this could turn on just several 1000 shares.
This stock provides an example of where volume analysis is actually worthwhile spending the time to delve a little ( I shall do this later )
Fundamentally, I would not buy any company that was associated with real estate in northern climates. Type "peak oil" into google and think about what will happen to real estate values when the winter heating bill is as big as the rent........
This company buys properties to rent ( although it also sells ).
However, I also feel that the housing sector is frothy, and as an industry, already enjoyed a big run. In any major correction, this company could get caught up in the general slide, and really give you a scare. Or, it might be to small and just go unnoticed, along it's merry way.
My concern is that it is a SMALL COMPANY.
It has huge debt...........90% of it's market cap is debt. ( in the form of property, thus recoverable )
This is why the common can perform so well.........a la General Motors.
The cash per share, is illusion, as this debt would swallow that if a meltdown came.
In a Bankruptcy, the odds on the Common surviving would be LOW.
CHUMP
First only fundies would be watching a tidller like this so whatever it is doing technically is irrelevant...leading on from that they will be triggered by the next qtr or two's stats especially as they come into this low risk area of cash backstop ...but there is always a chance that a good punt like this might get caught up in the mainstream backwash of negative sentiment on the housing market and that is the concern..that that sentiment could push it dramatically lower and without a stop I hope you would not be averaging down
True.
No I wouldn't average down on this, nor will I have a stop.
from a numbers point of view I don't get it at this point ...buying now to me is the equivalent of trying to make a couple of dollars whilst risking at least the same..I wouldn't be interested in that within the context that I expect the upside to be so dramatically larger anyway..to be honest entry here smacks of fear that I may be missing an opportunity ..if you're guilty hold your hand up
And this is the point.
I want to buy it CHEAP.
Later, when the price rises, it gets risker, as it is getting more expensive.
In truth I don't understand your reluctance to use TA (momentum trading)..in a case like this one...using TA has nothing to do beliefs/reliance ..it is simple recognition that TA has a tool can in a situation like this allow you to deflect excess risk...let someone else take the risk for you and only come in when they have reduced risk to a level that makes economic sense
Because TA as a tool has so many flaws, as to make it worse than useless.
ROGUE
Sorry Ducati, from my perspective there is too much wrong with this stock, The only type of stock that I would entertain trading at less than 1 million shares a day is an ETF.
Of course, and a crucial point, traders need the volatility..................but that volatility must be joined by liquidity, otherwise, curtains!
Another thought that occurs is that a lot of TA (not all, but a lot) makes use of anticipating what institutions and other traders are going to do
And within those two quotes is a summary of TA, and trading.
Nothing more need be said.
cheers d998
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