YHOO (Yahoo!): Question of the Day: 25 or 32?

Wow, that was a drop. The market is a total heart breaker sometimes. Let me be the first to tell you that it was a punch in the midsection to watch my nest egg at 32 be decimated 4 bucks the next morning. My stop automatically kicked in at 28 for a tiny gain... I <3 the market (Yes, I'm being sarcastic). There really was nothing I could have done about it. It opened at $28 and I can't always be around for after hours. Meh... Shit happens.

Now the reason I didn't write about this earlier is because I wanted to wait for Google to report earnings so that I could get a better understanding of the Ad Word landscape. Also, since I do not have the money nor the balls to invest into a $500 dollar stock, this will strictly be about the Y!

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So let's look at the two. Yahoo! fell 11.8% to $28.31 on volume nearly triple the stock's full-day average. Quarterly profit dropped 11% on higher operating costs, as the No. 1 operator of Web sites by traffic spent heavily to better compete against rival Google Inc. Net income for the first quarter fell 11% to $142 million, or 10 cents a share, from $159.9 million, or 11 cents, earned in the year-earlier period. Analysts had, on average, expected a profit of 11 cents a share, according to a Thomson Financial survey. Sales rose 7% to $1.67 billion on stronger demand for the company's online display advertisements and a surge in sales of text-only search ads late in quarter. OK, not too bad. A penny shy on inflated expectations that Yahoo!'s new ad word engine would come through early.

Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, an increase of 63% compared to the first quarter of 2006 and an increase of 14% compared to the fourth quarter of 2006. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2007, TAC totaled $1.13 billion, or 31% of advertising revenues. In other words... Google ... Crushed... Yahoo!

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So here's my take on things. Yahoo! execs already told us to set our expectations with their new ad word platform, Panama, and told us not to expect anything to happen until Q3 of 2007. I think with any launch, it takes time to gain traction. On the buyer side, I think they need to see how well the new product performs and on Yahoo!'s side there will be a ton of adjustments made along the way. I think the turkey is still in the oven. So the big question is, will YHOO hit 25 first or rebound back to 32?

This is where Google steps in. I think the overwhelming mentality is that YHOO just can't compete. Just as investors were falling in love with the Big Purple again, Google reminds you why you settled down with it in the first place with yet another "I'm still the hot, sexy mama that locked down your candy ass" quarter. That combined with the usual weak Q2 and Q3 for internet companies will make me lean towards betting that the stock hits $25 (maybe lower) first.

And yes, for those of your who are wondering. If I had the 7 figure account, I would have definitely bought Google at $435.




Notes:
In Portfolio: Just got out... time to watch.
Investing Mindset: F-Large Caps... Go Smallies
NBA Playoff Hopes: I'm shouting "GO ROCKETS!" and I'm whispering "go lakers" ;)

EBAY (eBay Inc): You Can Find It (Sadness) Here!

You know, only with large cap stocks, you can have a situation where a company totally overachieves and still gets penalized for it.

eBay posted a 52 percent jump in net profit on a 27 percent revenue rise, led by growth in its core auctions business and the rising prominence of international sales. On top of that, they also raised the top and bottom line for 2007 Guidance. Wow, that's impressive for a mature company. Really impressive.

Then the next day. The stock drops 10% from it's previous day after hour highs of $36+. I know... WTF. But that's the way the stock market works. It doesn't always make sense. And this is why smart traders can make money. So eBay going to go back up? Ya, probably. But you're going to have to be patient.

Today's fall came as a result of some report from yet another so-called expert. We've all seen them before. Worthless. I can't believe that people pay for insight like that. What it comes down to is numbers. And eBay came through... But then again... when has the stock market ever been about fundamentals.

So here's why I think you hold. eBay has just updated it's header which probably means they are probably going to improve the rest of the site. eBay is a horrid experience right now and they make a ton of money. It just goes to show that people would jump through any hoop to get what they want. Imagine if they finally got their act together and created a good experience?

Paypal is continuing to grow like crazy. Google's Gpay hasn't hurt it's sales at all. So will growth slow? Probably not, eCommerce is still growing and PayPal still has a tiny slice of the bigger commerce pie (both on and offline). Imagine what happens when they finally go offline into the stores. Watch out!

Skype is intruiging. It's growth is still amazing and it will interesting to see what eBay does with it. The latest updates to Skype Prime has been the integration of PayPal. Imagine what happens when they integrate into eBay. All of a sudden, customer service goes way up and trust and safety concerns go way down. It'll be interesting to see what happens.

So Hold... hold on tight. As for Large Caps in general. I think I will start investing more heavily into the smallies. At least I'll have hope and speculation on my side.



Notes:
In Portfolio: More than you know
Duration: I say it'll hit $60 again! Heck, maybe more!
Finally: Goodbye Sanjaya... I shall forget you

Holding Things Down

So I'm at a point where the portfolio is extremely diversified and in good position to grow. I think tinkering with what you have before it moves is a big mistake. For now, I'm going to sit on the portfolio for a bit until after earnings.

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Here's a current look at the current stock mix:

AMD (Advanced Micro Devices)- Still low. I think it goes a little lower or stays the course until they release their next gen technology.

ARNA (Arena Pharmasuticals)- It's slowly moving upwards

BBI (Block Buster Video)- I still believe that it will continue to gain on NetFlix. The CEO's leaving is not about the business. It's more about the relationship between him and the board.

CELL (Bright Point)- Interesting one... Has made a nice 12% but I want to see where it goes... It's still low.

COGT (Cogent)- Holding steady at 13.

EBAY (uh... eBay)- The header has just changed and it's a world better. Is it a sign of things to come..? You know what they say about business' that are changing their storefronts...

EGY (Vaalco)- Iran, Iraq, and every other major oil supplier is a hot topic now. EGY are looking for alternatives. Let's see how Africa turns up.

EXEL (Exelis)- Another Stock for hope. Does it blow up like NUVO did?

ISV (Insight Vision)- Don't look at me, This is a girlfriend pick. Can't let her have all the fun ;)

LOOP(LoopNet)- Near 52 week highs... Waiting for Q1 Earnings to see if it meets and exceeds.

MNST (Monster) - Unjustly pummeled. Nice Bounce in the last couple of days.

NUVO (Nuvelo) - Does it keep on going up? I already cashed out.

PANL (Universal Display) - I'm holding onto this one forever!

RRGB (Red Robin) - Think I'll have burgers tonight. Still 10 bucks away from my 50 mark.

SBUX (Starbucks)- Still a chance to get in?

USO (United Oil Fund)- God, this one has gone nowhere. I think I'm up like 1% on this one. Hahaha. I'm terribly interested to see how this stock does as summer progresses.

VLO (Valero)- Too late baby!

YHOO (Yahoo!)- Let's see how Q1 has fared for the Y!

NUVO (Nuvelo): Placing Bets On Hope

I've had a lot of trouble writing about this stock. Believe it or not, this humble penny stock used to rock $378.75 (February 18, 2000).

So today, this bad boy exploded for 50% during the day and another 15% in after hours trading and I'm sorry that I couldn't write about this sooner but I just didn't have any major insights like I do with some other stocks like ARNA or GM. So I apologize however I just wanted to share my notes on this bad boy while it's top of mind.

HOW IT GOT HERE:
Back in December (2006) the company's main pharmaceutical pony, Alfimeprase, got steamrolled when it failed a Phase 3 clinical trial of it's performance in acute peripheral arterial occlusion (in English: it fights blood clots and might be effective against stroke) and took an undeserved (okay, maybe deserved) drubbing.

Testing involves, at times, failures. My thoughts on the 80% drop in one day...Wow.

WHY YOU SHOULD BUY (HAVE BOUGHT) IT:
It just received fast track approval for several of their cancer drugs (see website for details). I've read that "usually (and I emphasize usually), bio techs receive final FDA approval when the FDA has already fast tracked their drug." But let's be honest... any drug is fast tracked if there is a disease out there with no treatment or cure. It's fools gold.

It also has a decent pipeline with cash on hand and no debt. It's also worth mentioning that Bayer, the 50 million sponsor for Alfimeprase didn't jump ship.

MY REASONS FOR BUYING IT:
I really didn't have any. I didn't write about this one early on because I didn't feel strongly about it or have any unique insight. I just saw a solid company with with a lot of potential, strong public (CAPs) support, that is trying it cure something that is very close to me. It all came down to a bet on hope.



Notes:
In Portfolio: This one's for hope... I'm in!
Duration: Until it hits $378.75 again! (hmm, we'll see)
Random Thought: Cats are clean, they're covered in spit.

MNST (Monster Inc): Yet Another Classic Over-Reaction By The Market

"The parent of the job website Monster.com said in a statement that its revenue for the first quarter ended Mar. 31 is expected to be in the range of $328 million to $329 million, slightly below its $330 million to $338 million forecast issued on Feb. 1. It also said Apr. 4 that it continues to expect the same financial results for the full year 2007 that it had forecast on Feb. 1. At the time, Monster projected revenue of $1.36 billion to $1.41 billion for the year.

Shares of Monster Worldwide Inc., which operates job site Monster.com, continued falling but a number of analysts (a lot of them) said the company will gain from international exposure. Monster backed full-year revenue guidance on Wednesday, but said first-quarter sales will come in below expectations, due in part to weakness in its North American careers unit."

Okay, okay... so what this all mean? It means that they slightly adjusted the guidance and the public over-reacted... as usual. And the result is the public sent the stock down 18%. Translation... Sale!

The North American Market is a little weak now but remember, it's cyclical. But I think as Americans, we don't see the big picture and in this case, it's the world. Monster is just dominating the international landscape and pretty soon, over sea revenue (now 27 percent of revenue) will surpass homeland revenue. But really, the situation at home isn't all that bad so if anything, think of it as an opportunity to get in on a solid stock with growth potential at a relatively cheap price. As always, we'll see.



Notes:
In Portfolio: Entry buy at $40 and will buy more as the stock bottoms out.
Duration: Tighten the leash at $60
Gyroball?: Daisuke Matsuzaka fans 10... Sox win 4-1

ARNA (Arena Pharmasutcials): Phat for Fat

We're big and we ain't so bad. Although you as a reader might not be in this category, let's face it, or rather, we have to face it, Obesity is a serious issue.

More than 30 percent of Americans are obese, a figure that has risen sharply over the past decade, according to the Centers for Disease Control and Prevention. Substantial health risks (cardiovascular disease, hypertension, and type two diabetes) are associated with being overweight and obesity, leading to increased morbidity and mortality (2.6 million deaths annually worldwide from type two diabetes). The U.S. Surgeon General has estimated the direct and indirect economic costs of obesity at $117 billion per year.

So here's the big idea or rather, "the skinny." Arena has developed a top drug candidate Lorcaserin for Obesity entering phase 3 Insomnia APD125 in phase 2. Several more promising compound are also on deck (phase 1 or about to enter phase 1) and I'm liking the odds. What the drug essentially does is stimulates the 5-HT2C serotonin receptor, located in the part of the brain called the hypothalamus, which helps regulate satiety and influences metabolic rate. In English, it makes you feel full.

Data from a Phase 2b trial of lorcaserin demonstrated that patients who received the drug experienced significantly greater weight loss than patients who received placebo. So it's a miracle diet pill. Solid right? No you say? Okay, let's consider the alternatives we currently have:

Stomach Stapling: Needs strict patient compliance to diet, Vertical Banded Gastroplasty (the medical name for Stomach Stapling) is in no way a magic bullet or pill (ah, but Lorcaserin is). It must be emphasized that lifestyle changes (boo), i.e. diet (boo) and exercise (boo), are absolutely imperative for weight loss to occur and be maintained. As with any surgical procedure, there are risks of complications. It has been observed that approximately one in every hundred patients undergoing VBG die within a year.

Diets: Normal diets stress a lifestyle change and strange or extreme diets can be very dangerous, and they are often ineffective.

Liposuction: Who can afford it?

Fat Burners: There is no good reason for speeding up your heart but I guess the silver lining is that it proves that people are willing to pay for weight loss pills.

Richard Simmons: Side effects include embarrassment, a tacky wardrobe, and if you are a male, a significant increase of effeminate tendencies.

Let's face it, current weight loss systems are ineffective and in some cases, dangerous. As for alternatives involving medication, there are currently only two approved drugs to treat obesity and concerns about side effects and efficacy have limited the use of these, presenting an opportunity to help millions of patients with a new, safe and effective therapy and Arena has a viable drug candidate. The fate of this will turn initially on the results of the safety portion of the BLOOM (Behavioral modification and Lorcaserin for Overweight and Obesity Management) trial in the 3rd Quarter of 2007 however the result will be huge if they pass.



Notes:
In Portfolio: Yesh. (Sean Connery in da house!)
Duration: Until obesity is eridacated.
Over with: American Idol (Booooring). It's all about the Search for the next Pussy Cat Doll! P-C-D-4-LYF!!!

GRMN (Garmin): In 100 Meters... Don't Buy

To begin with, I own a Garmin. I love it. It's really changed the life of this person who is forever cursed with wanderlust. For the 300-400 bucks that was paid, it was worth every penny. The money is paid back 10 fold with the time and gas that was saved from not getting lost (it's a common thing for me).

OK, So there are a lot of good things about the product however the business is a completely different story. So right now, the stock is soaring at near 52 week, not to mention lifetime highs at $56 a share. Nearly every article and nearly every person who comments on CAPS on Motley Fool, thinks this is a winner. But I'm having trouble believing that it's going to be the next AAPL or GOOG and that it's just going to keep on going up. It just doesn't feel right. So I put some thought into it and wrote them all down. Here are my notes:

STICKINESS:
While they currently have 60% of the market, there is nothing that is keeping a consumer stuck to them. I think of Apple's iPod and the amazing success they have had. While the product is gorgeously designed, I can think of a hundred other MP3 players are that just as beautiful, usable and frankly, more capable. What keeps someone from buying another player is iTunes. Buying another player means giving up all the money you invested into iTunes and starting over from scratch. So tell me. What's holding back a buyer from buying an alternate system from say, Tom Tom?

LOWER MARGINS:
We all know that it's inevitable that the prices will go down as competition within this space becomes more fierce. Units that now sell for $400+ will soon be sold for $150. Unfortunately, they can't control prices like iPod and the bottom line is that in the short term, they might be OK as everyone else begins to buy GPS devices because of the low cost, but I see a very similar future for Garmin much like what has happened for Motorola and the RAZR.

SATURATION:
So I recently had lunch with a co-worker who just bought a brand spanking new Mercedes CLK and I was oohing and ahhing over her new ride. I asked her if she got it fully loaded and she said: "No, we left off the GPS navigation system."

I got all excited and said: "Oh, you can get a Garmin! It's only $400 bucks and you can put it both of your cars."

She politely passed and mentioned that she didn't need to because she could just install GPS software onto her cellphone. I then thought: "Gosh, it would really suck for Garmin if everyone started putting it into their mobile devices."

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So ya, I hear everyone that Garmin is pretty bad ass. Heck, I'm one of the people saying it. But with all the hoopla around the stock, I just don't feel good putting the money into it. What ever happened to "Buy low, sell high..." We need to feel good in a trade and believe we picked it for the right reasons because when the stock drops, we won't freak out. It's at all time highs, there is no stickiness to the product, the prices are going down and soon, anything mobile with a screen will be doing the same thing. I'm sure that there are a lot of things I don't know about the company and their strategy however 1) If you don't know the business, don't invest in it and 2) It doesn't pass the common sense test.

We'll see how well it does but I'll pass on this one.



Notes:
In Portfolio: Gosh no, Heck no, Please no.
Remember: The Silverhawks?
Bullshit: Sajaya Malakar is still on American Idol