Saturday, September 26, 2009

Latest Ideas

I went through several ideas this Saturday.

One fellow who I follow on Yahoo who I have determined has a fair amount of knowledge like the radio stocks CMLS and ROIAK. Here's a write up from another blogger who likes CMLS:

There are several other people I follow who like ROIAK in particular. My read of the charts confirms there is some support for both of these names. They kind of scare me because of all the debt. CMLS earned about .35/share last qtr., not bad for a stock at $1.57. However, book value of -$6.00/share is not good.

Still, I did a quick DCF calculation. If CMLS can earn $1/share next year and grows 5% for the next 10 years... it's worth $3.75 today. So I can understand why this guy like CMLS. You have to assume there won't be a double dip recession and drop in ad revenues. You also have to have the balls to buy a stock with -$6.00 book value. The last candlestick was one of those 'dragonfly' sticks, the low of the day just touching the 20 day MA. So technically I like the way this ended on Friday. (I read a book on Japanese Candlesticks so I like to refer to them every once in a while because it makes me sound super knowledgeable.)

I do not own any CMLS. I'm not sure I like this idea. Shouldn't I wait for the very best ideas? The ones that your gut says you should buy? My gut is not so excited about CMLS but maybe it's worth a trade, especially at the current price, with a stop below the 20 day MA. I might commit a small, 2% position. I'm more comfortable trying to grab $500 - $1000 in a swing trade than taking a big position. I have plenty of cash sitting around.

My review of general indexes is that the market is tired and wants to rest, so I'm not sure CMLS will go up in such an extended market. On a scale of 1 - 10, buying CMLS on Monday rates about a 6. Maybe a 7 depending on premarket action. What do you think?

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