Tag - Netlist

You've heard me call out big-name investors who are "talking their book" in the past. An investors is "talking his or her book" when he/she states an opinion as fact for the sole purpose of helping a particular trade.

We've seen Warren Buffett do this. Last year, it was widely known that he was massively short the U.S. dollar. And he continued to say he thought the dollar was collapsing, even as it hit important support. Then we learned later that Buffett was covering his dollar short, all the while extolling its weakness.

Obviously, Buffett, in true P.T. Barnum fashion, was attempting to use his influence to talk the dollar down while he covered. He only needed to fool people for a short time as he exited the trade.

Last month at the Davos conference in Switzerland, George Soros did his version of talking his book. He made headlines when he said "The ultimate asset bubble is gold."

I always view statements like these with skepticism. And sure, recent SEC filings reveal that at the same time Soros was saying gold was a bubble, his Soros Fund Management was buying 6.2 million shares of the SPDR Gold Trust ETF (NYSE: GLD) for $663 million.

Looking at this 6 month chart of GLD, it's a reasonable guess that Soros was buying between $105 and $110 in December (you may need to zoom in on the chart in order to see all the information). Gold is on the verge of breaking above that range now.

It would be easy to think that Soros was simply pulling a fast one on unsuspecting investors. But this is a case where it pays to know a little more about the man and his methods. Here is a Soros quote from the early '90s:

"Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited."

I love that quote, even though it's a bit cynical and perhaps depressing. But what he is saying should be a revelation to any investor, because it requires the investor to maintain a sense of skepticism.

I also want to emphasize that companies do make money, they grow, and their stock prices will reflect this. In other words, there are fundamental reasons for stocks to move. But Soros is talking about making the big money.

As late as 2007, Soros was calling the housing boom a bubble. I also think we can assume he made a lot of money during the housing bubble in the sectors that were supporting the housing bubble, like commodities. And there's no doubt he was well-positioned when the bubble burst.

The Cheapest Gold Stock?

So what do we do with the information that he's now buying gold explicitly because gold is bubble fodder? We assume that he sees the potential for a big move in gold. Gold moves for two reasons: a weak U.S. dollar and inflation fears.

Given the Fed's desire to keep interest rates low, we can imagine that inflation could become an issue. And U.S. dollar weakness is also not outside the realm of possibility.

Soros isn't the only one moving into gold. Hedge fund manager Henry Paulson and even China have been buying gold. It may be a good time to take a position.

SmallCapInvestor PRO members are holding a $3.50 gold mining stock that's so cheap it's like buying gold at $120 an ounce. For more on this stock, click HERE.

20% in Two Days

On Tuesday morning, TradeMaster Daily Stock Alerts' Jason Cimpl told his readers to buy Netlist (Nasdaq: NLST) at $3.58 share. They sold it yesterday at $4.29 for a sweet 20% gain in less than 2 days.

For today, Jason is looking for two things from the stock market:

First, I want to see late day buying. This means that pull-backs are being bought and prices are likely to move higher.

Second (and more important) selling volume has to be low. Heavy volume selling is not a strong signal that the market is preparing to make higher highs, the opposite is then true for selling with low volume. If we do not get a pull-back today, then I'm looking for technology to show leadership on increasing volume - this will show me that this week's rally has legs.

And I'm sure that will mean more trading gains for his readers.

April 17 (SmallCapInvestor.com) – Stocks are posting small gains this morning following news of stronger-than-expected home construction in March and an easing of inflation.  Among small caps, weak quarterly sales are hurting shares of Universal Forest Products, Inc. (Nasdaq: UFPI), while InsWeb Corporation (Nasdaq: INSW) is surging after reporting its first ever profit.

At 10:50 AM the Russell 2000 was down 0.56 points, or 0.07 percent, to 830.88.  The Dow Jones Industrial Average had gained 57.13 points, or 0.45 percent, to 12,777.59.

Shares of computer memory subsystems manufacturer Netlist, Inc. (Nasdaq: NLST) are losing ground on news preliminary first-quarter results fell short of Wall Street’s expectations.  Earnings per share for the quarter ended March 31 will be between $0.02 and $0.03, compared with a previous forecast of earnings of $0.07 to $0.08 per share, the Irvine, Calif.-based company said after Monday’s close.  Analysts polled by Thomson Financial were looking for earnings of $0.08 per share.  Netlist attributed the decline to lower-than-expected volume from two large customers.  Shares are down $1.62, or 27.14%, to $4.35.

Shares of Gold River, Calif.-based InsWeb Corporation are soaring following news the company has reported the first quarterly profit in its history.  Revenues for the quarter ended March 31 were $8.11 million, compared with $7.66 million a year earlier, the online insurance marketplace operator said after Monday’s close.  Net income for the first quarter was $0.4 million, or $0.10 per share, compared with a net loss of 1.7 million, or $0.41 per share in the same quarter a year ago.  Analyst estimates were unavailable.  Shares are up $2.19, or 66.16%, to $5.50.

Grand Rapids, Mich.-based Universal Forest Products reported a decrease in quarterly earnings and sales attributed to a slowdown in the housing market.  Net sales in the first quarter of 2007 were $549.0 million, compared with $665.6 million for the same period in 2006, the company said after Monday’s close.  Wall Street was looking for revenue of $589.52 million.  Net earnings were $3.9 million, down from $15.9 million a year earlier.  Shares are down $3.57, or 6.78%, to $49.05.

Core inflation in March was almost flat despite a rise in gasoline prices, the Labor Department said before the opening bell.  Overall consumer prices increased 0.6% in March, after a rise of 0.4% in February.  Economists were expecting the consumer price index to rise by 0.7%.  However, core inflation, which excludes food and energy costs, rose just 0.1% during the previous month.  That’s the smallest gain this year.  Core prices increased 0.2% in February.

The data indicate a cooling economy is easing pricing pressures.

In other economic news, the residential construction market showed life in March, the Labor Department reported before the start of trading.  The construction of new homes increased 0.8% in March to a seasonally adjusted rate of 1.518 million, the highest rate this year.  Economists were expecting 1.50 million housing starts.

Netlist Inc. (Nasdaq: NLST) issued lower-than-expected guidance for its first and second quarters.

The Irvine, Calif.-based memory subsystems manufacturer said it now expects to report earnings per share of $0.02 to $0.03 per share on revenue of $37 million to $38 million. The firm had previously issued guidance of $0.07 to $0.08 per share on revenue of $40 million to $42 million.
 
Three analysts polled by Thomson First Call were expecting earnings per share of $0.08 on revenue of $41.2 million for the quarter ended March 31. Netlist CEO Chuck Hong cited operating expenses and decreased customer demand for the revised guidance.

Looking ahead, Netlist also estimated that it would report earnings per share of $0.02 per share on revenue in the range of $34 million to $36 million for the second quarter. The company cited continued softness in the DRAM (a type of memory) market, ramp up costs related to its new manufacturing facility in China and continued incremental investment in sales, marketing and R&D for the expected performance. Analysts were expecting earnings per share of $0.09 on revenue of $41.3 million for the quarter ended June 30.

Shares of Netlist Inc. (Nasdaq: NLST) fell by $0.97, or 16.25%, to $5.00 in after-hours trading Monday on the announcement. Nearly 180,000 shares had changed hands, compared with the company’s three-month average of 124,856.

Netlist’s stock hit a new 52-week-low of $5.86 on April 13 – less than half of its 52-week-high of $12.64 on Jan 17.

Shares of Netlist Inc. (Nasdaq: NLST) fell $0.86, or 14.4%, to $5.11 in after-hours trading Monday after the memory subsystems manufacturer issued a lower-than-expected revised first-quarter guidance. Irvine, Calif.-based Netlist said it now expects to report earnings per share of $0.02 to $0.03 per share on revenue of $37 million to $38 million. The firm had previously issued guidance of $0.07 to $0.08 per share on revenue of $40 million to $42 million. Three analysts polled by Thomson First Call were expecting earnings per share of $0.08 on revenue of $41.2 million for the quarter ended March 31. Netlist CEO Chuck Hong cited operating expenses and decreased customer demand for the revised guidance.

Electronics components distributor Nu Horizons Electronics Corp.’s (Nasdaq: NUHC) stock dipped late Monday when the company reported after-hours that it had received a subpoena from the Securities and Exchange Commission (SEC). According to a written statement issued by Melville, N.Y.-based Nu Horizons, the SEC is requiring the company to produce documents related to its business relationship with Vitesse Semiconductor Corp. Both Nu Horizons and subsidiary Titan Logistics Corp. are distributors of Vitesse products. Titan Logistics also received a subpoena from the SEC. The firms said they are cooperating fully with the federal agency. Shares of Nu Horizons Electronics Corp. were down $0.14, or 1.2%, to $11.53 in after-hours trading.

InsWeb Corp.’s (Nasdaq: INSW) stock soared by more than half its value, or $1.73, to $5.04 in after-hours trading Monday after the company announced it had turned a profit for the first time. The Sacramento, Calif-based online insurer posted net income of $400,000, or $0.10 per share, on revenue of $8.1 million for the first quarter ended March 31, versus a net loss of $1.7 million, or $0.41 per share, on revenue of $7.7 million a year earlier. Separately, InsWeb also announced the closure of its term life agency as the last stage in the company's plan to concentrate solely on lead generation opportunities. InsWeb said it will continue to offer term life products to consumers visiting its online insurance marketplace through a lead referral model, which the company believes is more profitable and offers a more scalable opportunity.

YM BioSciences’ (AMEX: YMI) stock gained $0.12, or 7.3%, to $1.76, after the Mississaugua, Ontario-based oncology firm said late Monday that its partner Daiichi Sankyo has received the green light for a Phase I trial of nimotuzumam, a tumor treatment in Japan. Nimotuzumab is already approved in India, China, Cuba, Argentina and Colombia for nasopharyngeal and/or head and neck cancer, depending on the country.