08 December 2008
By Capital Gainer
Sometimes there is no need to analyze a stock:
The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits. [Read]
The New York Time Company (NYT) is going to borrow against an asset with tangible value to spend on an asset that is, without a doubt, of declining value in a dying industry, an asset that is a cash hungry monster.
What would be the reason to invest in a company with management making these types of decisions?
PN: $7.79
25 November 2008
By Capital Gainer
In this environment, Jamba Juice (JMBA) managed something that is said to be difficult in the current economic environment: get cash. Jamba Juice managed to raise millions, but it is debt, not equity. That being said it is cash, not debt raised to extinguish other debt. They have cash.
Now, they sales have been slapped with a downturn in the economy and they are going through a significant management change, but if they can weather the storm...
Is it worth the risk? The model score is extremely low, which is extremely good. Is it a good investment? A trade?
(Score, v.1: Post-debt: JMBA= -0.11, Pre-debt= -0.18 [Lower is better.])
PN: $0.59
24 November 2008
By Capital Gainer
All automakers are not equal. Though General Motors (GM) and Ford (F) both want government funds--who doesn't want free money these days--they are not equally desperate. In reviewing their financial statements, it appears that Ford can outlast General Motors, and in a free-market the downfall of GM could greatly benefit Ford.
That being said, neither automaker would be considered a strong and viable financial concern. A prescient short-term trader might be able to make money with the stock but as a long-term investment, there are too many unknown variables combined with very weak financial statements. Could you image taking a long-term stake in either of these companies?
Based on the CG score and review of the financials, if you have to pick one of these, GM or Ford, then F looks like the better choice. Though, the best choice of all may be neither. Though their prices are low, neither are cheap stocks.
Yes, Chrysler wants money also, but being a private company means we are not interested in the analysis because of our inability to make money off of their success or failure.
(Score, v.1: GM=3.63, F=1.09 [Lower is better.])
PN: GM @ $3.22, F @ $ 1.56