***Official*** 2011 Stock Market Thread

[mitmot]

Got back into SD at 9.95 this morning and it's looking good so far. I really didn't think we'd see sub-10 on this stock again

 

[HopJokey]

JNJ:

35% of my money is in JNJ stock.
1.8% of my money is in Jan 2013 LEAPS @85 (expire Jan 19, 2013)

The LEAPS are not a huge amount to loose if I do loose it all.

Ya, the stock is great. It's one of the best run companies and it is trading at a discount. Some think I am a fool for saying what I think it is worth because people run to PE ratios. PE is not a bad measure for JNJ (just how it has worked out in the past), but FCF is the real beautiful thing. The dividend is a nice bonus. Recently increased 3 cents (5%).

Well I agree looking at their FCF they are undervalued. Eventually the dividend yield with necessitate the steady rise in PPS and they haven't missed a divy hike in quite a long time and I don't see them missing one due to their FCF in the foreseeable future.

But there was a reason why the price was under 60 the past few months due to operational issues (manufacturing QA issues) that they have seem to corrected.

 

[IHateMyJob2004]

JNJ has some overthe counter drugs pulled right now due to manufacturing issues. Their cold and allergy type stuff. That should be resolved this year. And people need to remember that JNJ can threaten wal-mart and similar companies with not stocking them with anything if they refuse to put it back on the shelves. I even think I saw my local Wal-Mart having an empty shelve with a "coming back soon" type of thing on it showing the missing products.

JNJ is awesome for many reasons. Some people criticize JNJ for letting this happen with the drugs. I applaud them. They admitted issues. Pulled everything off shelves and are working to fix manufacturing issues. That is transparency.

 

[IHateMyJob2004]

Got back into SD at 9.95 this morning and it's looking good so far. I really didn't think we'd see sub-10 on this stock again

I'd re-enter at $8 or so. I figure it is worth $11/share or more so I need to buy for atleast 25% less than that. FWIW: I am basing value on revenues only since FCF has been bumpy over the years due to acquisitions.

They are back up to to $10.25. One can always D.C.A. into SD though. So good juob. Hopefully you can make 20%+ on this one.

 

[mitmot]

Yep, the way I look at it, oil stocks are probably going to be good through the summer. If it falls some more I'll likely DCA until it goes back to $11+

 

[lothar]

Well I agree looking at their FCF they are undervalued. Eventually the dividend yield with necessitate the steady rise in PPS and they haven't missed a divy hike in quite a long time and I don't see them missing one due to their FCF in the foreseeable future.

But there was a reason why the price was under 60 the past few months due to operational issues (manufacturing QA issues) that they have seem to corrected.

The price of JNJ was under $60 the past few months due to Mr. Market, not operational or manufacturing QA issues.

 

[IHateMyJob2004]

The price of JNJ was under $60 the past few months due to Mr. Market, not operational or manufacturing QA issues.

Ahh, that manic depressive guy.

I do see how the news caused Mr Market to behave the way it did though. I will say it this way. There was correlation. I used that word intentionally.

 

[lothar]

Ahh, that manic depressive guy.

I do see how the news caused Mr Market to behave the way it did though. I will say it this way. There was correlation. I used that word intentionally.

The news of JNJ recalls have been well known for more than a year.
We still haven't had Motrin, Zyrtec, Sudafed, some Tylenol, and a lot of other JNJ brands and they've been recalled for over a year(~14-16 months) now.

protip: I am a pharmacist that gets info on recalled medications and manufacturing issues every hour, every day the moment they immediately occur.
I didn't see anything new in my inbox the past few months that is particularly revealing or damaging to warrant the <$60 stock price.

The stock is worth minimum $78, realistically probably closer to $82-85.
I vote a fair value "conservative" estimate of $78.

 

[IHateMyJob2004]

The slip to $60 can be correlated by something else. I forget what at this point. Might have been the earnings release or something to do with the CEO. I just don't remember other than at the time when it happened. Maybe it was the recall in the hip device piece of JNJ. There is a potential for lawsuits there since the hips (I think) are not lasting as long as they should on average.

Have there been any whispers on those products that are off the shelves? Is there a sales rep you can contact and ask if there is anything that can be said off the record, even vaguely?

Hopefully people will see JNJ climbing and join in on the "momentum". JNJ has been beat down for a long time and sometimes when that happens you see run ups to irrational levels.

I maintain that worst case, JNJ is worth about $85. In being precisely wrong, I think $92 is accurate. To be approximately right I think JNJ is worth $90-$110 (maybe I should say $85-$110. That $92 is a more pessimistic view that only uses an 11&#37; discount rate.

Because of the options I hold, I am praying for a run to $100+.

 

[dullard]

JNJ has some overthe counter drugs pulled right now due to manufacturing issues. Their cold and allergy type stuff.
...Pulled everything off shelves and are working to fix manufacturing issues. That is transparency.

I personally wouldn't call it transparent or just "some over the counter drugs."

First, lets tackle the "some" part of your quote. Here are the over the counter recalls. That "some" part includes dozens of products in the Motrin, Tylenol, Benadryl, Rolaids, Simply Sleep, and St. Joseph lines. These aren't minor products, they are very well known products and a large number of them.

Next, the "over the counter" part. This week they pulled an HIV drug. In March it was Insulin pumps and surgical sutures. In Feb, it was Prescription filled syringes. Etc.

As for the transparent part, what about hiring consultants to do a phantom recall? That isn't transparent at all.

This stuff has been going on for 2.5 years. They are still using the contaminated wood pallets instead of the slightly more expensive plastic ones. They still have terrible cleaning proceedures. They still have smells two years later and it is spreading into prescription drugs. They still have an attitude of arrogance. In light of that, what makes you think that J&J should trade at an all time high (their previous high was under $72)?

 

[endervalentine]

anyone know what's going on w/ RMBS, just took a dive this morning, down 20&#37;?

 

[goog40]

Uhhh, what's going on with RMBS? Trading's been halted multiples times?

They bought some company yesterday and were down 2&#37; in AH, but when they opened today they spiked up right before free-falling.

 

[endervalentine]

The only thing I could find was this:
>Appeals court affirms-in-part, vacates-in-part Rambus appeal

From Reuters
http://www.reuters.com/article/2011/05/13/us-rambus-micron-hynix-idUSTRE74C4NA20110513

(Reuters) - A federal appeals court has ruled that Rambus (RMBS.O) did inappropriately destroy documents related to patent cases but overturned a lower court's dismissal sanction.

Both Micron (MU.O) (MU.O) and Hynix Semiconductor Inc (000660.KS) had accused Rambus of spoliation, the legal term for inappropriate document destruction.

Rambus shares were down 20 percent in noon trading on Friday

 

[goog40]

Ugh... woke up and checked my phone and saw RMBS was up (quotes delayed 20 minutes in the app) and was thinking about selling. Checked my computer and saw this now.

I think trading just got halted for at least the fifth time.

 

[Azurik]

6th time now. It's a stock record...

Appeal courts agreed with one of the lower court's decision (Robinson they say got it right, not Whyte) that they destoryed documents in inappropriately, but that it does not warrant making the patents unenforceable and vacates the decision back to Robinson.

 

[JS80]

6th time now. It's a stock record...

Appeal courts agreed with one of the lower court's decision (Robinson they say got it right, not Whyte) that they destoryed documents in inappropriately, but that it does not warrant making the patents unenforceable and vacates the decision back to Robinson.

Which translate to what in terms of RMBS trading at $16?

 

[Azurik]

Slgiht over reaction. Spoliation without criminal intent is not a negative - slap my wrist and fine, I won't do it again under the definition the court defined.

I'm a glutten for punishment. I just bought 1,200 more around $16.

 

[endervalentine]

Slgiht over reaction. Spoliation without criminal intent is not a negative - slap my wrist and fine, I won't do it again under the definition the court defined.

I'm a glutten for punishment. I just bought 1,200 more around $16.

And the AT trail is still on right?

 

[Azurik]

Still on for June 6. We'll see if they try any funny things with that.

Here's an honest answer to a lot of people's questions. It's getting remanded back to Judge Robinson, who I don't think will turn pro-RMBS anytime soon. And Judge Whyte is not going to turn against RMBS. Whyte was largely upheld on critical issues such as patent be infringed & valid. Also, they asked him for reconsideration on spoliation. The worst he'll do is a veritable slap on the wrist.

Expect a drag-out on this situation, which have been dragged out enough by the courts.

 

[Imp]

Market just about "crashed" in the past hour. Great shit, I'm doing worse than I was a few days after the Japan tsunami.

MSFT should be about bottomed out if you want to buy and hold for 1 or 2 weeks.

 

[eLiu]

Still on for June 6. We'll see if they try any funny things with that.

Here's an honest answer to a lot of people's questions. It's getting remanded back to Judge Robinson, who I don't think will turn pro-RMBS anytime soon. And Judge Whyte is not going to turn against RMBS. Whyte was largely upheld on critical issues such as patent be infringed & valid. Also, they asked him for reconsideration on spoliation. The worst he'll do is a veritable slap on the wrist.

Expect a drag-out on this situation, which have been dragged out enough by the courts.

Does that mean rmbs will eventually lose vs hynix & micron again? Considering Robinson's disposition that is. I mean even if rmbs's behavior isn't grounds for dismissal, it could be grounds for some like "well if you hadn't destroyed docs, you deserve $X, but since you did, you get $X-X = 0!"

 

[lothar]

How long are RMBS shareholders willing to wait for these court cases and settlements to end?
I still vaguely remember the long discussion on RMBS me and Azurik had a while back here ~3 years ago.

 

[endervalentine]

Still on for June 6. We'll see if they try any funny things with that.

Here's an honest answer to a lot of people's questions. It's getting remanded back to Judge Robinson, who I don't think will turn pro-RMBS anytime soon. And Judge Whyte is not going to turn against RMBS. Whyte was largely upheld on critical issues such as patent be infringed & valid. Also, they asked him for reconsideration on spoliation. The worst he'll do is a veritable slap on the wrist.

Expect a drag-out on this situation, which have been dragged out enough by the courts.

I'm curious as to why you bought another 1200 shares, the way I understood the ruling was that, the us appeal court decision was in line with the robinson decision which mu won because of spoliation. This also should say that whyte's decision was incorrect. Anyway you look at it, this is not good for the AT trial right? Just curious as to your thinking behind picking up more.

 

[Azurik]

AT Trial is not against RMBS, so spoilation should play a very limited role in it. It's about the memory makers colluding to price-fix DRAM and make RDRAM irrelevant.

The ruling came to this:

1. Whyte - they agree that Hynix infringed and Rambus' patents are valid, but that Rambus improperly destroyed documents. So what will Whyte do? Probably say, "Rambus, you shouldn't have done it, but the infringed and I'm still awarding you damages."

2. Robinson - they agree that Rambus destoryed documents and that Robinson was right in that aspect, but that Rambus' patents shouldn't be unenforceable, so they give it back to her to decide again or explain in further detail.

Do you see the predictament? They're essentially handing the cases back to the judges instead of consolidating it into one judge. They're just going to rule about the same as they did before.

 

[endervalentine]

AT Trial is not against RMBS, so spoilation should play a very limited role in it. It's about the memory makers colluding to price-fix DRAM and make RDRAM irrelevant.

The ruling came to this:

1. Whyte - they agree that Hynix infringed and Rambus' patents are valid, but that Rambus improperly destroyed documents. So what will Whyte do? Probably say, "Rambus, you shouldn't have done it, but the infringed and I'm still awarding you damages."

2. Robinson - they agree that Rambus destoryed documents and that Robinson was right in that aspect, but that Rambus' patents shouldn't be unenforceable, so they give it back to her to decide again or explain in further detail.

Do you see the predictament? They're essentially handing the cases back to the judges instead of consolidating it into one judge. They're just going to rule about the same as they did before.

If they asked Whyte to remand his decision, wouldn't the judgement that RMBS won against Hynx by thrown out?

Also, prob. a stupid question but they're having two judges for essentially the same case at the same time?

Is there a conf. call scheduled by RMBS mgmnt?