ArvinMeritor, Inc. (ARM) [Bearish]

Market cap 1.8B trading around $19.50

275M Cash + 530 AR = 805
430 Inv
430GW
400 net PPE
2800 Total Assets
1.4B gross PPE, 1B accum dep

650 AP + 110 net accrued exp + 530 other current liabilities = 1290
1B LTD
90M Deferred tax
35 Minority interest
1375 other liabilities – retirement benefits 1.1B, check 305 other
3800 TL

-1000 rBVe
+1000 accDep
0 aBVe
-430 GW
-430 Be
Weak financial position

Best case earning power
40M GP less SGA per quarter for 160M annual
100M Interest expense about 25M per quarter
+80M annual dep
-80M annual capex
2008 + 2009 capex = 98, 82, respectively – during down turn so assuming that’s baseline maintenance capex (although have had divestitures – but recent quarters show 20M capex as well)

Let’s add a generous 15M from affiliates each quarter for 60M annual.

120M income at 10x multiple = 1200

Misc.
60M investment in 2008 – poor timing and probably over paid
Luckily its significant debt maturities start in 2015, 2018
But it’s still bad that they have 1.1B in retirement liabilities
CCC+ rated unsecured debt

Even after given generous figures, it has a weak financial position and earning power for a company trading at 1800M market cap. Think it could stand to drop 20% or more.

Amazon.com, Inc. [Bullish]

Amazon has earnings release after close today. If I had surplus capital I would buy AMZN. I think they are going to crush expectations.

SMART Modular Technologies (WWH), Inc. [Bullish]

Current Price: $6.08
Strengths:

-Recent technical strength - could be beginning of uptrend - largest positive volume day since October and gapped up
-Recovering economy so hopefully greater demand for DRAM as well.
-Not very leveraged - Balance sheet cash can easily cover debt
-High Accumulated Depreciation so fair value of PPE may be much higher
-Good earning power -Quarter ending 11/26/2010- about $8M net income (annualized of $32)even half annual NI for $16 million-- at a 10x multiple + a discounted book value of equity (especially for $100M of inventory)still leaves us w a valuation floor of $410M or $6.5 per share of SMOD.
-Potential Acquisition target? Fundamentally undervalued and I'm curious what fair value of its PPE and operations would be

Weaknesses:
-Weak medium term technicals - Strong 2009, Flat 2010, Declining DRAM prices could entail a decline in 2011
-Recent Q2 EBITDA guidance of $.06-.08 vs expected $.19
-Operating scale is much smaller relative to competitors so will be even more vulnerable from eroding margins
-3 major customers make for over half of sales (maybe research their financial position and creditworthiness)

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Short CWTR@4.55

Current Mkt Cap of $420. Weak balance sheet with rBvE of $240. Should be discounted for illiquidity of cash assets and inventory ($72 and $166, respectively + total assets of 580M). No annual sales growth for past 4 years. No actual Income. What is the premium for then? Could be the 250M of accumulated depreciation--fair value of PPE actually greater than BV?

HOTT

Long @ $6.48

SKF

Long @ $18.69

Short the financial sector. Uncertainty about regulation and European banks.

GSL

Re-entered Long @ $2.89

PACR

Long @ $6.12 yesterday. High operational leverage and looks like it may return to profitability this year--good quarterly improvement over the past year. It gapped up today to open at $7.38 and is currently trading down - but more likely due to weak macroeconomic climate with Europe worries and banks possible adjustment of balance sheets.

HOTT added to watch list LONG today.

Potentially a new stock screener to use?

http://www.trade-ideas.com/StockInfo/_TopListResult.html?sort=MaxRV&MinVol30=5&MaxVol30=20&XN=on&X_NYSE=on&X_AMEX=on&show0=Price&show1=TV&show2=FCD

CFA

Break until exam is over!

DRYS

Long @ $6.35.

It's finally moving. I thought it was highly undervalued before - Lets see if it can break this week.

Still long GSL (shipping as well)