SNDA (Shanda Interactive Entertainment)
SNDA is not a typical investment for me. The stock is coming out of a long downtrend and while it has had a positive move the last 6 months, the chart looking back several years shows a good bit of pain.
The company is a chinese internet content firm. Currently sales and earnings are decreasing on a year-over-year basis but the expectations are for this to turn back up. The company has a new model that is attracting usuers better and generating better margins per user. This is driving an increase in the stock multiple as the company should be able to leverage this successful model to the main public. There are several new games planned to launch in 2007 that will drive further growth.
I currently have 10,000 shares with cost of 19.50. I have done some hedging since to reduce the volatility but as of today the 10,000 shares is all I am holding. I will watch both the fundamentals and the technical pattern carefully and I don't anticipate holding if either area shows weakness.
Jan 23, 2007
The overall market has given some discouraging signals the last few days with volume rising as the indexes sell off. More importantly, leaders as defined by the IBD highly rated stocks have seen more than their fair share of selling. We are not at a place where i feel comfortable swinging to having a bearish portfolio, but it warrants more caution.
With this in mind, I decided to sell my SNDA position. Over the weekend, I had lost 5,000 or 1/3 of my position due to options being assigned. I have a healthy gain in the position but the turnaround story is not the type of trade that I am especially skilled at so I felt it was the most disciplined decision to take this position off since i have less of an edge and i am uncomfortable with the overall market trends.
Jan 23, 2007
The overall market has given some discouraging signals the last few days with volume rising as the indexes sell off. More importantly, leaders as defined by the IBD highly rated stocks have seen more than their fair share of selling. We are not at a place where i feel comfortable swinging to having a bearish portfolio, but it warrants more caution.
With this in mind, I decided to sell my SNDA position. Over the weekend, I had lost 5,000 or 1/3 of my position due to options being assigned. I have a healthy gain in the position but the turnaround story is not the type of trade that I am especially skilled at so I felt it was the most disciplined decision to take this position off since i have less of an edge and i am uncomfortable with the overall market trends.
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