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Shorting opportunity in XL

(Update July 11th, 2008)  XL shorting trade worked out well.  That being said the market maker looks to be holding inventory in the low 20’s and may move the stock higher out of this double bottom at least in the short run until more clarity over the future business prospects of XL are more clearly stated in upcoming earnings reports. )

XL is an insurance company that had some of its debt cut to junk on Wednesday by Moodies.            Friday  Jan 18th,   2008    3:30 pm

Last month an article said this would be disastrous for the company when they were put on watch by Fitch as two chairman stepped down.   The company has exposure to homeowners insurance among many other problems areas of the insurance business model.  The company should have a hard time going forward.  The limited time this company has had in the spot light over its exposure to the housing market indicates to me an opportunity to short unexploited.  Company breaking out lower of a consolidation pattern.      The argument against this trade is the company has alot of cash, earnings, and assets to offset the losses.   Earning come out in early February and  I hope will put a big dent in the share price. 

http://www.reuters.com/article/marketsNews/idUKN1627979520080116?rpc=44

  http://biz.yahoo.com/ap/071228/xl_capital_chairman.html?.v=1

entertainment purposes only

January 18, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , | Leave a comment

Past thoughts on CRM

 

(January 18th, 2008 –  CRM is trading lower this morning, and I think it may be the beginning of a big move lower.   Friday  January 18th, 2008      10:30 am

  I must say thank you Cramer from Mad Money for the UA information last weak that helped me make the move to short the stock.  I lost a little shorting CRM last week another Mad Money stock from Cramer about possibility of sell off.  Today the market seems to be positioned to take the stock lower when the market is open.  CRM has very little earnings;not good in my opinion.  Growth expectations to high for slow or bear market based on principles of doing more with less.  The competition is coming from all angles.  It is just too easy to duplicate customer management software.   Good customer service, followed up witha letter, and a couple of phone calls over the next year is not worth billions of dollars.  Not saying that’s all CRM does; but, you get the point.   INTUjust entered the market with a simple customer support  service that customers can call to get help.   The article pointed out other competitors CNQR , INTU, OMTR,TLEO,SFSF,N,PAYX.  It also mentioned GOOG in the article not as a competitor; but, as a source of new business for the sector.  I can see GOOG is looking to grow to move into the sector with the low barriers to entry.  Google has good street cred as Cramer would say when it comes to delivering a friendly product that makes investors mullah. –Some adlib–

   Pricing pressure in customer management from advertising or lack ther of.   To other anticipated slow downs that can hurt. , business cutbacks,  and churn should all erode CRM’s future hopes.  At least that my opinion.   http://www.forbes.com/2008/01/17/saas-recession-concur-tech-enter-cx_sm_0118saas.html?partner=yahootix

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January 18, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , , , , , , , , , | Leave a comment