If anyone is still holding CALL (I am, for now), below is a perspective that favors our side. (I’ve read the exact opposite too.)
As we approach September, my make or break month, the delayed launch of their product is causing me to question if I am giving them enough time to work out the kinks.
Any comments would be welcomed but to me, with $72M in cash and a PE in the low single digits, there’s not much downside so holding is just an opportunity loss. The way I have constructed my portfolio, I can live with an opportunity loss since I haven’t yet taken all opps available to me anyway. And this is a small position.
MUSINGS:
Frankly, I look at this position as a terrific learning experience since the story on both sides of the aisle is convincing and I can not for the life of me, figure out which way it will go. So basically it’s a struggle between waiting for the story to resolve itself and not eating up too much of my investing time with the puzzle. Not a bad position to be in as long as you don’t have too much cash involved. I’m in the same position with another stock except the other stock promises a bigger payout than I think I can get with this one, unless CALL becomes a take over target. (Couldn’t you buy this company with their own $72M in cash?)
I sold my position over a month ago at a loss. I am skeptical that they have a competitive advantage as what they do does not seem unique to me. I don’t like investing on the hopes of a buyout.
Me neither but here’s my thinking: They have $72M cash and growing. They have a positive sales response to their new MagicGo. They are increasing their mobile App customers. Their PE is abysmally low. Positive articles are starting to be published. Short interest is almost half the stock.
How low can they go? (The only bad information is that you and Saul sold out.)
Today I sold 5 puts for $2.10 each and March 2015 expiration with a strike price of $12.50 (3.36%/month return). I also rolled out the September $22.50 puts to March for a small credit, just to clear the decks so to speak.
It appears to me it has approached the no brainer stage.
Mykie
Sorry for talking options here but you really have to love them and with a stock like CALL, they are a life saver…or not
Yes, if they can grow or even maintain their current level of business then you should do ok with the stock. I certainly would still be careful and limit your investment…if it were me I would not invest more than 5% in this type of company even if I was very confident. I worry about all the other free calling services and wonder if a paying service will eventually become obsolete. Or if some other thing will become popular and people stop using MagicJack. Technology moves fast and this is always a danger.
But if you have conviction about the company’s future business prospects then you shouldn’t let someone else selling (like me or Saul) convince you otherwise. I just decided that I didn’t want to take the risk with this company and put my money to work in other stocks. But I also didn’t do exhaustive research in this company.
I agree that CALL looks like a no brainer. However, no matter how hard I try, I can’t seem to convince my brain to let me buy in. There are just too many free competitors to the products CALL sells.
I’ve never heard the name MagicJack mentioned in a conversation by anyone under 40 that wasn’t followed by uproars of laughter. That said, I firmly believe there is money to be made here, even if I can’t bring myself to open a starting position.
I agree that CALL looks like a no brainer. However, no matter how hard I try, I can’t seem to convince my brain to let me buy in.
Mykie,
This comment by slips says it all for me. It’s cheap, it should be a nice turnaround and double in price. It sounds like I should buy some back, but I can’t bring myself to do it.
But if you have conviction about the company’s future business prospects then you shouldn’t let someone else selling (like me or Saul) convince you otherwise. I just decided that I didn’t want to take the risk with this company and put my money to work in other stocks. But I also didn’t do exhaustive research in this company.
Yes, I have only .4% of my port in this stock but I also think I can make some money with it due to the conditions of high cash accumulation, no debt and a shot at getting better. Can it go to a PE of 1?
I also have sold off half my stock position and now am using options going forward. I think there’s a bottom for the stock and I’m guessing we are at it.
M
I’ve never heard the name MagicJack mentioned in a conversation by anyone under 40 that wasn’t followed by uproars of laughter. That said, I firmly believe there is money to be made here, even if I can’t bring myself to open a starting position.
Yes, that’s my problem…I’m over 40.
At any rate I reduced my position by half, (I was 10 points underwater) and used that money to buy KNDI (a Chinese electric company with gov subsidies of $14K on a car costing $15K). Now intend to make it back with options.
At any rate I reduced my position by half, (I was 10 points underwater) and used that money to buy KNDI (a Chinese electric company with gov subsidies of $14K on a car costing $15K). Now intend to make it back with options.
Welcome to the jungle, we got fun ‘n’ games
We got everything you want, honey we know the names
We are the people that you find, whatever you may need
If you got the money, honey we got your disease.
Hey Mykie,
Glad to have you in Kandi. Looking forward to seeing you on the board.
I’m with you FrickNFool. No way I’d buy ANY Chinese company after my experience with them.
Saul
and
KNDI. Can you say China Green Agriculture?
drdm
I HEARTILY AGREE WITH BOTH OF YOU! When I was evaluating KNDI the company seemed like it was too good to be true. Huge red flag. When something seems like that, it probably is. So I bought them as .001% of my portfolio and decided to let it ride. I am currently up 327% from that purchase 106 weeks ago. Not bad! I’ll take it. But I also am not going to fool myself into thinking that they are any different than CGA, FEED, YONG or any of the other companies that the Chinese opaquely run like it was a private checking account. I have no intention of buying more shares.
My current bit of speculation is with AEYE, of which I bought .0008%. Thanks for the tip!
Just curious Jeb, why bother to buy at all if it’s such a small percentage of your overall port? 0.001% of 10,000,000 is only 100… Even if the position increased by 100x, it’s still barely a rounding error overall.
Just curious Jeb, why bother to buy at all if it’s such a small percentage of your overall port? 0.001% of 10,000,000 is only 100… Even if the position increased by 100x, it’s still barely a rounding error overall.
-srslydude
Good question and this is my mistake. I bought in at one tenth of a percent, so that should have been .1%. If there was no percent sign it would be .001 of the whole. It is still a small amount, but not so small as to be irrelevant.
The same is true of AEYE. It is .08 of a percent, or .0008 of the whole.
