Monday
Dec112006
Wait 'Till Winter: Taking Profits On IAC (IACI)
December 11, 2006 at 4:19 PM
I posted this entry on July 24th, 2006 (Wait 'Till Winter) on buying semi-conductors and online retailers in the summer and waiting for winter. That week I made the following buys in anticipation of a winter rally:
$24.75 for IAC/Interactive (IACI) - now $36.67
$17.39 for Advanced Micro Devices (AMD) - now $20.80
$17.10 for Intel (INTC) - now $20.84
Last week, I sold part of the IACI position at $36.64 and sold Jan 2008 37.5 calls against another part at $3.90 each. At a p/e of 38 trailing and forward of 18, the stock seems fairly valued. Though I'm still looking for a decent pop going into the year end and I left another part of the position unhedged to sell in January.
While I have a nice profit in both AMD and Intel, I do not feel they are yet ready to be sold. At p/e's just under 20, the stocks seem fairly valued but there always seems to be a tech/semi-conductor euphoria in January. I'm going to wait for that buying panic to set in. I love to sell to panic buyers.
As for Microsoft (MSFT), priced on July 24th at $24.00 now $29.65, I said that the impending release of Windows Vista would push the stock higher into year end. The push is on buyers have not yet pushed the beheamouth software maker as much as I thought. I sold April 30 strike calls at $1.20 against part of my position last week and have a target sale price somewhere above 30. See (Where Is Microsoft Top?).
$24.75 for IAC/Interactive (IACI) - now $36.67
$17.39 for Advanced Micro Devices (AMD) - now $20.80
$17.10 for Intel (INTC) - now $20.84
Last week, I sold part of the IACI position at $36.64 and sold Jan 2008 37.5 calls against another part at $3.90 each. At a p/e of 38 trailing and forward of 18, the stock seems fairly valued. Though I'm still looking for a decent pop going into the year end and I left another part of the position unhedged to sell in January.
While I have a nice profit in both AMD and Intel, I do not feel they are yet ready to be sold. At p/e's just under 20, the stocks seem fairly valued but there always seems to be a tech/semi-conductor euphoria in January. I'm going to wait for that buying panic to set in. I love to sell to panic buyers.
As for Microsoft (MSFT), priced on July 24th at $24.00 now $29.65, I said that the impending release of Windows Vista would push the stock higher into year end. The push is on buyers have not yet pushed the beheamouth software maker as much as I thought. I sold April 30 strike calls at $1.20 against part of my position last week and have a target sale price somewhere above 30. See (Where Is Microsoft Top?).
Disclosures and Confessions:
I own IAC/Interactive Group (IACI), Intel (INTC), AMD (AMD) and Microsoft (MSFT). I am short April 30 strike calls against part of my Microsoft position. I am short Jan 2008 37.5 calls against part of the IAC position. I may sell any of these positions at any time if there is a price spike. I have been trying to use Ask.com (owned by IAC) for searches to see if it is any better or worse than Google.com. I have found it about the same. I think ask.com is a little better for looking up people. Google is much better for looking up businesses.
Disclaimer:
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