2012 Articles

2012-12-24 – Happy Holiday’s

No matter what you celebrate or don’t at this time of year – today is Christmas Eve and I wish everyone a healthy and prosperous holiday season & Happy New Year.

I will be taking the week off – starting now and not posting another column until January 2, 2013.

As promised, I’ve crunched the numbers for rolling out Xerox Corporation (XRX) for those of you that hold the position. Depending on your own personal tax situation, it may be best for you to take the tax loss, over rolling the position out. Please consult with a tax professional for advice regarding your own situation.

My thanks to those who shared their positions with me to help devise the best roll out strategy for all – it does help to know if the numbers I am crunching will be of any use to anyone. One thing with the Nails strategy is that you don’t have to follow the rubuy instructions 100% of the time. It’s not like a margin call when you have only so much time to pony up. I provide the guidelines and you follow as your wallet allows you to, and when you can.

For the most part, most of you have an average price very close to the stat book at about $0.30 and under. And, there’s a handful that stopped rebuying a while back and have an average price close to $2.00. There aren’t too many in the middle.

For those of you at the high end, at this point – there isn’t much I can recommend to keep you in the position. It would cost quite a bit to roll it over and have a good position going forward. For those of you in this situation – you best choice is probably to sell before the end of the year – for the tax loss.

For those of you in the position and with a decent average price – I have a spreadsheet I can send you to calculate the roll over for you. You input a few numbers and it will calculate how much it will cost for the roll over.

Xerox Corporation (XRX) has been on the open portfolio since May 2011 and for the roll – I am recommending selling the 2013 $7.50 strikes and buying the 2014 $5.00 strike to replace it, keeping the average price of the new position under $5.00 per share.

To use the spreadsheet, input the number of contracts you own, the average price you have in them, and the selling price. Next input the purchase price of the new 2014 options and then play around with the number of new contracts to buy – in order to keep your average price under $5.00 if possible.

This will mean that we expect the price to go up to $10.00 before the end of next year. It’s a doable objective – but, I would expect that more rebuys in the next year will lower our average – so that we may realistically try to exit at about $8.00. That would be the plan.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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At the time of publication, Mr. Dykstra will not, directly or indirectly, have a position in any security that he discusses in Nails Investments by Lenny “Nails” Dykstra (the”Product”). HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails Investments contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails Investments for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

The Product includes a list of stocks chosen by Mr. Dykstra in accordance with his stated investment strategy. Your actual results may differ from results reported for the list for many reasons, including, without limitation: (i) performance results for the list do not reflect actual trading commissions that you may incur; (ii) performance results for the list do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the price of stocks chosen for the list may change in a short period of time, and although the “purchase” or “sale” of a stock on the list will not be affected on the list until confirmation that the email alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of stocks on the list at the point in time you begin subscribing to the Product may be higher than such prices at the time such stocks were chosen for inclusion on the list. Past results are not necessarily indicative of future performance. All suggested trading ideas involve the purchase of 10 options contracts, unless otherwise noted.

2012-12-21 – End of Days with PG!

This morning’s pick is expected to open low, while at the same time the options are going at a good price – so grab your shopping cart as I head to the grocery store to see how many labels I can find with a Proctor & Gamble Co. (PG) logo on them again.

Today marks the end of the Mayan calendar, which some say foretells the end of the world – and it’s my nephew’s birthday too. What most people don’t realize is that the Mayan calendar is a series of rings or “octets” which means you multiply by eight to move to the next ring and you continue to do that until you reach the last ring. Since the calendar isn’t infinitely large – eventually you will run out of room, out of multipliers and out of days. Basically their calendar ends because of the finite size of the thing, not because the world is supposed to end… but it makes for good fiction and film.

I’m pretty sure that tomorrow will come and with it all the same worries of today – and not the need for a year’s or more supply of food and an armed bunker to keep it.

But, if an asteroid does hit and it’s the long goodnight for most of us – well, it’s a good day to celebrate your birthday – or at least better than if your birthday is tomorrow & the world ends today. Happy Birthday Kevin!!!

Proctor & Gamble makes just about every household consumable supply you have. You can go to http://www.pg.com/en_US/brands/all_brands.shtml and check out how often a P&G product falls into your household shopping cart. They have 12 brands that have sales over a billion dollars each and 19 brands that top $500 million in sales each. That, my friends, is a lot of firepower. Here is the list of brands that top a billion in sales: Always, Ariel, Bounty, Braun, Charmin, Crest, Dawn, Downy, Duracell, Fusion, Gain, Gillette, Head & Shoulders, Iams, Mach 3, Olay, Oral B, Pampers, Pantene, Tide, and Wella. How many to you buy?

Revenues are posted at $82.89 billion, $13.89 billion in operating cash flow and $5.30 billion in cash or equivalents on the balance sheet. Debt is more than twice operational cash flow, it comes in $31.88 billion, but the company is such a staple of consumable supplies and they’ve been around since 1837 and I don’t plan to stop showering or shaving or moisturizing anytime soon… unless of course – by tomorrow, we can’t. I have faith that we will all be able to shower tomorrow.

The company has a return-on-equity (ROE) of 14.05% and forward price-to-earnings (P/E) ratio of 16.24 is a bit higher than I like. But, once again – it’s the stock chart I like today and the anticipated drop in price. It is telling me to buy along with doable option price. I do like it when that happens.

Please see the scorecard page for trading details and don’t forget to immediately place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as we hit the target.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-12-19 – Double D’s with DD

The market continues to test resistance and continues to push upward. Once again, early morning pre-market trading and stock futures are pointing to an open with a rise in opening prices over yesterday’s close. We are starting to see some improvement to the open portfolio – and it would be nice to clear out additional open positions and add to the win column.

Wednesday we got on board with Qualcomm Inc. (QCOM) and both Costco Wholesale (COST) and Home Depot (HD) have popped as predicted and given us some quick Christmas cash. With a few more days of upward trends – we might even see Xerox (XRX) clear out before I have to post a roll recommendation. That would be fantastic.

However, those of you that are still holding XRX – please send me an update and let me know where you stand. Tell me how many positions your hold and your average price. This will help me select the best recommendation for everyone – based on the average of all positions, not just the virtual account here. I’ll post the roll out recommendation – before the end of the year – to cover anyone who needs the tax loss of just selling by the end of the year – that option too.

Today’s recommendation is DuPont de Nemours & Company (DD).

From previous columns, you will know that this household name has been around for over 200 years and operates as a science and technology company in various areas, including biotech, electronics, materials science, safety and security, and synthetic fibers. A couple of DuPont brands everyone is familiar with are Corian, Kevlar and Teflon. For many years DuPont was one of the most sought after stocks to own for its consistent dividend payouts.

DuPont’s stock chart is coming back from a “cliff diving” experiment that left the stock looking like it missed the water after a really disappointing earnings report. Yesterday the stock closed at $44.89, which is 17% down from the 52-week high and only 8% up from the 52-week low, so there plenty of room at the top as the stock edges back upward.

DD’s forward price to earnings ratio is 12.07 today and anything below 15 is considered to be undervalued by Wall Street, so DuPont is in the sweet spot with that stat. Revenue of $39.43 billion kicks back a return on equity of 27.46 percent of which both these figures are down from the last time I picked the company. They have about $15.07 billion in debt and total cash of $3.52 billion. It would be better if those numbers were reversed. However – DuPont has been around for so long, they have a track record for managing debt successfully. Lastly, the company has $4.30 billion in operating cash flow.

Please see the stat book page for the specific trading details for today’s recommendation.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.
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At the time of publication, Mr. Dykstra will not, directly or indirectly, have a position in any security that he discusses in Nails on the Numbers by Lenny “Nails” Dykstra (the”Product”). HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-12-17 – Timing QCOM for a Win

The market is up this morning and in doing today’s research, there weren’t too many stock charts pointing to good timing opportunities for a buy this morning. I’ve been a little under the weather, with a bit of a cold with all the trappings of being a virus factory. Sorry for my tardiness.

So, let me get right to it – today’s recommendation: Qualcomm Incorporated (QCOM).

QUALCOMM Incorporated makes digital telecommunications products. The company develops and supplies integrated circuits and system software for voice and data communications, networking, application processing, multimedia, and global positioning systems. QCOM is headquartered in San Diego, California and employs about 21,000 full timers.

QCOM is a monster company with revenue of $19.12 billion, debt at only $60 million as compared to total cash of $12.37 billion and operating cash flow of $6.00 billion making for a very solid balance sheet. The company’s forward P/E ratio is a modest 12.74 with a PEG Ratio of 0.99 and a return on equity of 17.46%. About 81.50% of the stock is held by institutional traders. All in all, the stats tell me this continues to make a nice choice, but we need the market to come to us just a bit to see this trade fill. It would have been better to buy last Friday at the close, as it has already popped this morning and looks to be a long shot.

Please check the scorecard for trading details and if the order fills, immediately place a GTC limit order to cash out the position for a win should the option price per share increase by $1.00 to lock in a win.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-12-14 – You Can Do It – HD can Help!

Today there weren’t very many good choices out there. I ended up with two to pick from: DuPont de Nemours and Company (DD) or Home Depot, Inc. (HD). Of the two, I’m going with the bright orange aprons and Home Depot.

Oddly enough, I’ve had plenty of opportunities to pick HD along with other stocks and I’ve gone with Lowes too many times to count – but, I cannot find a previous article about Home Depot so I think this will be a debut pick. How about that? And, for Home Depot – no less?

Founded in 1978, The Home Depot, Inc. is the world’s largest home improvement specialty retailer with current revenue at $72.52 billion operating cash flow of $6.34 billion. The Home Depot has 2,249 retail stores in the United States, Canada, Mexico and China and employs about 330,000 people. They are based in Atlanta, Georgia.

I’m sure that each of us has been to Home Depot many, many times and know the store layout as well as the grocery store.

The forward P/E is 17.99 and the PEG ratio is 1.27. Total debt is $10.81 billion with operating cash in the bank at $2.55 billion, numbers that would make me happier if reversed, but debt is not a bad thing if managed well and operating cash flow is healthy.

I looked at a lot of stock charts this morning and not many were showing timing opportunities. This one is. The stock has been climbing steadily all year and has just recently pulled back enough to show me enough room at the top for a stock that is trending higher over all ranges.

Please check the stat book page for trading details and if your order is filled, remember to set a good-till-cancel (GTC) sell order at $1.00 above the purchase price for a lock quick win.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

2012-12-12 – It’s 12-12-12 – Let’s Win with COST

On Monday we added Target Corp. (TGT) options to the portfolio and saw our Johnson & Johnson (JNJ) pop for a very quick win. Additionally, all the way down the portfolio – we are seeing our positions moving into the green. A couple good market days and we could see several more winners posting.

If you’re inclined to believe in the end of the world scenarios or don’t want to participate in any cliff diving that may send things tumbling down next month – no one would blame you for cashing out with some nice profits and playing observer, so you can watch what happens with cash in the bank. It’s always a good idea to have some cash around when the media is preparing for our financial doom. We do want to have money to buy things cheap when there is opportunity to do so.

It would be better to get through such things from a position of strength and not have to scramble to shore up our own portfolios and cover our rears. So, even if you don’t cash out on any position – save some green for the possibility of some really good deals coming soon.

As I said on Monday – today, I am going to try once again to add Costco Wholesale Corporation (COST) to the DITM portfolio. Timing is looking good for another quick pop.

As we all know, Costco operates membership warehouses and offers discounts on brand and private label goods and services – with no frills stores and high quality merchandise, usually packaged for mega consumers. It’s a great place to shop if you have a few kids, own a business or like quality with competitive prices, and don’t mind volume. It’s my favorite store. I am there practically every Saturday morning at the 9:30 am open to beat the hordes that show up an hour later.

The company sells just about everything, except for the item you bought last week; those will be gone. This “here today, gone tomorrow” situation with inventory sets up a consumer attitude where there is always a spending frenzy, as consumers never know if the items that seem like a good buy and in stock today will be there the next time they shop. I call it the $200 club, as you never seem to get out without giving up at least that much cash.

Costco operates 612 warehouses in the United States and nine other countries and employs 96,000 people.

Along with most of the merchandise they sell, the company has an extra large balance sheet too. Revenues are posted at $99.14 billion annually, $4.85 billion in the bank and only $1.56 billion in debt, with operating cash flow of $3.06 billion. It has a return-on-equity (ROE) of 14.09% and forward price-to-earnings (P/E) ratio of 19.62, which is a bit higher than what I like to see for bargain shopping, but they support a higher P/E ratio on a consistent basis.

A week ago the company posted a new 52-week high mark of $105.97 and the stock closed yesterday, trading at $98.31. The 2014 calls are selling with a higher premium than the usual Nails formula – but, like most of our consistent winners that have share prices over $70 – they carry that extra premium around all the time. We will pay it to get in, and it will still be there when we cash out.

Please check the stat book page for trading details just below the open positions chart.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-12-10 – Aiming Again at Target!

Premarket trading and stock futures are mixed this morning, so what the day will bring is going to be a surprise. And, the key to the strategy here is to never chase the morning’s recommendation if it is just out of range. We let the market come to us or we let it go.

Today, I’m going back out shopping. When it comes to shopping at a discount store, I’ll take this one – Target Corp. (TGT). I picked Target last Monday as well, but the position did not fill. I still like it today. I also like Costco – but, TGT is looking better today and Costco is looking like the timing will be good for a Wednesday or Friday pick.

Now back to TGT.

Target has cleaner stores than Wal-Mart (at least here where I do my shopping), more name brands I trust, and I don’t have to wait 45 minutes in line each time I show up, and I don’t feel the need to shower in Purell as I exit. Sure, Wal-Mart prices mostly the same brand merchandise up to a nickel lower, but in my opinion, it is worth the extra few pennies – for the difference in shopping experience and time saved.

This is a good DITM selection too, as the numbers don’t lie. Revenue comes in at $71.86 billion, cash in the bank sits at $1.48 billion and operational cash flow is measured to be $5.81 billion with total debt about three times cash flow at $18.62 billion. I do wish they would keep more cash around, but – this isn’t a new stat and the company has made money for us before.

Last week’s pull back in share price is providing us with a nice opportunity to score while many other choices are looking at testing resistance not support. Target’s share price has dropped enough for some upside potential, with a Forward P/E of 12.74, a PEG ratio of 1.20, and Return on Equity of 19.10%.

The price for this option right on target with our Nails pricing strategy so look for an easy fill today if the market shows only a marginal movement at the open. If filled, don’t forget to immediately place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-12-07 – Portfolio Review

Wrote this up on Friday and didn’t publish it. Sorry for the delay and inconvenience. It’s time to go over the portfolio and review each open position. Here is where we stand with each.

Johnson & Johnson (JNJ) – was added to the portfolio on the 5^th. We have ten contracts at an average price of $7.90. The rebuy level has been set to the most recent low and mid and long term trending is moving up, while short term trending is down and on the verge of reversing direction as the curve on the stock chart is flattening out. I see this as a potential quick win, however – if the stock heads down before going up enough for a win, there are several support levels for rebuys.

Microsoft Corporation (MSFT) – has been in the portfolio since November 14^th. We have ten contracts with an average price of $7.50 and the options are currently going for $6.70. A look at the stock chart with the 21-day, 50-day and 200-day moving averages superimposed over the share price tell me to expect further drops in price before we can expect it to start climbing again. Share price is closing in on a 52 week low and may start having to calculate the rebuy price on 2-5 year averages.

Pepsico Inc. (PEP) – was added to the open portfolio on September 7, 2012 and we currently hold 50 contracts with an average cost of $10.80 with the options currently going for $10.70. I am going to move the rebuy level back to $68.40. With the options near even money and PEP trending back up, this could be where we cash in before it goes back down.

Coca-Cola Company (KO) – has been in the portfolio since August 13th. We have 70 contracts that are trading about $0.02 below our listed average. The rebuy price will be adjusted with the newest level of support. KO is peaking, but we will need it to push upwards just a bit more for a win. With 70 contracts on board – I may recommend a lower GTC sell order so we can cash out with some green before the end of the year and before we bound out over the looming fiscal cliff.

Intel (INTC) – We’ve had INTC for about seven months now and hold 420 contracts. Our average price on Intel is $3.10 which is about a point higher than the current option price of $2.10. With our position as it stands – INTC needs to see upwards of $24 for us to see a win. I do see the possibility of more rebuys in our INTC future so we can clear out at $22, which looks more doable for the share price in the immediate future. To get that we need our average price to be lower or we need it to go up beyond that for a win.

Applied Materials Inc. (AMAT) – We’ve had for almost eight months now and we are down about 40 cents when you compare our average to the current option price. Resistance is still at $12.00. The stock needs to break this level for us to see a win as recommended and it is strong resistance. The rebuy price has been changed to $10.20; and look for a lowered GTC price on this one to sell at $12.00 the next time it peaks, which it is closing in on now.

Xerox Corporation (XRX) -This position has been on the open portfolio since May 2011. We’ve gotten the average price about as low as you can get it for being this close to expiration and close to in the money and nearly even comparing our average to the going option price. We are down by three cents. For a win – we’d need the stock to go to $7.25 in the short term – for a modest win. I still see this one as a possible roll out to the 2014 position by the end of the month – but I am going to sit on in for the next few weeks because we are so close and only need a couple good market days to clear it out. No adjustment to the rebuy level is needed – if it drops that far – we will roll it out. Instead I’m lowering the GTC sell target to clock in a win in the 11^th hour.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-12-05 – Keeping Healthy with JNJ

Lenny’s hearing went extremely well on Monday. The judge was very fair and it looks like our stock picking mentor will be released next summer and be done completely with all cases. He is going to be busy performing 500 hours of community service upon his release, which will be good for him and better than sitting in a box doing nothing.

Today, stock futures and premarket trading are pointing to another small dip in pricing across the board with the opening bell.

And as usual – once again I am reaching back into the basket of solid stocks and selecting one that has a strong ability to provide a bounce and a quick win for the Nails DITM calls system – Johnson & Johnson (JNJ). As you know, when trading Lenny’s DITM calls, we continue to revisit the same stocks, returning to the well when market conditions are right.

JNJ isn’t far from the 52-week high, but there are not a lot of good choices out there. It has dropped a bit and with a couple point drop in price in the last month – there is room for a predictable bounce if the market sees short term gains. If the price drops further – we will be on base with a good option price will have enough intrinsic and time value for a significant pull back in order to shore it up and make the strategy work.

So we stay the course with our DITM calls strategy and revisit Johnson and Johnson as it currently presents us with a very solid, safe play. They have been around since 1886 and provide us with such household names as over the counter pharmaceuticals as Tylenol, Sudifed, Zyrtec, Pepcid and Motrin IB, along with many others.

Johnson and Johnson stock closed yesterday at $69.86. Their financials are the definition of “healthy” with and undervalued forward price-to-earnings ratio of 12.72, revenue of $65.92 billion, total cash in the bank of $19.77 billion, and debt comfortably less than that at $16.85 billion and operating cash flow of $15.47 billion. Quarterly earnings saw a dip of -7.30%, but share price has completely recovered since the announcement.

Please see the scorecard for trading details and look for a very nice and healthy “W” in our future.

Once an order is filled, it’s important to remember to immediately place a GTC sell order for $1.00 higher than your purchase price to automatically cash in a win for $1000 when the option price hits the sell mark.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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At the time of publication, Mr. Dykstra will not, directly or indirectly, have a position in any security that he discusses in Nails on the Numbers by Lenny “Nails” Dykstra (the”Product”). HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-12-03 – My Sights Again are on Target!

The market should open up this morning based on stock futures and premarket activity, so don’t chase this morning’s recommendation if it is just out of range. Let the market come to you or let it go.

Last week, the Nails website was hacked again. My web guy sent me a nice email showing me all the malware that had been installed on the site. So, now I’ve got an incomprehensible password to the admin panel to protect the site from future hacks.

Today is Lenny’s sentencing hearing, I’ll be in downtown LA this afternoon showing my support for the man – unless my daughter, who is in labor right now – experiences complications or extra long delay and my new granddaughter makes a difficult entry into the world. Otherwise – it will be a welcome to little Hailey and an “I’m here for you Lenny” type of day.

So, today I am going do some early Christmas shopping with my pick. I can get quality merchandise with name brand name choices, all for a nice price.

When it comes to shopping at a discount store, I’ll take this one – Target Corp. (TGT).

Last week’s pull back in share price is providing us with a nice opportunity to score while many other choices are looking at testing resistance not support. Target’s share price has dropped enough for some upside potential, with a Forward P/E of 12.88, a PEG ratio of 1.20, and Return on Equity of 19.10%.

The price for this option right on target with our Nails pricing strategy so look for an easy fill today if the market shows only a marginal gain at the open. If filled, don’t forget to immediately place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-11-30 – Nails – Nov 30th – COLUMN SENT BY EMAIL

Good Morning Nails Subscribers –

There seems to be a Joomla hosting site that has taken over the Nails website. It’s not the same company I switched to – so I’m working on getting the site back online. For about a week, there have been some problems getting the site to come up or load quickly. Still this morning it was hit or miss. On one computer I’d get Nails to pop up – then on another – the Joomla hosting site. I’ve sent an email to the guy hosting for me & I’ll get it squared away soon. I can still access the admin panel & post to the site – but, today… I’ll just email the pick.

Today I’m going with Abbott Labs (ABT), which is also showing a nice about face on the stock chart and looks to be trending higher in the short term. ABT will also give us a chance to score another DITM win, this time with a bet with this pharmaceutical giant.

Revenue comes in at $39.41 billion, while showing that it is undervalued with a Forward P/E ratio of 12.40. Further, its one-year low is only 32% off of its high which means this is a very stable company. Abbott’s price-to-earnings to growth (PEG) ratio this year is 1.38 which is a moderate indicator of potential growth. Operating cash flow comes in at $9.21 billion, cash on hand is $11.50 billion and debt is close to about twice operational cash flow at $16.28 billion.

Please consider buying the Abbott Laboratories (ABT) January 2014 $55.00 (ABT140118C00055000) paying $10.10 or better and when the order fills, remember it is important to set a good-till-cancel (GTC) sell order $1.00 above the purchase price to lock in a win.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

2012-11-28 – Don’t Stand in Line at WMT

Next week on Monday – Lenny will appear in federal court for sentencing on his bankruptcy case. The US Attorney has been quoted in the news asking for 30 months. Lenny’s attorneys are asking for 12 months (with credit for time served) – but, their pleading was submitted under seal, so not in the news. Additionally, he has been assigned a parole officer in advance of this hearing and this person also recommends sentencing to the judge as well and he has interviewed people from both sides of the case. I’d think his recommendation would carry the most weight – as it is more impartial. However, I do not have access to his recommendation.

I’d expect Lenny’s sentence to be somewhere in the middle – between 12 and 30 months – leaning towards wherever the parole officer recommends. I doubt very much that it will be more than 30 months – but, the judge makes this decision and can go up to 51 months before Lenny can appeal his decision.

We’ll know for sure on Monday.

Today I’m looking to once again to add Wal-Mart Stores Inc. (WMT) to the portfolio. Although not a big fan of shopping at Wal-Mart, I’d rather pay five to ten cents more for the same thing at Target (TGT) and save the 45 minutes of standing in line, but the world’s largest retailer has the distinction of being the world’s largest, because many people feel that the five to ten cents makes it worthwhile. They make it up in quantity. I am just glad that investing in Wal-Mart doesn’t require the same line and I can take advantage and make money because other people are willing to stand in line for those incremental savings.

Wal-Mart is a Major League company and they know how to make that cash register ring 24-7 with revenues over $464.41 billion. Yes folks, that’s right OVER $464,000,000,000 in sales and that my friends is a lot of zeros and a figure that is closing in on half a trillion dollars. They generate $27.25 billion in operating cash flow and have $8.64 billion in the bank with a hefty debt load of $57.46 billion. Although the debt is large in comparison to cash, most of it is in the stores, the buildings and the land they sit on. You can’t own that much real estate without owing a few mortgage payments.

The company has a return-on-equity (ROE) of 22.96% which is good considering their profit margins are small and forward price-to-earnings (P/E) ratio of 12.92. The stock chart looks promising for a quick win so getting on board with the options is going to be the challenge this morning.

Please see the scorecard for today’s trading details.

And remember, using limit orders lets us get the best price available. If you can’t get the options at the price recommended, it’s OK to let the opportunity go. No non-buyer’s remorse here. Although I don’t like to wait in line and will pay more not to have to, when I trade options, I get the price I want, or I play again another day. We can’t just say oops – I want a return on this item here.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-11-26 – Dial Up a Win with VZ

Good Morning, I hope everyone enjoyed a lovely holiday weekend with plenty of good food and good company to share it with. Here at Nails, we avoided the mall and the movie theaters and opted for staying at home and shopping online, although it was more of a window shopping vs. actual shopping. I haven’t made up my mind yet on what to buy everyone on my list.

Today is cyber Monday – which is gaining more purchases than black Friday – however retailers are promoting earlier and earlier and offering deals earlier and earlier, and in some cases opening earlier and earlier too – so it’s blurring the lines as to which event creates more revenue. Here at Nails, we take the capitalist point of view and encourage the spending (if you can afford it) regardless of when or how. Spending puts money back into the economy and grows it – a simplistic bullish approach. And, the strategy does well when the market is going up.

Right now the market seems to be on the rise – incrementally, from post election blues..

Today I am looking to add Verizon Communications Inc. (VZ) to the portfolio. The timing for VZ looks nearly perfect and the option price is a bit under Lenny’s formula too.

Verizon is headquartered in New York and is the second largest US telecommunications services provider (after AT&T) and has taken the top spot in wireless services (ahead of AT&T).

Verizon touts itself as America’s most reliable wireless network and the most advanced fiber-optic network. The company delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500. A Dow 30 company, Verizon employs nearly 190,000.

The company’s wire-line business provides local telephone, long-distance, and Internet access services to residential and business customers. I have Verizon FIOS and you can’t get a better consumer internet provider in the home without installing a T-1 line. Their HD TV FIOS service isn’t bad either. I never thought I’d say it, but – it really is better than Direct TV, and when I had it, Direct TV picture quality was excellent.

Verizon has spent millions promoting the Droid and the addition of the iPhone hasn’t hurt sales, although FIOS hasn’t performed financially as well for the company as would be expected for the excellent speed and service provided.

However all in all, the numbers are still nice to look at – Verizon has revenue of $114.24 billion; a forward P/E of 15.30; operating cash flow of $33.03 billion; total cash on hand of $10.32 billion; making Verizon a very solid play, even with debt at $52.80 billion.

The chart for the stock tells me timing is good and there is still room at the top for getting a win before the need to break beyond resistance, and the option prices are good.

This feels like a quick win for Lenny’s DITM calls strategy.

Remember, once filled – please remember to place a GTC sell order a dollar higher than the purchase price, as this will automatically capture what we set out to achieve; a really quick $1,000 dollar profit.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-11-21 – Double-Down on INTC

Happy Thanksgiving! I’ll be taking Friday off to sleep off all those carbs of the holiday. It’s not the turkey that makes you sleepy – it’s the calories. There are way too many – but all of them are so very good. Yum! I wish I could bring a taste of Thanksgiving to Lenny – because I am sure that whatever he is served – it can’t compare to home cooking.

In checking all our open positions – today’s pick is one of my most reliable purchases and already on the scorecard with 200 contracts. I am referring to Intel Corporation (INTC).

The option price has come down, way down and we need to double up and lower the average. I recommend a double-down on this position but if you can add as many contracts to your position as possible – you just do it. I am looking at 2-year and 5-year lows now for the rebuy price and we would have to see that “fiscal cliff” for it to drop below those support levels. Although the stock is now out of the money – we have plenty of time to cash in.

In my opinion, as I have stated many times – Intel continues to be one of the most dominant companies in the world. It defines the term “wide moat” meaning, Intel has very few competitive disadvantages. They control the playing field with an 80% market share and this makes them the single best stock in the world. And they will continue to perform.

INTC closed trading yesterday at $19.51, which is way down from the year’s high of $29.27 posted in May. The stock chart looks like there is an excellent buy or rebuy opportunity for our DITM calls strategy. We need to take advantage of the lower price while we can.

Let’s look to the numbers:

Revenue: 53.75 billion

Forward P/E: 9.96

PEG Ratio: 0.78

Return on Equity: 24.95%

Cash: 10.50 billion

Debt: 7.25 billion

Operating Cash Flow: 19.49 billion

Please check the scorecard for today’s trading details.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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At the time of publication, Mr. Dykstra will not, directly or indirectly, have a position in any security that he discusses in Nails Investments by Lenny “Nails” Dykstra (the “Product”). HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

2012-11-19 – Clean Up with PG!

With the Nails DITM calls strategy – we continue to revisit those companies that make money for us again and again. We employ a short term strategy that allows us to follow the ups and downs of the market and cash in repeatedly with those companies that win for us.

Today I’m going to the grocery store with Proctor & Gamble Co. (PG) again.

The market continues to look for excuses for a sell off and encourage investors to feed the fear by selling everything you own and buying a bunker for end days. When I see all these doom and gloom – “fiscal cliff” type stories I recall Lenny’s favorite quote from Warren Buffett saying to be fearful when others are greedy and greedy when others are fearful. There is opportunity when others are running around like the proverbial chicken sans head.

This morning stock futures are up in premarket trading so we can expect a bit of green today. How much of a rally we will see – well only the day will reveal that to us.

Regardless of the direction of today’s trading, let’s try to add PG to the scorecard again. The timing is looking good for a win.

The company has a return-on-equity (ROE) of 14.05% and forward price-to-earnings (P/E) ratio of 15.58 is a bit higher than I like. But, once again – it’s the stock chart I like today and the drop in price caused by post election overreaction, fiscal cliffs and the like. It is telling me to buy along with doable option price. I do like it when that happens.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-11-16 – Going Up with UTX!

Today I am a bit tardy getting the pick out. It’s been a little over a month since I have set my sights on United Technologies Corporation (UTX). Getting a Win out of UTX isn’t as hard as getting in on the options for the right price, but with just about everything at support levels right now – the timing is looking good.

As you know from previous columns, UTX specializes in technology products, building systems and aerospace. The options for this company have been elusive, to say the least, but it is better to go after the best companies and not get filled – over going with a so-so company that fills and ends up being a so-so choice.

There is nothing so-so about UTX. Anyone who has spent time in an elevator or used an escalator or moving sidewalk is familiar with their Otis segment, and one would be equally hard-pressed to find someone who has never heard of Carrier cooling systems, Pratt & Whitney jet engines or Sikorsky helicopters – all of which are UTX brands.

United Technologies is a mega-conglomerate that is vastly diverse and on the cutting edge on technological innovation. They employ over 200,000 people and have been around since 1934; UTX is here to stay and has been a valuable component in my DITM strategy.

In looking at the stock chart – the timing for a buy is right there. The stock price is down off a recent peak of $82.45, closing yesterday at $75.23 and the stock chart is showing really good support several points down. With room at the top before the stock heads back towards resistance and strong support below the current price point – those factors add up to a buy now scenario.

Here are the notable stats: Forward P/E ratio: 12.18; Return on Equity: 22.68%; Revenue: $58.08 billion; Cash: $6.24 billion; Debt: $28.70 billion; Operating Cash Flow: $6.68 billion; and, the percentage of stock held by institutions: 83.60%.

These stats continue to remain solid and as long as we need moving parts, UTX will find a segment of the market to capitalize in and provide long term shareholder value and have been paying out consistent dividends every quarter to shareholders since 1936.

Please check out the scorecard for today’s specific price recommendation and be sure to set a GTC sell order for $1.00 more than the purchase price to lock in a $1000 gain when the price hits our sales target.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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At the time of publication, Mr. Dykstra will not, directly or indirectly, have a position in any security that he discusses in the Nails Investments newsletter by Lenny “Nails” Dykstra (the “Product”). HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission, or with any state securities regulatory authority. The Nails Investments newsletter contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon the product for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

IMPORTANT RISK DISCLOSURE: Options trading carries substantial monetary risk and may not be suitable for all investors. Unlike stock trading, there are different levels of risk associated with various options positions, and you should familiarize yourself with the type of options (i.e., put or call) you contemplate trading. The Product includes a list of stocks chosen by Mr. Dykstra in accordance with his stated investment strategy. Your actual results may differ from results reported for the list for many reasons, including, without limitation: (i) performance results for the list do not reflect actual trading commissions that you may incur; (ii) performance results for the list do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the price of stocks chosen for the list may change in a short period of time, and although the “purchase” or “sale” of a stock on the list will not be affected on the list until confirmation that the email alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of stocks on the list at the point in time you begin subscribing to the Product may be higher than such prices at the time such stocks were chosen for inclusion on the list. Past results are not necessarily indicative of future performance. All suggested trading ideas involve the purchase of 10 options contracts, unless otherwise noted.

2012-11-14 – Timing is Good for MSFT

For the past couple of months, I have been sending Lenny the picks each morning by email – to keep him up to date with Nails and all we’ve been doing here. However, he got himself in trouble somehow and lost both phone and email privileges for a while. He had to resort to sending me a handwritten letter through the mail, to let me know he’s ok. He’s ok. I’ve had to go back to writing him a postcard everyday and sending that to him as well, but I am unsure if he is getting them.

I had sent books – but, they were returned.

His sentencing hearing is coming up – December 3^rd and this latest setback in his conditions, could not have come at a worse time. Whatever happened, it will be in the sentencing brief of the opposing counsel – and it could cost him dearly when the judge makes his decision.

However, many of Lenny’s family and friends have rallied to write letters for the judge, with stories of Lenny’s generosity and kindness. I do hope they will have sway in his favor. His son Cutter wrote the best letter possible about his dad. Every father should receive such a letter – without it being needed such as it is.

While Lenny is once again MIA, today I will go with one of favorites: Microsoft Corporation (MSFT). Microsoft has been a consistent winner in the Nails DITM calls strategy, and much of what I do all day is monitor the same winning stocks to see where opportunity is knocking. MSFT has given my strategy many such opportunities and it is looking good again today.

Microsoft is such a wide moat player and today we have the right option price to get on board.

The company remains one of the strongest out there, period. You can let the numbers be your guide. MSFT has a Forward P/E ratio currently of 8.36, a PEG ratio of 1.04. Revenue remains very strong at $72.36 billion, cash in the bank at $66.07 billion, debt of only $12.37 billion in comparison with operating cash flow of over $31.62 billion which is excellent. Return on Equity is a strong at 24.50%. Quarterly earnings growth is a negative 22.20% – but, that number gives us timing opportunity. Overall, I love these numbers.

Also, the stock chart is showing a huge dip in share price, making the price is right for an easy fill today. For this one I say, put your new Halo4 disc into your Xbox and lock and load.

After the order is filled, don’t forget to set a good-till-cancel (GTC) sell order $1.00 above the purchase price.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-11-12 – Love to Shop COST

Last Friday, we saw another rebuy – along with another double-down recommendation with our Xerox Corporation (XRX) position. With the average price down to $0.16 per share – we can ease up on doubling up with the next rebuy. Now we are in a good position to see where the market will take us before the end of the year. We need the stock to rally up to $7.50 – $8.00 for a solid win. If it doesn’t seem like it will get close – we will see the recommendation to roll this one for 2014 positions before the year ends.

Today, I am going to try once again to add Costco Wholesale Corporation (COST) to the DITM portfolio. Timing is looking really good for a quick pop – as Wall Street comes around to the fact that the election results didn’t cause the end the world as we know it. We still have until December 21^st for that – and I for one am not going to run out and buy a year of food or a pallet of duct tape before that date either.

Costco operates 612 warehouses in the United States and nine other countries and employs 96,000 people.

Along with most of the merchandise they sell, the company has an extra large balance sheet too. Revenues are posted at $99.14 billion annually, $4.85 billion in the bank and only $1.56 billion in debt, with operating cash flow of $3.06 billion. It has a return-on-equity (ROE) of 14.09% and forward price-to-earnings (P/E) ratio of 18.98, which is a bit higher than what I like to see for bargain shopping, but they support a higher P/E ratio on a consistent basis.

A month ago the company posted a new 52-week high mark of $104.43 and the stock closed yesterday, trading at $95.46. The 2014 calls are sell with a higher premium than the usual Nails formula – but, like most of our consistent winners that have share prices over $70 – they carry that extra premium around all the time. We will pay it to get in, and it will still be there when we cash out.

Please check the stat book page for trading details just below the open positions chart.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-11-09 – The Healing Strength of PFE

With the market doing a post election tanking – we got a win with Qualcomm Inc. (QCOM), which shows that no matter which way the wind blows, we can still come up with consistent wins. We also saw Pepsico. Inc. (PEP) hit a rebuy, however there was no volume of the recommended PEP options that day – so no rebuy was recorded.

For today’s recommendation I am going back to pharmaceutical giant Pfizer Inc. (PFE) once again. Pfizer has been a consistent winner for the strategy, and it doesn’t matter how many times a company wins for us or when the last win crossed over, if we can score again, that is the plan… as many times as possible.

Pfizer is a New York based company with a market cap of $180.46 billion and a current average dividend yield of approximately 4.7%. The stock chart is telling me the timing is right for a buy. There is short term support at $24 and additional support at $22 and again at $21 for the rebuy strategy. The stock closed yesterday at $24.16. The 52-week high mark is $26.09.

Pfizer is a solid company and the January 2014 options are affordable. Buying now means we are buying at a discount and it will be easy to get in on the day’s recommendation.

Here are the stats to make note of:

The company release earning on the first, therefore some of these numbers could be updated soon.

Please see the scorecard for trading details.

If the position fills today, I will immediately place a GTC limit order to sell the options at a point higher. This locks in a win of $1000 for the 10 contracts I am recommending today.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-11-07 – No Line for WMT!

The Nails deep-in-the-money (DITM) investment strategy continues to roll out the winners and as long as we keep taking positions in the world’s best companies, we should be working towards the goal of converting open positions into wins each and every day. We got a nice one-day win with 3M Company (MMM) yesterday – and with the stock dropping again today – if you want, you could buy 3M again today and do it again.

Wal-Mart is a Major League company and they know how to make that cash register ring 24-7 with revenues over $460.71 billion. Yes folks, that’s right OVER $460,700,000,000 in sales and that my friends is a lot of zeros and a figure that is closing in on half a trillion dollars. They generate $26.14 billion in operating cash flow and have $8.02 billion in the bank with a hefty debt load of $55.35 billion. Although the debt is large in comparison to cash, most of it is in the stores, the buildings and the land they sit on. You can’t own that much real estate without owing a few mortgage payments.

The company has a return-on-equity (ROE) of 22.90% and forward price-to-earnings (P/E) ratio of 13.65. The stock chart looks promising for a quick win so getting on board with the options is going to be the challenge this morning.

Please see the scorecard for today’s trading details.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-11-05 – MMM and Portfolio Review

We have our website back! Yes!

My thanks to Mike DeSabitino – friend of Lenny’s who miraculously had a copy of the website from April of 2010 and hooked it up and worked out most of the bugs, making it operational. He was very helpful and due to his kindness – we are back in business. Also – more thanks to subscriber Greg who saved me months of work repopulating the site – as he had a screen shot of about 99% of the articles and a very recent stat book page. These two guys made it possible for you to view the site up and running – and complete with info. Thank you, thank you, THANK YOU!!! It looks nice – doesn’t it?

I have still to go through the subscriber list and update everyone’s subscriber details and hook up PayPal. Please do not worry if your account isn’t up to date – I will have that done shortly. If you have any login issues – please let me know ASAP. Currently the articles are not password protected, so this can be read by anyone – but, that is temporary. If you can’t log in and see the stat book page – I’ll fix those issues first.

Tomorrow is Election Day, please be sure to vote. With the polls and the press saying that it’s basically a dead heat right now – this means you can cast your vote and know that it will count. I am oddly pleased that it hasn’t been decided before I close that curtain and make my selection. I really hate it when they tell me the outcome or know well enough what the outcome will be – before I can be a part of the process. There are times when I wish that polls and predictions were not allowed.

One of my high school buddies posted this on Facebook. I felt it was worth sharing.

To my politically-minded friends: many of us have passion about the party and the candidate(s) we support. Because of that passion, we tend to believe that should our candidate fail to win, the consequences will be dire. And sometimes, because we believe so fervently, we cast aspersions on those who disagree. The reality is, however, that we all want what is best for our nation. We may have different priorities, but there is none among us who wants this nation to fail. If history has taught us anything, it is this: no one president in a four year term, has the ability, no matter how great or how feeble, how brilliant or misguided, to do all the good we hope or all the bad we fear. The right will, eventually, prevail, albeit, often later than it should. The slaves were freed. Women won the right to vote. Civil rights were attained. In the end, whoever wins, it will be okay. – Bret Barrett

So make your selection, and remember that even if your choice isn’t the choice of the majority – the earth will not implode, but we will not have world peace overnight either. But please, for democracy to work – you have to make your voice heard. You can only do that by making your choice known. Vote.

Now back to Nails.

Once a month we look at the open portfolio and review each open position.

In addition to the review – and due to missing several picks in the last few weeks – I’m tossing out a bonus pick with multi-industry conglomerate 3M (MMM). 3M has been a consistent winner for Nails and when the stock chart continues to looks right, I can’t resist taking a swing at it again. I picked MMM on the 26^th – but the position didn’t fill. Let’s see if I get it right this time.

3M is a highly profitable, technologically differentiated innovation machine that is best known for everybody’s favorite reminder: the Post-It Note. I doubt you could find an office anywhere without a cube of the infamous sticky notes, as they are a fixture essentially anywhere and everywhere.

Beyond the Post-It, 3M has a lot to offer consumers and investors, operating in six business segments: industrial and transportation; health care; safety, security and protection services; consumer and office; display and graphics, and electro and communications.

Though they are based in Minneapolis, MN, the company spans the globe. In fact, their exposure to faster growth markets abroad is phenomenal. Two-thirds of their revenue is currently derived internationally.

Looking at the stats:

Forward P/E: 13.01

Return on Equity: 25.21%

Revenue: 29.61 billion

Total Cash: 5.02 billion

Total Debt: 6.36 billion

Operating Cash Flow: 5.30 billion

For today’s specific pick, please check the Current DITM Picks page.

Here is where we stand with our current positions.

Valero Energy Corp. (VLO) – was added to the open portfolio on October 19^th. We have 10 contracts at $10.60 and the options are currently trading for $9.30. The rebuy is set for $28.00 and if the market sinks just a little – we will see that automatic recommendation hit.

Bank of America (BAC) – was added to the portfolio on October 15^th and we have 10 contracts at $4.50. These options are currently going for $5.10. BAC is trending up – so look to cash out a win with this position in the next week or two – if trending continues as predicted.

Qualcomm Incorporated (QCOM) – has been in the open portfolio since October 10^th – another relatively new open position. Here too we have only 10 contracts. These were purchased for $13.40 and would currently go for $12.90. I readjusted the rebuy level last week – so no new adjustment is necessary. Short term moving averages seem to be leveling off – which along with the slow stochastic tell me the next trend will be up. This looks like it will close for a win in the next week or two.

Pepsico Inc. (PEP) – was added to the open portfolio on September 7, 2012 and we currently hold 40 contracts with an average cost of $11.30. The options are currently going for $9.45. The rebuy level of $68.40 doesn’t need to be adjusted at this time. I see that we will probably pick up another round of PEP before it starts to trend back up.

Coca-Cola Company (KO) – has been in the portfolio since August 13th. We have 50 contracts that are trading about $0.50 below our listed average. There is no need to adjust the rebuy price. PEP and KO look as though we will be holding on to them for a month or two.

Intel (INTC) – We’ve had INTC for about five months now and hold 180 contracts. Our average price on Intel is $5.10 which is about a point and a half higher than the current option price. If INTC drops to the rebuy price – another double-down is the recommendation. Although, looking at the stock chart – INTC seems to be slowly inching up. With our position as it stands – INTC needs to see upwards of $24 for us to see green and $25 or better for a win. I do see more rebuys in our INTC future so we can clear out at $23, which looks more doable.

Applied Materials Inc. (AMAT) – We’ve had for almost six months now and we are down about 50 cents when you compare our average to the current option price. Resistance is still at $12.00. The stock needs to break this level for us to see a win as recommended and it is strong resistance. The rebuy price has been changed to $10.60; and look for a lowered GTC price on this one to sell at $12.00 the next time it peaks.

Xerox Corporation (XRX) -This position has been on the open portfolio since May 2011. I am still recommending another double-down play with the next rebuy and every rebuy that hits this month, as the options are going for pennies. For a win – we’d need the stock to go to $8.00 in the short term. In looking at the chart – although we are only down by $0.20, I still see this one as a possible roll out to the 2014 position by the end of the year. No adjustment to the rebuy level is needed. Look for a GTC adjustment if the stock shoots up and we see green. This is our LAST 2013 position. To win, we need to be aggressive as the stock has the volatility to make this one a good win by year end.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-11-02 – Turn The Lights Back On With GE

THIS POST WAS SENT BY EMAIL

Today I’m back in the batters box – ready to take a swing for another base hit.

It’s been quite the week. I do hope everyone is doing well and home and hearth are well as well. My sister is in Pennsylvania and is still without electricity and expected to have to deal with several more days of the same. Every time there’s a big storm out east – I decide I really don’t mind earthquakes all that much. I’ll stick with that until there’s a really big one.

If you attempt to visit the website – it’s finally up – on a new server. The content is REALLY OLD – look, the last article to post was on April 23, 2010… wow, more than two years ago and quite a few wins back. It’s going to take me a few days to get it all updated – but at least I have a roof and electricity… things to be extremely grateful for. Earlier in the year our hot water heater died – and we had to go 3 or 4 days without hot water. I didn’t care for it at all, so I can’t imagine what people are having to deal with. Yikes!!!

Today you will see that this morning I am going back to a consistent winner, General Electric (GE). In August I went with GE and here I am again ready to go and ding the scorecard again with another quick win and with the stock chart looking so nice – its a good day to appreciate all things electrical… buy this, then go buy a flashlight or two. Check that you have batteries too, while you’re at it.

Share price has come down with the rest of the market over the last couple of days and I see several layers of support – this is a stock chart that says buy now – making this multi-national conglomerate a good deal. The option prices are excellent as well – cheaper than the Nails formula – so good news all around. If you venture out to the GE website and look up their products and services listing – it is quite the list – as GE now covers just about everything from household appliances, aviation equipment and asset management, power generation and distribution, water processing and so on – even entertainment and banking.

You could almost say you have a diversified portfolio with just this one purchase.

Here are the numbers to note: Revenue: 142.31 billion / Forward P/E: 12.48 / Return on Equity: 11.26% / Cash: 134.20 billion / Debt: 431.50 billion. Debt is high but the company has a track record of managing debt well and I have found that older companies have more of a tendency to keep a lot of debt. GE has been around since 1892, so that qualifies as not just old but quite stodgy too. Recently, I watched a TV program about Thomas Edison and JP Morgan and how General Electric came to be. What an eye opener that was. It was on the History Channel – called The Men Who Built America. Very well done.

Please see the subject line above for trading details and once filled set a GTC (good ’til cancelled) order at $1.00 higher than your average cost to lock in a $1000 gain.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

2012-10-31 – Halloween Ticks – Not Picks

Markets Open after Hurricane Sandy – but limited trading available/encouraged.

Nails on the disabled list – as subscribers regroup.

Rough couple of weeks!!!

2012-10-29 – Hurricane Sandy Blows Out US Markets

Hurricane Sandy Hits Eastern U.S.

Markets Closed – NO PICK!

2012-10-26 – Going for a Triple with MMM

THIS POST WAS SENT BY EMAIL

The website is still down. I’ve moved the hosting to GoDaddy and am working on building a temporary site until I can get the files back from my Joomla guys. They are very smart kids, but they are kids and their strong suit is Joomla programming, not customer service. So, another email update – instead of being able to post to the site.

TODAYS PICK: January 2014 $75.00 (MMM140118C00075000) paying $15.80 or better.

Today’s opportunity is with multi-industry conglomerate 3M (MMM). 3M has been a consistent winner for Nails and when the stock chart looks right, I can’t resist taking a swing. And, today – the charts are telling me the time is now.

Looking at the stats:

Forward P/E: 12.80

Return on Equity: 25.21%

Revenue: 29.61 billion

Total Cash: 5.02 billion

Total Debt: 6.36 billion

Operating Cash Flow: 5.30 billion

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-10-24 – Double Up on XRX

THIS POST WAS SENT BY EMAIL

Dear Nails Subscribers –

I’ve gotten a lot of mail in the last few days. The server that has been hosting the Nails Website was cooked. I’m not sure if it can be fixed – and if so – how long that might take.

In the short term – I’m going to build a new temp Nails site – which could take a couple days before it becomes live. I’ll aim for creating it today & tomorrow – with the hope that you’ll be able to see it by Friday – or Monday latest. In the meantime – my Joomla boys that host the site and programmed the back end functionality – are running on panic mode – as ALL the sites they host have been cooked too.

Attached – you will find a PDF copy of the current stat book. As an email update – it beats having nothing. With the recent market tanking – I was expecting to see more rebuys – so I’ll be making adjustments to several of the rebuy levels for Friday.
Today – I’m not picking a stock – but once again, recommending a double down on Xerox Corp. If the stock behaves as it did last quarter – this should give us the added ammo we need to get out of the position before the end of the year with a win. I did do research this morning on a possible – early roll to the 2014 positions – but, the stock would have to jump past $10 to get a win with the added loss carryover – to see a win without additional rebuys. Also -It would cost about $15,790 to get enough contracts for that scenario to even work. It seemed like a good idea – but the more I look at it – the double down play – makes more sense right now. It’s less than half the cost & will lower the average to about $0.40 and we only need a bump back to $7.50 to see a slight win in the next month. That feels more doable.

Pull up the stock chart and look – the last time they reported poor earnings – they tanked to where they are now. Within a couple of months – it was right back to within the “in the money” range.

However, even though this looks like the better choice today – we may still need to roll this out another year. We have two months to make that decision.

Sorry about the site going down.

Carl – give me a call – I may need to talk to your friend Andy – to help me get a better Nails site going.

Thanks everyone for your continued support of Nails.

Dorothy

2012-10-22 – Nails Website Down – Server Toast

The server hosting the Nails Website was damaged – all files were lost/destroyed. Total loss.

There was no pick today.

2012-10-19 – Back to the well with VLO.

A few more open positions crossed the finish line this week as we finally scored with Corning Inc. (GLW) – which comes with a either a heavy sigh of relief or a little victory dance – maybe both. Yes!

We also saw wins with Caterpillar Inc. (CAT) and Pfizer Inc. (PFE). All in all, I’d say it was a really good week for those of here at Nails. Our win total keeps climbing and we are now looking at our 300^th win since Lenny started the Nails subscription service. It’s a record to be proud of. I know I am. We do try to make both you and your trade account happy.

Today I am going back to the well with Valero Energy Corporation (VLO). Valero, the largest independent oil refiner in the country is a relatively small company as compared to the big guns in the oil industry.

With gas prices so high at the pump – especially here in Southern California – I really love it when I can score with an oil company – and get a little back. Takes the sting out of it.

The company operates through three segments: Refining, Retail, and Ethanol. Valero service stations in Southern California are starting to be more prevalent and they have upped the image and are starting to look less “no frills” to more mainstream gas station.

As a previous owner of a gas station and convenience store, Lenny has the experience to know that margins for the retail owner of a gas station are really small, so you have to have a first class convenience store to get and keep customers – or really competitive gas prices. Valero is doing both; their convenience stores are so much cleaner and well stocked over your average ARCO station, but the gas prices are comparable. That is a good combination for success.

In looking at the stock chart, it is a good time to make a purchase of VLO options.

Revenue comes in at $137.29 billion; Forward P/E is 6.18 and the PEG Ratio is 1.00; Return on Equity is a 10.09% which continues to move up after a dismal 2010; total cash is $1.03 billion; operating cash flow is $4.08 billion and debt is a bit high at $7.04 billion, but not too bad – and, with good news on the horizon we won’t need them to pay off the debt before we cash in.

Please check the stat book scorecard for today’s trading details.

Remember: Life is a Journey; enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-10-17 – Double Up on XRX

THIS ARTICLE IS MISSING from the Nails Archive.

I recommeded a double down on XRX instead of rolling to the 2014 positions. I did the math & the double down was the better choice.

2012-10-15 – Banking on BAC!

Last week we saw a few rebuys hit the scorecard as the market dipped down and many stocks hit support levels. This week we will see a couple of our open positions post earnings. Earnings are expected this week for Coca-Cola Company (KO) and Pepsico Inc (PEP) – and the word is out that both companies will provide Wall Street with upside surprises. Good news for us here at Nails.

It is good for the strategy to have stocks that show plenty of upside potential. Reading the stock charts and comparing the graphs of current stock price against the 21-day, 50-day, and 200-day moving averages – I can forecast the direction a stock will most likely move. In looking at the stock chart for today’s recommendation – the moving averages tell me that we should see short term tends going up.

I am going back to the bank with today’s recommendation: Bank of America (BAC).

BofA (as we call it, sometimes fondly and sometimes not, depending on how much you account was just charged) is a bank holding and financial holding company, which through its subsidiaries, provides banking and non-banking financial services and products throughout the United States and in selected international market, and is one of the world’s largest financial institutions. They serve individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services.

The company provides unmatched convenience in the United States, serving approximately 53 million consumer and small business relationships with more than 5,700 retail banking offices, nearly 17,750 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries.

Bank of America is once again a good buy. The stock closed yesterday at $9.24 which is cheaper than most options that are recommended. Lenny had me go with BAC with the first column of the New Year and we scored a win in just 15 days. I repeated that with two more wins with BAC – for three wins so far this year. Today’s recommendation looks to be another quick score as everywhere you look – a pop for the banks is being predicted everywhere.

Later this week, BAC will post earnings – and it can be somewhat risky to dive in ahead of earnings – with this one – we can buy it for no premium. The stock price less the strike price is less than the option price and share price is heading up. All in all – it looks like a good time for a good deal.

Please see the stat book page for the specific trading details for today’s recommendation.

Always remember: Life is a journey, enjoy the ride!

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-10-12 – Catch the Mouse with DIS

Today should be another red-number day, with stock futures and pre-market trading predicting more sell offs and lower share prices across the board. There are several rebuys to post – but, the good news in all this is that we are seeing share prices reaching support levels or nearing support levels.

Buy averaging down at support levels – we put our open portfolio in a better position to not just win, but win bigger. The strategy here at Nails is to increase our profit potential with every buy in. It’s a plan that only works with this type of methodology. You won’t see that kind of profit potential by using a margin account.

Today, I am going with a very well known brand that has provided happiness, joy and adventure for all ages since 1955. I am talking of course of Walt Disney Co.(DIS). There is probably no other company you can invest in that is guaranteed to instill some appreciation for what they do from people of all ages.

As a company, Disney is much more than the Mouse. They are a well rounded entertainment company, owning the television network ABC and others, the entire ESPN franchise and several other cable networks, Hyperion Books, Radio Disney, Touchstone Pictures and many additional bottom line enhancers. They have merchandise licensing like no other company and a brand that spans the globe with the Disney Resorts and cruise lines that all cross promote everything.

Disney is showing continued upward momentum, but the week of market drops, is giving us an opportunity to catch a quick win on the rebound. Share price is right at support – a perfect time to buy.

Company stats are as follows: Revenue comes in at $41.92 billion; Forward P/E is 14.34 and the PEG Ratio is 1.31; Return on Equity is 14.54%; total cash is $4.37 billion; operating cash flow is $8.54 billion and debt is a little less than twice that at $15.02 billion.

Please see the scorecard page for trading details and remember that as soon as an order fills, it is always a good idea to place your limit order for the sell at a $1.00 higher than the purchase price, to lock in a win – as soon as it happens.

Remember: Life is a Journey; enjoy the ride! (Especially the “E” ticket rides).

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-10-10 – Swinging at Tech Stocks with QCOM

Stock futures and pre-market trading are pointing to another day off sell-offs, or at least a open lower than yesterday’s close. Indicators are not pointing to a large sell-off, so we could see things start to pick up after the bell.

I had planned to go with Costco Wholesale Corporation (COST) as they posted earnings this morning and easily beat the number. However, in looking at pre-market trading there – Costco looks like it will jump several points this morning and that will make it difficult to get filled today.

Therefore, I decided to go with a bit of a long shot. The option price for today’s recommendation is currently selling for a few points higher – but with the early morning sell off – I am hoping that the price will drop enough to give us an edge.

With that in mind – today’s recommendation: Qualcomm Incorporated (QCOM).

QCOM is a monster company with revenue of $18.37 billion, debt at $1.35 billion as compared to total cash of $13.40 billion and operating cash flow of $6.41 billion making for a very solid balance sheet. The company’s forward P/E ratio is a modest 14.69 with a PEG Ratio of 1.12 and a return on equity of 17.31%. About 82.60% of the stock is held by institutional traders. All in all, the stats tell me this continues to make a nice choice, but we need the market to come to us just a bit to see this trade fill.

News in the tech sector has been gloomy lately – with many tech stocks seeing shares price drop, however – that’s something we can take advantage of again and again. QCOM should bounce back quickly.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-10-08 – Aim for TGT

Over the weekend here in sunny California – gas prices shot through the roof due to supply constraints – which actually kept weekend commuters at home for a change. I did have to do some weekend driving and the freeway was almost pleasant – there were so few cars about. It was like driving at midnight.

Although the price gouging will not save the freeways during the week – as commuters have to get to work – it was nice to see the laws of economics at work. Supply and demand do have an effect on price – and alternatively – price can lower demand, when supply is reduced and prices increase.

The market should open down this morning based on stock futures and premarket activity, so don’t chase this morning’s recommendation if it is just out of range. Let the market come to you or let it go. I would have liked to go with Valero (VLO) this morning – due to the price hike in gas prices and the lovely stock chart and timing opportunities I see there. However, earnings will be announced later in the week for VLO – so it’s a good idea to sit it out until after earnings post.

Therefore, today I am going shopping with my pick. I can get quality merchandise with name brand name choices, all for a nice price.

When it comes to shopping at a discount store, I’ll take this one – Target Corp. (TGT).

This is a good DITM selection too, as the numbers don’t lie. Revenue comes in at $71.34 billion, cash in the bank sits at $1.46 billion and operational cash flow is measured to be $5.57 billion with total debt about three times cash flow at $18.58 billion. I do wish they would keep more cash around, but – this isn’t a new stat and the company has made money for us before.

Last week’s pull back in share price is providing us with a nice opportunity to score while many other choices are looking at testing resistance not support. Target’s share price has dropped enough for some upside potential, with a Forward P/E of 13.11, a PEG ratio of 1.21, and Return on Equity of 18.95%.

The price for this option right on target with our Nails pricing strategy so look for an easy fill today. If filled, don’t forget that I will immediately place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-10-05 – Taking a Swing at DOW

This morning I found several stocks I’d like to recommend. The timing is looking good for several Nails repeat winners. With the market looking like it will open higher than yesterday’s close – I went for the choice I felt would have the best opportunity of filling. No matter how many good opportunities we see in the stock charts – if we can’t get on base – we can’t score.

Lenny’s job as a leadoff hitter was to put his team in the best position to score, by getting on base consistently. Our job at Nails is no different. We’re here to help you score again and again.

Today’s pick is a consistent winner: Dow Chemical Company (DOW). Our last swing at DOW was in July after the company severely missed earnings estimates and the stock was showing signs of recovery from the news. We got on base with undervalued options and once the stock recovered from the news – the price self corrected and with that – we scored a nice $2000 win in 45 days.

Once again the stock chart is showing plenty of upside potential. At Nails we seek to take advantage when solid companies see a sudden drop in share price. Remember we do want to buy low and sell high.

DOW manufactures and supplies chemical products used as raw materials in the manufacture of customer products and services worldwide. For a company that has been around for over a century, it wouldn’t be difficult to imagine a lot of outdated processes. However, Dow was recognized with four 2010 American Chemistry Council (ACC) Responsible Care Energy Efficiency Awards for programs that improved energy efficiency at three of its U.S. facilities and in previous articles, I noted that the company had announced its plan to invest in projects to reduce greenhouse gas emissions and improve energy efficiency, which when implemented would cut nearly eight-trillion BTU’s of energy use and eliminate over 400 thousand metric tons of carbon emissions.

Here are the numbers to consider: Revenue: $58.44 billion, Forward P/E Ratio: 10.89, PEG Ratio: 2.52, Total Cash: $3.96 billion, Operating Cash Flow: $4.68 billion, and Debt: $20.66 billion. Both the PEG Ratio and debt are higher than ideal, however the company performs for Nails over and over and the stock chart and technical charts tell me it’s a good time to buy, plus they continue to offer a consistent dividend payout to stock holders.

For today’s specific pick, please check the Current DITM Picks page.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-10-03 – WIN Overnight With FDX!

The market has been especially nice to us this month. Good trades abound. Wins continue to come through the front door. As long as we follow the system – we cannot fail.

Today I hope to deliver another DITM win with FedEx Corporation (FDX). Overall, stock prices are up across the board, and finding trades that are not priced too high may start to be a bit of a challenge with the overall market increase over the last four months.

Today is no exception. Timing is right for FedEx, but the options are rather pricey, but like my last two recommendations that sell in the $80.00 plus range – it is OK to increase the premium if the option price seems to carry it on a consistent basis. Along with MMM, UTX and CAT – FDX also comes at a higher price.

Most stock charts are showing me a gathering momentum and it doesn’t seem at all unlikely that the DJIA will touch 14,000 points and continue to move north from there in the coming months. And, statistics show that if the incumbent president wins in November – it will be more likely to happen. So regardless of your political leanings – for a bullish strategy – Obama is the better choice.

However, that is just my gut – and what I see on many stock charts – and what they are telling me to expect. However, we all need to remember, I don’t have a crystal ball, no one does – so anything can happen… and of course, someone will have predicted it first. I’d rather have the DJIA blow right through 14K points and start flirting with 15K real soon. With the exception of all the Gloomy-Gus’ out there – that scenario would be ideal for the majority of investors.

That would really help our open positions, especially some of those stubborn ones that have been dogging us for a while.

Now back to FedEx.

When it comes to delivery service, FDX is a monster and the stock chart is telling me to buy now. The company’s forward to earnings price ratio (forward P/E) is currently 10.89, with a PEG Ratio of 1.0. Return on Equity is 13.19% and revenue tops out at $42.95 billion. Operating cash flow as compared to debt is looking good, with debt at $2.36 billion and operating cash flow twice that at $4.88 billion – so the company has a nice handle on cash flow management and I’ve never met a FDX employee that didn’t seem happy. They aren’t quite as taken as UPS employees are with their company, but overall I’ve never come across a rude FDX worker. And I am a big fan of FedEx Office – formerly known as Kinko’s. They charge an arm and a leg for copies, but overall – it’s still a better value than printing at home, if you need to print volume and you need quality.

Right now the options are posted at a higher than recommended price, but those options traded when the stock was higher too. With the padded premium, we should have no problems getting on base – unless we see another jump in prices across the board.

However, do not overpay and go with a good-till-cancelled (GTC) order.

And, don’t forget to place a good ’til cancelled order in for a dollar higher if the order fills, so you can lock in a win at the correct price.

Please check the scorecard page for trading details and if we get in on FDX today, look for another quick shipment of DITM cash.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-10-01 – Going Up with UTX!

On Friday, we got on base with Caterpillar Inc. (INC) by going with a slightly higher premium than the usual Nails formula. There are a few stocks – up there in the $80 plus price range – that based on their stock price alone go at a higher premium. Today will be another that will require a bit more to get on base.

According to premarket trading and stock futures, this morning looks to open strong. That may make today’s recommendation jump higher than the recommendation, so please remember not to chase the stock.

It’s been a couple months since I have set my sights on United Technologies Corporation (UTX). Getting a Win out of UTX isn’t as hard as getting in on the options for the right price.

In looking at the stock chart – the timing for a buy is right there. The stock price is down off a recent peak of $82.45, closing Friday at $78.29 and the stock chart is showing really good support several points down. With room at the top before the stock heads back towards resistance and strong support below the current price point – those factors add up to a buy now scenario.

Here are the notable stats: Forward P/E ratio: 12.45; Return on Equity: 23.89%; Revenue: $57.27 billion; Cash: $5.97 billion; Debt: $20.72 billion; Operating Cash Flow: $7.0 billion; and, the percentage of stock held by institutions: 83.90%.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-09-28 – Portfolio Review & CAT

Once a month we look at the open portfolio to see what needs to be shored up due to weakness and what can be exploited due to strength. Normally, I write the review column on the first trading day of the month – but, today I’m moving it up a day because Lenny has asked me to start emailing him the columns each morning after they are posted and this seems a good place to start.

In addition to the review – I’m tossing out a bonus pick with Caterpillar (CAT). We have stepped up to the plate with CAT several times. We have a slim chance of landing our position today and it’s not a cheap pick either, but it’s the one pick where once again, I really like the stock chart and the potential I am seeing there.

The company’s 52-week high tops out at $116.95 and the low $67.54 which is a pretty large spread, with the stock trading midway at $86.92 at yesterday’s close. However, if you program your chart to view the 21-day, 50-day and 200-day moving averages you will see that the 200-day average is flat, showing me that long term ups and downs are pretty even. The 21-day moving average is starting to trend back up and has crossed over the 50-day moving average that is still leveling off and looks as though it will start to head up again soon.

The slow stochastic – an add on chart I use that helps with timing – is saying “Buy Now.”

There is resistance at $94.00 so we can lock in a win before resistance is tested, that is – if we can get in a position to score by getting on base. And there is support at $80.

Here are the stats to make note of: Forward P/E Ratio – 8.39 (really good) / PEG Ratio – 0.52 (this is excellent) / Return on Equity 40.41% (fabulous) / Quarterly Growth – 67.40% (really good) / Revenue $66.31 billion / Debt $39.32 billion (it is a bit high) / Operating Cash Flow – $5.72 billion.

After the order is filled, set a good-till-cancel (GTC) order $1.00 above the average purchase price to cash out for a quick win.

For today’s specific pick, please check the Current DITM Picks page.

Since the last portfolio review – ten positions have moved from the open positions at the top to the win column down at the bottom. It was a good month.

Here is where we stand with our current positions.

Texas Instruments (TXN) – was Wednesday’s pick. It’s now posted to the open portfolio and is looking good for a quick win.

Pepsico Inc. (PEP) – was added to the open portfolio on September 7, 2012 and we currently hold 20 contracts with an average cost of $12.50. The options are currently going for $11.55. Support for the stock is starting to inch up, so the rebuy level will be adjusted from 68.80 to 70.00 to give the strategy the best chance and price to add more contracts.

Pfizer Inc. (PFE) – was added to the open portfolio on August 29, 2012 and we still have just 10 contracts with an option price of $4.60. These options are currently selling for $5.25 and it is looking as though we will see a win here shortly. Support here too has gone up – so the rebuy level has been increased to that level. In looking at the stock chart and the slow stochastic – PFE seems to be peaking and it is trading at a new 52-week high. If anyone wants to pull the plug and walk off with a win at this time – it wouldn’t be a bad idea.

Coca-Cola Company (KO) – has been in the portfolio since August 13^th. We have 30 contracts that are trading right at our listed average. I have readjusted the rebuy price to account for the newer level of support.

Intel (INTC) – We’ve had INTC for about four months now and hold 170 contracts due to the double down play recommended on September 14th. Our average price on Intel is about a point higher than the current option price. Another double down on INTC will be in the cards if the price drops below support again. However, with the rebuy earlier in the week, the current rebuy level is good… for now.

Applied Materials Inc. (AMAT) – We’ve had for almost five months and we are down about 20 cents when you compare our average to the current option price. Resistance is still at $12.00. The stock needs to break this level for us to see a win as recommended and it is strong resistance. The rebuy price needs no adjustment; however look for a lowered GTC price on this one to sell at $12.00 the next time it peaks.

Xerox Corporation (XRX) -This position has been on the open portfolio since May 2011. I am still recommending another double down play with the next rebuy. For a win – we’d need the stock to go to $8.50-9.00 for a win in the short term with a rebuy in there to help the cause and drive the average price down. In looking at the chart – although we are only down by $0.50, I see this one as a possible roll out to the 2014 position by the end of the year. I have adjusted the rebuy level to 6.90.

Corning (GLW) At the end of the year, we rolled this position out another year. We gained a bit more ground with GLW this last month. But, the stock is peaking and we are still down by $0.20 and not quite in the green. We need to consider another double down play – or rebuy as many as possible play to continue to lower our average. I have adjusted the rebuy level and recommend you double up if we see this price. Then, if we see any green – look for the nod to cash out ASAP. I see a real strong possibility of a modest win here in the next couple of months – if we stay on it and double up when the opportunity presents itself.

Suntech Power Holdings (STP) is dead and buried. I didn’t hear from anyone still holding the options – so if no one pipes in – I’ll remove it from the open scorecard next week.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-09-26 – Look Again to TI

On the 19^th I recommended Texas Instruments Inc. (TXN) but the position was not filled at the recommended price. TI, creators of the first computer using integrated circuits and the first handheld calculator have an excellent track record here at Nails. We never want to chase a stock – but, there are times too – when the best choice you can make is the same one you looked at just a couple days ago. I do think that we’ll have a better chance of getting on base today.

In the news – TI was named with several other tech stocks that may have participated in insider trading with certain hedge fund companies that are under investigation. I’d like to think that the company plays by the rules – but, unfortunately, the company cannot completely control those that step over the line. We can hope that the truth will prevail, those responsible will be dealt with appropriately – and that we as investors can make money on the selloff caused by the news.

TI hasn’t stopped making good products, and a few dishonest people can sometimes make it seem like everyone is tainted – but, we know that’s not true. Not everyone is guilty by association. However, most people tend to feel that way.

Additionally, the stock was recently downgraded by one of Wall Street’s analysts. The timing for these occurrences will work nicely in our favor.

Now back to the stock pick. The rest here is a rerun of the previous column – with the exception of the numbers that have changed slightly.

TI’s vision for new products is to help create self-driving cars and controls for home appliances linked to your cells phones. In the future – TI and I both seem to both think that our world will soon be condensed into what you can buy an app for or how you can gain access to their new DLP technology for projectors using a wide array of platforms, including smart phones, tablets and laptops.

From previous columns about the company, you will know that Texas Instruments is a world leader in digital signal processing and analog technologies. With close to 35,000 employees worldwide, they are a monster company with a rock solid balance sheet. Revenue comes in at $13.34 billion and the company’s forward P/E ratio is looking good at 13.38 and return on equity posts at 14.59%.

TXN manufactures a whole host of products, from audio, video and imaging – to medical, industrial and military products and applications. This company is all about cash management and that is a very healthy way to run a business. Debt doesn’t have to be bad, but if you can keep your cash in the bank and generate continued organic company growth – you are certainly doing something right. Although last year, TXN added a bit of long term financing to its balance sheet- adding debt by financing the purchase of National Semiconductor. And it is through this new purchase of National Semiconductor that supplies Apple components which should do its part to rally the share price going forward.

Looking to the chart, we see Texas Instruments has dropped from the high of $34 and currently sits at $27 and change. I am seeing support at $27 and at $26.50 and so on. We don’t need much of a spread for a good DITM opportunity, so today offers us a good opportunity for a buy.

Please check the scorecard page for the specifics of the trade and when the order fills, remember it is important to set a good-till-cancel (GTC) sell order $1.00 above the purchase price to lock in a win.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-09-24 – Flying with Endeavor

On Friday, I met with Lenny’s attorneys briefly in Los Angeles and upon leaving the building, I noticed that there were people and news crews up on the roof tops of several buildings all around downtown LA. In addition to that, there were a lot of people gathered in groups with phones and cameras out – all pointing up. My husband had told me about the Space Shuttle Endeavor going on a flying tour the day before – but, I guess I didn’t realize that Friday was the day for LA.

Anyway – I got a great photo of the space shuttle and its fighter plane escort and could not have been prouder to be an American at that moment. And, the feeling was catchy too. As I headed for the freeway – more people were gather around – crowding bridges and open areas where it would be visible for the second fly by before landing at LAX.

Growing up – both my grandfather (60’s & 70’s), then my father in-law (70’s, 80’s & 90’s) worked for Rockwell/Boeing in Downey, California. During those years, the company was working on government contracts for the Apollo and then space shuttle. So the pride of what can be built by human hands – goes a bit deeper when you know that people you’ve cared about worked on those projects. I am sure that just about everyone who knows someone involved feels the same way.

Coincidentally, I got a stock alert from Value Engine later that day which directed me to Boeing stock regarding a buy opportunity – due to undervaluation and timing.

So today’s pick is Boeing Company (BA), which is involved in the design, development, manufacture, sale and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services. Boeing is a major player in the U.S. defense industry and will continue to win both defense and commercial contracts well into the future.

Here are the numbers to note:

Forward P/E Ratio – 12.34, PEG Ratio – 1.41, Return on Equity – 81.60%, Revenue – $76.67 billion, total cash – $10.25 billion, debt – $11.20 billion and operating income is posted at $5.12 billion.

Please check the stat book page for trading details.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-09-21 – Let’s Go with MO

Today I need to be quick – I have to get on the road to LA to meet with Lenny’s attorneys this morning and it’s quite the drive and always fun battling the freeways in LA on a Friday morning. Even more fun will be the challenge of coming back in Friday afternoon traffic. Hopefully I can be expedient and get back on the road before 2:00 pm.

Today’s recommendation is an older favorite of Lenny’s and one he’s done quite well with. As a non-smoker and one of those people who really dislikes everything that has to do with cigarettes – today’s choice would never be my emotional favorite. However, there are still plenty of people in the world who have been lured into tobacco use and seem to enjoy smelling bad and as long as we have people who continue to waste their money and buy the little cancer sticks – well, why not make a buck off their poor judgment.

Don’t get me wrong – there are plenty of people who I know and love who smoke (Lenny included) – but, there are plenty of people who I have known and loved who have smoked and have been lowered into the ground from complications of that same choice… so I am probably a bit more judgmental that I should be – but, I feel I have cause. I can say that I wish Earth was a non-smoking zone. So, a few of you may find today’s choice a bit hypocritical. So bit it.

However, companies like Altria Group, Inc. (MO) – which is today’s choice – can be profitable for our bottom line – even if we may not like what they do. And, when it comes to making money – we should not let our emotions get in the way – at least – not when it’s a stock choice. It’s no different from not liking the taste of beer and not ever buying it – and not having any qualms against buying Budweiser.

Although it is easier to pull the trigger when you love the products of the companies you buy – it’s not a requirement for making a profit.

As you know, Mo primarily manufactures and sells cigarettes, smokeless products, with brands such as Marlboro, Copenhagen, Skoal, and a few others. The company also maintains a portfolio of leveraged and direct finance leases in rail and surface transport, aircraft, electric power, real estate, and manufacturing. The company was founded in 1919 and is headquartered in Richmond, Virginia and employs about 10,000 people.

The stats for the company to note are: Forward P/E – 14.18; Return on Equity – 98.75%; Quarterly Earnings Growth – 175.90%; Revenue – $17.25 billion; Total Cash – $1.53 billion; Total Debt – $13.69 billion and Operating Cash Flow – $3.05 billion.

Timing is right for an easy DITM win.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-09-19 – Hitching a Ride on the Coattails of Apple with TXN

Yesterday I joined the millions of people who were online buying the new iPhone 5. News reports indicate that Apple Inc. (APPL) was logging up to 20 orders per second. That’s a lot of new phones people. What’s even more exciting about the purchase – I was able to finally dump AT&T (T) and sign the new phone up with Verizon Communications Inc. (VZ). It is estimated to arrive October 5, 2012.

Apple is expected to sell 8,000,000 phones by the week end and another 8,000,000 before the end of the month. I don’t know about you – but even though I could have gotten one sooner if I went to the store this weekend, as they become available in the stores this weekend – I am sure the wait in line for service would have been ridiculous. I can wait a week and have it come to me.

In the meantime – I did a little online research. Buying options in Apple would be too costly for the average investor – it sure would be fun anyway. Instead of buying Apple – we can buy into other tech stocks that provide the parts for the wildly popular gadget.

Therefore – today’s pick has an excellent track record here at Nails and is one of my favorites: Texas Instruments (TXN), creators of the first computer using integrated circuits and the first handheld calculator.

Looking to the chart, we see Texas Instruments has dropped from the high of $34 and currently sits at $28 and change. I am seeing support at $27 and at $26.50 and so on. We don’t need much of a spread for a good DITM opportunity, so today offers us a good opportunity for a buy.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-09-17 – Hit the SPLS Easy Button to WIN

Last week Lenny’s email was hacked and thousands of emails went out to all his email contacts asking to help him get home from vacation in Madrid – as the email says he was mugged and all his money and credit cards were stolen.

This was a spam email – from an email hacker. Lenny is not in Madrid – he is still a guest of the Metropolitan Detention Center in Los Angeles and will remain so for a while yet.

If by some miracle – he were released by the feds – there is still the matter of a three year sentence he would need to complete for the State of California. He will not be traveling abroad for a year or two or three.

I am surprised that so many people contacted me – people that get regular updates as to his status and should know how unlikely he would be in Spain – who asked me if the email was legit. I guess most people really don’t pay attention to anything that really doesn’t fall into their circle of influence/importance – everything else is just casual information that doesn’t really get processed – so that when news like this pops up – however false… they are taken in.

If you got one of these phony emails – please accept my apologies – it was a hack, and beyond my control. At this point – I believe that Lenny is getting his email now and it is no longer being forwarded to the spammer.

Any act of email fraud should be reported to Yahoo! and the district attorney’s office.

Please watch your own email for phony emails asking you to verify your email account. This was how he was hacked. I got an email from Yahoo! saying that the email account was in danger of being deleted for inactivity. This was believable – because he’s not using his email.

From there they forwarded all his email to a new account and sent out thousands of spam emails asking for money.

It would be funny except for the fact that someone who hasn’t heard from Lenny for a while may have sent money – not knowing the truth. Something I’ll never know.

Now to today’s recommendation:

Right now – some of our 2013 positions are looking as though they will finally clear the finish line and can be scored as a win. Today – I am recommending that everyone that holds Staples Inc. (SPLS) sell it if they can do so at a profit. According to the stat book – the portfolio here at Nails holds 1840 contracts with an average price of $0.80. The calls are currently selling for $0.95 per share.

If your average price is LOWER than the current selling price – you should dump them if you can.

In looking at the stock chart and the slow stochastic chart both – it looks as though Staples is peaking and will soon drop back down. I am not sure how much more room there is at the top before we will see the price pull back a bit.

If you own the 2013 position in Staples – please send me a quick email through the site here to let me know how many contracts you hold and your average price – this way I can let everyone know the best price to sell at – and update accordingly – to try to help everyone clear the position with a little bit of green if possible.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-09-14 – Double up on INTC

Once again we have a lot of action to post. Earlier this week I scored Pfizer Inc. (PFE) as a win – when it was not. I had made a typo on the GTC sell order price and booked it as the same as the purchase price – and when the option price was even after dropping a bit – I made the mistake of marking it as a win. Not yet. It’s back on the scorecard with the correct GTC sell price posted.

We got on base with MMM, saw a rebuy of PEP and wins with GE, VZ and JNJ. It’s been a very good week. I am even seeing a glimmer of light with XRX, GLW, and SPLS which if the market plays nice for us and we don’t see another European country top the financial news with economic collapse – we may cash in on these too. I know we are all looking forward to converting these ASAP.

In checking all our open positions – today’s pick is one of my most reliable purchases and already on the scorecard with 80 contracts. I am referring to Intel(INTC).

The option price has come down, way down and we need to double up and lower the average. I did recommend a double-down earlier at $5.00 but that price didn’t get filled and I just scored the rebuy as usual. Today the price is going for about $4.40 – $4.50. Today’s recommendation will be a market order. Just buy it.

The recent pull back is a result of not meeting earnings estimates and lowering guidance for the remainder of the year. News like this results in investor over reaction. We can take advantage of the lower price – double up & go to the bank quicker with this play.

In previous headlines – INTC purchased Interconnect Hardware assets from supercomputer maker Cray and beat earnings estimates by 6 percent. If you watched Intel’s “Watson” crush the human competitors on Jeopardy last year, you may have heard that the supercomputer whose programming has it processing with impressive results has been recruited by Citigroup to be a Wall Street analyst.

On the small scale, I realize that people may not have much loyalty when it comes to choosing a computer processor for a PC or laptop but, when looking for a new computer, I shy away from those without an Intel processor in them. Additionally, I will choose the newest and the fastest processor available, because I know the technology will quickly become outdated.

There is a level of trust that comes with Intel processors that just can’t be shaken. Forget the cloud and forget that people are envisioning the demise of the hard core processor as cloud computing gains a foothold.

We don’t need to worry how big the clouds get – even if there is a storm brewing on the horizon, there will still be a need for raw computing power. Designers and graphic artists, programmers and CG artists will still need processing power. And the processors within the cloud will need processing power too, lots of it. Intel has the R&D capacity to make sure they stay in the driver’s seat with where new processors are headed and where they will be needed.

INTC closed trading yesterday at $23.36, which is down from the year’s high of $29.27 posted in May. The stock chart looks like there is a excellent buy or rebuy opportunity for our DITM calls strategy.

The entire R&D section of the Intel site never ceases to amaze me; if you have time you should poke around and see what they are up to. It’s never a waste of time to learn what the companies you are investing in are doing and what they see in their futures.

Let’s look to the numbers:

Revenue: 54.53 billion

Forward P/E: 9.95

PEG Ratio: 0.91

Return on Equity: 25.42%

Cash: 13.65 billion

Debt: 7.23 billion

Operating Cash Flow: 20.69 billion

Please check the scorecard for today’s trading details.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-09-12 – Post-It Note to Self – Buy 3M – Again!

In doing today’s research and gathering the data to update the scorecard, there are a couple wins to post a rebuy to calculate and a new position to post… all in all, a good day. Activity in the market is a very good thing for the strategy here at Nails.

If the market continues to push upward, we should see many more conversions from open position to winning position – including those stubborn 2013 calls we have in Xerox Corporation (XRX), Corning, Inc. (GLW), and Staples Inc. (SPLS). I’d like to think there is hope for Suntech Power Holdings (STP) for those of you that still own it – but, that one seems beyond hope at this point and I’ve already posted it as a loser.

Looking at the stats:

Forward P/E: 13.16

Return on Equity: 25.45%

Revenue: 29.64 billion

Total Cash: 4.90 billion

Total Debt: 6.31 billion

Operating Cash Flow: 5.32 billion

52 week high: 94.30

52 week low: 68.63

Yesterday’s close: 91.17

Please check the score card page for today’s buying details.

For today’s specific pick, please check the Current DITM Picks page.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-09-10 – Good Picks on Bad News

Last week we saw quite a bit of activity with the open portfolio with several wins, a couple of rebuys and a few additions to the scorecard. Movement is always good. Up or down is good – anywhere but sideways and we should be happy.

Another bit of news that should make us all happy here at Nails – is that Lenny is able to receive newspaper and magazine subscriptions now. So, I have ordered up the Wall Street Journal, Barron’s and Dow Theory Forecasts for him. He won’t be able to see any stock charts – live, but very soon he will have access to market trends and performance.

He wants to start providing input to the picks and participate once again in the columns. I’ll still do the writing and post all the updates – but, soon we should see some picks by the master. I’ll keep everyone posted once he starts making the recommendations.

On Friday – I recommended a double down on Intel Corp. (INTC) with a GTC order at $5.00 – however, that price was not up for sale – but, the traditional rebuy will post as the share price dropped below the recommended price listed in the stat book. INTC missed the number and is lowering guidance for the remainder of the year – at a time when normally they would see growth in the sector.

Today’s pick also missed the number and saw a sharp drop in share price with the news and additional news regarding the upcoming company split.

Today’s pick is Kraft Foods Inc. (KFT) makers of the ever-popular Oreo and many other recognizable brands. Kraft, along with its subsidiaries, manufactures and markets cookies, crackers, coffee, packaged juice drinks, and powdered beverages; cheese, dressings, condiments, and desserts. It also makes frozen pizza, packaged dinners, lunch combinations, and processed meats. Kraft Foods markets its products under various brand names, including Kraft, Oscar Mayer, Philadelphia, Maxwell House, Jacobs, Nabisco, and my favorite, Oreo.

Kraft is the world’s second largest food company with annual revenues of around $54.88 billion which means that millions of times a day, in more than 160 countries, people reach for a Kraft brand. According to their web site, you can find their products in 99 percent of all US households. And, that my friends, represents a lot of Mac N Cheese.

They have 11 brands with revenues exceeding $1 billion each, and close to 70 brands with revenues greater than $100 million. More than 40 of Kraft brands are at least 100 years old, and further – they have ability to say that 80 percent of their revenues come from products that hold the No. 1 share position in their respective categories. And, more than 50 percent of the company’s revenue is driven by categories where their market share is twice the size of the nearest competitor.

We call that a “wide moat,” as competitors would have to swim quite the distance to storm the Kraft castle.

Right now the numbers for Kraft are: Forward P/E ratio of 14.46, Return on Equity of 9.61%, Revenue of over $54.29 billion, total cash on the balance sheet of $4.73 billion, debt of $30.74 billion, which is hefty. The stock closed yesterday at $39.99, which is off the 52-week high by only a few points with short term support at about $38.50, with back up support at nice intervals – which tells me all I need to know for a quick DITM calls play.

Please see the scorecard page for trading details and if the order is filled, the GTC (good ’til cancelled) order should be set immediately at $1 above the purchase price.

Then grab a good book and poor yourself a large glass of milk and enjoy.

Remember: Life’s a Journey, Enjoy the ride.

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-09-07 – Snack on PEP

With the last couple of days – the market did a nice bounce and with it we saw four positions on the open portfolio cross the finish line for wins. If only it were this easy ALL the time.

In the news – Intel Corporation (INTC) announced lowered guidance for Q3 and will update end of year guidance with third quarter earnings. That has sent the share price down very close to the rebuy level. However, I am going to adjust the rebuy this morning to make sure we take advantage of the drop in price.

We currently have 60 contracts listed in the Nails open portfolio with an average price of $6.50 and with today’s news – those contracts are trading for $5.25. I am going to recommend a day order double down on Intel – with limit order of $5.00 – regardless of the rebuy price. If you get it at that price – the average price of the options will see a very nice reduction.

I found today choice in Ken Fisher’s column at Forbes.com. Lenny has been a big fan of Fisher and I always enjoy reading his columns. Not only is he an excellent source when it comes to a bullish outlook – his choices are always spot on – although, most of Fisher’s choices are geared more for long term trading strategies, where timing isn’t as important as making the right stock choice.

Here at Nails – the strategy is short term. Therefore timing is a factor. So while Fisher is a great source for stock choices, it is still necessary to me to look at those choices using the guidelines for a short term opportunity.

Today I am going with Pepsico, Inc (PEP).

No Diet Coke today. However, like Coca-Cola, Pepsico is one of the largest beverage and snack food companies in the world with brands such as Frito-Lay, Tropicana, Quaker and Gatorade in the lineup. Under the Pepsi brand there are several popular beverages – with many top selling labels such as 7Up, Ocean Spray, Mountain Dew, Sierra Mist, SoBe, Aquafina, Brisk Ice Tea’s, Lipton, and Propel.

My favorite of these is the Starbucks Frappuccino – in the little glass bottle that makes up my morning coffee. I buy these at Costco by the 12 pack. Mmm Mm – delicious.

The company was founded in 1898 and headquartered in Purchase, New York and employs nearly 300,000 people worldwide.

Right now the numbers are as follows: Forward P/E ratio of 16.44, Return on Equity of 26.90%, Revenue at $66.63 billion, total cash on the balance sheet of $4.19 billion, debt of $28.33 billion, and operating cash of $7.84 billion. The stock closed yesterday at $72.15 with short term support trending up with the share price.

The slow Stochastic dropped and has switched directions, which tells me that it’s a good time for a purchase using our DITM calls strategy.

Remember: Life’s a Journey, Enjoy the ride.

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-09-05 – Buy CAT & Rebuy Others Too

Once a month we look at the open portfolio to see what needs to be shored up due to weakness and what can be exploited due to strength.

With Monday being a holiday – the portfolio review follows today’s pick, to double up on today’s feature and make up a column.

Today, I will go for Caterpillar (CAT). We have stepped up to the plate on this name several times. We have a slim chance of landing our position today and it’s not a cheap pick either, but it’s the one pick where I really like the stock chart and the potential I am seeing there. I am going deep in the money with this one – with the option that has a bit more open interest and is trading closer to the Nails formula.

The company’s 52-week high tops out at $116.95 and the low $67.54 which is a pretty large spread, with the stock trading midway at $82.66 at yesterday’s close. However, if you program your chart to view the 21-day, 50-day and 200-day moving averages you will see that the 200-day average is flat, showing me that long term ups and downs are pretty even. The 21-day moving average is starting to trend back up and has crossed over the 50-day moving average that is still leveling off and looks as though it will start to head up again soon.

The slow stochastic – an add on chart which helps with timing – is saying “Buy Now.”

There is resistance at $97.00 so we can lock in a win before resistance is tested, that is – if we can get in a position to score by getting on base. And there is support at $80.

Here are the stats to make note of: Forward P/E Ratio – 7.86 (really good) / PEG Ratio – 0.51 (this is excellent) / Return on Equity 40.41% (fabulous) / Quarterly Growth – 68.40% (really good) / Revenue $66.31 billion / Debt $39.32 billion (it is a bit high) / Operating Cash Flow – $5.72 billion.

After the order is filled, set a good-till-cancel (GTC) order $1.00 above the average purchase price to cash out for a quick win.

For today’s specific pick, please check the Current DITM Picks page.

Here is where we stand with our current positions.

General Electric (GE) – was purchased on August 31^st and the open position is trading within ten cents of our purchase. It is now posted to the open portfolio.

Walt Disney Co. (DIS) – has been on the open portfolio list since August 27^th. We have 10 contracts that are trading even with the open portfolio. In looking at the slow stochastic – I would expect to see Disney to drop a bit further before heading back up. However, with this chart – you will see that DIS tops the 80 percent line much more often than dropping below the 20 percent line – which matches the steady climb in the stock chart over the last 12 months.

Verizon Communications Inc. (VZ) – was purchased on August 20^th and is trading about 35 cents below our current average. In looking at the stock chart – I have adjusted the rebuy level to match current support levels. Because our position is trading lower than the average on the portfolio – you can expect that we may need to rebuy and lower our average at least once before we see a win here.

Coca-Cola Company (KO) – has been in the portfolio since August 13^th. We have 30 contracts that are trading well below average. I have readjusted the rebuy price to take advantage of the current rebuy opportunity. If the market drops enough today – a rebuy here is a good idea.

Johnson & Johnson (JNJ) – has been listed in the open portfolio since August 10^th – with 20 contracts at an average price of $8.40. The options are currently being traded at $8.25 which is very close to our average. Chart wise – it would be a good time to buy or rebuy – but with our average right there – it makes no sense to spend money to stay the same. The current rebuy level is good – no change today.

Bristol-Myers Squibb Company (BMY) – has been on the open portfolio list since August 8^th and we currently hold 10 contracts that are very close to crossing the finish line. I am going to adjust the rebuy level here a bit – but am not really expecting to need it. If you’d like to pull some cash out of your portfolio – this one is just about at the peak – timing wise – it could be a good move. Here at Nails – we will keep the GTC sell price as posted. But, if you need some green – you could decide you are close enough here to cut and run.

Dow Chemical Company (DOW) – has been on the scorecard for a little over a month – I recommended the purchase on July 27^th. Yesterday the position hit a rebuy and the new average and rebuy price have been calculated and posted to the statbook.

Bank of America (BAC) – has been on the open portfolio since July 16th showing 20 contracts at an average price of $3.20 with the price of the January 2014 contracts going for $3.50 – so the position is up about 30 cents after rounding. The rebuy price has been adjusted to reflect current support.

Intel (INTC) – We’ve had INTC for about four months now and hold 60 contracts. Our average price on Intel is about a point higher than the current option price. A rebuy now is looking like a good move. The rebuy price has been adjusted to reflect this.

Applied Materials Inc. (AMAT) – We’ve had for almost five months and we are up about 30 cents when you compare our average to the current option price. The stock chart is telling me that the stock is going to be peaking soon with resistance at $12.00. The stock needs to break this level for us to see a win as recommended. The rebuy price needs no adjustment.

Microsoft Corporation (MSFT) – Is looking a bit better than it did last month, with our average price at $6.00 with 60 contracts and the going price at $5.70. I have no worries with this 2013 position, but have adjusted the rebuy level here just a bit with everything else. In addition, because it is a 2013 position – last month I adjusted the GTC selling price target to get out of any 2013 positions earlier. As soon as we see a little green – we should cash in and put our money in longer options.

Xerox Corporation (XRX) -This position has been on the open portfolio since May 2011. I am still recommending another double down play with the next rebuy. For a win – we’d need the stock to go to $8.50-9.00 for a win in the short term with a rebuy in there to help the cause and the average price. In looking at the chart – I see this one as a possible roll out to the 2014 position by the end of the year.

Corning (GLW) At the end of the year, we rolled this position out another year. We gained a bit of ground with GLW this last month. But, we still need to consider another double down play – or rebuy as many as possible play to continue to lower our average. I have adjusted the rebuy level and recommend you double up if we see this price. Then, if we see any green – look for the nod to cash out ASAP. I see a real strong possibility of a modest win here in the next couple of months – if we stay on it and double up when the opportunity presents itself.

Staples, Inc. (SPLS) has posted a small adjustment in the rebuy and here too, to take advantage of the drop in price that killed the share price earlier in the month. Double up if you can as soon as you can. We dropped back out of the money with SPLS, so it’s cheap to buy. We need to get our average down while we can – so that when the share prices rally – we can collect on that. We are getting closer – it’s not at all looking hopeless.

Suntech Power Holdings (STP) is dead and buried. However, there are a couple of you that didn’t bail on it just yet – however, with the investment fraud scandal posting in the news- it’s not looking good and the stock is less than $1.00 and we hold $5.00 options that expire in January and are not trading at all even though the price says three cents. The ONLY way to pull this one from the grave and see some cash would be to roll it or buy the stock as previously noted. The loss on the scorecard – and it looks to stay that way… but, if I can resurrect it – I’ll change it to a win – but only if it can be saved with what the handful of you have in your own portfolios. So – if you still have STP – let me know when you add to the position – if you do.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-08-31 – Get the Lights with GE

Today I am posting early – as I have an early morning drive into LA. I wish I was going to see Lenny – but, alas – I am not. It is his attorneys that have me getting up early to drive instead of picking a stock. It should be a good meeting. I am looking forward to it.

Therefore, you will see that this morning I am going back to a consistent winner, General Electric (GE). Last month I went with GE and here I am again ready to go and ding the scorecard again with another quick winner.

If you venture out to the GE website and look up their products and services listing – it is quite the list – as GE now covers just about everything from household appliances, aviation equipment and asset management, power generation and distribution, water processing and so on – even entertainment and banking. You could almost say you have a diversified portfolio with just this one purchase.

Here are the numbers to note: Revenue: 145.03 billion / Forward P/E: 11.93 / Return on Equity: 11.18% / Cash: 74.30 billion / Debt: 428.77 billion / Operating Cash Flow: 32.44 billion.

Debt is high but the company has a track record of managing debt well and I have found that older companies have more of a tendency to keep a lot of debt. GE has been around since 1892, so that qualifies as not just old but quite stodgy too.

Please see the stat book page for trading details and once filled set a GTC (good ’til cancelled) order at $1.00 higher than your average cost to lock in a $1000 gain.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-08-29 – Back Again to PFE

Today’s research brings me once again to pharmaceuticals of which we now have a few on the open scorecard. If you are one to worry about diversification of your open portfolio – then sit this one out, as it does add risk to your portfolio if you put all your eggs into one or two sectors, unless of course you only have a couple open positions. Then it can’t be helped.

With the recommendations – they are picked on the metrics, the timing, and the price – but not on possible diversification of your portfolio. So, on that issue – you decide how many purchases to get into for each sector of the market, as only you can determine your own risk tolerance for such things. Therefore, please don’t read off the open portfolio and ever ask Cramer if we are diversified. You should try to be somewhat diversified – but, as an FYI – it’s not something I factor in when making a selection.

Pfizer is a New York based company with a market cap of $178.15 billion and a current average dividend yield of approximately 4.7%. The stock chart is telling me the timing is right for a buy. There is short term support at $21 and additional support at $20 and again at $19 for the rebuy strategy. The stock closed yesterday at $23.85. The 52-week high mark is $24.49.

Pfizer is a solid company and the January 2014 options are affordable. Buying now means we are buying at a discount and it will be easy to get in on the day’s recommendation.

Here are the stats to make note of:

Please see the scorecard for trading details.

If the position fills today, I will immediately place a GTC limit order to sell the options at a point higher. This locks in a win of $1000 for the 10 contracts I am recommending today.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-08-27 – Deep into DIS

Today I am a little behind schedule so will get right into it.

I am going with a very well known brand that has provided happiness, joy and adventure for all ages since 1955. I am talking of course of Walt Disney Co.(DIS). There is probably no other company you can invest in that is guaranteed to instill some appreciation for what they do from people of all ages.

Disney is showing continued upward momentum, but the last couple of days of market drops (sans Friday), is giving us an opportunity to catch a quick win on the rebound. Company stats are as follows: Revenue comes in at $41.92 billion; Forward P/E is 14.15 and the PEG Ratio is 1.27; Return on Equity is 14.54%; total cash is $4.37 billion; operating cash flow is $8.54 billion and debt is a little less than twice that at $15.02 billion.

Today’s pick is a really deep in the money pick. There isn’t much open interest in going this deep – but it covers the 52-week low and at this price – the option price is doable and will be very stable. When Disney goes back up – it will ride up in tandem at a closer rate – dollar for dollar than an option not as deep.

Remember: Life is a Journey; enjoy the ride! (Especially the “E” ticket rides).

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-08-24 – Bigger Wins With TXN

With the market trimming back – stock choices are starting to be more plentiful. There were quite a few nice choices that looked good this morning.

Today’s pick has an excellent track record here at Nails and is one of my favorites: Texas Instruments (TXN), creators of the first computer using integrated circuits and the first handheld calculator.

I can’t wait for self-driving cars to become a reality. So much time is wasted behind the wheel of a car, especially here in Southern California where public transportation is not very practical for most commuters, as it is more expensive than driving, takes more time, and never quite gets you to your destination. With a car that drives itself, for me, the time spent driving could be spent working or reading.

Looking to the chart, we see Texas Instruments has dropped from the high of $34 and currently sits at $29.32. I am seeing support at $27 and at $26 and $25. We don’t need much of a spread for a good DITM opportunity, so today offers us a good opportunity for a buy.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-08-22 – No Standing in Line for WMT

The Nails deep-in-the-money (DITM) investment strategy continues to roll out the winners and as long as we keep taking positions in the world’s best companies, we should be working towards the goal of converting open positions into wins each and every day. We got another win with Hewlett-Packard Company (HPQ) yesterday – bringing the win total up to 286.

Today I’m looking to once again to add Wal-Mart Stores Inc. (WMT) to the portfolio. Although not a big fan of shopping at Wal-Mart, I’d rather pay five to ten cents more for the same thing at Target (TGT) and save the 45 minutes of standing in line, but the world’s largest retailer has the distinction of being the world’s largest, because many people feel that the five to ten cents makes it worthwhile. I am just glad that investing in Wal-Mart doesn’t require the same line and I can take advantage and make money because other people are willing to stand in line for those incremental savings.

Wal-Mart is a Major League company and they know how to make that cash register ring 24-7 with revenues over $460.71 billion. Yes folks, that’s right OVER $446,000,000,000 in sales and that is a lot of zeros and a figure that is closing in on half a trillion dollars. They generate $26.14 billion in operating cash flow and have $7.94 billion in the bank with a hefty debt load of $54.62 billion. Although the debt is large in comparison to cash, most of it is in the stores, the buildings and the land they sit on. You can’t own that much real estate without owing a few mortgage payments.

The company has a return-on-equity (ROE) of 22.90% and forward price-to-earnings (P/E) ratio of 13.35. The stock chart looks promising for a quick win so getting on board with the options is going to be the challenge this morning.

Please see the scorecard for today’s trading details.

And remember, using limit orders lets us get the best price available. However, don’t chase the price, because the market has opened up this morning. If you can’t get the options at the price recommended, it’s OK to let the opportunity go. No non-buyer’s remorse here. Although I don’t like to wait in line and will pay more not to have to, when I trade options, I get the price I want, or I play again another day.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-08-20 – Dial Up a Win With VZ

Tomorrow marks the big 5-0 for me, bringing around another full tour of the solar system to a close and the start of a new one. My older brother used to tease me and say that because I was born in Pakistan instead of the US – I did everything out of phase (Star Trek reference for a space-time shift) because of the different time zone. Physically though all it really means is that at 6:00 pm today – here in Southern California would mark the specific time anniversary of my birth and not 3:00 am tomorrow.

It all depends on how you look at the timing of things.

Because we cannot predict the future – timing can be a tough nut to crack. A stock can be down and look ready to come back – then fall further. And a stock can be rising and look like it will continue to climb – then pull back.

Right now the market seems to be on the rise – incrementally. That makes it somewhat harder to find a stock that has enough room at the top to get in and get out with a win and not need too many rebuys, if any.

Today I am looking to add Verizon Communications Inc. (VZ) to the portfolio. The timing for VZ looks perfect and the option price is well under Lenny’s formula too.

If you want to make sure you get the lowest price – set your bid lower than the recommendation and go with something between the bid and ask prices posted. If it doesn’t fill – come back and bid at the ask price – and you’ll be on base.

Verizon is headquartered in New York and is the second largest US telecommunications services provider (after AT&T) and has taken the top spot in wireless services (ahead of AT&T).

However all in all, the numbers are still nice to look at – Verizon has revenue of $113.14 billion; a forward P/E of 15.62; operating cash flow of $32.26 billion; total cash on hand of $10.80 billion; making Verizon a very solid play, even with debt at $52.39 billion.

The chart for the stock tells me timing is good and there is still room at the top for getting a win before the need to break beyond resistance, and the option prices are good.

This feels like a quick win for Lenny’s DITM calls strategy.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-08-15 – Going Up with UTX!

Stock futures were down this morning just a tiny bit – a good indication of red ink with the morning’s open with another day of incremental swings.

I really didn’t find a perfect trade this morning. Most stocks are still testing resistance with the overall market doing the same. Where I am seeing weakness or buy opportunity – I am also seeing stocks that are going to take too long to recover and feel like a bit of caution is warranted with those choices.

It’s been a few months since I have set my sights on United Technologies Corporation (UTX). Getting a Win out of UTX isn’t as hard as getting in on the options for the right price. With previous recommendations of UTX – I have padded the premium a bit for a good chance to get on base – however, not doing that today. I am sticking with the formula.

As you know, UTX specializes in technology products, building systems and aerospace. The options for this company have been elusive, to say the least, but it is better to go after the best companies and not get filled – over going with a so-so company that fills and ends up being a so-so choice.

In looking at the stock chart – timing could really be better. The stock price is up from recent dips and I’d usually wait for it to pull back a bit before jumping in – however, this is the one stock chart that is showing me really good support several points down and nice room at the top before the stock approaches resistance. Meaning I see room for movement.

Here are the notable stats: Forward P/E ratio: 12.21; Return on Equity: 23.89%; Revenue: $57.27 billion; Cash: $5.97 billion; Debt: $20.72 billion; Operating Cash Flow: $7.0 billion; and, the percentage of stock held by institutions: 83.90%.

These stats continue to remain solid and as long as we need moving parts, UTX will find a segment of the market to capitalize in to provide long term shareholder value and have been paying out consistent dividends every quarter to shareholders since 1936.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-08-13 – Knock One Out with KO

THIS MORNING WHEN POSTING TODAY’S PICK – I MISSED THE STOCK SPLIT BEFORE POSTING THE RECOMMENDATION – THE CORRECTED RECOMMENDATION IS ON THE SCORECARD PAGE.

Stock futures and pre-market trading started off this morning a bit down, but have been gaining steady momentum upward since I got up to see what today will bring. What started off as looking like we might see red is looking like it might be a day for green.

Most of the stocks I’d normally recommend are testing resistance and not support. It’s always better to buy at support. However, with the market testing resistance – if it can break out and aim for new levels – the open portfolio will benefit greatly. Personally, I’d rather see some of those 2013 calls score over getting on with a new pick this morning.

Today choice has dropped a couple points off the high and is looking as though we could score a quick win. Today I am going with Coca-Cola Company (KO). Coke is it!

KO is one of the favorites to the DITM strategy here at Nails and when it looks good – we need to do what we can to let it win for us. In the last five days – KO was dropped sharply, so we have a good opportunity to score quickly when it reverses direction.

Coca-Cola Company is the largest beverage company in the world and produces over 500 brands. They are also the No.1 provider of sparkling beverages, juices and juice drinks and ready-to-drink teas and coffee. Even with pressure from the United Nations to limit advertising to emerging markets to restrict advertising to children under 12, there may not be a market that Coke hasn’t already sewn up the market, as it is the world’s most recognizable brand.

What Lenny and I love most about this stock is that it truly is recession-proof. With all the recent market turmoil, Coca-Cola continues to pay out generous dividends and has even increased its investor payout by 8% over the last 5 years. This alone is an excellent sign of health and I’ll drink to that! The Coke brand historically transcends national, political and social barriers.

Founded in 1886 and headquartered in Atlanta Georgia and employing about 140,000 people worldwide, Coca-Cola represents the world’s most valuable brand and KO products are sold in over 200 countries worldwide at the rate of 1.6 billion servings per day. By selling the syrups direct to local bottlers and licensing the brand names, Coca-Cola has developed a distribution system that works beautifully. The company focuses on marketing and production and does an excellent job of keeping up with current trends in the beverage market.

In trying to meet the diverse and ever-changing needs of beverage consumers around the world, KO tries to stay a few steps ahead of its competition. When consumers develop a thirst for bottled water, they promptly respond with a cold Dasani in hand.

The brands are so diverse- Fanta, Sprite, Nestea, vitaminwater, Odwalla, Sprite, Minute Maid, Hi-C, Powerade, and so many more… Chances are, if it’s non-alcoholic and comes in a can or bottle, it is likely a Coca-Cola product.

Aside from their innovation in products, the company is also leading the way in social responsibility and eco-friendly recyclable packaging. Coca-Cola truly is a company whose success will continue to spill over on us.

Right now the numbers for Coca-Cola are as follows: Forward P/E ratio of 9.06, Return on Equity of 25.80%, Revenue at $47.51 billion, total cash on the balance sheet of $16.97 billion, debt of $32.48 billion, and operating cash of $10.01 billion. The stock closed Friday at $78.79 with short term support still trending a bit higher and now around $76.50 and further support at $75.00 and $74, which gives me more than two levels of short term support.

The slow Stochastic is dropping, which tells me that it’s a good time for a purchase using our DITM calls strategy, but if we don’t get a fill today – look to see KO as pop back up as it bottoms out and starts to go back up. Please check out the scorecard page for today’s trading details and remember to place a GTC sell order to lock in a win if your order is filled.

Still can’t beat the feeling. Life tastes good.

Remember: Life’s a Journey, Enjoy the ride.

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-08-10 – A Healthy Pick with JNJ

This morning I slept in and got a late start. On Tuesday we got a win with Yahoo (YHOO), one of our stubborn 2013 positions with the lowered GTC sell price. Yesterday we got another win with Cisco Systems Inc. (CSCO). If the market can continue to inch up, that does allow the option prices to gain more traction and move more in tandem with the underlying security – the stock.

Today, stock futures and premarket trading are pointing to another small dip in pricing across the board with the opening bell.

JNJ isn’t far from the 52-week high, but nearly everything is near the 52-week high. It has dropped a bit, but all averages are still trending up and with a couple point drop in price – there is room for a predictable bounce if the market sees short term gains. If the price drops further – we will be on base with a good option price will have enough intrinsic and time value for a significant pull back in order to shore it up and make the strategy work.

Johnson and Johnson stock closed yesterday at $68.32. Their financials are the definition of “healthy” with and undervalued forward price-to-earnings ratio of 12.51, revenue of $64.87 billion, total cash in the bank of $16.92 billion, and debt comfortably less than that at $17.56 billion and operating cash flow of $15.60 billion. Quarterly earnings saw a dip of -49.30%, but share price has completely recovered since the announcement.

Please see the scorecard for trading details and note that I have low balled the recommendation with the anticipation that the market will open low enough to get in at this price – so there may be some price resistance in getting on base. Don’t chase it. Today’s recommendation isn’t a pick I’d normally go with (with the stock being so close to the top) – for the exception that it dropped enough over the last few days and with the pull back expected today – if we can get in – we should be able to get out again quickly once the market bounces back.

I see a very nice and healthy “W” in our future.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-08-08 – Convert BMY Testing Loss into DITM Win

Over the last three days, the market has been climbing steadily, however today premarket trading and stock futures predict a bit of a pull back this morning as stock prices look at resistance. With many stocks closing in on highs, as I looked for a stock with excellent upside potential, a fair option price, and the right metrics for a buy – I found that once again, branching into puts wouldn’t be a bad choice.

Although could make a few great put recommendations, here at Nails, the strategy continues to be about Deep-In-The-Money Calls, not Puts.

Today’s recommendation however is not testing resistance. In fact they’ve run into a snag in clinical trials with a new drug they have been testing. A person in the testing group had heart failure so the drug testing has stopped so they can assess the situation and safety of the drug. Meanwhile the stock dropped nearly four points in a day – providing opportunity due to the overreaction to the news – although bad – probably not as bad as the news warrants.

I am going with pharmaceutical giant Bristol-Myers Squibb Co. (BMY). Bristol Myers is a New York based company with a market cap of $54.35 billion and a current dividend yield of approximately 4.6%. In looking at the stock chart, the recent pull back spells out opportunity.

BMY has been a solid choice time and again. It has been a core money maker for investors for many years. The company doesn’t turn out mega returns, but it remains consistent over time and they have recovered from similar setbacks before. Every major pharmaceutical company has experienced testing trials. It’s unfortunate for the person involved with health issues – but, testing is necessary and comes with risk.

Here are the stats to make note of:

Revenue: $20.49 billion

Forward P/E: 17.22

Return on Equity: 30.52%

Total Cash: $5.04 billion

Total Debt: $5.44 billion

Operating Cash Flow: $4.79 billion

Please see the scorecard page for trading details and note that the recommended play is well below the normal price I am willing to pay. This is because the options are selling at a good price, making this trade easy to make. By placing a limit order, you will automatically get the best price at open if the options open lower than your bid.

If the position fills today, immediately place a GTC limit order to sell the options at a point higher. This locks in a win of $1000 per 10 contracts held, which is the goal.

Also, please note that Monday’s recommendation should have been posted to the open portfolio when previously recommended on July 27. 2012 – I apologize for the error and the scorecard will reflect the original recommendation.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-08-06 – Go with DOW and Review Open Positions

Last week, on Friday – it was portfolio review time, but – the website was down for most of the day. Once a month we look at the open portfolio to see what needs to be shored up due to weakness and what can be exploited due to strength.

So the portfolio review that should have posted Friday – follows today’s pick.

Today’s pick is a consistent repeat winner: Dow Chemical Company (DOW). I took a swing at DOW on the 27^th of July as the company severely missed earnings estimates and the stock chart is showing signs of recovery from the news and the stock price for the January 2014 $20 contracts are a real bargain. Based on the pricing formula here at Nails – the price you would expect to pay is about a point higher than the going price. Once the stock recovers from the news – the price here should self correct and with that – we should see a quick win.

So I still see some very good reasons to buy instead of cut and run. At Nails we seek to take advantage when solid companies see a sudden drop in share price. Even when the company falls short of expectations – the market will overreact to the news and people will jump ship – far beyond what is warranted. That means opportunity when the share price drops. Remember we do want to buy low and sell high.

Here are the numbers to consider: Revenue: $58.44 Billion, Forward P/E Ratio: 10.93, PEG Ratio: 2.47, Total Cash: $3.96 billion, and Debt: $20.66 billion. Both the PEG Ratio and debt are higher than ideal, however the company performs for Nails over and over and the stock chart and technical charts tell me it’s a good time to buy, plus they continue to offer a consistent dividend payout to stock holders.

For today’s specific pick, please check the Current DITM Picks page.

Here is where we stand with our current positions.

General Electric (GE) – was purchased on July 13 and crossed over the finish line on Friday – but, just barely. Those of you that haven’t seen your GTC sell order post a win for you – should see that happen today as the market is expected to see modest gains in early trading.

Bank of America (BAC) – has been on the open portfolio since July 16^th showing 20 contracts at an average price of $3.20 with the price of the January 2014 contracts going for $3.00 leaving us down about 20 cents after rounding. Currently the rebuy price needs no change.

Cisco Systems, Inc. (CSCO) – has been on base since July 11^th and the current position is up by 20 cents. We have 20 contracts of this January 2014 position and are in good shape for a quick win. There is no need to change the posted rebuy price.

Hewlett-Packard Company (HPQ) – has been on board since July 9^th and there are 40 contracts open with this position. The position is down by about 90 cents so another rebuy or two is in order to bring the average price down. I have adjusted the rebuy price to reflect where the next purchase should occur. With the position we have – we need the stock price to increase to about $25.50 or better to see a win. With an additional rebuy or two – then we could lower that target accordingly.

Intel (INTC) – We’ve had INTC for about three months now and hold 40 contracts. Our average price on Intel matches the current option price – so we do not need to buy more now – but wait for the next dip down to do so, or wait for a pop to cash in. The rebuy price has been adjusted just a bit. It won’t be long for this one to cross the finish line for us.

Applied Materials Inc. (AMAT) – We’ve had for almost four months and we down by just 10 cents when you compare our average to the current option price. The stock chart is telling me that the stock is going to be peaking soon with resistance at $11.50. The stock needs to break support for us to see a win at a point higher as recommended. The rebuy price has been adjusted a bit to match current support.

Microsoft Corporation (MSFT) – We have slipped bit further south on this position, with our average price at $6.00 with 60 contracts and the going price at $5.15. I have no worries with this 2013 position, but I am going to adjust the rebuy level here just a bit with everything else. In addition, because it is a 2013 position – I have adjusted the GTC selling price target to get out of any 2013 positions earlier. As soon as we see a little green – we should cash in and put our money in longer options.

Yahoo Inc. (YHOO) – Our Yahoo position is up about $0.20 and is slowly marching higher. I have adjusted the rebuy to reflect the current higher support levels, and feel as though we will see a win here before we see a rebuy and like MSFT, I have adjusted the GTC selling price here too to cash out sooner with this 2013 position.

Xerox Corporation (XRX) -This position has been on the open portfolio since May 2011. I will recommend another double down play with the next rebuy. Our average is $1.00 and the current price is $0.40 – we need to get further under our $1.00 average and can do that while the option is out of the money. I have adjusted the rebuy to $6.70 to really use the double down play to our best advantage. If we see a rebuy – we’d only need the stock to pop up to $8.00 for a win. If we don’t see the rebuy soon, we’d need the stock to go to $9.00 for a win in the short term. In looking at the chart – I see this one as a possible roll out to the 2014 position by the end of the year.

Corning (GLW) At the end of the year, we rolled this position out another year. We lost a bit of ground with GLW this last month. Therefore, we are getting close to another double down play – or rebuy as many as possible play to continue to lower our average. I have adjusted the rebuy level and recommend you double up if we see this price. Then, if we see any green – look for the nod to cash out ASAP. I see a real strong possibility of a modest win here in the next couple of months – if we stay on it and double up when the opportunity presents itself.

Staples, Inc. (SPLS) has posted a small adjustment in the rebuy and here too, if you want to double up – do this one too. We are back in the money now with SPLS, but not out of the woods just yet. We need to get our average down while we can – so that when the share prices rally – we can collect on that. We are getting closer – it’s not at all looking hopeless.

Suntech Power Holdings (STP) is dead and buried. However, there are a couple of you that didn’t bail on it just yet – however, with the investment fraud scandal posting in the news- it’s not looking good and the stock is less than $1.00 and we hold $5.00 options that expire in January. The ONLY way to pull this one from the grave and see some cash would be to roll it or buy the stock as previously noted. The loss on the scorecard – and it looks to stay that way… but, if I can resurrect it – I’ll change it to a win – but only if it can be saved with what the handful of you have in your own portfolios. So – if you still have STP – let me know when you add to the position – if you do.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-08-01 – Small Window of Opportunity with QCOM

This morning we are seeing a bit of green with the open, however today’s pick has been dropping steadily since the opening bell. With the market going up – it isn’t a good idea to chase a stock up. We want to see one that is coming down or just starting to make a turn.

In looking at the stock charts this morning – I decided to go with a long shot, but you should know – it’s only a long shot with regards to being able to buy the option at the price I am recommending. The option price for today’s recommendation is currently selling for a few points higher – but with the early morning sell off – I am hoping that the price will continue to drop throughout the day and give us an edge. If investors overreact to news – we can take advantage of that.

With that in mind – today’s recommendation: Qualcomm Incorporated (QCOM).

QCOM is a monster company with revenue of $18.37 billion, debt at $1.35 billion as compared to total cash of $13.40 billion and operating cash flow of $6.41 billion making for a very solid balance sheet. The company’s forward P/E ratio is a modest 14.46 with a PEG Ratio of 1.12 and a return on equity of 17.31%. About 82.60% of the stock is held by institutional traders. All in all, the stats tell me this makes one hell of a nice choice, but we need the market to come to us on this choice.

News that guidance was lowered due to European decreases in demand and have sent the stock dropping this morning. However, with the upcoming announcement of the new iPhone 5 and a possible smaller version of the iPad – QCOM should bounce back quickly.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-07-30 – Run FRX Run

Last week, Friday – Lenny signed a movie deal for his life story rights. It probably won’t make headlines like his court appearances because only a handful of people are aware of the deal and until there is a script – not many people hear about movie options. Both Lenny and his ex-wife have picked out their preferred actors who they feel would do the best job of playing them, and they have made some good choices – but, I seem to be drawing a complete blank when Lenny asks me to do the same. I just cannot fathom anyone wanting to play me as a character in a movie – let alone that I’d be a character in a movie. I just can’t picture it.

Although I can picture being a part of the behind the scenes action on the set – watching it being filmed and consulting on it to make sure everyone is coming across correctly. That I can picture doing with ease – but watching someone be me – how odd would that be?

Now, for this morning’s recommendation and work I can wrap my head around – I am going back to a company that has won for Nails several times before:Forest Laboratories Inc. (FRX).

The company is in the process of battling out a contest of wills against investor Carl Icahn – but where Icahn is involved there is usually a conflict happening. And, there are still hints and rumors around that Eli Lilly & Co. (LLY) may be in the market to buy them out, but those rumors are getting harder to find.

Forest Labs is a pharmaceutical company that specializes in developing, manufacturing, and selling many kinds of drugs. Its drugs help treat depression, anxiety, Alzheimer’s, and hypertension, to name a few. FRX has ranked sixth among the top pharmaceutical and biotech companies, according to Pharmaceutical Executive’s annual strategic industry audit.

It is a very solid company. I have confidence in the stock chart that they are on the rebound with new drugs in the pipeline, along with the fact that they have zero debt – all are great signs in my book for a good play. They have $2.43 billion in cash and NO debt. Overall, the stats on this company tell me again and again that this continues to be a solid pick.

Trading the same companies over and over again as the technical indicators point to the correct buy and sell numbers is the best way to make money trading Lenny’s DITM picks. It removes all the emotional factors that can lead an investor to trouble. One of the rules here at Nails is to never get attached to a trade or a company. Only be attached to the numbers.

Please check the Stat Book page for the specifics of today’s recommendation. Remember to post a GTC limit order to sell your call at the target sale price of $1.00 higher than the purchase price as soon as the order is filled in order to lock in a win.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-07-27 – BUY on Bad News With DOW

The market seems to be having fun – as though playing with a yo-yo. We go up, we go down, and all while the little wheel spins around. This morning before the bell, stock futures and premarket trading predicted the open fairly accurately. Most companies have done well over the last couple of days – with the noted exception of today’s pick.

Once again I am going back to a long term and repeat winner for the Nails strategy. We continue to go back to the well and cash in as often as possible with companies we know have won and can win for us again and again. Today’s pick is a consistent repeat winner: Dow Chemical Company (DOW).

Dow just go hammered the last couple of days due to a severely missed earnings estimate and quotes from the company CEO stating that they believe economic growth is going to be non-existent for a year or two blaming a “synchronized global economic slowdown” as the cause.

However, I see some very good reasons to buy instead of cut and run. At Nails we seek to take advantage when solid companies see a sudden drop in share price. Even when the company falls short of expectations – the market will overreact to the news and people will jump ship – far beyond what is warranted. That means opportunity when the share price drops. Remember we do want to buy low and sell high.

Here are the numbers to consider: Revenue: $59.97 Billion, Forward P/E Ratio: 9.18, PEG Ratio: 1.99, Total Cash: $3.46 billion, Operating Cash Flow: $4.0 billion, and Debt: $20.58 billion. Both the PEG Ratio and debt are higher than ideal, however the company performs for Nails over and over and the stock chart and technical charts tell me it’s a good time to buy, plus they continue to offer a consistent dividend payout to stock holders.

For a company that has been around for over a century, it wouldn’t be difficult to imagine that they might have a lot of outdated processes. However, Dow was recognized with four 2010 American Chemistry Council (ACC) Responsible Care Energy Efficiency Awards for programs that improved energy efficiency at three of its U.S. facilities and in previous articles, I noted that the company had announced its plan to invest in projects to reduce greenhouse gas emissions and improve energy efficiency, which when implemented would cut nearly eight-trillion BTU’s of energy use and eliminate over 400 thousand metric tons of carbon emissions.

As for the company’s financial outlook, they have done business since 1897, and you don’t go from horses, buggies, and telegrams – through the depression – to corporate jets and BlackBerry’s without understanding how the market works.

For today’s specific pick, please check the Current DITM Picks page.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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At the time of publication, Mr. Dykstra will not, directly or indirectly, have a position in any security that he discusses in Nails on the Numbers by Lenny “Nails” Dykstra (the “Product”). HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person.

To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-07-25 – I’m Going to Disneyland

The market is starting to swing in broader swaths each day. This type of market volatility can be great for quick wins. It can also mean that the market is ready to change direction and start trending down for a market correction. There are plenty of stories out there saying that we should expect another market correction – but, not until we see the effects in the numbers should we pay too much attention. There will always be seers out there that will predict down when the market is going up and down further when the market is going down.

Last week it was Microsoft (MSFT) that missed the number for the first time in company history, this week it’s Apple (AAPL) falling off the tree of earnings expectations.

I’d like to believe that the market is testing resistance. However, if we start to see a month or so of wild upswings and down swings each day – that usually is a precursor to a change in market direction.

If we do see a big loss in market position, when it looks like we are seeing the bottom – that will be the time to move any remaining 2013 positions into 2014 positions – when everything is cheap and long term options are not resisting market swings. In other words, we have plenty of time – and I thank everyone for sending in data – so the best possible strategy can be implemented for all.

Today I am going with a very well known brand that has provided happiness, joy and adventure for all ages since 1955. I am talking of course of Walt Disney Co.(DIS). There is probably no other company you can invest in that is guaranteed to instill some appreciation for what they do from people of all ages.

Like Monday’s pick with JNJ – Disney is showing continued upward pricing, but the last couple of days of market tanking, is giving us an opportunity to catch a quick win on the rebound. Company stats are as follows: Revenue comes in at $41.51 billion; Forward P/E is 13.88 and the PEG Ratio is 1.28; Return on Equity is 14.11%; total cash is $3.73 billion; operating cash flow is $7.47 billion and debt is a bit more than twice that at $16.03 billion.

Remember: Life is a Journey; enjoy the ride! (Especially the “E” ticket rides).

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-07-23 – Red Letter Day with JNJ

This morning is going to be very bloody. Stock futures and premarket trading indicate a strong sell off, so we should expect to see a few rebuys today. On the rebuys – I’m going to check out the stock charts of all our open positions after I publish here – so hold off for about an hour before you buy any rebuy positions in the portfolio – I want to see just how far things are going to drop before I give you a green light.

I’ll post a quick update after this – in this section – to let you know that I’ve looked at every position closely.

Once again I am reaching back into the basket of solid stocks and selecting one that has a strong ability to provide a bounce and a quick win for the Nails DITM calls system – Johnson & Johnson (JNJ). Right now it’s a good time to stock up on options that provide value.

As you know, when trading Lenny’s DITM calls, we continue to revisit the same stocks, returning to the well when market conditions are right. For example, every position on the board right now, with the exceptions of Xerox Corporation (XRX) has been on the scorecard before.

Today we stay the course with our DITM calls strategy and revisit Johnson and Johnson as it currently presents us with a very solid, safe play. They have been around since 1886 and provide us with such household names as over the counter pharmaceuticals as Tylenol, Sudifed, Zyrtec, Pepcid and Motrin IB, along with many others.

Johnson and Johnson stock closed Friday at $68.63. Their financials are the definition of “healthy” with and undervalued forward price-to-earnings ratio of 12.57, revenue of $64.87 billion, total cash in the bank of $33.85 billion, and debt comfortably less than that at $19.45 billion.

Please see the scorecard for trading details and note that I have low balled the recommendation with the anticipation that the market will open low enough to get in at this price – so there may be some price resistance in getting on base. Don’t chase it. Today’s recommendation isn’t a pick I’d normally go with – for the exception that it dropped enough on Friday and with the bloodletting expected today – if we can get in – we should be able to get out again quickly once the market bounces back.

I see a very nice an healthy “W” in our future.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-07-23 – New Rebuy In SPLS

After looking over the current open positions – I have made a small adjustment in Staples, Inc.’s (SPLS) rebuy level. All othter rebuy levels are good.

2012-07-20 – Taking Another Swing at LOWES

On Wednesday, I went with Lowe’s as the stock chart has very clear upward potential as compared to many other charts that look to be topping out. However, the price was a bit too high to get on board. We saw resistance or a bullish stance in the long term option price.

However, yesterday the price did come down and in looking at the choices out there for a buy, Lowes still looks to be the choice I’d go with.

Therefore, today I am going right back to the plate to take another swing at Lowe’s Companies, Inc. (LOW) this morning.

Lowe’s has grown from a small hardware store in North Carolina to the second largest home improvement retailer worldwide and the 7^th largest retailer in the U.S. The company was founded in 1952 and is based in Mooresville, North Carolina and has been helping customers improve home improvement for more than 60 years and has been paying out dividends since the company went public in 1961.

Revenue is posted at $48.79 billion; forward P/E is 11.46 and the PEG ratio is 0.84. Total debt is $9.61 billion with operating cash flow at $4.39 billion, numbers that would make me happier if reversed, but debt is not a bad thing if managed well and operating cash flow is healthy. I wish I could pay off all long term and short term personal liabilities with just a little over two years of disposable income.

The overreaction to yesterdays slide – spells opportunity – but, only if you can get in at the right price. Please do not overpay for any recommendation. It’s better to let the price come to you.

Please check the stat book page for trading details and if your order is filled, remember to set a good-till-cancel (GTC) sell order at $1.00 above the purchase price for a lock quick win.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

2012-07-18 – Improving the DITM Calls Portfolio with LOW

It is sometimes fun reading all the different news stories that post in the morning before the market opens. Shocker headlines that predict the end of the world economy as we know it are some of my favorites. Rarely does the article go so far as to predict the end of economic times – but, there is still time until December 21^st for the end of the Mayan Calendar and the end of the world to bolster that thought.

Before the world ends – let’s work on the house and make our living space and yards more attractive and renovate what needs fixing. At least then we can go out with nice surroundings. I say this because yesterday both Home Depot (HD) and Lowes dipped down after news of further doom and gloom. When the market overreacts to news, I see that as an opportunity to buy.

Therefore, today I am going with Lowe’s Companies, Inc. (LOW). For those of you that still have homes to improve, I see opportunity for a DITM win here as headlines on Yahoo Finance this morning pointed me in this direction.

Please check the stat book page for trading details and if your order is filled, remember to set a good-till-cancel (GTC) sell order at $1.00 above the purchase price for a lock quick win.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

2012-07-16 – Back to BAC

Last week we were able to get on base with each recommendation. This happens when the overall long term outlook of the Wall Street operators being more bearish than bullish.

Therefore, it is important to find stocks that still show plenty of upside potential. Reading the stock charts and comparing the graphs of current stock price against the 21-day, 50-day, and 200-day moving averages – I can forecast the direction a stock will most likely move. In looking at the stock chart for today’s recommendation – the moving averages tell me that we should see short term tends going up.

I am going back to Lenny’s New Years recommendation: Bank of America (BAC).

The company provides unmatched convenience in the United States, serving approximately

53 million consumer and small business relationships with more than 5,700 retail banking offices, nearly 17,750 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries.

Bank of America is once again a good buy. The stock closed yesterday at $7.90 which is cheaper than most options that are recommended. Lenny had me go with BAC with the first column of the New Year and we scored a win in just 15 days. I repeated that with another win in mid-March on the February 15^threcommendation. Today’s recommendation looks to be another quick score as everywhere you look – a pop for the banks is being predicted everywhere.

Please see the stat book page for the specific trading details for today’s recommendation.

Always remember: Life is a journey, enjoy the ride!

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-07-13 – Lucky 13 with GE

Happy Friday the 13^th.

My Grandmother used to tell us that since she was born on Friday the 13^th – that there couldn’t be any bad luck associated with that day. Wise words – because I do believe that there are times when we can experience good or bad luck – those times when nothing you have done yourself can account for what happens. So yes, luck happens – but, I don’t believe it happens on a certain day or day of the week – like it’s preordained. And, no – I don’t believe in horoscopes either.

However, if you do run into some good or bad luck and it happens to fall on Friday the 13^th – I will concede that you’d be more likely to remember it – than if it happened on another day.

Here at Nails we don’t consider luck in our formula for winning. Yes, there can be days where we score a win – right before the market pulls back a couple hundred points – but, that isn’t luck, that just how the market works in today’s economy and that is how we play the game. We set a predetermined selling point on our open positions so that when the price is hit – we score. No luck in that at all. It’s strategy. It’s planning.

And what we need to do – is start planning for the end of 2012 – and those positions that remain on the board that could expire in January 2013.

However, before I start crunching all the numbers, and start projected the best time to move any 2013 positions further out – I am going to ask for feedback to see what everyone is holding and what their average cost in each position – so I can plan it out to help as many subscribers as possible with any roll outs. Please send me a quick note and list any open positions you have that will expire in 2013. Please let me know the position, number of contracts held and average cost. Your feedback is appreciated and helps the whole team.

Today I am going back to a consistent winner, General Electric (GE). It has been a while since GE was recommended here and its one of those positions that can continue to perform again and again. Share price has come down with the rest of the market since the first of the month and I see several layers of support – this is a stock chart that says buy now – making this multi-national conglomerate a good deal. The option prices are excellent as well.

Here are the numbers to note: Revenue: 140.45 billion / Forward P/E: 11.24 / Return on Equity: 11.45% / Cash: 83.65 billion / Debt: 442.80 billion / Operating Cash Flow: 32.13 billion.

Please see the stat book page for trading details and once filled set a GTC (good ’til cancelled) order at $1.00 higher than your average cost to lock in a $1000 gain.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-07-11 – Another Tech Choice with CSCO

It has been well over a year since today’s pick has been posted as a recommendation here at Nails. However, it has been a repeat winner again and again, even though the last time it was recommended – we ended up rolling the position out to gain a win. Although not a big fan of having to chunk down extra cash to roll a position, as it generally costs more than a typical rebuy – it is part of the system in order to convert unrealized losses into wins.

Today’s pick is Cisco Systems, Inc. (CSCO).

The Company provides a line of products for transporting data, voice, and video within buildings, across many platforms, and around the world. Its products are designed to transform how people connect, communicate and collaborate. Cisco Systems, Inc.’s products, which include primarily routers, switches, and products that the Company refers to as its technologies, are installed at enterprises, public institutions, telecommunications companies, commercial businesses and personal residences. They have been in business since 1984 and employ over 70,000 people.

CSCO’s current price is $16.41 and the forward P/E ratio is 8.59, PEG ratio is 1.05, and return on equity is 14.92%. Revenues of this monster company are $45.57 billion, of which they have $48.41 billion in cash, and $11.23 billion in operating cash flow. The debt is quite manageable at $16.37 billion as compared to operating cash flow. And, institutional investors make up 72.30% of those that own the stock.

It is the stock chart today that is looking good, beyond the metrics above. The 21-day moving average is transitioning past the 50-day average while the stock price is approaching a nice support level. I see support where the stock is now, then down again at $16.00 and then again at $15.00 with the 52-week low at $13.30.

CSCO’s share price has in the past streaked down on bad news, then climbed back up over the next successive months. It does this again and again. Therefore, it is good to see several layers of support.

Please see the scorecard page for today’s trading details and remember to set a GTC sell order at $1.00 higher than the purchase price once an order fills to lock in a win when the target sales price is reached.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-07-09 – Stock up with HPQ

Last Friday was the perfect market day to post a portfolio update. The market dropped a chunk of share value across the board, but not enough to hit the new rebuys and trigger a bunch of spending – where most stocks in our basket of Nails choices are still posting prices that are too high to buy. Today the market looks like it will again drop some – if the pre-market trading and stock futures are any indication.

I continue to talk to Lenny every day. He is doing well – reading quite a bit and very grateful to have access to email so we can chat each and every day. However, I am running into a wall on what books to send him. Where I read everything under the sun and more – Lenny’s likes in books are a bit more narrow than mine. I’ve got to find him some new titles quickly – to help keep the man sane.

He has been reading spy thrillers and other type mysteries – although he has tired of the cop/lawyer/courtroom types – which severely limit good books in that category. I’ve sent him some historical fiction – to get him away from the cop/lawyer books – but, he found them to be too slow to get into.

Does anyone have some titles they can recommend – in the suspense category – that do not have a cop or lawyer as the protagonist?

Now on to today’s pick:

Hewlett-Packard (HPQ). I recommended this stock last in October and it has been a while since HPQ scored for Nails, but that gave us a win in less than three weeks.

Currently, the stock has a price-to-earnings-to-growth (PEG) ratio of 1.19, which tells me we can expect to see additional earnings growth. The forward P/E ratio is way down at 4.45, indicating a serious undervaluation of share price. Institutional shares are high at 74.90%. HP’s debt is a bit higher than I’d like at $30.12 billion when compared to cash which is listed at $8.34 billion and operating cash flow is listed at $9.27 billion. So although debt is high, it is manageable.

In looking at the HPQ’s stock chart – the stock has dropped all the way to the bottom. There have been multiple levels of what looked liked support that the stock has fallen though. The company hasn’t just hit a double bottom – it hasn’t been this low since 2004 after the dot com crash.

HP actually offers quite a bit that share holders should take notice of by offering a huge variety of goods and services. They make products that people use and like Doritos, they will make more. They make up to $124.04 billion worth of “more” annually.

HP is the largest PC maker with a nice 20% market share which equates to selling two PC’s/laptops per second which isn’t even the highest profit center for the company. There was news that HP had been considering selling off its PC brand. This worked well in the case of IBM, so I will not be concerned if HP considers the margin on PC’s not worth keeping. So far they haven’t done so – and that news is over a year old. But they do rake in $38 billion a year selling PC’s yet only generate a 5.8% profit margin on them so it ends up putting fewer dollars in bank for them. Every other business segment provides HP with better margins.

I see HP having really only one way to go – up. That will spell out a DITM win for Nails.

Please see the scorecard for today’s trading details. And remember to always set a GTC sell order at $1.00 higher than your average cost to lock in that win.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-07-06 – Portfolio Review

Portfolio Review

I trust everyone had an enjoyable holiday on the 4^th.

Once a month we look at the open portfolio to see what needs to be shored up due to weakness and what can be exploited due to strength. Here is where we stand with our current positions. Yesterday we scored a quick win with our Procter & Gamble (PG) pick of June 22^nd. It would be really nice if all wins were as reliable and quick. That brings the win total up to 277 and counting.

I have been thinking about changing up the format of the column to allow for global buys, rebuys and sells when the stock charts and overall market warrants it. In other words, instead of my usual column picking one trade at a time, I’d update a spreadsheet that would give you ALL the recommended buys in the Nails basket of stocks being watched – therefore, with the ebb and flow of the market – I’d try to share with you all the buying opportunities from a select number of stocks – to keep the research manageable.

Let me know what you think – and if I get enough positive feedback – then that is where I’ll go.

This idea stems from the daily research that shows me that market conditions usually will afford us more than one buying opportunity at a time – and then some days – it’s not a good day to buy anything, so instead of picking the best from a lot of bad choices – the column would be able to show you that it’s just not a good day to buy, and on good days – it would show you all the choices and after doing your own research – you could pick one or several.

Now onward to the portfolio review…

Kraft Foods, Inc. (KFT) – We’ve had KFT on the books for a few weeks and currently hold 20 contracts in our virtual Nails account after buying on June 11^thand adding to that position when the first posted rebuy hit. With two positions, our average price has been lowered from the initial purchase, making it easier to cash in on a win and add to the win total at the same time. The current average is $8.70 while the position is going for $8.15 and has not been trading at all in recent days. We need to see the stock go up by about a point and a half to score a win – and based on the stock chart, the moving averages in share price and the slow stochastic chart – I am going to expect another rebuy before we see this one cross the finish line for a win. I am going to raise the rebuy price to $37.50 to match the most recent dip in price.

Intel (INTC) – We’ve had INTC for about two months now and hold 30 contracts. In looking at the stock chart, the 21-day and 50-day moving averages are looking as though the 21-day average will overtake the 50-day average, which would indicate an upward trend on the horizon. The 200-day moving average is still trending up as the overall price is still marching upwards from the low last August. The Slow Stochastic chart tells me that share price will be dropping first before we see the share price increase over the next couple weeks. Our average price on Intel matches the current option price – so we do not need to buy more now – but wait for the next dip down. I will keep the rebuy level at $25. No change is necessary. If it drops just a little – buying more doesn’t improve our average price enough to warrant the expense – and if we see a jump in price – cha-ching – we will have a winner.

Applied Materials Inc. (AMAT) – We’ve had for almost three months and we are seeing just a bit of green in our average price as compared to the share price. The stock chart is telling me that up or down could be the next direction for the stock – as there is no clear metric that shows me where its headed. We could flip a coin and have about the same odds for predicting where it will go. The 21-day moving average is on the rise, but the slow stochastic is dipping down. But, either direction is OK. Up and we will get our win – down and we have excellent support for a rebuy at the price on the score card. With the next bounce up – we should be able to cash out.

International Paper Co. (IP) – We’ve got both the 2013 and the 2014 calls here – just to see which one pops first. When you play with options, it’s the stock we follow to know what to do with the options, so the rebuy level is the rebuy level no matter which position you have. IP seems ready for a bump. The current rebuy level is consistent with the current share price trending. No adjustments are needed. However, our average price is too high as compared to the option prices currently being traded for the options – with the next rebuy – double up – so the rebuy is effective in cutting the average price enough to make a difference.

Microsoft Corporation (MSFT) – We are just a bit south on this position, with our average price at $6.40 with 50 contracts and the going price at $6.00. I have no worries with this 2013 position, but I am going to adjust the rebuy level here just a bit as I don’t think the stock will drop far enough to hit the current level and I want to make sure we are able to catch the rebuy if the opportunity presents itself.

Yahoo Inc. (YHOO) – Our Yahoo position is up about $0.20 and is looking a lot like AMAT as far as being able to predict a direction it will go. Right now, it looks like the share price could head either way. I am going to raise the rebuy to $15 to reflect the current higher support level, but feel as though we will see a win here before we see a rebuy. We should be able to convert this one to a win soon.

Xerox Corporation (XRX) – Like IP – we should double up again when the rebuy level hits the next time around as the only way to get out of this one with the price moving so incrementally is to load up on quantity to get the price down enough to make a difference. I will recommend another double down play with the next rebuy. Our average is $1.60 and the current price is $0.86 – we need to get closer to being under $1.00 with this one as quickly as possible. I am leaving the rebuy at $7.10 so that when we do get it – we can really use the double down play to our best advantage. However, getting to the rebuy level could take a bit of time – so look for a possible rebuy increase before the next portfolio review. If I feel it needs to come up – I will let you know it has been changed.

Corning (GLW) At the end of the year, we rolled this position out another year. We are getting closer to being in range with GLW – to finally pull it out of the crapper. To do that – we are getting close to another double down play – or rebuy as many as possible play. I am going to adjust the rebuy level to $12.50 and recommend you double up if we see this price. Then with the next bounce – we could see the first hints of green glowing in the dark. Once we’re looking at some green – look for the nod to cash out ASAP. I see a real strong possibility of a modest win here in the next couple of months – if we stay on it and double up when the opportunity presents itself.

Staples, Inc. (SPLS) will not see a change in the rebuy as I am going to keep it right where it’s currently posted at $12.30 and here too, if you want to double up – do this one. We are back in the money now with both GLW and SPLS, but not out of the woods just yet. We need to get our average down while we can – so that when the share prices rally – we can collect on that. We are getting closer – it’s not at all looking hopeless.

Suntech Power Holdings (STP) is dead and buried. However, there are a couple of you that didn’t bail on it just yet – so I will continue to post rebuys when needed. If you have it and can afford to – every time there is a posted rebuy – double up. It’s super cheap and will be the ONLY way to pull this one from the grave and see some cash. The loss on the scorecard – but, if I can resurrect it – I’ll change it to a win – but only if it can be saved with what the handful of you have in your own portfolios. So – if you still have STP – let me know when you add to the position – if you do.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-07-02 – Wins are Bigger with TXN

News of Lenny’s plea deal have hit the wires, however the details of the deal have been misreported. I supposed that is the nature of a sealed deal – the press just makes shit up to fill the void. I have been in daily contact with Lenny and although I am not at liberty to discuss the details of the deal – it remains sealed – I can say with certainty that he will NOT be facing 20 years for taking the plea.

Look for the market to continue Friday’s rally today, with an expected open higher than Friday’s close. And expect to see the portfolio review up as the next column as I go over what I see coming up with all our open positions here at Nails.

From previous columns about the company, you will know that Texas Instruments is a world leader in digital signal processing and analog technologies. With close to 35,000 employees worldwide, they are a monster company with a rock solid balance sheet. Revenue comes in at $13.46 billion and the company’s forward P/E ratio is looking good at 12.31 and return on equity posts at 16.95%.

Looking to the chart, we see Texas Instruments has dropped from the high of $34 and currently sits at $28.69. I am seeing support at $27 and at $26 and $25. We don’t need much of a spread for a good DITM opportunity, so today offers us a good opportunity for a buy.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-06-27 – Run with FRX

Last week I told you that Lenny was considering a plea deal with the US Attorney’s Office with regard to his federal bankruptcy case. On Friday, they came to an agreement and yesterday it was filed under seal in federal court.

I am not able to provide any details of the deal – because of the nature of the sealed agreement – but, Lenny will not really know until he is sentenced what he has agreed to. In federal court it is up to the judge to impose sentencing and the US Attorney cannot promise a specific sentence. The defendant has to agree to the deal based on the maximum sentence allowed based on sentencing guidelines for the charge admitted to. Then the federal attorney will recommend a sentence which is usually the max, and the defending attorneys will counter with their own recommendations. We just will not know the outcome until he goes to court later in the week or next week sometime.

Today I will be writing a character reference letter so his attorneys can include it in their sentencing brief. If any of you would like to say a few nice words about how Lenny has helped you with market strategy – I can include it in my letter. Any little bit of niceness will help and be most appreciated.

Now, for this morning’s recommendation – I am going back to a company that has won for Nails several times before: Forest Laboratories Inc. (FRX).

FRX was doing quite well until last July. With Lexapro – FRX’s top selling antidepressant going generic, the stock saw a large pull back, on fears that all cash would evaporate completely and it has just been within the last couple months that the stock has started to gain momentum and come back. The company has several new drugs in the pipeline and a couple of these are doing very well in trial. And, the last time I wrote about FRX there was rumor that Eli Lilly & Co. (LLY) may be in the market to buy them out. And, there’s nothing like a good mergers & acquisitions rumor to send a stock upwards even further.

It is a very solid company.

There are a number of statistics that jump off the page when looking at Forest Laboratories. The P/E ratio is at 20.43 and still a bit higher than what I normally go with. But, confidence that they are on the rebound with new drugs in the pipeline, merger news possibilities and the nice stock chart – along with the fact that they have zero debt – all are great signs in my book for a good play. It also has plenty of institutional support at 97.90%. They have $2.43 billion in cash and NO debt. Overall, the stats on this company tell me again and again that this continues to be a solid pick.

Trading the same companies over and over again as the technical indicators point to the correct buy and sell numbers is the best way to make money trading my DITM picks. It removes all the emotional factors that can lead an investor to trouble. One of my rules is to never get attached to a trade or a company. Only be attached to the numbers.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-06-25 – My Sights are on Target!

The market is supposed to open down this morning based on stock futures and premarket activity so don’t chase this morning’s recommendation if it is just out of range. Let the market come to you or let it go. Today I am going shopping with my pick. I can get quality merchandise with name brand choices, all for a nice price.

When it comes to shopping at a discount store, I’ll take this one – Target Corp. (TGT).

Target has cleaner stores than Wal-Mart (at least here where I do my shopping), more name brands I trust, and I don’t have to wait 45 minutes in line each time I show up, and I don’t feel the need to shower in Purell as I exit. Sure, Wal-Mart prices its merchandise a cent or two lower, but in my opinion, it is worth the extra pennies – for the difference in shopping experience and time saved.

This is a good selection, as the numbers don’t lie. Revenue comes in at $70.80 billion, cash in the bank sits at $690 million and operational cash flow is measured to be $5.69 billion with total debt about three times cash flow at $17.52 billion. I do wish they would keep more cash around, but – this isn’t a new stat and the company has made money for us before. The debt ratio isn’t stellar and certainly not anything to bet the ranch on, but good for a solid recommendation at a good price.

Even with last week’s pull back, most other choices are looking at testing resistance not support. Target’s share price has dropped enough for some upside potential, with a Forward P/E of 11.82, a PEG ratio of 1.19, and Return on Equity of 18.89%.

The price for this option is just a bit north of what I am willing to pay, so it is not a strong possibility for a fill today. It will depend on how low the market goes today. Please don’t chase it, it’s not worth doing.

If filled, don’t forget that I will immediately place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-06-22 – Clean Up With PG

On Wednesday I said that we’d be going with Proctor & Gamble Co. (PG) today. And so we will. Yesterday, the market took a big tumble and share prices are down across the board. With their earnings outlook scaled back for the fourth quarter – P&G shares really tanked. No surprise.

This morning stock futures are up slightly in premarket trading but, I am not sure how much of a rally we will see today. I am actually expecting more red – since early morning indicators point the other direction – we can go with that.

Lenny will be making a big decision in the next day or two. The US Attorney has presented him with a plea deal in his federal bankruptcy case. In similar fashion to the LA City case the prosecutors seem to find new charges that have not been included in the indictment to present in the deal that have us scratching our heads. Anyway, the deal is pretty lousy – the alternative is worse and the odds for beating the charges – very remote. The government loses approximately 2% of all cases.

Whatever he decides, we will be standing behind him here at Nails. And, in the meantime, Lenny and I talk everyday by email and get about 15 minutes on the phone several times per week. He’s been pretty stressed over the plea deal that has been offered. However, yesterday he asked me the rules for Gin Rummy – something to pass the time and divert his attention while waiting for his attorneys to show up. Lenny tells me his is good at cards and I am sure he is… but, I told him that I’d trounce him but good playing Gin. He is doubtful. And, the concept of playing cards with Lenny – hard to imagine…I just don’t see it happening. I can’t see him ever wanting to waste time on a card game unless there was a lot of money involved. And, I can’t imagine ever playing for cash.

And on a side note… Lenny wants me to write him everyday – with a different fun fact. He wants a few interesting tidbits about a wide variety of subjects to help him divert his attention. I’ve been sending him astronomy facts – because I’m a big fan of the cosmos and like science and math. I am of the belief that everyone can have something cool to share – so send me your odd facts and I’ll pass them on.

Now, back to our regularly scheduled column…

Let’s try to add PG to the scorecard again. The timing is looking good for a win.

Revenues are posted at $85.37 billion, $13.09 billion in operating cash flow and $3.99 billion in cash or equivalents on the balance sheet. Debt is more than twice operational cash flow, it comes in $33.11 billion, but the company is such a staple of consumable supplies and they’ve been around since 1837 and I don’t plan to stop showering or shaving or moisturizing anytime soon.

The company has a return-on-equity (ROE) of 14.51% and forward price-to-earnings (P/E) ratio of 14.97. But, once again – it’s the stock chart I like today and the drop in price caused by overreaction. It is telling me to buy along with doable option price. I do like it when that happens.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-06-20 – Load Up Heavy-Duty CAT

In this morning’s research, resistance is being tested nearly everywhere and I would have a lot of choices if Nails offered Puts as well as Calls. But, we don’t. Lenny is very rigid in that the strategy here remains simple and easy to follow.

This morning Procter & Gamble (PG) lowered 4Q profit estimates and the stock has dropped this morning in premarket trading. Look for P&G to be Friday’s pick as we allow those who like to panic to finish up dumping the stock. Then we can swoop in and get another quick PG win when they realize they mostly overreacted.

Much has changed at the construction- and earth-moving equipment vendor over the last year. The 52-week high tops out at $116.95 and the low $67.54 which is a pretty large spread, with the stock trading midway at $88.84 at yesterdays close. However, if you program your chart to view the 21-day, 50-day and 200-day moving averages you will see that the 200-day average is flat, showing me that long term ups and downs are pretty even. The 21-day moving average is at the bottom of the curve and will be trending back up soon if the pattern continues, and the 50-day moving average is still dropping.

There is resistance at $97.00 so we can lock in a win before resistance is tested, that is – if we can get in a position to score by getting on base.

Here are the stats to make note of: Forward P/E Ratio – 11.20 / PEG Ratio – 0.52 (this is excellent) / Return on Equity 37.40% (fabulous) / Quarterly Growth – 23.40% (still good) / Revenue $63.17 billion / Debt $35.95 billion (it is a bit high) / Operating Cash Flow – $6.58 billion.

After the order is filled, set a good-till-cancel (GTC) order $1.00 above the average purchase price to cash out for a quick win.

Always remember: Life is a journey, enjoy the ride!

(At the time of publication, Dykstra had no positions in the stocks mentioned.)

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2012-06-18 – Quick DITM WIn with QCOM

The market this morning is headed for bit of red at the open if we can guess by looking at stock futures.

I got up early this morning and looked at lots and lots of stock charts in searching for a good choice for the day. While most of the stock charts viewed give me much encouragement for our open portfolio – not many charts said “buy me” with any decisiveness or volume. One of my favorite technical indicators for making a recommendation is the Slow Stochastic which when combined with the 21-day, 50-day and 200-day moving averages tells me much about the stocks potential direction in share price.

With those technical indicators in mind – today’s recommendation is Qualcomm Incorporated (QCOM).

QCOM is a monster company with revenue of $17.36 billion, debt at $1.18 billion as compared to total cash of $15.08 billion and operating cash flow of $6.75 billion making for a very solid balance sheet. The company’s forward P/E ratio is a modest 13.91 with a PEG Ratio of 1.11 and a return on equity of 17.16%. Over 82.600% of the stock is held by institutional traders. All in all, the stats tell me this makes one hell of a nice choice, even when timing isn’t perfect.

However, I am going with an option that is priced a bit higher than todays recommendation. Please don’t make the mistake of buying the $50 options for the price I have quoted for the $45 recommendation. If the market opens low – we have a chance at this price. If not – let it go.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-06-15 – Driving into the Future with TXN

Yesterday, I was contacted by another reporter wanting to interview me with regards to Lenny. He sounded very nice, but it seems like each time I think it will do some good to say something nice, the end result doesn’t turn out the way I thought it would. Therefore, I respectfully declined. The only news about Lenny from me – will be here in this column and written by me – where I can never be taken out of context to fit the article they write.

They say that if you want something done right – you should do it yourself. Of course that only works if you’re good at the particular something you want done. In that regard, I think I should be able to handle news about Lenny just fine.

Today’s pick is a company that also takes the initiative when it comes to doing things themselves and getting it right. And, today’s pick has an excellent track record here at Nails: Texas Instruments (TXN), creators of the first computer using integrated circuits and the first handheld calculator.

Yesterday was media day for TI where the company shared future projects with the press. They shared their vision to help create self-driving cars and controls for home appliances linked to your cells phones. In the future – TI and I both seem to both think that our world will soon be condensed into what you can buy an app for or how you can gain access to their new DLP technology for projectors using a wide array of platforms, including smart phones, tablets and laptops.

From previous columns about the company, you will know that Texas Instruments is a world leader in digital signal processing and analog technologies. With close to 35,000 employees worldwide, they are a monster company with a rock solid balance sheet. Revenue comes in at $13.46 billion and the company’s forward P/E ratio is looking good at 11.85 and return on equity posts at 16.95%.

Looking to the chart, we see Texas Instruments has dropped from the high of $34 and currently sits at $27.73. I am seeing support at $27 and at $26 and $25. We don’t need much of a spread for a good DITM opportunity, so today offers us a good opportunity for a buy.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-06-13 – Going With King Hal!

Thanks to everyone who responded to my inquiry regarding Suntech Power Holdings Ltd. (STP). It seems like nearly everyone has given up on STP and only a handful still hold any contracts at all, and those that do – really aren’t interested in spending any more on this loser. So, the loss in the books will stand going forward – however, I will show you how to mathematically force the win, so you can fully understand and appreciate Lenny’s “Never Say Die” attitude in life and investing.

With the average price on the open portfolio at $1.20 and the options currently selling for a nickel, mathematically – if you wanted to force it – you’d need to double up at least three times at the current price, which would lower the average to $0.30 and cost $17,700 to save $141K. In the scheme of things – it’s an expensive move, but not really a bad hedge. Let’s say for the sake of argument we recommend that today, buying all 3,540 contracts now while the options are going for a nickel. I realize no one is going to do it – but, let’s just say we do.

Then, the stock – which we really don’t expect to see a comeback… might in the ebb and flow of the market, gain some ground. It only needs to come back to about $3.50 – $4.00 to score a small profit. At $5.00 it would be a solid win. I’d give the possibility of a save about a 70% chance of success.

Now to today’s pick:

The recommendation today is global monster Halliburton (HAL). The company has been taking hit after hit and sits at a new 52-week low. Remember – buy low – sell high. That’s the motto. Since it is at the bottom – the stock chart shows major upside potential. This means opportunity in a sea of choices that are all looking as though the right timing for a buy is a week behind us.

Here are the stats to take note of: Forward P/E is 7.48; Return on Equity is 25.29% which is very good for such a large company. Revenue continues to be strong at $26.42 billion annually with quarterly earnings growth at 22.70%. Debt is very manageable at $4.82 billion with operating cash flow coming in at $3.85 billion.

Timing is good for a buy – but the option prices are being a bit stubborn as it relates to the formula used to calculate a buy. You should not become a big fan of spending more than necessary, but once again – today I have chosen a deeper call – which is right there with our buying strategy.

Also remember, if the order fills today, set a GTC sell order at $1.00 than your purchase price to take the cash as soon as our target sell price is reached and head to the bank.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-06-11 – Milk & Cookies – Buy KFT

This year marks the 100 year anniversary of the perfect food, the Oreo. It was first introduced in 1912. And, you’d have to admit, a cookie that has been selling in the number one spot for 100 years is a pretty popular cookie.

But, actually it’s not the cookie – it’s the name. Oreo’s aren’t just popular here. Kraft markets the Oreo name worldwide, but what you might not know is that an Oreo here in the US is not the same cookie in Japan, China or even Italy or France. Kraft has done enough market research to create custom culture specific Oreo’s for each customer base. So the cookie that is number one here – isn’t the same cookie that is number one in Japan – but we all call them Oreos.

We call that a “wide moat,” as competitors would have to swim quite the distance to storm the Kraft castle.

Right now the numbers for Kraft are: Forward P/E ratio of 19.13, Return on Equity of 9.56%, Revenue of over $54.88 billion, total cash on the balance sheet of $1.96 billion, debt of $28.68 billion, which is hefty. The stock closed yesterday at $38.24, which is off the 52-week high by only a dollar and change with short term support at about $37, with back up support at $36.00 and inching up – which tells me all I need to know for a quick DITM calls play.

Please see the scorecard page for trading details and if the order is filled, the GTC (good ’til cancelled) order should be set immediately at $1 above the purchase price.

Then grab a good book and poor yourself a large glass of milk and enjoy.

Remember: Life’s a Journey, Enjoy the ride.

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-06-08 – A Smile and a Coke!

With the dip in the market – we scored a quick win with Procter & Gamble (PG) – holding that position for only three days. Cha-ching!! With stock futures looking like another drop in the market this morning – today looks like another good opportunity to get on base so we can score quickly once again.

If we see a repeat of the choppiness in the market like we did last summer – we should be able to take out all the older portfolio positions and convert them all to a win. All it takes is patience, time and strategic rebuys.

Yesterday, Lenny was in court for the hearing on the motion brought by his attorneys to have all federal charges dropped. His lawyer made a good argument – but the judge ruled against the motion anyway. It was a long shot and worth a try – but, it seems our fearless leader will be heading for trial next month.

As hard as it is to see him all trussed up like a Thanksgiving Day turkey – seeing him at all is better than not. In addition to being there in court yesterday, we were able to chat on the phone for a few minutes as well. It’s always good to hear his voice and hear in his voice that he is doing well enough.

Today choice is Coca-Cola Company (KO). Coke is it!

KO is one of the favorites to the DITM strategy here at Nails and when it looks good – we need to do what we can to let it win for us. Today’s open for KO was down sharply, so we have a good opportunity to score quickly when it reverses direction.

What Lenny and I love most about this stock is that it truly is recession-proof. With all the recent market turmoil, Coca-Cola continues to pay out generous dividends and has even increased its investor payout by 8% over the last 5 years. This alone is an excellent sign of health and I’ll drink to that! The Coke brand historically transcends national, political and social barriers.

Right now the numbers for Coca-Cola are as follows: Forward P/E ratio of 16.65, Return on Equity of 26.70%, Revenue at $47.16 billion, total cash on the balance sheet of $15.78 billion, debt of $31.12 billion, and operating cash of $9.51 billion. The stock closed yesterday at $74.28 and opened this morning over a point lower, which is off the 52-week high by about 6% with short term support still trending a bit higher and now around $73.00 and further support at $72.00 which gives me two levels of short term support.

The slow Stochastic has been down – and starting to move up once again, which tells me that it’s a good time for a purchase using our DITM calls strategy. Please check out the scorecard page for today’s trading details and remember to place a GTC sell order to lock in a win if your order is filled.

Still can’t beat the feeling. Life tastes good.

Remember: Life’s a Journey, Enjoy the ride.

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-06-06 – Let the Sunshine In

A lot has happened in the market – in the world – and with Suntech Power Holdings Co. Ltd. (STP) since it was first recommended here at Nails Investments. We have seen the company miss the number time and time again. We’ve seen the stock upgraded, downgraded and overall tramped in the mud and spit on – so that the position in the stat book is looking unredeemable.

On Friday – I recommended just pulling the plug and selling the options – recording the loss and using what proceeds from the sale – to just buy the stock and stash it in a mental sock drawer to see what it could bring down the road.

Well, in looking at the stats for the options – no one has taken that recommendation to heart as there have been no significant sales of the option – even at the current rate of two cents per share. Volume listed since the post on Friday – 5 contracts. Yep, that’s all in almost a week of trading.

Therefore, I believe one of the following is true – (a) either the market maker that controls sales on the floor of the CBOE has declined to sell the options for anyone that put in a sale order, or (b) no one paid any attention to the recommendation, or (c) no one has any STP options at this time and everyone cashed out the last time I recommend a roll out – in December of last year.

If (a) is the reason for the lack of volume, you can go ahead and sell if you still have any options left and just allow them to sell in the time frame that occurs. Or you could cancel your order and stick it out since the options are not even selling at two cents per share.

There is over six months left before the current position expires and it is mathematically possible that we could force a win out of this one – if we continue to double up at key levels of support.

In order to get a win out of this position – we would need to (a) double up enough times to force the average price into the area of ten to 30 cents per share. We would need to double up – three times at the current price per share to do this. Then we would be able to cash out if the stock were to go up to $4.00-5.00 before expiration. A long shot – but not completely out of the realm of possibility.

If (b) or (c) is the reason for not paying attention to Friday’s recommendation – if everyone could send me a quick email through the site here and let me know if you have any STP options or not. Let me know how many contracts you have and your current average price and/or let me know you don’t have any. That would better allow me to assess the best strategy, because if no one has any STP options, fretting over it is a waste of time.

I said I would post the loss on the stat book page and I will do that now. However, I have NOT yet removed it from the top of the page – showing further rebuys and I will not until I have feedback from everyone. If anyone wants to tough it out – and try to force a win on this – I’ll keep posting updates for the position – and will NOT reverse the loss until that can be achieved.

Suntech Power (STP) is one of the largest solar energy companies in the world and strives to deliver alternative energy choices through partnerships as their mission is to build a brighter, sustainable future. Suntech is also one of the largest solar module providers worldwide, and has an established a consistent track record of delivering high quality solar solutions to their customers.

Suntech makes photovoltaic solar cells (PV cells) and solar electric systems. Its products are used in residential, commercial, industrial, and public utility applications, for both on-grid electricity generation and off-grid use, such as stand-alone lighting for street lamps, garden lamps, telecommunications relay stations, and mobile phone networks. The company is one of the world’s largest solar cell manufacturers (in terms of production output) and the leader in China. Suntech plans to build a production and distribution center for solar energy products in the US.

About three-quarters of the company’s products are sold to European customers, primarily in Germany and Spain. And, that is where the current problem is. European sales have dropped considerably and the company’s production levels have surpassed demand causing pricing to drop and profits to dwindle. There is some good news coming out of Japan – however, short term is not looking good.

Always Remember: LIFE IS A JOURNEY, ENJOY THE RIDE!

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-06-04 – A Different Option to Swing at PG

On the 23^rd, I went with Proctor & Gamble Co. (PG) but the option did not fill with the particular option selected and the price recommended. Then on the 31^st, the site here got hacked and taken over by malicious code writers. It has happened before – and I am sure it will happen again. The site has been restored, although the type is different. A change of type is acceptable – short term, just so long as I am able to post once again.

Today I am looking to add Proctor & Gamble Co. (PG) to the scorecard once again, but this time I have changed the option I am looking to take a swing at. The timing still looks very good for a P&G win – and it can be the best move to just take a look at what you swung at and missed before you go fishing for a different choice.

In addition – I’d like to take a closer look at my Suntech Power Holdings (STP) sell recommendation on Friday. The recommendation still stands that the best choice of action would be to sell and just buy the stock – however, there is a lot of time to make that decision, if you are in agreement with me. The options don’t expire for over six months, and in that time – well anything can happen. No one has a crystal ball and can accurately predict where the market will be in that time.

Therefore, on Wednesday I will post several choices for STP so that you can weigh the benefits of these choices to your own situation.

Now back to P&G:

The company has a return-on-equity (ROE) of 14.51% and forward price-to-earnings (P/E) ratio of 14.93. But, once again – it’s the stock chart I like today. It is telling me to buy along with the excellent option price. I do like it when that happens. For the most part, P&G’s chart is a bit dull, prices seem to stay rather stable and stay within a nice tight trading range. Right now the stock is trading at $63-ish, and with the system, we don’t need a large pop to take us over the top. I see P&G trending a bit higher in the coming months, and that will score us another DITM win.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-06-01 – Portfolio Review

First off, I would like to apologize for going dark for a week. Last Thursday the site was hijacked by a hacker calling himself “Hellboy” like the character in the movie. So, I reached out to the Joomla experts that have helped me with website issues before. They usually charge me in advance for work performed, and usually it’s reasonable and they are quick. However, this time – they got the site back for me right away but decided (without telling me beforehand they would be doing this) that they needed to be paid before they would let me use the site – so they locked me out by changing my admin user name and password.

Unfortunately, their timing was lousy and I needed the week to get paid myself before I could submit their payment. Lenny’s financial needs have been my only priority and I have been sending him every available extra dollar so that he can eat soft foods and have a few little perks.

It has been very nice being able to chat with him every day using the email system he has available. But every perk available is designed to be a profit center. They ding you for everything.

Now to Nails –

It’s that time again, to look at the open portfolio to see what needs to be shored up due to weakness and what can be exploited due to strength.

During my week of forced vacation – we had wins to post for Coca-Cola Co. (KO), Dow Chemical Company (DOW) and Costco Wholesale Corp. (COST).

Here is what we have on the books right now:

Intel (INTC) – We’ve had INTC for about three weeks now and hold 20 contracts. In looking at the stock chart, the 21-day and 50-day moving averages have both peaked and are starting to trend down in line with the sharp drop in share price over that last month. However, the 200-day moving average is still trending up as the overall price is still marching upwards from the low last August. The Slow Stochastic chart tells me that share price will be increasing in the next couple weeks. I am going to adjust the rebuy level to match short term support which is the average price between the two most recent lows.

Applied Materials Inc. (AMAT) – We’ve had for about six weeks and all the metrics are looking good for a buy and we are right on top of the rebuy price posted, so if today’s market opens with the anticipated red ink, we will see the rebuy target hit and add to the portfolio with 10 more AMAT contracts. Support for AMAT is really strong at this level as there are many dings at this price level and none falling below. We should be able to lower the average and hit a win when the stock bounces back up.

Microsoft Corporation (MSFT) – If the market opens lower today, my personal put position will cash out for a win, then it will be time to buy the call and ride it back up. I am going to adjust the rebuy level here just a bit as I don’t think the stock will drop far enough to hit and I want to make sure we are able to catch the rebuy. Look for MSFT to hit the adjusted price today.

Johnson & Johnson (JNJ) – Last week we got a rebuy with JNJ and with the position adjusted accordingly – we are looking good when the stock heads north again.

Yahoo Inc. (YHOO) – Our Yahoo position is down about $0.30 but we missed a rebuy because there is a new support level. Right now, it looks like the stock could head either direction and has been going sideways for a few months. Good news is – we won’t need to see much of a bump to cash in here.

Xerox Corporation (XRX) – We hit a rebuy last week – but, the overall average doesn’t look like it changed any due to the rounding. We should double up again when the rebuy level hits again as the only way to get out of this one with the price moving so incrementally is to load up on quantity to get the price down enough to make a difference. I will recommend another double down play with the next rebuy.

Corning (GLW) At the end of the year, we rolled this position out another year. This too looks like we are getting close to another double down play – or rebuy as many as possible play. I am going to adjust the rebuy level to $12.70 and recommend you double up if we see this price.

Staples, Inc. (SPLS) will see a change in the rebuy as well. Up it goes to $12.80 and if you want to double up on only one play – do this one. We are out of the money now with both GLW and SPLS so we need to get our average down while there is NO intrinsic value in the options – so that when the share prices rally and head back into the money – we can collect on that.

Suntech Power Holdings (STP) is killing us. Every time I think – it can’t get worse – it does just that. YUCK… so, my recommendation on this is – sell the options for whatever you have in the position and just buy the stock. Don’t exercise your options because the stock price is too low for that to be a good choice – just sell and rebuy the stock. Then you can take your loss and just park it in a sock drawer and not worry about rebuys and so on. Sit on it and perhaps in a couple years – the stock will rebound enough to get your cash back. The reason for this is the loss is so large – just keeping the cash out – minimal… you may as well have some hope for the stock going forward and it looks like it might take a while for any cash to come out of this one. Today, at the close of the market – I will post the net loss and show the purchase of the stock – as a new position. However – I’ll show the loss on the scorecard.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-05-23 – Clean UP with PG

Today I am looking to add Proctor & Gamble Co. (PG) to the scorecard once again.

The company has a return-on-equity (ROE) of 14.51% and forward price-to-earnings (P/E) ratio of 15.07. But, once again – it’s the stock chart I like today. It is telling me to buy along with the excellent option price. I do like it when that happens. For the most part, P&G’s chart is a bit dull, prices seem to stay rather stable and stay within a nice tight trading range. Right now the stock is trading at $63-ish, and with the system, we don’t need a large pop to take us over the top. I see P&G trending a bit higher in the coming months, and that will score us another DITM win.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-05-21 – Bigger Wins with TXN

This morning there were several picks that needed to be updated on the scorecard as the week finished out with lots of red. Facebook (FB) got a lackluster start with its IPO on Friday. Not sure what’s in store for the social networking monster, but the overall debut was less than spectacular. We won’t be recommending FB here anytime soon. We need to get a feel for how the stock will perform over time first.

Here at Nails we are not completely adverse to taking risks, however – we do limit them to risks we understand. FB needs to be around for a while first – post earnings a few times and build a track record of performance.

Today’s pick has an excellent track record here at Nails: Texas Instruments (TXN), creators of the first computer using integrated circuits and the first handheld calculator.

From previous columns about the company, you will know that Texas Instruments is a world leader in digital signal processing and analog technologies. With close to 30,000 employees worldwide, they are a monster company with a rock solid balance sheet. Revenue comes in at $13.46 billion and the company’s forward P/E ratio is looking good at 12.03 and return on equity posts at 16.95%.

Looking to the chart, we see Texas Instruments has dropped from the high of $34 and currently sits at $28.85. I am seeing support at $28 and at $26 and $25. We don’t need much of a spread for a good DITM opportunity, so today’s price is a good opportunity for a buy.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-05-18 – Coke is it!

Over the last week we have had several positions hit their rebuy price. Look for the updated stat book later today to reflect those changes. A few of the earlier rebuys have already been posted.

Today choice is Coca-Cola Company (KO). Coke is it!

What Lenny and I love most about this stock is that it truly is recession-proof. With all the recent market turmoil, Coca-Cola continues to pay out generous dividends and has even increased its investor payout by 8% over the last 5 years. Additionally, if you check out the company’s stock chart and compare it to many others, yes – they have had their share of ups and downs, but – while everyone else is still smarting from the last pull back- KO didn’t plunge as far and recently posted a new 52-week high (September 8, 2011). This alone is an excellent sign of health and I’ll drink to that! The Coke brand historically transcends national, political and social barriers.

Right now the numbers for Coca-Cola are as follows: Forward P/E ratio of 16.61, Return on Equity of 26.70%, Revenue at $47.16 billion, total cash on the balance sheet of $15.78 billion, debt of $31.12 billion, and operating cash of $9.51 billion. The stock closed yesterday at $75.12 and opened this morning over a point lower, which is off the 52-week high by about 6% with short term support still trending a bit higher and now around $72.00 and further support at $68.00 which gives me two levels of short term support.

The slow Stochastic is coming on down – which tells me that it’s a good time for a purchase using our DITM calls strategy. Please check out the scorecard page for today’s trading details and remember to place a GTC sell order to lock in a win if your order is filled.

Still can’t beat the feeling. Life tastes good.

Remember: Life’s a Journey, Enjoy the ride.

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-05-16 – Consistent Wins with DOW!

Therefore, today I wil go back to a long term winner for the Nails strategy. It has been a repeat winner. So we will continue to go back to the well and cash in as often as possible. Today’s pick is a consistent repeat winner: Dow Chemical Company (DOW).

They offer a consistent dividend payout to stock holders. And the metrics all say “yes.”

Numbers to consider: Revenue: $59.97 Billion, Forward P/E Ratio: 9.17, PEG Ratio: 1.12, Total Cash: $3.46 billion, Operating Cash Flow: $4.0 billion, and Debt: $20.56 billion.

For today’s specific pick, please check the Current DITM Picks page. Also note that the price for the options listed look much too expensive – however, the last time they traded – the stock was significantly higher. Today’s recommended price is doable.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-05-14 – Ride UTX to a Win!

Stock futures were down this morning – a good indication of red ink with the morning’s open.

It has been a while since I updated the scorecard for rebuy’s and made adjustments to some of our open positions. I did so this morning. So it is now up to date as of the close of the market on Friday. Please note – I changed the rebuy levels for Costco, Microsoft and Staples.

Today’s recommendation is a good one, but the option prices are just a bit higher than the recommendation. We will have to see another day of pull backs in share price to see a fill. The timing is good for a buy, the stock chart is perfect for a buy – but it was necessary to up the premium just a bit – to give us a chance to get on base.

It’s been a few months since I have set my sights on United Technologies Corporation (UTX). Getting a Win out of UTX isn’t as hard as getting in on the options for the right price. So, I’ve upped the premium a tiny bit to give us a better shot, as UTX is ALWAYS priced a bit higher so it’s not a bad choice to do so. However, even with the padded premium – the market will have to open as low as predicted to see a drop in pricing we will need to get on base today.

In looking at the stock chart – the stock has pulled back about five point in the last couple weeks and company understands how to position itself for every market advantage. We need to take advantage of the dip in price and step into the batter’s box to see if we can get on base before it heads back on up.

Here are the notable stats: Forward P/E ratio: 11.50; Return on Equity: 23.62%; Revenue: $57.93 billion; Cash: $6.28 billion; Debt: $9.79 billion, which isn’t bad for the size of the company; Operating Cash Flow: $6.53 billion; and, the percentage of stock held by institutions: 84.30%.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-05-11 – I’ve Got Mail!

In the classic romantic comedy – “You’ve Got Mail,” characters played by Tom Hanks and Meg Ryan form a relationship using email while the characters themselves feel great dislike for each other. I love Tom Hanks in this movie, and he tells Meg Ryan’s character at one point that having your computer chime “you’ve got mail” can be a powerful thing. Indeed it is!

Although I don’t use AOL so I never get hear those particular words coming from my computer – getting a daily message from Lenny once again – amounts to the same thing. He was able to set up his electronic messaging access and for the past few days – we are back to the daily correspondence. It’s a bit slower than our current email systems, as he can only be on the computer for a few minutes each day, so it’s not perfect – but, I’ll take it.

If anyone would like me to relay a message to the man – send me a quick note and I’ll forward on to him.

Now on to the day’s recommendation: DuPont (DD).

DuPont’s stock chart is looking good this morning and closed at $52.02 yesterday and with the market dropping six days out of seven, getting in on a DD while the stock has dropped nearly two points and is trending within a tight trading range, we will be able to score quickly on the subsequent rebound the following week or so. If the market continues the see-saw motion, we should be able to score easily with trades like this.

DD’s forward price to earnings ratio is 10.88 today and anything below 15 is considered to be undervalued by Wall Street, so DuPont is in the sweet spot. Revenue of $39.62 billion kicks back a return on equity of 32.86 percent. They have about $14.82 billion in debt and total cash of $3.60 billion. It would be better if those numbers were reversed. However – DuPont has been around for so long, they have a track record for managing debt successfully.

Lastly, the company has $4.76 billion in operating cash flow and it’s important for a company to have money on hand during challenging market environments.

Most important though is the stock chart and the buy indicators I am seeing there. It’s a good time to buy and the price is good for the strategy as well.

For that reason, DuPont is a good choice again today.

Please see the stat book page for the specific trading details for today’s recommendation.

Always remember: Life is a journey, enjoy the ride!

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-05-09 – Process a Win with INTC

Good news on the Lenny front. He has been moved from basic solitary confinement at Men’s Central Jail’s SHU (high security isolation) to the general population at the federal detention center in downtown Los Angeles. He was moved on Friday. On Monday morning funds were added to his commissary account and yesterday he was able to buy a prepaid phone card and called twice. And, by some miracle the calls were NOT cut off after I accepted them. He is not stuck in a jail cell all day and can now watch TV, exercise, visit the onsite law library and they even have an electronic messaging system (email) without direct connection to the internet and I have been invited to join his messenger list. In a few days – we will be able to chat by email or phone on a daily basis. They call it “club fed” and it is a huge relief to know that he is now being treated like a human being over a rabid dog.

This morning’s research is pointing to several good choices – I especially liked ConocoPhillips (COP) or the new Phillips 66 (PSX) spin off or company split. However, both companies’ options for 2014 were way beyond the formula for a Nails pick – so we will have to wait for the prices to come down to earth. It looks as though investors are very bullish on both.

Today pick is one of my most reliable purchases: Intel (INTC) which is also the most recent win. The stock price has come down enough to load up once again.

In recent headlines – INTC purchased Interconnect Hardware assets from supercomputer maker Cray and beat earnings estimates by 6 percent. If you watched Intel’s “Watson” crush the human competitors on Jeopardy last year, you may have heard that the supercomputer whose programming has it processing with impressive results has been recruited by Citigroup to be a Wall Street analyst.

INTC closed trading yesterday at $27.37, which is down from the year’s high of $29.27 posted about a week ago. The stock chart looks like there is a good buy opportunity for our DITM calls strategy. And when one of my favorites looks favorable, I’ll take a swing to see if I can get on base to score another win. The option prices are favorable too.

Let’s look to the numbers:

Revenue: 54.06 billion

Forward P/E: 10.21

PEG Ratio: 0.93

Return on Equity: 26.61%

Cash: 13.75 billion

Debt: 7.52 billion

Please check the scorecard for today’s trading details – you should be able to get in rather cheap today (lower than the recommendation). Bid low of the current ask price and see what happens.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-05-07 – Everything’s Bigger in TXN

According to early morning stock futures – this morning we can expect to see a bit of red with the open. However, the stock futures chart has been slowly inching up – so we could see improved stock performance as the day progresses.

Friday – there was an issue with the website. After updating the stat book and posting the pick to the scorecard page – the site locked up with a database error as I was posting the article for the morning. Only a handful of subscribers were able to see the pick on the scorecard page before the site was down across the board.

Costco Wholesale (COST) was the pick on Friday, and for those of you that sent email asking if I was sure I wanted the 2013’s over the 2014’s – the answer is yes. Costco is stable enough to support the shorter termed call. However, this will be the exception, not the rule. Overall – I have made the choice to stick with 2014 leaps going forward. Today’s pick is for a 2014 leap even though the 2013’s would be an easy fill.

Today’s pick is a repeat of last Monday – Texas Instruments (TXN), creators of the first computer using integrated circuits and the first handheld calculator.

TXN manufactures a whole host of products, from audio, video and imaging — to medical, industrial and military products and applications. This company is all about cash management and that is a very healthy way to run a business. Debt doesn’t have to be bad, but if you can keep your cash in the bank and generate continued organic company growth – you are certainly doing something right. Although last year, TXN added a bit of long term financing to its balance sheet– adding debt by financing the purchase of National Semiconductor.

Looking to the chart, we see Texas Instruments has been moving up and down between $32 and $34 and very recently dropped to $30.59, providing nice upside opportunity. We don’t need much of a spread for a quick DITM win opportunity.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-05-04 – Buy a DITM Membership at COST

Another Thursday has provided me with another 30 minutes with Lenny. It could be our last visit for some time. He is scheduled to be moved to the federal facility on Monday – which will provide him with much better conditions. However, once in federal custody – only immediate family is allowed to visit for the first 90 days unless special permission is granted.

We had a nice visit. Lenny is doing well enough, although he is starting to look a bit wild, as he hasn’t had a hair cut or shaved for some time and has dropped quite a bit of weight. He’s going to start looking like Grizzly Adams soon, although really not tall enough to pull off the “mountain man” look completely.

Today, I am going to try once again to add Costco Wholesale Corporation (COST) to the DITM portfolio. Timing for today is still pointing to those stocks that are too expensive to buy the options for – however, Costco could be the exception for us today by going with the January 2013’s over the 2014’s.

Costco operates membership warehouses and offers discounts on brand and private label goods and services – with no frills stores and high quality merchandise, usually packaged for mega consumers. It’s a great place to shop if you have a few kids, own a business or like quality with competitive prices, and don’t mind volume. It’s my favorite store. I am there practically every Saturday morning at the 9:30 am open to beat the hordes that show up an hour later.

Costco operates 592 warehouses in the United States and nine other countries and employs 92,000 people.

Along with most of the merchandise they sell, the company has an extra large balance sheet too. Revenues are posted at $93.40 billion annually, $5.78 billion in the bank and only $2.28 billion in debt, with operating cash flow of $3.00 billion. It has a return-on-equity (ROE) of 12.68% and forward price-to-earnings (P/E) ratio of 19.32, which is a bit higher than what I like to see for bargain shopping, but they support a higher P/E ratio on a consistent basis.

A month ago the company posted a new 52-week high mark of $92.10 and the stock closed yesterday, trading at $84.24. Prices for the 2014 leaps are too high for a fill – which is why I am going with the 2013 calls instead.

Please check the stat book page for trading details just below the open positions chart.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-05-02 – Back in Line at WMT

IMPORTANT UPDATE:

If anyone has been charged by Lenny’s former CPA Robert Hymers – for an automatic renewal, please send me a quick email if you have not yet done so. I’d like to gather the total amount he has collected and have an attorney contact him over the matter. However, I need accurate information, so that I can show just how much he is responsible for keeping.

Please let me know – thank you.

Today’s Pick:

The Nails deep-in-the-money (DITM) investment strategy continues to roll out the winners and as long as we keep taking positions in the world’s best companies, we should be working towards the goal of converting open positions into wins each and every day. This last week, we saw three more positions cross the finish line as Intel Corporation (INTC), Kraft Foods (KFT) and Verizon Communications (VZ) are all now part of the win list.

This brings the win total up to 271 and counting.

Take a look at the scorecard, the wins keep coming in again and again. As the Dow Jones Industrial continues to dance around 13,000 points, our win total continues to climb and with the market going up – it becomes harder to time the stocks that are going to pop.

Today I’m looking to once again to add Wal-Mart Stores Inc. (WMT) to the portfolio. Although not a big fan of shopping at Wal-Mart, I’d rather pay five to ten cents more for the same thing at Target (TGT) and save the 45 minutes of standing in line, but the world’s largest retailer has the distinction of being the world’s largest, because many people feel that the five to ten cents makes it worthwhile. I am just glad that investing in Wal-Mart doesn’t require the same line and I can take advantage and make money because other people are willing to stand in line for those incremental savings.

Wal-Mart is a Major League company and they know how to make that cash register ring 24-7 with revenues over $446 billion. Yes folks, that’s right OVER $446,000,000,000 in sales and that is a lot of zeros and a figure that is closing in on half a trillion dollars. They generate $24.26 billion in operating cash flow and have $6.55 billion in the bank with a hefty debt load of $53.54 billion. Although the debt is large in comparison to cash, most of it is in the stores, the buildings and the land they sit on. You can’t own that much real estate without owing a few mortgage payments.

The company has a return-on-equity (ROE) of 22.26% and forward price-to-earnings (P/E) ratio of 11.19. The stock chart looks promising for a quick win – however, earnings are scheduled for next week, so be prepared to double up if they miss the number.

Please see the scorecard for today’s trading details.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-04-30 – Quick DITM Win with TXN

According to early morning stock futures – this morning we can expect the market to open lower than Friday’s close. A little red on the stock ticker to start the day helps us get on board with a pick, but it doesn’t help our open positions all that much.

In looking at the many stock charts I view each morning – it’s the chart for the Dow Jones Industrial Average that looks to me that we might be looking at a little bull run over the next week or two. There was a nice run starting mid-December, that lasted until the beginning of April where there was some choppy volatility after a slight pull back. But through the volatility, both the high and low marks have been trending higher.

Therefore, to score quick wins – it would be helpful to get in on each new position when the market is trending down for a day or two.

Today’s pick is another stock from the tech sector: Texas Instruments (TXN), creators of the first computer using integrated circuits and the first handheld calculator.

Looking to the chart, we see Texas Instruments has been moving up and down between $32 and $34 and currently sits at $32.01. We don’t need much of a spread for a good DITM opportunity, so today’s price is a good opportunity for a buy.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-04-27 – Make a PDF of ADBE for a DITM Win!

Yesterday I made another trek into Los Angeles to spend some time with Lenny. Traffic for LA was good, the wait was long and made to seem longer because it was a bit cold – but, Lenny was in such a good mood that it wouldn’t have mattered if I had waited waist high in snow – had that been necessary. It was a really good visit. Lenny was in good spirits – being be both inquisitive and funny.

Two weeks ago when I saw him – it was like I was visiting a jumpy alien wearing a “Lenny suit” like the scene from the original “Men in Black” when there was the alien wearing an “Edgar suit” running amok in New York. In other words, he wasn’t himself. Yesterday, Lenny was back in his own skin and my worry has lessened considerably.

This morning there were several choices that I liked, however only a couple of them have options that are priced right.

Today’s pick is Adobe Systems Inc. (ADBE). Adobe is a monster software company that has been providing superior products for nearly 30 years. I doubt you could find a computer in use today that hasn’t made use of Adobe Reader to view PDF files. Other household names found in their tool belt include, Flash, ColdFusion, Photoshop, Illustrator, Acrobat, Dreamweaver and Creative Suite. They also market enterprise solutions for professional publishing, movie editing, web design and animation, just to name a few.

I have personal experience with many of their programs as well. I use Acrobat each and every day, to scan, copy and edit files and forms. Photoshop is the industry standard in photo editing, but needed here to transform the stat book scorecard win spreadsheet into a JPG file before it is inserted into the website.

The moving averages I add to the stock chart when viewing it indicate long term trending is now sloping back up, which is a good sign for a bullish strategy. Overall, a lot of stock charts are looking similar.

In looking at the numbers I see a forward P/E of 12.41, which is a good indicator that the stock is trading at a good price. Anything under 15 is considered to be undervalued, and that is the place we want our stocks to be priced. When they are undervalued, that’s the best time to buy.

Revenue for the company is posted at $4.23 billion, total cash on hand is $2.77 billion and debt is managed well at $1.51 billion with operating cash flow is posted at $1.53 billion. The company scores big for keeping debt ratios manageable and operating cash flow would cover all the bills if they were inclined to do so. Numbers for the company are consistent and reliable.

Please check the scorecard for today’s trading details.

If the order fills, remember to immediately set up a GTC sell order at $1 over the purchase price to cash out a cool $1000 gain. Should the stock decline in price, I will then recommend that subscribers watch the Next Buy column on the scorecard to know when to place an order for additional contracts, which are needed to improve the position’s average price. This way – on the rebound, the stock doesn’t need to regain as much in share price to lock in a win.

Always remember: Life is a journey, enjoy the ride!

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-04-25 – Watson Says to Buy INTC

Before I get into today’s recommendation – I need to remind everyone still that some payments are still being processed through Lenny’s former CPA Robert Hymers who later changed the passwords on the company PayPal account while Lenny was in custody and will continue to keep the funds unless you cancel the payment or dispute the charges. I apologize for this inconvenience – but, I cannot access the prior PayPal account to correct any unwanted charges. PLEASE log into PayPal and be sure you have cancelled any recurring payments.

Going forward – I will not be able to honor any payments made to Robert in this way. Lenny’s financial needs make it necessary that he earns what is due him and we all do what we can to ensure that happens. PLEASE, PLEASE, PLEASE check with PayPal to make sure you have not paid good money to this individual within the last few months.

Today pick is one of my most reliable purchases: Intel (INTC).

Today they are buying Interconnect Hardware assets from supercomputer maker Cray and last week they posted earnings, beating estimates by 6 percent. If you watched Intel’s “Watson” crush the human competitors on Jeopardy last year, you may have heard that the supercomputer whose programming has it processing with impressive results has been recruited by Citigroup to be a Wall Street analyst.

INTC closed trading yesterday at $27.31, which is down from the year’s high of $28.78 posted about a week ago with earnings. The stock chart looks like there is a good buy opportunity for our DITM calls strategy. And when one of my favorites looks favorable, I’ll take a swing to see if I can get on base to score another win.

Let’s look to the numbers:

Revenue: 54.06 billion

Forward P/E: 10.19

PEG Ratio: 0.93

Return on Equity: 26.61%

Cash: 13.75 billion

Debt: 7.45 billion

Please check the scorecard for today’s trading details – you should be able to get in rather cheap today (lower than the recommendation). Bid low of the current ask price and see what happens.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-04-23 – Still Going with QCOM

Last Friday the website was down. Now that it is currently back up – please refer to Friday’s recommendation – for today’s pick, as very few people were able to see the post before the site went down.

Thank you & so sorry for the inconvenience.

Dorothy / Nails Investments

2012-04-20 – Chip in a Win with QCOM

Anyone following the Lenny news will have heard that he accepted another deal – this time in the case brought by the LA City attorney. Please understand that the deal actually means that he will serve no additional jail time and most importantly – will not have to register as a sex offender once released and both counts accepted were misdemeanors.

I realize that the news out there over the last few days was harsh, but – if you read any of the stories, read Nancy Dillon of the New York Daily News. She was the only one I saw that reported that the “assault with a deadly weapon charge” came from a person who says she saw a knife on the table and felt threatened by it.

And, I will admit – I have seen the knife Lenny had in his bedroom. It was a very intimidating piece of steel and not something I’d want to meet in a dark alley. However, I do know with certainty that Lenny would have never threatened anyone with it. Of that I have every confidence. And, yesterday I tried to go see him again – however, the entire jail was on lockdown and no visits were allowed. One long drive turned into two long drives – with no visit in between.

I’d be disappointed I wasn’t allow to see him, however with the conclusion of the LA City case – now Lenny is scheduled to be moved today or tomorrow to the federal detention facility which I have been told will be much better for everyone. I look forward to being able to see him with better circumstances.

Now to today’s recommendation: Qualcomm Incorporated (QCOM).

QCOM beat the numbers yesterday, but Wall Street had some issues with guidance numbers for the upcoming quarter so the stock tumbled in trading yesterday. Let’s take advantage of that and see if we can score a quick win.

QCOM is a monster company with a Market Cap of $105.82 billion, revenue of $16.29 billion, virtually no debt at $928 million when compared to total cash of $11.54 billion and operating cash flow of $6.63 billion. The company’s forward P/E ratio is a modest 14.97 with a PEG Ratio of 1.08 and a return on equity of 18.36%. Over 81.80% of the stock is held by institutional traders. All in all, the stats tell me this makes one hell of a nice choice for a quick win.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-04-18 – Swing For the Fences with 3M

Today, Lenny should be in court to settle the case brought by the LA City Attorney. It should have been finalized last week, but the LA County Sheriff failed to bring him to court. This week there is a court order, so hopefully – it will finally be done. Once this matter is settled, then he can be transferred to the federal detention center, also located in Los Angeles, which I hear is a better facility to be in while he awaits his federal case. Lenny is looking forward to the move.

Last Thursday I was finally able to see him and spent the day driving and waiting before I was given my 30 minutes with a very jumpy guy who doesn’t have his ADD meds and couldn’t sit still. The wait wasn’t as long as usual and depending on how things go today – I will go back tomorrow and say hi again, if I can. However, if he is in the process of being relocated – I will have to wait until I can see him there.

The boss is doing well enough under the circumstances – but, I still worry. There is much he needs and little I can provide for him. It’s all rather frustrating and I don’t understand why he is still not allowed to make phone calls. It would be nice to hear from him on a regular basis – without the need to take a whole day to do it.

However, eventually this will all be behind us, just like some of the trades on the scorecard that continue to linger – eventually they will be leveraged low enough to get the win and we will put those to bed. Life goes on. The market goes up, comes down, and goes up again. We buy, we sell and we buy again.

In doing today’s research, there were a few companies that I’d like to recommend, because I am noticing our typical buy indicators in a couple of my favorite stocks.

Today’s opportunity is with multi-industry Conglomerate 3M (MMM). 3M has been a consistent winner for Nails and when the stock chart looks right, I can’t resist taking a swing. And, today – the charts are telling me the time is now.

Looking at the stats:

Forward P/E: 12.58

Return on Equity: 27.34%

Revenue: 29.61 billion

Total Cash: 3.68 billion

Total Debt: 5.24 billion

Operating Cash Flow: 5.28 billion

52 week high: 98.19

52 week low: 68.63

Yesterday’s close: 87.45

Please check the score card page for today’s buying details.

For today’s specific pick, please check the Current DITM Picks page.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-04-16 – Mousing Around with DIS!

Therefore, going forward – ALL picks will be for 2014 leaps. The time has come to step into the gap and make sure we are purchasing long on all positions. If we are going to see broad sweeps – we have to ensure that our picks can withstand the time needed for the market to do what it will.

Currently the stock chart is looking good timing wise for a buy. Disney Company stats are as follows: Revenue comes in at $40.96 billion; Forward P/E is 12.35 and the PEG Ratio is 1.14 (nice); Return on Equity is 13.76%; total cash is $3.77 billion; operating cash flow is $7.61 billion and debt is a bit more than twice that at $14.39 billion.

Remember: Life is a Journey; enjoy the ride! (Especially the “E” ticket rides).

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-04-13 – Apply the Strategy to AMAT

The market did a nice turn around this week – although this morning’s open a bit south of yesterday’s close was not unexpected.

Picking solid companies and knowing what to do with the options to protect your interest if the stock goes up or down, is what makes the system bullet proof.

When the stock goes up, we take the money and run. Cha-ching!

If the stock goes down, we add more options as needed. This allows us to leverage into a better position for a win, when the stock rebounds. In many cases the stock price can be lower than when first purchased – and still cash out for a win. This is why the importance of the rebuy is a significant component of making my DITM calls strategy an unprecedented success.

Up or down, we know how to ring the register.

Today I’m going with Applied Materials (AMAT). It has been quite a while since e picked the semiconductor-maker, but if you recall it has been a repeat winner.

Timing for an entry into this position is looking good as the company share price tested the support levels a couple of days ago then bounced back. The stock closed yesterday at $12.07 and for the last couple of months it has been trading in a nice tight range. I believe there is room for improvement as far as share price is concerned and that we will be able to covert this one to a win pretty quick. Although, share price is in the low teens, so it may be smart to buy now, then just sell at $13.00 and take what profit the trade makes, instead of looking for the target $1000.00.

Applied Materials is a solid company. I have always liked its balance sheet.

The company showed has a forward price-to-earnings ratio of 10.68. It has $2.00 billion in the bank and $2.18 billion in operating cash flow and only $1.95 billion in debt. Lastly, 80.50% of the company’s stock is owned by institutions, which are generally thought to be long-term shareholders. This tends to equate to more stability for the stock.

Please check the stat book for trading details and remember to set a GTC sell order at $1.00 higher than your purchase price to automatically exit at the correct price for a $1000 gain. Also, please check the stat book for a lower target GTC on this one to possibly post.

Always remember: Life is a journey, enjoy the ride!

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-04-11 – Trying Costco Again

This morning, stocks look as though we will see a bit of a bounce back from continued losses that have been posting since the first of the month. With the drops in share prices across the board, I will be posting several rebuys that hit Monday and Tuesday and updating the scorecard.

While I am doing that, today, I am going to repeat Monday’s column and try once again to add Costco Wholesale Corporation (COST) to the DITM portfolio. Timing and pricing for today is even better for Costco – however, I will post the recommendation for the 2013 calls over the 2014 leaps to see if that will provide the opportunity we need to get on the board.

Meanwhile, later today I have an appointment with the federal prosecutor with regards to Lenny’s federal case that is currently scheduled for July. It is not a meeting I am looking forward to because they would like me to be a witness for the prosecution, and that is NOT something I want to do. However, I will go in and tell them what I know, with the belief that they actually want the truth from me.

Now back to Costco –

Costco operates 592 warehouses in the United States and nine other countries and employs 92,000 people.

Along with most of the merchandise they sell, the company has an extra large balance sheet too. Revenues are posted at $93.40 billion annually, $5.78 billion in the bank and only $2.28 billion in debt, with operating cash flow of $3.00 billion. It has a return-on-equity (ROE) of 12.68% and forward price-to-earnings (P/E) ratio of 20.08, which is a bit higher than what I like to see for bargain shopping, but they support a higher P/E ratio on a consistent basis.

Last week the company posted a new 52-week high mark of $92.10 and the stock closed yesterday, trading at $88.65. Prices for the 2014 leaps are looking good for a fill – but if we fail to get the fill today, look for Costco to be on our shopping list on Friday or next week once again.

Please check the stat book page for trading details just below the open positions chart.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-04-09 – Let’s Go Shopping at Costco

This morning, stocks again dropped, this time on news of poor payroll postings. The tumble this morning will give a good chance to get on board with today’s recommendation.

Costco operates 592 warehouses in the United States and nine other countries and employs 92,000 people..

Along with most of the merchandise they sell, the company has an extra large balance sheet too. Revenues are posted at $93.40 billion annually, $5.78 billion in the bank and only $2.28 billion in debt, with operating cash flow of $3.00 billion. It has a return-on-equity (ROE) of 12.68% and forward price-to-earnings (P/E) ratio of 20.08, which is a bit higher than what I like to see for bargain shopping, but they support a higher P/E ratio on a consistent basis.

Please check the stat book page for trading details just below the open positions chart. Please note – this recommendation is for a 2014 leap.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-04-04 – Paper the Deal with IP

Friday / Monday’s portfolio review sported several buying opportunities to shore up the open portfolio. I will post those shortly.

In looking at stocks for today – I really wanted to recommend several – but, the option prices were too high. I’ve always believed that if I should be willing to pay a dollar over the stock price plus strike price in premium for a $20 stock, I should be willing to pay $2 more in premium for a $40 stock and $4 for an $80 stock and so on, keeping it proportional as the stock price increases. And, if you were to look at the current asking price for the options of Caterpillar Inc (CAT),Deere & Company (DE), Parker Hannifin Corp. (PH) and United Technologies Inc. (UTX) – you would see what I am talking about. Each of these stocks are priced exactly where I’d recommend a buy, but because the share price is much higher than our average purchase of $20-30, the option prices are proportionally higher.

So, if you have a hankering for some quality companies that look ready for a nice bump – pick any of these and see what they get you. Be sure to go deep enough in the money to cover at least two levels of support or the 52-week low.

However, since those were too expensive to fit the rules set out by Lenny for our Nails strategy, today’s pick is one of my favorites – paper and packaging company, International Paper Co. (IP). The metrics on this one are just as good as those above, but the stock price is in the $30 range so our option prices are within range of the rules as well. In fact, the recommendation covers both the 2013’s posted to the score card page or – if you wanted additional time value – you could go with the 2014 leaps at the same price. I am going with the 2013’s because open interest in these options is much higher, meaning a greater possibility of getting the fill on our order.

International Paper is a global paper and packaging company with manufacturing operations in more than 20 countries, including the United States, Europe, Latin America and Asia, and they operate 18 pulp, paper and packaging mills, 94 converting and packaging plants, and five wood products facilities. With annual sales of about $26.20 billion, they employ approximately 60,000 people worldwide, and they have a long-standing policy of using no wood from endangered forests.

They make the products that are essential for today, while sustaining millions of acres of forest for the needs of future generations; as they are the nation’s largest private landowner and seedling grower, planting more than 500 million seedlings a year.

Last month, the company posted a 52-week high of $36.50 coming back from a low of $21.55 at the beginning of October. When there are a lot of stocks testing resistance at the top, it can be challenging to find one that shows nice upward potential. With IP, I find this to be a good buy opportunity.

Here are the metrics to take note of: Forward P/E – 9.97; Return on Equity – 18.60%; Revenue – $26.03 billion; total cash – $3.99 billion; operating cash flow – 2.68 billion; debt $9.91 billion.

Please see the scorecard for today’s trading details and remember to post a GTC (good till cancelled) order at $1.00 higher than the purchase price to lock in a win.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-04-02 – Portfolio Review – Continued

Last week, the portfolio review Friday didn’t post – so no one was able to see the recommendations for the open portfolio.

So, I have reposted it this morning. In the review – there are several plays needed to shore up open positions – so I will not make an additional selection this morning – there is enough in the review to spend money on.

Friday, is a market holiday – so look for Wednesday’s pick… and I will work on Chapter Three of the tutorial – with the goal of finishing it to post for the Friday column.

2012-03-30 – Portfolio Review

It’s that time again, where we look at the open portfolio to see what we need to shore up weakness and exploit strength. With the last update – I predicted wins with Kraft (KFT), Wal-Mart Stores Inc. (WMT), Bank of America (BAC), and Pfizer, Inc. (PFE). With the exception of KFT – I was correct, so three out of four performed within the time line expected and Eli Lilly & Company (LLY) also posted a win – however, I hadn’t said it was expected as I did with the others.

Here is what we have on the books right now:

Dow Chemical Company (DOW) and Microsoft Corporation (MSFT) were both added to the scorecard this week. With these new positions, they each look like a two-four week time frame to post a win. I just updated the stat book with the purchase and rebuy levels.

Halliburton Company (HAL) was added to the scorecard last week. The timing for HAL was good, however the moving averages of the stock chart all point to a continued downward trend – but these indicators are tapering off, which I expect will level off, then start to trend upwards. When earnings post on April 18 – we will know if this will be a quick win (four weeks or less) or if it will take more time. Right now the options we have are going for much less than our purchase price, so I am going to recommend a rebuy today – with a market order – then I will leave the rebuy price the same for the next level.

Verizon Communications Inc. (VZ) just posted a rebuy on Tuesday. I have posted the new rebuy level to the scorecard and expect Verizon to drop about a half a point still before we see the trend to move back up. I do want to make sure we get in on another rebuy at the lowest point possible because the last rebuy really didn’t lower our average as much as I would have expected. With the next rebuy we want to make sure we improve our position a bit more – or we are wasting money, so look for small changes in the rebuy level in the next week or two. If I have to tweak it to get the right rebuy – that is what I will do. I’ll be watching VZ daily – as this could score nicely for us in a very short time if we rebuy correctly.

Kraft Foods, Inc. (KFT) – We hold 10 contracts at $8.30 and the rebuy price the stock would need to drop to is $36.50 before we would look to add 10 additional contracts to the position. The amount of needed time estimated to close out the position if the current trend continues – 6 weeks. I may adjust the rebuy level here too – in the next week or two – just not ready to do so yet.

Johnson & Johnson (JNJ) – We’ve had this position since the last day of January. Although the option price is up a bit from where it was purchased – the stock has been moving sideways and not getting much altitude. We are about halfway there and the stock chart looks as though it will bounce down about a point in the short term before going back up again. The rebuy level needs no adjustment as support levels here are quite firm – and to get a win, we need the stock to break resistance and shoot back to $66.00.

Bristol-Myers Squibb Co (BMY) – This position was looking good for a turnaround pop but it didn’t quite make it. I have adjusted the rebuy to catch the current support level and the stock chart tells me we could see a point or two on the upward side before we’d see a rebuy at the new level. We are about even on this position, so it won’t take much more than just a point to convert.

Yahoo Inc. (YHOO) – Our Yahoo position is down about $0.20 but we missed a rebuy because there is a new support level. Right now, it looks like we could see a dip before we see a bump – so, I am adjusting the rebuy to make sure we pay attention to the new support level.

Xerox Corporation (XRX) – We hit a rebuy yesterday – and with my last month recommendation with the portfolio update – I felt if we hit a rebuy we should make it a double down purchase and look to really lower the average. It does looks like XRX is slowly climbing up, so this double down play was a good idea. If you forgot to double up – the price is right to do so. We need the stock price to hit about $9.30 to convert to a win, just a bit over a point. However, with the stock price less than $10, that’s a big percentage jump in price. If the next quarter is a good one – we could see this one crossing over the finish line.

Corning Inc. (GLW) At the end of the year, we rolled this position out another year. This too looks like we are getting close to a double down play – or rebuy as many as possible play. I am going to raise the rebuy level to $12.90 and recommend you double up if we see this price.

Staples, Inc. (SPLS) will see a change in the rebuy as well. Up it goes to $15.00 and if you want to double up on only one play – do this one. We need to get our average price down, so that if we see an increase in share price that would reflect the good news on earnings – we should strike when the opportunity is right. I like that we are seeing the support for Staples increase a bit each month – but where we are now, we’ll need to see the stock price inch up about three points. If the stock continues to trend that direction – it will take about six months to convert to a win.

Suntech Power Holdings (STP) is also ripe for a double down play. You can do this one again NOW as the option prices are low and we really need to get our share price down, down, down. And the only way to do that is buy, buy, buy. Right now the option prices are about as low as they have ever been. Take advantage. I want to see our average lower than $1.00 – so look for another double down play again after this. Then we’d only need to see this get to $4-$5 to post a win and put this one behind us. Let’s hope the anticipated quarter is as nice as expected and we could finally put this one to bed.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-03-28 – Looking for a Chemical Reaction

Today, I am going back to a long term winner for my strategy. It has been a repeat winner. So we will continue to go back to the well and cash in as often as possible and I went to one of Lenny’s most reliable sources for today’s choice – Ken Fisher. Today’s pick is Dow Chemical Company (DOW) and this is what Fisher posted recently:

“Dow is priced where it was 13 years ago. That’s pretty ridiculous for America’s largest basic chemical maker and arguably the world’s best. Its strategies are great. This is the year Dow’s image should start coming together and appreciate nicely from 12 times my 2012 earnings estimate.”

They offer a consistent dividend payout to stock holders. And the metrics all say “yes.”

Numbers to consider: Revenue: $59.98 Billion, Forward P/E Ratio: 10.22, PEG Ratio: 1.32, Total Cash: $5.28 billion, Operating Cash Flow: $3.88 billion, and Debt: $21.60 billion.

For today’s specific pick, please check the Current DITM Picks page.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-03-26 – Keep the Hits Coming with MSFT

On Friday, Lenny was finally able to use the phone for the first time and I was able to chat with him for about 30 minutes. It was very good to hear from him as my overall stress level is much reduced by being able to update him with what I’ve been doing and ask for guidance on what he would like me to do next.

As usual, he sends his regards to everyone that has been supporting him throughout this ordeal. He appreciates everything that we are doing to make such and unendurable experience – more tolerable.

He has started to get the books I’ve been sending and he will now be able to phone me on Monday, Wednesday and Friday – as there is no longer a phone restriction in his file. This should make things much more manageable for us.

Today I am going right back in with one of favorites: Microsoft Corporation (MSFT). Microsoft has been a consistent winner in the DITM calls strategy, and much of what I do all day is monitor the same winning stocks to see where opportunity is knocking. MSFT has given my strategy many such opportunities and it is looking good again today.

Microsoft is such a wide moat player and today we have the right option price to get on board.

The company remains one of the strongest out there, period. You can let the numbers be your guide. MSFT has a Forward P/E ratio currently of 10.63, a PEG ratio of 1.49. Revenue remains very strong at $72.05 billion, cash in the bank at $50.69 billion, debt of only $12.80 billion in comparison with operating cash flow of over $28.97 billion which is excellent. Return on Equity is a very strong 41.68%. I love these numbers.

Also, the stock chart is showing a strong upward trend and the recent dip in share price shows me that there is room for a quick win if the market trends as expected.

The price is right for an easy fill today. For this one I say lock and load.

After the order is filled, don’t forget to set a good-till-cancel (GTC) sell order $1.00 above the purchase price.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-03-23 – Moving Up with UTX

Market news report that Asian markets were down today, European markets were up and stock futures this morning mixed. So what we will see in trading today is anyone’s guess.

It’s been a few months since I have set my sights on United Technologies Corporation (UTX). Getting a Win out of UTX isn’t as hard as getting in on the options for the right price. So, I’ve upped the premium a tiny bit to give us a better shot, as UTX is ALWAYS priced a bit higher so it’s not a bad choice to do so. However, even with the padded premium – the market will have to open even or a bit lower than yesterday’s close or see a drop in pricing at some point today.

However, when I look at the stats for this international powerhouse of innovation, and in looking for a stock that will pay off again using my system, I am convinced that it looks like a great opportunity to buy.

In looking at the stock chart – the stock has pulled back about five point in the last week and company understands how to position itself for every market advantage. We need to take advantage of the dip in price and step into the batter’s box to see if we can get on base before it heads back on up.

Here are the notable stats: Forward P/E ratio: 12.21; Return on Equity: 23.45%; Revenue: $58.19 billion; Cash: $5.96 billion; Debt: $10.26 billion, which I’ll admit is a hefty A/P; Operating Cash Flow: $6.59 billion; and, the percentage of stock held by institutions: 84.30%.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-03-21 – Taking Another Swing at the King!

Six years ago today – I drove to Lenny Dykstra’s Car Wash in Corona, California and met this little retired baseball player who asked me the oddest questions before deciding he wanted to hire me. I wasn’t looking for a job that day, but the job found me.

Six years – it doesn’t seem like a long time. But, when working with Lenny – you almost have to calculate it in “dog years” because it seems like that long. On the flip side, I’ve been married for 28 years (coming up next month) and honestly – those years seem to have passed much faster and much easier.

I have no news to report, as I have yet to hear from Lenny since that last phone call the day he was taken into custody. I do hope that when I call tomorrow – I’ll be once again an approved visitor and can make the trip to see him tomorrow afternoon.

This morning I am going back again with a pick a made just ten days ago, but was not filled. The recommendation today is global monster Halliburton (HAL) and today I have gone deeper in the money to try and get on base. The company took a huge hit last summer and has not surged back like many of our favorites. The stock chart shows plenty of upside potential as they are down from the 52-week high by 40%. This spells opportunity in a sea of choices that are all looking at yearly high marks or better.

The numbers haven’t changed much – but, here are the stats to take note of: Forward P/E is 7.41; Return on Equity is 25.51% which is very good for such a large company. Revenue continues to be strong at $24.83 billion annually with quarterly earnings growth at 49.80%. Debt is very manageable at $4.82 billion with operating cash flow coming in at $3.68 billion.

Also remember, if the order fills today, set a GTC sell order at $1.00 than your purchase price to take the cash as soon as our target sell price is reached and head to the bank.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-03-19 – The Call is VZ

Due to an early morning phone call distraction (too many people know I get up early) – I will skip any preamble and get right to the pick, as I am late posting.

Today I am looking to add Verizon Communications Inc. (VZ) to the portfolio.

With so many stocks testing the highs, it becomes harder to find a stock to recommendation where I can see there is still room to move up before posting a record high. However, with nearly everything posting well on share price, option prices are excellent, so we should be able to get on base at a very good price this morning.

If you want to make sure you get the lowest price – set your bid lower than the recommendation. But, remember – when you bid with a limit order – you will get in at the lower price automatically. It just might not be the lowest price.

Verizon is headquartered in New York and is the second largest US telecommunications services provider (after AT&T) and has taken the top spot in wireless services (this time, ahead of AT&T).

However all in all, the numbers are still nice to look at – Verizon has revenue of $108.83 billion; a forward P/E of 14.27; operating cash flow of $29.78 billion; total cash on hand of $13.95 billion; making Verizon a very solid play, even with debt at $55.15 billion. While the chart for the stock tells me there is still upward momentum, the option prices are good. There is a nice support level around the $38.00 mark.

This feels like a quick win for Lenny’s DITM calls strategy. Lock and Load!!

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-03-16 – Nails Tutorial

Nails Tutorial – Chapter One

Nails Tutorial – Chapter Two

2012-03-14 – Looking at the FRX, not the Trees

When video games were in their infancy, one of the most satisfying games to play was Breakout.

For those of you too young for “Stone Age” video games like me, it worked like this…

There was a little blip or ball that you hit with a paddle that moved right or left across the screen. You’d hit the blip to the top of the screen at a wall of colorful blocks that when hit would disappear. If you could aim the blip at the same location again and again, you would eat away a section of wall and the blip would pop over the wall to the top part of the screen… your ball would “breakout” and up went the score as the mostly trapped ball would eat away lots of blocks from the top down.

I think of this game when driving in traffic and finally breakout of it with open lanes in front of me. I also think of this game when we see such a nice jump in the market, like yesterday’s breakout from the last month of resistance. The Dow Jones Industrial Average (DJI) finally broke free of the 13K point ceiling. The question will be, how many of our positions at the top will bounce into the win column before the ball comes back down? And, will the ball stay at the top long enough to take care of those positions further down?

It’s certainly a lot easier to let the ball do the work for you at the top, then to keep trying to hit the ball and possibly miss, because if the market continues to play nice – we will score nicely with all our open positions.

In looking for a nice choice for today – I went through a lot of stock charts. Many are posting 52-week highs and many of those I had to look at the 2-year, 5-year and max charts to see if the high was a one year high or if it was an all time high. There were quite a few that are looking at all time highs. That’s really good to see and rather good news, but – it’s also a bit risky to go with a company at the very top. We can’t predict how high it will go before starting to come back down.

And with the market doing so well, we don’t want to pick a stock that is not increasing along with the market. Therefore, we want a stock that saw a pullback in share price, but is now increasing with the market – and still has upside potential that we can see on the stock chart. I like to know that the stock is capable of the high I am looking for, because I can see it’s been there before.

So, for this morning’s recommendation – I am going back to a company that has won for Nails several times before: Forest Laboratories Inc. (FRX).

FRX was doing quite well until last July. With Lexapro – FRX’s top selling antidepressant going generic, the stock saw a large pull back, on fears that all cash would evaporate completely and it has just been within the last couple months that the stock has started to gain momentum and come back. The company has several new drugs in the pipeline and a couple of these are doing very well in trial. And, I read this morning that it’s possible that Eli Lilly & Co. (LLY) may be in the market to buy them out. And, there’s nothing like a good mergers & acquisitions rumor to send a stock upwards even further.

It is a very solid company.

There are a number of statistics that jump off the page when looking at Forest Laboratories. The P/E ratio is still a bit high and normally I’d wait for this to come down. But, on the merger news and the nice stock chart along with the fact that they have zero debt – all are great signs in my book for a good play. It also has plenty of institutional support at 97.90%. They have $2.44 billion in cash and NO debt. Overall, the stats on this company tell me again and again that this continues to be a solid pick.

Please check the Stat Book page for the specifics of today’s recommendation and note, today’s pick is a 2014 leap, the price is right to go LONG. Remember to post a GTC limit order to sell your call at the target sale price of $1.00 higher than the purchase price as soon as the order is filled in order to lock in a win.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-03-12 – Making a Buck on DE

It’s no secret that I like the heavy-equipment sector. I tried to get on base with CAT on Friday, but the pick didn’t get a fill. There was NO volume or no trades. But, when there is opportunity, shares in names like Deere & Company (DE), Terex (TEX) and Caterpillar (CAT) have been previous picks and are looking good – timing wise for a nice DITM win.

As a kid – in first grade, the school was overcrowded so we had two classes for each classroom. I was scheduled for the afternoon class, so in the morning before school – I could watch cartoons. I watched Spiderman and Underdog. Of course Underdog was my favorite. In every episode – he would run into trouble and he would have to save Polly Purebread and each time he failed – he would say – “if at first you don’t succeed, try, try again.”

Today, I will try again in the sector, this time with Deere & Company (DE). It has been a while since I have stepped up to the plate with DE and the open positions have been filling up – so, I want to go with a position that has all the metrics for a quick win.

Friday’s close at $80.17 a share – is down 20% from the 52-week high mark and down from the recent high by about 10% and I expect improvement on the horizon. With an estimated $32.66 billion in revenue, Return on equity is posted at 42.32% for most recent quarterly data. Deere P/E ratio tells me the stock is undervalued at 9.41 with a PEG ratio at 0.99.

Please see the scorecard for trading specifics and note that by the end of the month – I will be going for the 2014 leaps and will stop picking the 2013 calls. Today’s pick is a 2013 call because the 2014’s are too pricey – but, I am starting to look for 2014 leaps that are selling at the right price for the strategy.

And, after your order is filled, I set a good-till-cancel (GTC) order $1.00 above the average purchase price to lock in a $1000 win should the price jump quickly.

Always remember: Life is a journey, enjoy the ride!

(At the time of publication, Dykstra had no positions in the stocks mentioned.)

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2012-03-09 – Load Up Heavy-Duty CAT Calls

Thank you to those of you who called and expressed well wishes through email. Your words of encouragement mean the world to me – and I’ll pass on the kind words to Lenny when I next see him. You’re all a pretty nice group of people – I am fortunate to have you all in my corner.

In this morning’s research, I read that we should favor the tech, financial and the industrial sectors, for a continued “passive” bullish trend. And, yes – resistance is being tested everywhere and if we can find the sector in which “resistance is futile” and can break through – we will score another win.

With yesterday’s Wal-Mart win – the scorecard now reads 261 which a milestone win for Nails and especially for me. The scorecard total was 130 when I took over picking stocks for Lenny 100% of the time and it became my sole responsibility. Yes, I have always had Lenny as back up – and I still do (even if remote). But, the 261^st win means that I’ve picked more DITM winners for the strategy than Lenny. I’ve officially doubled the win record – plus one. And, before I took over completely – several of the 130 were also my choices – just not the majority, and each one was reviewed by Lenny before being posted. He made sure I had plenty of “guided” wins before letting me loose.

Today, I will go for Caterpillar (CAT). We have stepped up to the plate on this name several times. We have a good chance of landing our position today, but it’s not a cheap pick.

Much has changed at the construction- and earth-moving equipment vendor since I last picked it. The last time CAT was in the column, it was trading at $51.70 a share. Yesterday’s close was $110.28. The price of the options are in the $20 range, but the dip in share price earlier in the week will give a great opportunity to score quickly.

Here are the stats to make note of: Forward P/E Ratio – 9.75 / PEG Ratio – 0.44(this is excellent) / Return on Equity 40.29% (fabulous) / Qtrly Growth – 59.80% (more fabulous) / Revenue $60.14 billion / Debt $34.60 billion (it is a bit high) / Operating Cash Flow – $7.01 billion.

After the order is filled, set a good-till-cancel (GTC) order $1.00 above the average purchase price to cash out for a quick win.

Always remember: Life is a journey, enjoy the ride!

(At the time of publication, Dykstra had no positions in the stocks mentioned.)

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2012-03-07 – Update on Lenny’s Situation

As I am sure most of you are aware that Lenny was sentenced on Monday to three years in state prison. For the past several weeks Lenny had been working with his attorney to prepare the “Motion to Withdraw” the plea of “no-contest” so that he would be allowed to take the case to trial with a “not-guilty” plea and seek an acquittal.

To say he was consumed with giving himself the best chance of exoneration would be an understatement. He was beyond consumed. It was all he could think of and work on 24/7. He looked up laws, prior cases – turning into his own legal research assistant. He didn’t sleep – for weeks.

However, on Monday the judge denied the motion and Lenny was sentenced.

Lenny had been advised by numerous attorneys that the withdrawal motion, although legally viable and not unwarranted, was not in his best interest. But he could not be swayed. He knew that critical evidence had not been presented in court and he believed the evidence would prove his innocence and would ultimately allow him to go free… and more importantly, he would be found “not guilty.”

He was told what the risks would be – that if the judge failed to grant the motion, she would also lean towards a longer sentence – because she would be looking for remorse, instead of an affirmation of innocence. This was indeed the case and the three year sentence was given. Lenny was immediately taken into custody.

I spoke with Lenny shortly after he was booked into custody. He was devastated by the result. Who wouldn’t be? But, Lenny is the type of man that finds it impossible to believe that there are any other possible outcomes beyond the one he seeks, the one he believes in. He will not even listen to another perspective. This makes it doubly hard on him when he is disappointed.

From my own perspective – I consider myself to be a bit of a pragmatist. Although optimistic most of the time – I’ve come to expect to be disappointed now and again. I was prepared to be disappointed and as such I thought I was fully prepared for the outcome. I believed that the advice of seven different attorneys could not ALL be wrong. Every one of them said the withdrawal motion wasn’t going to work. I was told again and again what to expect. So, I went into the courtroom that morning with Lenny – fully expecting to walk back out alone. In that, I was correct.

However, even preparing in advance for the worst possible outcome, or thinking I was. Let me tell you how wrong I was.

As it turns out – I too was unprepared for the result. It had to be the one of the saddest possible moments ever and I honestly can’t explain how difficult it was to hear the judge misread the events and facts and send Lenny to prison on things she got wrong… so much for being prepared. I wanted to stand up in the courtroom and tell her she was wrong. It is a truly horrible thing to have to sit there, silent and powerless to fix it by stating the truth – and have it matter. Horrible – I tell you.

So, how much worse for Lenny – the man was not prepared, could not look at any possible scenario for a result different from what he felt to the very core of his being to be right. So, yes -bad day for me… unimaginable for Lenny. Not only was he sentenced for a longer period, but he too had to sit and listen to the judge screw up on the chain of events and tell the world that Lenny did something he didn’t do – but to tell the world of events that didn’t actually occur at all.

The complete devastation in his voice when he called me afterward… I’ve never heard the like. They say Lenny wears his heart on his sleeve… but, in reality it’s in the tone of his voice. I can always tell his mood – just in the way he says “hello.”

However, he is a very resilient sort. They call him Nails for a reason. Even with him being as low as I’ve ever heard. After he expressed his disappointment in the outcome of the hearing – in the next breath he asked for me to find out where he was being sent, to put money on his account for personal items and to send him books to read ASAP. He knows what he needs to get through it.

Soap and reading material.

And, here is where you can help.

I am going to put up the links for adding money to Lenny’s account on the stat book page. For every $50 sent to Lenny – I will extend a subscription by a month. After the link is up – if you contribute to Lenny’s account – please send me a copy of the confirmation page – your receipt, and I’ll extend your subscription.

Here is the info I have now:

Yesterday afternoon, Lenny was booked into Men’s Central Jail – the address is:

Men’s Central Jail – Los Angeles County
441 Bauchet Street
Los Angeles, CA 90012

Books & or postcards would be nice. Address for mail:

Lenny Dykstra, Bkg # 3074878
P.O. Box 86164 Terminal Annex
Los Angeles, CA 90086

Rules for mail can be found here: http://www.lasdhq.org/divisions/custody/mcj/inmatemail.html however, please note – they only allow postcards. Please do not send letters in envelopes as envelopes that are not court related are returned.

If you would like to send books – please be kind enough to commit to sending three books at a time, as he can only have one package of books per week & only three books max in any package & note they have to be shipped from a fulfillment house or book company like Amazon or Barnes & Noble – you can’t mail from home. If you would like to order books for him – please let me know & I will give you a list – so he doesn’t get repeats.

As for personal needs – all personal hygiene items have to be purchased from the prison store – so he needs money on books to have them… things like soap, shampoo, razors & shaving cream. From that same website – using the search link http://app4.lasd.org/iic/ajis_search.cfm – you can add money on books for him from $5 to $50 at a time. You need his date of birth (02/10/1963) for access to the inmate information page and his booking number (3074878) to add to his account.

I would like to do everything I can make sure he has at least $50 per week. Honestly, it doesn’t go far. This buys him the basic necessities and nothing more.

And doing what I can to keep at least $50 added his account per week, purchasing books – 3 per weeks and paying for collect calls at about $50 per week for about 20 minutes if he is allowed to call… it adds up… so, any and all assistance is greatly appreciated and will go towards extending your subscription as my way of saying thank you.

Now as for news…

I am not sure how long Lenny will remain at Men’s Central – it could be as quickly as 2-4 weeks before he may be moved to a State facility. However due to overcrowding at State facilities, there is a slight chance he will remain at Men’s Central for the duration of his sentence. At this point there is no way to know exactly when he will be moved or if it will happen.

He has been sentenced to three years, however – his previous stay at Men’s Central counts for 360 days, so depending how they do the math – he is looking at six months to a year of actual time left. Each day spent in custody before sentencing counts for two, so the six months he spent before reduces the sentence by a year.

Inmates in state prison have been doing about 50% of their sentence before release – so depending on how they do the math, 6-12 months.

Here is how it’s calculated.

Three years – less one year = equals two remaining years at 50% – that’s one year.

50% of three years is 1.5 years – less one year credit – that’s 6 months.

I vote for the later calculation.

However, these are estimates – actual results may vary… just like in ads for losing weight, perhaps it needs the “results not typical” in there.

I will keep you all posted if the situation changes.

If postcards or packages are sent and he has been moved – they will be returned. So no one will be out purchases.

If you have any questions about Lenny’s situation or would like to have me forward a message to him – let me know.

Thank you,

Dorothy
for
Lenny Dykstra

Dorothy Van Kalsbeek | PH: 951-970-3277 | EMail: [email protected]

2012-03-07 – Update on Lenny’s Situation

Today I am going to write an update on Lenny’s situation. When complete – I’ll post here and send the morning email.

Then, I will update the statbook with the rebuys that were recommended last week and any changes with yesterday’s market drop.

Then, I will post a recommendation – after I see where things are going today.

2012-03-05 – It’s Good to be King!

Good Morning Everyone –

As I reported last week, Lenny filed a motion with the Superior Court of California to withdraw the plea that was entered last fall in favor of a Not-Guilty plea. This morning in court we will know how that turned out.

If you are interested in seeing what happens live – I am sure TMZ will have their cameras in the courthouse with a live feed to their website. If nothing else, it should be interesting.

I am going to be with Lenny at the courthouse, so I wrote this column in advance and posted it early in anticipation that it would be needed. When one spends the day with Lenny there isn’t much time for regular work. And, somehow I left my extra charger – the one that stays in the computer bag at home, so I’ve only got a limited time on battery power – and then it will be lights out – until I return home, so I am going to be very brief.

It’s going to be hard to get this morning’s recommendation as long term options for the recommendation are quite bullish, which means – pricey.

Today I am going with global monster Halliburton (HAL) due to their balanced global portfolio and broad offering of services. The company has took a huge hit last summer and has not surged back like many of our favorites. This spells opportunity.

The numbers have changed quite a bit since the last time I took a swing at King HAL, so here are the stats to take note of: Forward P/E is 7.99; Return on Equity is 25.51% which is very good for such a large company. Revenue continues to be strong at $24.83 billion annually with quarterly earnings growth at 49.80%. Debt is very manageable at $4.82 billion with operating cash flow coming in at $3.68 billion.

Timing is good for a buy – but the option prices are being a bit stubborn as it relates to the formula used to calculate a buy. You should not become a big fan of spending more than necessary.

Also remember, if the order fills today, set a GTC sell order at $1.00 than your purchase price to take the cash as soon as our target sell price is reached and head to the bank.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-03-02 – Portfolio Review

It’s that time again, where we look at the open portfolio to see what we need to shore up weakness and exploit strength.

Here is what we have on the books right now:

Kraft Foods, Inc. (KFT) – Was just added to the portfolio on Wednesday. We hold 10 contracts at $8.30 and the rebuy price the stock would need to drop to is $36.50 before we would look to add 10 additional contracts to the position. The amount of needed time estimated to close out the position if the current trend continues – 3 weeks.

Wal-Mart Stores Inc. (WMT) – Came on board last Friday. We’ve got 10 contracts here too. No changes are required at this time. Estimated time to convert to a win – 2 weeks.

Bank of America (BAC) – Has been on the scoreboard for two weeks. We are looking at no net change in the option value. The BAC stock chart is trending down – so, I will estimate that we may need to purchase a rebuy before we catch a win on this one. Estimate time to rebuy – 2 weeks; Time needed for a win – 6 weeks.

Pfizer, Inc. (PFE) – Is climbing – if slowly. I will not make any changes to the rebuy and I’d estimate 4-6 weeks for a win.

Eli Lilly and Company (LLY) – If share price could climb like it did in December, this one would close really fast. However, the stock is looking as though it will come down before it climb back up. I am going to raise the rebuy level to make sure we get the rebuy at the right price. The new rebuy price will be set at $38.60.

Johnson & Johnson (JNJ) – We’ve had this position since the last day of January. Although the option price is up a bit from where it was purchased – the stock has been moving sideways and not getting much altitude. We are a bit past the halfway mark – so if you wanted to cash out and not wait it out, no one will blame you. I see more sideways movement ahead. I can’t really tell it it’s headed up or down with much conviction, however – the Slow Stochastic chart is telling me it’s a good buying time – so odds are favoring an upward trend – only the stock chart looks stuck.

Bristol-Myers Squibb Co (BMY) – This position looks good for a turnaround to pop in the next week or two. I don’t need to change the rebuy price unless the stock misses the one set on a downward turn. But, the stock chart tells me we could see a point or two on the upward side before we’d see a rebuy. We are down a bit on this position, so it may take more than just a point to convert.

Yahoo Inc. (YHOO) – Our Yahoo position is down about $0.60 but not down enough to hit a rebuy and it looks as though I didn’t estimate the level high enough to grab the last dip in price. Right now, it looks like up will be the new direction, but if the stock dips again and I miss another rebuy – I’ll adjust it to grab some more of these and improve our chances to win – while at the same time, double the return.

Xerox Corporation (XRX) – Looks like XRX will be on the rise, but support for the stock has gone up, so the rebuy level needs to match. I’ll be increasing the rebuy level to $8.00. And, if we hit a rebuy, consider doubling up. The options are cheap and a double down play on this one will be cheap and easy to do.

Corning (GLW) At the end of the year, we rolled this position out another year. Like XRX, this looks like we are getting close to a double down play – or rebuy as many as possible play. I am going to raise the rebuy level to $12.60.

Staples, Inc. (SPLS) will see a change in the rebuy as well. Up it goes to $14.00 and if you want to double up on only one play – do this one. We need to get our average price down, so that if we see an increase in share price that would reflect the good news on earnings – we should strike when the opportunity is right.

Suntech Power Holdings (STP) is also ripe for a double down play. You can do this one NOW as the option prices are low and we really need to get our share price down, down, down. And the only way to do that is buy, buy, buy. Right now the option prices are about as low as they have ever been. Take advantage.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-02-29 – Comfort Food for Thought with KFT

Good Morning Subscribers, Happy Leap Day!!!

The Dow Jones Industrial Average (DJIA) finally closed over the 13K mark. My guess is that today, there will be a large group of investors that will cash out on some positions that have been steadily climbing due to the recent high marks across the board. However, futures are up this morning – which usually signals a strong market open.

Later today, Lenny’s attorney will be filing a motion to withdraw the plea of “no-contest” in the state criminal case where he is being prosecuted for auto theft and a host of related charges in conjunction with a vehicle lease transaction. Lenny decided that he would rather face a sentence of 12 years with the opportunity to exonerate himself over the prospect of being sentenced to four years and having the world believe his is a criminal. Sentencing with the original plea is scheduled for Monday, March 5, 2012.

We plan to issue a press release once the motion to withdraw has been filed with the court, so – I am giving you the scoop, before TMZ is all over it.

It is not expected that the request to change his plea from “no-contest” to “not guilty” will be allowed by the judge. It is a rare request and slim chance it will be granted. He has been told that the odds of being granted the request are about one in five, or 20%. For a guy who made millions hitting the ball about 30% of the time, he felt his chances were remarkably good – all things considered.

If the change of plea is granted, there is a very good chance that he will be remanded back into custody until the trial concludes – because, he was unable to bail out the first time on these charges and they could reinstate the remainder of the $455K of the $505K that was lifted when he was released in October.

Of course, our fearless leader does not believe that will be the case at all. I do hope he is correct. The uncertainty of it all makes me want to curl up on the couch with some comfort food and a good book.

So, if on Monday I see Lenny carted off again for an unspecified stay at one the state’s facilities for felons, look for stock in the makers of Oreo’s and Mac N Cheese to be on the rise.

Of course I am talking Kraft Foods Inc. (KFT).

In looking at the packing of my favorite packaged cookie – I was reminded that this year marks the 100 year anniversary of the perfect food. It was first introduced in 1912. And, you’d have to admit, a cookie that has been selling in the number one spot for 100 years is a pretty popular cookie.

But, actually it’s not the cookie – it’s the name. Oreo’s aren’t just popular here. Kraft markets the Oreo name worldwide, but what you might not know is that an Oreo here in the US is not the same cookie in Japan, China or even Italy or France. Kraft has done enough market research to create custom Oreo’s for each customer base. So the cookie that is number one here – isn’t the same cookie that is number one in Japan.

Kraft is the world’s second largest food company with annual revenues of around $54.36 billion which means that millions of times a day, in more than 160 countries, people reach for a Kraft brand. According to their web site, you can find their products in 99 percent of all US households. And, that my friends, represents a lot of Mac N Cheese.

They have 11 brands with revenues exceeding $1 billion each, and close to 70 brands with revenues greater than $100 million. More than 40 of those brands are at least 100 years old, and further – they have ability to say that 80 percent of their revenues come from products that hold the No. 1 share position in their respective categories. And, more than 50 percent of the company’s revenue is driven by categories where their market share is twice the size of the nearest competitor.

We call that a “wide moat,” as competitors would have to swim quite the distance to storm the Kraft castle.

Right now the numbers for Kraft are: Forward P/E ratio of 13.65, Return on Equity of 9.77%, Revenue of over $54 billion, total cash on the balance sheet of $2.06 billion, debt of $29.56 billion, which is hefty. The stock closed yesterday at $38.00, which is off the 52-week high by only a dollar with short term support at about $36, with back up at $35.50 and inching up – which tells me all I need to know for a quick DITM calls play.

Please see the scorecard page for trading details and if the order is filled, the GTC (good ’til cancelled) order should be set immediately at $1 above the purchase price.

Then grab a good book and poor yourself a large glass of milk and enjoy.

Remember: Life’s a Journey, Enjoy the ride.

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-02-27 – WIN Overnight With FDX! WIN Overnight With FDX! Going for an Overnight Delivery with FDX

The market has been especially nice to us this month. Good trades abound. Wins continue to stack up.

Today I hope to deliver another DIMT win with FedEx Corporation (FDX). Stock prices are up across the board, and finding trades that are not priced too high can be a bit of a challenge. Today is no exception. Timing is right for FedEx, but the options are rather pricey, so we would need to see a big drop in prices to get a fill this morning. If Nails included a put strategy in conjunction with the calls strategy, we could pick up a few winners there too.

I have a bullish attitude, but I do believe that we will see a slight pull back – before the DJIA crosses 13,000 points and stays north of there. However, that is just my gut – and what I see on many stock charts – telling me what to expect. But, we all need to remember, I don’t have a crystal ball, no one does – so anything can happen… and of course, someone will have predicted it first. I’d rather have the DJIA blow right through 13Kpoints and start flirting with 14K real soon.

That would really help our open positions, especially some of those stubborn ones that have been dogging us for a while.

Now back to FedEx.

When it comes to delivery service, FDX is a monster and the stock chart is telling me to buy now. The company’s forward to earnings price ratio (forward P/E) is currently 12.24, with a PEG Ratio of 0.92. Return on Equity is 11.48% and revenue tops out at $41.32 billion. Operating cash flow as compared to debt is looking good, so the company has a nice handle on cash flow management and I’ve never met a FDX employee that didn’t seem happy. They aren’t quite as taken as UPS employees are with their company, but overall I’ve never come across a rude FDX worker. And I am a big fan of FedEx Office – formerly known as Kinko’s. They charge an arm and a leg for copies, but overall – it’s still a better value than printing at home, if you need to print volume.

Right now the options are trading a lot higher than the recommendation, but volume is low. With enough orders in line, we could see some action here, as it’s not out of the range of possibility, but I think it will be a hard one to pull off, but a good deal if we do.

However, do not overpay and go with a good-till-cancelled (GTC) order.

And, don’t forget to place a good ’til cancelled order in for a dollar higher if the order fills, so you can lock in a win at the correct price.

Please check the scorecard page for trading details and if we get in on FDX today, look for another quick shipment of DITM cash.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-02-24 – A Swing & a Miss for WMT

Today I’m looking to once again to add Wal-Mart Stores Inc. (WMT) to the portfolio. Although not a big fan of shopping at Wal-Mart, I’d rather pay five to ten cents more for the same thing at Target (TGT) and save the 45 minutes of standing in line, but the world’s largest retailer has the distinction of being the world’s largest, because many people feel that the five to ten cents makes it worthwhile. I am just glad that investing in Wal-Mart doesn’t require the same line and I can take advantage and make money because other people are willing to stand in line for those incremental savings.

Wal-Mart is a Major League company and they know how to make that cash register ring 24-7 with revenues over $440 billion. Yes folks, that’s right OVER $440,000,000,000 in sales and that is a lot of zeros and closing in on half a trillion dollars. They generate $24.29 billion in operating cash flow and have $7.06 billion in the bank.

The company has a return-on-equity (ROE) of 23.11% and forward price-to-earnings (P/E) ratio of 11.00 and with a rare swing and a miss at quarterly earnings – the stock has tanked over the last couple of days falling four points on a 1.37% miss. I am seeing a typical overreaction to market news that we can take advantage of.

Please see the scorecard for today’s trading details.

If the order is filled, don’t forget to place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Let’s turn Wal-Mart’s swing & a miss – into a hit for the Nails scorecard.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-02-22 – Support for BA and for LKD

Yesterday the Dow Jones Industrial Average topped 13,000 for a brief time – which is very good news for bullish investors. Here at Nails, we are definitely bullish investors – as the Nails strategy works best in a bull market. However, it holds its own in a bear market too, as those of you that have been with us from the beginning can attest. But, it does much better when stock prices are on the rise.

When the market is up – we will see some of our open positions cross the finish line and the wins will be easy, like those that I will post shortly that scored recently: International Paper (IP), Coca-Cola Company (KO) and Verizon Communications (VZ).

However, buying calls within the pricing guidelines established will become harder to do. This is OK. We don’t want to start chasing stocks. Lenny developed a plan of attack that removes emotional decisions from the buying and selling process – so that our all too human emotional brains will not hijack common sense and lead us into making bad decisions.

I was talking last week with long time Nails subscriber, Carl – one of a handful of subscribers who calls me from time to time to make sure I’m going OK and holding up under the stress of Lenny’s current legal issues. He reminded me of Lenny’s pricing guidelines as he has the formula taped to his computer. The formula is as follows:

Stock Price + $1.00 – Strike Price = Option Price we are willing to pay.

Therefore, if we want to buy Boeing – which is today’s recommendation, we add a dollar to yesterday’s closing stock price and subtract the strike price of the option we want, and then arrive at the target price we’d be willing to pay for the option.

To pick the right option – I try to go deep enough in-the-money to cover the 52-week low. However, sometimes, like now – when the market is doing well across most sectors – going that deep in-the-money isn’t needed, if we can find strong support a bit higher. So for today’s recommendation, we will go with a $65.00 strike and not the more favorable $57.50 strike.

Today’s pick – regardless of which strike I choose, will have a hard time making it on base. Most stocks in the Nails basket of winners are looking like good candidates for a sell over a buy. If the strategy incorporated puts, today there could be several put recommendations as most of our recommendations are testing resistance not support.

And, while on the subject of “Support” – coming up, in Lenny’s state case – his attorney is putting together a brief that could use your support. In the brief, we are assembling letters from those that have been impacted by Lenny in a positive way. If you would like to lend your hand to the cause, please write a short letter telling the judge how Lenny has impacted your life and helped you to achieve your investing goals. Send them to me, or send them through the Nails “comment” section here – and I will forward them to his attorney to be used as an exhibit.

Now to today’s pick: Boeing Company (BA) is involved in the design, development, manufacture, sale and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services. Boeing is a major player in the U.S. defense industry and will continue to win both defense and commercial contracts well into the future.

Here are the numbers to note:

Forward P/E Ratio – 13.35, PEG Ratio – 1.28, Return on Equity – 123.99% (which I am sure is a typo), Revenue – $68.74 billion, total cash – $11.22 billion, debt – $12.37 billion and operating income is posted at $4.02 billion.

Please check the stat book page for trading details.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-02-17 – Motion Controls for a PH Win

Today’s pick is one I has been recommended many times, although not for a while – Parker Hannifin (PH); maker of motion and control components and one of Lenny’s favorite companies to recommend. Motion-control equipment made by Parker Hannifin helped sink a replica of the Titanic in the Academy Award-winning film. The company has operations in about 40 states and almost 50 foreign countries. They have approximately 12,000 distributors worldwide and employ about 58,000.

The company has strong operational cash flow and is focusing on maintaining a long standing dividend payout to stockholders. The company now has 248 consecutive quarterly dividends and recently increased their dividend payout by 5.41% for a dividend yield of 1.89%. PH has increased its annual dividends paid to shareholders for 54 consecutive years, among the top five longest-running dividend-increase records in the S&P 500 Index.

With sales reported at $12.99 billion annually, Parker Hannifin is the world’s leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of mobile, industrial and aerospace markets.

The stock ended up at $89.26 at the close yesterday, and has been steadily moving up since October. Shares will soon test the 52-week high of $99.40. Their forward price-to-earnings ratio currently sits at 11.50. Most company’s trade with a forward PE of 15-25, I consider anything under 15 to be undervalued by the operators on Wall Street.

Operating cash flow is healthy at $1.32 billion as compared to sales, however – debt is comparable to cash flow, as it currently sits at $1.74 billion.

Please check the scorecard page for trading details and when the order is filled, remember to immediately set a good-till-cancel (GTC) sell order $1.00 above the purchase price to lock in a win at the target price.

Open interest in these options today are light – so it will be a challenge to get a fill today.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-02-15 – Head to the Bank with BAC

Over the last few weeks, we have been able to get on base with several recommendations. This happens when the overall long term outlook of the Wall Street operators being more bearish than bullish. With the major indexes all posting 52-week highs and testing resistance levels.

I am going back to Lenny’s New Years recommendation: Bank of America (BAC).

The company provides unmatched convenience in the United States, serving approximately

53 million consumer and small business relationships with more than 5,900 retail banking offices, nearly 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries.

You know the old saying, “why fix it – if it isn’t broke.” That being said, Bank of America is once again a good buy. The stock closed yesterday at $7.98 which is cheaper than most options that are recommended. Lenny had me go with BAC with the first column of the New Year and we scored a win in just 15 days, Today’s recommendation looks to be another quick score.

Please see the stat book page for the specific trading details for today’s recommendation.

Always remember: Life is a journey, enjoy the ride!

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-02-13 – Go Bog with PFE

Pfizer is a New York based company with a market cap of $161.81 billion and a current dividend yield of approximately 4.2%. The stock chart is telling me the timing is right for a buy. There is short term support at $20 and additional support around $19 for the rebuy strategy. The stock closed Friday at $21.05. The 52-week high mark is $22.17.

Pfizer is a solid company and the January 2013 options are really cheap. Buying now means we are buying at a sharp discount and it will be easy to get in on the day’s recommendation.

Here are the stats to make note of:

Please see the scorecard for trading details.

If the position fills today, I will immediately place a GTC limit order to sell the options at a point higher. This locks in a win of $1000 for the 10 contracts I am recommending today.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-02-10 – Looking for a TKO with KO

Today is Lenny’s birthday, so if anyone would like to say hi and wish the boss a happy day – please send your well wishes through the leave comments section of the site. He does get a copy of ALL the comments – directly into his email, so fire away. He’s been a bit cranky and out of sorts of late, and he could use the reminder that there are a few folks out there still who think highly of him and want to wish him well.

Now, to work…

With all the indexes posting 52-weeks highs it’s always a challenge to find a stock that is has all indicators pointing to a buy opportunity – and then is priced right to get it. We don’t want to overpay and we don’t especially like buying at the high mark, when selling at the high mark is oh so much better.

In spite of the nice roll the market has been on over the last few months, we did in fact still have a couple positions hit rebuy prices this week. In addition, we also posted a win with ConocoPhillips (COP). Look for the update stat book later today.

On Monday, I tried to get on base with Coca-Cola Company (KO), but the position wasn’t filled. Today, KO still looks like it could give a quick knock-out win, so once again, Coke is it!

KO is one of the favorites to the DITM strategy here at Nails and when it looks good – we need to do what we can to let it win for us. On Monday I recommended the January 2013 $62.50 calls, and today – in order to get the right price – I am going to recommend we go just a bit deeper in-the-money and try today with the January 2013 $60.00’s instead.

What Lenny and I love most about this stock is that it truly is recession-proof. With all the recent market turmoil, Coca-Cola continues to pay out generous dividends and has even increased its investor payout by 8% over the last 5 years. Additionally, if you check out the company’s stock chart and compare it to many others, yes – they have had their share of ups and downs, but – while everyone else is still smarting from the last pull back- KO didn’t plunge as far and recently posted a new 52-week high (September 8, 2011). This alone is an excellent sign of health and I’ll drink to that! The Coke brand historically transcends national, political and social barriers.

Right now the numbers for Coca-Cola are as follows: Forward P/E ratio of 15.14, Return on Equity of 41.31%, Revenue at $46.00 billion, total cash on the balance sheet of $16.50 billion, debt of $29.19 billion, and operating cash of $9.11 billion. The stock closed yesterday at $67.97, which is off the 52-week high by about 5% with short term support still trending a bit higher and now around $66.00 and further support at $65.00 which gives me two levels of short term support.

Still can’t beat the feeling. Life tastes good.

Remember: Life’s a Journey, Enjoy the ride.

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-02-08 – I’m Going to Disneyland

Yesterday – today’s pick posted better than expected earnings – and the stock did well for the trading day. However, there is news that aftermarket trading saw a drop in share price – which could provide an opportunity for a good buy this morning.

According to an AP article posted online –

“Disney’s movie studio revenue fell because it released fewer big films than in past years, in an effort to avoid write-downs on money-losers. Disney released “The Muppets” in the most recent holiday quarter, versus “Tangled” and “Tron: Legacy” a year ago. It also experienced a dip in sales of DVDs.

Interactive media revenue declined, too, as the company moved away from expensive console games and focused on cheaper-to-make social games. Iger said he believes the segment will finally turn a profit in the company’s 2013 fiscal year.

Revenue at the company’s parks and resorts division grew, thanks to higher spending and attendance at domestic theme parks, and the opening of Toy Story Land at Hong Kong Disneyland in November. Consumer products revenue grew.”

Currently the stock chart is looking good and the earnings announcement should help. However, timing for the buy is less than perfect, but about the same as other recommendation I was considering for the day. Disney Company stats are as follows: Revenue comes in at $40.89 billion; Forward P/E is 12.27 and the PEG Ratio is 1.11 (nice); Return on Equity is 13.35%; total cash is $3.18 billion; operating cash flow is $6.99 billion and debt is a bit more than twice that at $14.26 billion.

Remember: Life is a Journey; enjoy the ride! (Especially the “E” ticket rides).

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-02-06 – Grab a Coke & A Smile

Today the calendar is quite full, so without a lot of preamble – I’ll get right to today’s pick.

Coke is it! Once again, I will try again to score another hit with the Coca-Cola Company (KO), one of the favorites to the DITM strategy here at Nails. We scored a quick win about a month ago with KO by watching the charts for timing, so let’s do it again. And, while we’re at it, let’s go out on a limb and buy in advance of earnings – because the stock chart is looking good. If you are highly risk adverse – then sit this one out – or wait for Wednesday.

What Lenny and I love most about this stock is that it truly is recession-proof. With all the recent market turmoil, Coca-Cola continues to pay out generous dividends and has even increased its investor payout by 8% over the last 5 years. Additionally, if you check out the company’s stock chart and compare it to many others, yes – they have had their share of ups and downs, but – while everyone else is still smarting from the last pull back- KO didn’t plunge as far and recently posted a new 52-week high (September 8, 2011). This alone is an excellent sign of health and I’ll drink to that! The Coke brand historically transcends national, political and social barriers.

Right now the numbers for Coca-Cola are as follows: Forward P/E ratio of 12.52, Return on Equity of 41.31%, Revenue at $46.00 billion, total cash on the balance sheet of $16.50 billion, debt of $29.19 billion, and operating cash of $9.11 billion. The stock closed yesterday at $68.08, which is off the 52-week high by about 6% with short term support still trending a bit higher and now around $66.00 and further support at $65.00 which gives me two levels of short term support.

Please check out the scorecard page for today’s trading details and remember to place a GTC sell order to lock in a win if your order is filled.

Can’t beat the feeling. Life tastes good.

Remember: Life’s a Journey, Enjoy the ride.

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-02-03 – Print a

In the last week, it’s been rather easy to get on the board with each recommendation. Picks for January 23, 25, 27, 30 and February 1 are now posting on the scorecard. When the market is doing relatively smooth trending with no large swings in either direction, then long term option prices have a tendency to stabilize and move more in tandem with the stock price.

Back from August to mid-December, when market swings could make even a seasoned sailor get a little seasick, option prices remained high as compared to the underlying stock position and it was hard to keep the pricing strategy in place with such resistance. Now, when the market seems to be smoothly gaining momentum, we have long term options growing soft.

I see it as a nice little private sale on all my favorites. However, it could mean the trend long term will soon make a turn, and stop trending up. Yes, I do believe we will see a bit of prices falling in the next couple of months, but right now – most stock charts show more room still in the upward trend. I don’t think we have seen the peak.

However, I don’t possess a crystal ball, so I can only estimate what will happen based on studying previous trending patterns. By looking at what has happened, we put our faith in methods that have been successful before.

On Wednesday, when I recommended Eli Lilly and Company (LLY) – I told you of the process I go through to find good selections. Today’s pick is another following the same method. Find a stock that posted a nice upside surprise, then check the stock chart for trending patterns and timing, then I check the financial metrics.

Today’s pick is one of my favorites – paper and packaging company, International Paper Co. (IP).

Back in May of last year, the company posted a 52-week high of $33.01. We have seen it drop down to $21.55 at the beginning of October. Since the low mark, we see that it has marched right back up and soon will be challenging the 52-week high. When there are a lot of stocks testing resistance at the top, it can be challenging to find one that shows nice upward potential. With IP, I find this to be a good buy opportunity.

Interest in the option now is doing much better than the last time it was recommended. With earnings yesterday, there was a nice jump in price. The stock share price increased about fifty cents and the January 2013 options jumped by sixty cents (comparing the stock price & option price over the last four days, which was the last time the option traded). Even so, there is room with today’s recommended price, as there has been over the last week, so hold firm to the price posted to the score card page – and you should see a fill. And perhaps you’ll see a fill for a dime or two less.

Please see the scorecard for today’s trading details and remember to post a GTC (good till cancelled) order at $1.00 higher than the purchase price to lock in a win.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-02-01 – Relieve Stress with LLY

Today I am going with another recommendation in the pharmaceutical sector. This company too is in Lenny’s basket of solid plays and looks good today for several reasons. First off, I checked Yahoo! Finance for companies that have just announced earnings and posted an upside surprise by beating Wall Street estimates. Then I checked the stock chart to see if how the stock is trending. I look at the current stock price as compared to the 21-day, 50-day, and 200-day moving averages. I also look at the Slow Stochastic chart for timing. Then I move to the value metrics, checking the P/E ratio, debt ratio, return on equity and so forth.

All these tell me that today’s pick – Eli Lilly & Company (LLY) is a very nice choice.

LLY has been in business since 1876 employing nearly 40,000 and is based in Indianapolis, Indiana. They manufacture drugs that treat a wide variety of chemical disorders such as schizophrenia, bipolar disorder, bulimia nervosa, and ADHD among others. They also make several cancer and cardiovascular drugs as well, helping the medical profession treat a wide variety of conditions.

The stock closed Friday at $39.96. Their financials are solid with and a forward price-to-earnings ratio of 10.68, return on equity of 33.93%, revenue of $24.43 billion, total cash in the bank of $6.80 billion, operating cash flow of $7.52 billion and debt very close to that at $7.08 billion.

Please see the scorecard for trading details and note that the option price for this pick is well below the recommendation – so check to see where the options have opened this morning and bid low if you’re in the mood for saving money.

I see another very nice a healthy “W” in our future.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.
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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-01-30 – A Healthy Win with JNJ

Once again I am reaching back into the basket of solid stocks and selecting one that has a strong ability to provide a bounce and a quick win for my DITM calls system – Johnson & Johnson (JNJ). Right now it’s a good time to stock up on options that provide value.

Johnson and Johnson stock closed Friday at $65.56. Their financials are the definition of “healthy” with and undervalued forward price-to-earnings ratio of 12.01, return on equity of 16.38%, revenue of $65.03 billion, total cash in the bank of $30.93 billion, and debt comfortably less than that at $18.36 billion.

Please see the scorecard for trading details and note that the option price for this pick is below the recommendation – so check to see where the option have opened and bit low if you’re in the mood for saving money.

I see a very nice an healthy “W” in our future.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

2012-01-27 – Ring Up a Win with VZ

Before I made this morning’s pick I went through the current portfolio to see how we are doing with things. There were a couple of wins to be added to the scorecard as both Coca-Cola Company (KO) and 3M (MMM) crossed the finish line and add to the bottom line. Two more wins for Nails. It’s especially sweet to see one of our stubborn rolled positions make it to the end of the race.

Of the three positions that were rolled that still remain on the list of open positions, Staples, Inc (SPLS) looks as though we will be able to see that one come through the quickest and without too much rebuying to make it happen. That is, as long as the market continues to track as it has been. Both Corning Inc.(GLW) and Suntech Power Holdings (STP) are going to need significant rebuys to help them win. I am going to recommend that we consider rebuying aggressively (as long as we keep hitting the wins) to pull these out of the hopeless column and move them into the win column.

Today I am looking to add Verizon Communications Inc. (VZ) to the portfolio.

The stock chart is showing a drop in share price in line with their earnings announcement earlier this week. The company missed earnings expectations by a narrow margin and the stock is showing the effects. The lowered share price will give us the opportunity to score quickly with this recommendation as the long term options are trading lower then recommended.

Verizon is headquartered in New York and is the second largest US telecommunications services provider (after AT&T) and has taken the top spot in wireless services (this time, ahead of AT&T).

However all in all, the numbers don’t lie – Verizon has revenue of $108.83 billion; a forward P/E of 13.42; operating cash flow of $29.43 billion; total cash on hand of $3.84 billion; making Verizon a very solid play, while the chart for the stock tells me it is a really good time to buy. There is a nice support level around $35-ish.

This feels like a quick win for Lenny’s DITM calls strategy. Lock and Load!!

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-01-25 – Fill UP with COP

Monday morning was a good one. The detective who handled Lenny’s case filed all the proper paperwork to have my computers released and yesterday afternoon I made a visit to LAPD and picked them ALL up. Yay!

So far – I’ve plugged in my laptop only, my Sony Vaio with the Intel i7 processor, Windows 7 and programs that work. Ah, it was like I could hear the angels singing the Hallelujah chorus for me as I booted it up and saw that everything is there and it works (I had heard rumors that they scrub the hard drives at the very least and to possibly expect bits and pieces ). I am very happy to say that wasn’t the case. Later today, Lenny will be allowed to pick up his things too.

Yesterday was a lovely day… a long day – but lovely.

Today, in honor of having my things back – that make my work so much easier, I would have just loved to recommend Intel Corporation (INTC) or Microsoft Corporation (MSFT). But, their stock charts are telling me I’ll have to wait on those two. The timing isn’t right for particular favorites. To pick consistent winners, it’s necessary to go with the choice that makes sense technically, not emotionally.

Therefore, today I am going back to the well with ConocoPhillips (COP).

Conoco has a brand associated with the highest quality fuel. People pay more for Conoco, and I’ve had mechanics tell me to only use Conoco gas in my autos. They trust this product over the rest of them.

And, you’ve all heard about the marble bathrooms and high end brands from previous articles, so you will know that Lenny owned and operated a high end Conoco gas station, with the cleanest public bathrooms you could possibly find at a gas station. But it is the stock chart that tells me today is a good time to make a purchase of COP. The charts along with the key stats I watch – all tell me this is a solid play for today. With Lenny’s DITM calls strategy, timing is key.

This morning COP released earnings and reported better than Wall Street estimates. So if you plan to buy this morning, get your bid in early.

Revenue for COP comes in at $226.67 billion, yeah, that’s all; Forward P/E is 8.56; Return on Equity is 16.36%; total cash is $6.03 billion; operating cash flow is $20.02 billion and debt is just a bit high at $27.64 billion, but they could kill it with less than two years of operational cash flow. Not bad considering scale and scope of the company.

Please check the stat book scorecard for today’s trading details.

Remember: Life is a Journey; enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-01-23 – Clean Up Again with PG

This afternoon – Lenny will be appearing on a radio show in LA – called TailGate with host Kato Kaelin. With Lenny anything could happen – so if you want an hour or two of prime entertainment – it looks like the show airs as a podcast or you can listen online. Lenny knows Kato from years ago and says he’s not quite the idiot the media makes him out to be. I for one think the jury might be out on that one still, but since the media tends to crucify the boss with particular fervor, I’ll have to keep an open mind.

If you look for the show and don’t find it, I’ll get details from Lenny and send them to you. Just let me know you’d like to tune in.

Today I am looking to add Proctor & Gamble Co. (PG) to the scorecard once again.

Revenues are posted at $84.35 billion, $12.95 billion in operating cash flow and $3.58 billion in cash or equivalents on the balance sheet. Debt is more than twice operational cash flow, it comes in $33.85 billion, but the company is such a staple of consumable supplies and they’ve been around since 1837 and I don’t plan to stop showering or shaving anytime soon.

The company has a return-on-equity (ROE) of 18.23% and forward price-to-earnings (P/E) ratio of 14.56. But, once again – it’s the stock chart I like today. It is telling me to buy along with the excellent option price. I do like it when that happens. For the most part, P&G’s chart is a bit dull, prices seem to stay rather stable and stay within a nice tight trading range. Right now the stock is trading at $66.23 which was Friday’s close, and with the system, we don’t need a large pop to take us over the top. I see P&G trending a bit higher in the coming months, and that will score us another DITM win.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-01-20 – Run FRX Run

Today Lenny is in court once again as his sentencing hearing is scheduled for 8:30 am. Earlier this week, his attorney submitted a motion to the court for an extension on sentencing and the DA did not oppose, and the judge has already agreed to the extension – so, it will be just a day to show up and get a new sentencing date. The judge agreed to give Lenny another month, but his attorney will argue and ask for three months as per the agreement they made with the DA when Lenny accepted the plea bargain back in October.

I was in court with Lenny on Wednesday on another matter and that too was continued for another day. It seems like the most popular business before the court is to just ask for more time. Judges spend more time giving extensions for time over anything else – so, I am not sure how anything ever gets through the system. The wheels of justice move glacially slow and such aggravating slowness is not good for those prone to anxiety or hypertension.

For this morning’s recommendation, we have a cure for that anxiety or hypertension, as I found today’s pick in Yahoo Finance’s investing tools – by checking out what stocks have had recent upside surprises with the release of earnings. So, I am going back to a company that has won for several times before: Forest Laboratories Inc. (FRX).

There are a number of statistics that jump off the page when looking at Forest Laboratories. The P/E ratio is a bit high but by beating the number and being a consistent solid play – I see this as a good selection this morning. The fact that they have zero debt is also a great sign in my book. It also has plenty of institutional support at 97.00%. They have $2.20 billion in cash and NO debt. Overall, the stats on this company tell me again and again that this continues to be a solid pick.
Trading the same companies over and over again as the technical indicators point to the correct buy and sell numbers is the best way to make money trading my DITM picks. It removes all the emotional factors that can lead an investor to trouble. One of my rules is to never get attached to a trade or a company. Only be attached to the numbers.

Please check the Stat Book page for the specifics of today’s recommendation. However, please check the formula before you buy and if the market opens significantly lower than yesterday’s close – recalculate your buy in. Remember, the stock price plus a dollar, less the strike price should be your premium price for the option. Don’t overspend if you don’t have to.

Always remember: Life is a journey, enjoy the ride!

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-01-18 – Here Come The COP

Today is a court day for Lenny – which requires some prep time for yours truly and the boss. So I’ll get right to it and go back to the well with ConocoPhillips(COP).

As a previous owner of a Conoco gas station with a high end convenience store, Lenny can speak with experience to know that margins for the retail owner of a gas station are really small, so you have to have an edge. We did that with a marble appointed c-store and power washed and painted around the pumps daily. So with an ARCO and SAM’s Club on opposite corners, Lenny’s kept his store busy, because clean sells better than smelly and he could bump the margins up and charge $0.10 more for each grade of gas and diesel, and still have customers return with each fill up.

However, you’ve all heard about the marble bathrooms and high end brands from previous articles. You also know it is the stock chart that tells me today is a good time to make a purchase of COP. The charts along with the key stats I watch – all tell me this is a solid play for today.

Revenue for COP comes in at $226.67 billion, yeah, that’s all; Forward P/E is 8.46; Return on Equity is 16.36%; total cash is $6.03 billion; operating cash flow is $20.02 billion and debt is just a bit high at $27.64 billion, but they could kill it with less than two years of operational cash flow. Not bad considering scale and scope of the company.

Please check the stat book scorecard for today’s trading details.

Remember: Life is a Journey; enjoy the ride!

APRIL 15^th REMINDER: Don’t forget to file your taxes or apply for an extension, and remember if you owe tax – an extension doesn’t get you out of it. Pay what you owe now to avoid penalties and interest, if you can.

Note: I held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-01-13 – Good Luck on Friday the 13th with KO

In shopping this morning for today’s pick – I read a couple interesting stories by linking off the main Yahoo! Finance page. Apparently there was a near riot in China as the Apple Store announced that it would not be selling the iPhone 4S yesterday. People in the crowd egged the store, which strikes me as a bit funny – because who camps all night in front of a store and comes prepared with eggs to throw – if they are not satisfied? And, another story I read was about Lenny’s favorite investment guru – the Oracle of Omaha himself – Warren Buffett.

Some big name companies are getting ready to rock the stock charts with their earnings reports, of which several belong to Buffett.

Which lead me to today’s recommendation as I open the fridge and virtually pour myself a diet coke with lots of ice and recommend a great choice along with it and all the metrics that are lined up for a nice win. Coke is it!

We scored with Coke last month so today I will try again to score another hit with the Coca-Cola Company (KO), one of Warren Buffet’s favorites and a favorite to the DITM strategy here at Nails as well. We scored a quick win with KO last month by watching the charts for timing, so let’s do it again.

What Lenny and I love most about this stock is that it truly is recession-proof. With all the recent market turmoil, Coca-Cola continues to pay out generous dividends and has even increased its investor payout by 8% over the last 5 years. Additionally, if you check out the company’s stock chart and compare it to many others, yes – they have had their share of ups and downs, but – while everyone else is still smarting from the last pull back- KO didn’t plunge as far and recently posted a new 52-week high (September 8, 2011). This alone is an excellent sign of health and I’ll drink to that! The Coke brand historically transcends national, political and social barriers.

Right now the numbers for Coca-Cola are as follows: Forward P/E ratio of 16.40, Return on Equity of 41.31%, Revenue at $46.00 billion, total cash on the balance sheet of $16.50 billion, debt of $29.19 billion, and operating cash of $9.11 billion. The stock closed yesterday at $67.23, which is off the 52-week high by about 5% with short term support still trending a bit higher and now around $66.00 and further support at $65.00 which gives me two levels of short term support.

Can’t beat the feeling. Life tastes good.

Remember: Life’s a Journey, Enjoy the ride.

Note: Dykstra held no positions in any of the stocks mentioned in this column at the time of publication.

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2012-01-11 – Taking a Swing at BMY

The market has been rather tame since the switch of the calendar, without too many super high or super low days. This makes for a smoothing out of options prices where they will finally catch up to their stock partners and start to trade more in tandem with them. This happens because the volume of options traded decreases when the stock market is experiencing broad ups and downs.

In looking for a stock with excellent upside potential, a fair option price, and the right metrics for a buy – I found that once again, delving into a put now and again wouldn’t be a bad choice. If anyone trades puts – look today to pick up Intel (INTC) or Microsoft Corp. (MSFT).

Although those would make great put recommendations, here at Nails, the strategy is about Deep-In-The-Money Calls, not puts.

Today’s recommendation was a tough selection. It was hard to find a choice that truly made me happy on all fronts.

I am going with pharmaceutical giant Bristol-Myers Squibb Co. (BMY). Bristol Myers is a New York based company with a market cap of $58.66 billion and a current dividend yield of approximately 5%. In looking at the stock chart, I see a recent pull back – but to be honest, it looks as though it will come down a bit more, before going back up. Normally, this would indicate that we should wait for the bottom, however with earnings coming out on the 26th, I see some upside potential in the next couple weeks, in advance of earning.

BMY is a solid choice on any given day. It has been a core money maker for investors for many years. It doesn’t turn out mega returns, but it remains consistent over time. Today I like the stability factor. Plus the options are cheap and we can’t score a win if we can’t get on base.

Here are the stats to make note of:
Revenue: $20.90 billion
Forward P/E: 17.10
Return on Equity: 30.17%
Total Cash: $8.19 billion
Total Debt: $5.62 billion
Operating Cash Flow: $4.87 billion
Institutional Support: 68.50%

If the position fills today, immediately place a GTC limit order to sell the options at a point higher. This locks in a win of $1000 per 10 contracts held, which is the goal.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.
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At the time of publication, Mr. Dykstra will not, directly or indirectly, have a position in any security that he discusses in Nails Investments by Lenny “Nails” Dykstra (the”Product”). HOWEVER, MR. DYKSTRA MAY ENTER ORDERS TO PURCHASE OR SELL SECURITIES MENTIONED IN THE PRODUCT AFTER 10:30 A.M. ON THE TRADING DAY FOLLOWING THE DATE ON WHICH THE SECURITY IS MENTIONED IN THE PRODUCT. IF YOU ENTER ORDERS TO BUY OR SELL SECURITIES AFTER 10:30 A.M., IT IS POSSIBLE THAT MR. DYKSTRA MAY HAVE PURCHASED OR SOLD THE SECURITY AT A PRICE MORE ADVANTAGEOUS THAN THE PRICE YOU WILL OBTAIN.

2012-01-09 – Stocking up with Target!

The market is supposed to open up this morning, so look for improvements in your current positions, but don’t chase this morning’s recommendation if it is just out of range. In looking for a choice with plenty of upside potential, and one that has a better chance to fill than the recommendation did on Friday. So today I am going shopping with my pick. I will get quality merchandise (for the most part) and name brand choices, all for a nice price.

When it comes to shopping at a discount store, I’ll take this one – Target Corp. (TGT).

Target has cleaner stores than Wal-Mart, more name brands I trust, and I don’t have to wait 45 minutes in line each time I show up. Sure, Wal-Mart prices its merchandise a cent or two lower, but in my opinion, it is worth the extra pennies – for the difference in shopping experience and time saved.

This is a good selection, as the numbers don’t lie. Revenue comes in at $69.24 billion, cash in the bank sits at $821 million and operational cash flow is measured to be $5.39 billion with total debt about four times cash flow. The debt ratio isn’t stellar and certainly not anything to bet the ranch on, but good for a solid recommendation at a good price.

Right now the price is right. While most other choices are looking at new 52-week highs, Target’s share price has dropped down to near the 52-week low mark, giving it lots of upside potential, with a Forward P/E of 11.36, a PEG ratio of 0.97, and Return on Equity of 19.79%.

The price for this option is just a dime north of what I am willing to pay, so it is a strong possibility for a fill today, but not a lock. Please don’t chase it, it’s not worth doing.

If filled, don’t forget that I will immediately place a good-till-cancel (GTC) sell order $1.00 higher than the fill price in order to grab a $1,000 victory as soon as possible.

Always remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in the stocks mentioned.

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2012-01-06 – Is it safe to back into the water?

The market has been good to my DITM calls strategy. We have converted four open positions into wins in just the last week. Cha-ching! However, when the market has more stocks posting high numbers, it becomes more difficult to find stocks that have the option prices we want when the metrics say buy. When people are feeling optimistic, they will pay more for long term options.

For that reason, today pick is going to be a difficult one to bag at the price recommended but I am doing this one for Mike who has this in his portfolio and would like to see some rebuy guidance. Plus, if we could get a fill on this – it really has way more upside potential then other possible recommendations I researched this morning.

I have had several readers question me on the prices I am willing to pay, and the short answer is that I have a formula I use and I stick with it because it works. If I let my emotional side kick in and buy because I like a stock, I might make my decisions on the wrong criteria. When you do that, you set yourself up to becoming an emotional trader. That isn’t something you can do and remain successful. Human nature kicks in and you start selling low and buying high. We want to make money so we try to buy low and sell high – or high enough to take our profits and keep the hits rounding the bases for a score.

When buying long term options, the prices that are quoted do not always mean the options will trade today at that price. Many of the options I select are loosely traded and the volume of options moving around isn’t very high, so the price you may see on Yahoo! or Google might not be the price you should pay. So, as I have said, I have my formula and stick to it.

However, because I am going all the way out to 2014 with this, I am willing to pay a bit more than I would for the 2013 positions. That price is reflected on the scorecard page with today’s trading details.

If I get a fill, great – we will all be happy, but if I don’t – then we move on and will look elsewhere for a buy.

Today I am looking at Transocean (RIG).

The company operates contract drilling services for oil and gas worldwide, with an emphasis in deep water and harsh environment drilling. They own and operate about 140 mobile offshore drilling units – minus one now after the BP disaster.

RIG shares came in with news of the gulf oil spill as shares fell more than 50% from trading in the $90’s down to the $40’s where it is now currently residing. It looked like it was going to march right back, as news of its liability was minimal. However, that wasn’t the case and shares are now down, closing yesterday at $39.73. This makes RIG still a good value with its Forward price-to-earnings ratio of 12.47.

Transocean also has a very nice 8.2 percent dividend payout and has tremendous upside potential as it is highly undervalued.

Please check the stat book page for today’s trading details and if the order is filled, a good-till-cancel (GTC) sell order needs to be set $1.00 above the purchase price for a quick win.

Remember: Life’s a Journey, Enjoy the ride.

(At the time of publication, Dykstra had no positions in the stock mentioned.)

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2012-01-04 – First Pick of 2012

Good Morning Nails Team & Happy New Year!

Well we have started off 2012 nicely – as I will need to post several wins with yesterday’s market gains. And with this morning’s opener expected to send prices down a bit, today we should be able to get on base with the day’s recommendation.

As you all know, from article postings here at Nails – Lenny has turned the Nails website and maintenance over to my care, leaving him as back up for when I need it. However, today’s pick is his. He was doing his own research over the week end and sent me the recommendation for the day and a very nice way to start the New Year.

And, before we get to the pick – my New Year’s Resolution for Nails is to make every pick a winner and make sure every subscriber is successful. Therefore, please send me your suggestions that would help make that possible for you.

And, now – let’s get the year started, Lenny’s recommendation for today is Bank of America (BAC).

The company provides unmatched convenience in the United States, serving approximately 53 million consumer and small business relationships with more than 5,900 retail banking offices, nearly 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries.

You know the old saying, “why fix it – if it isn’t broke.” That being said, Bank of America is once again a good buy down here. The stock closed yesterday at an unbelievable $5.80 which is cheaper than most options I recommend. The last time I picked BAC it was in the $14.00 range, and before that it was trading close to $40.00. At today’s price, it has only one direction it can go – up.

Please see the stat book page for the specific trading details for today’s recommendation.

Always remember: Life is a journey, enjoy the ride!

Mr. Dykstra is not registered as a securities broker-dealer or an investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Nails on the Numbers contains Mr. Dykstra’s own opinions and is provided for informational purposes only. You should not rely solely upon Nails on the Numbers for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained herein constitutes, or is intended to constitute a recommendation by Lenny Dykstra of any particular security or trading strategy or a determination by Lenny Dykstra or Nails Investments that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

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