One thing I like about the recent turn of events in financials is the bargain you can find right now. There are some you want to stay away from of course but the bigger players are worth taking a look at. Companies like Bank of America(BAC) and Wells Fargo(WFC) are large enough to weather the really bad storms while others just may sink under the weight of their own debts.

Wells Fargo (whom I happen work for) is at a 52 week low at $23.23 in intraday trading. Two years ago, the stock split from the $70’s which dropped the price down to $36 roughly and since most financials trade in tandem, the stock is experiencing the same downgrades and downtrends others are. Does this spell doom for the company? Of course not. What’s happening is an overreaction by the market to the housing and credit crises currently going on and really, it’s overdue.

For a long time after the Silicon Valley bubble burst, everyone was looking for the next boom. In technology, the “web 2.0″ explosion could be seen as a kind of bubble, but VCs aren’t investing in phantom businesses anymore. Housing, it seems became the next bubble. Even as businesses in Silicon Valley began to fold, housing prices continued to rise. In some places (like where I live) prices still seem to have been unaffected. The mean price for a house in my area is $580k for a 2 bedroom 1 bath, 1200 sq ft. single story house. Add on another story and another $100k.

Wells Fargo, in its wisdom had only minor exposure to the sub-prime market that has taken out behemoths like Bear-Stearns. However, since these sector stocks all trade together, earnings can only play into a portion of the outlook. You have to dig deeper than earnings to understand why you might want to invest your money here.

WFC is looking at 13% growth through 2009 and a current PE of only 10. If you base your position on earnings alone, this stock should be at $60. That’s nearly triple the price currently. I try to look at an 18 month timeline because downtrends like this can take time to recover especially in this kind of market. I like the potential here and given enough interest (average volume is near 50k shares over a 10 day period) it could turn into a major momentum play.

Comparing this to Bank of America Corp. which according to earnings estimates over 2009 has 48% growth and also a current PE of 10. and you get some pretty unrealistic numbers for price targets. Based on earnings alone over next year, the mark is $170 a share. This leads me to believe most analysts are overestimating BACs profit potential and this stock hasn’t been over $55 in the last 3 years.

Taking that into consideration, sure, you could bank a double off BAC. They’re both about the same price and they both have as much potential to double or triple in value from here, but pick one or the other. You don’t want your portfolio to be overweight in any one sector.

I put 40% of my 401k each month into WFC and my company matches dollar for dollar so not only do I get the stock cheap, I get half of it for free. You can’t beat that!

Conexant(CNXT) stock split today 1 for 10 which is a reverse split. For every 10 shares you owned you now own 1. Typically this helps a company’s stock get out of the quagmire it seems to be stuck in because it has a higher perceived value. Bluefly(BFLY) did this recently and it seems to have helped stabilize the price.

I’ve had Conexant stock since 2006 when it was around 3.20. Comparitively, that buy price now becomes $32 due to the reverse split.

The good news here is a reverse split essentially removes shares from the market making the float smaller and again, giving the appearance of a more valuable stock because they supply becomes more limited.

Going forward, I’d like to see this recover to previous levels but the semiconductor industry has been suffering along with the rest of the economy. There also won’t be any earnings announcements soon so price action for this stock is going to be solely based on momentum, which is fine as long as the momentum stays. I also don’t think this stock is going to be shorted anytime soon because there won’t be any shares to borrow.

I own stock in Conexant and Bluefly. 

The big news for Quiksilver is that Kohl’s has agreed to be the sole retailer of the Hang Ten brand (which you might remember from the 80s). Quiksilver will be designing the new brand aimed at a younger audience and will launch in the spring of 2009 in over 240 stores.

Quiksilver has a growth rate of 13% over the next year. Q1 and Q2 were both profitable for the company, earning $.16 cents and $.29 cents per share respectively. This new contract bodes well for the company and you could see this stock double over the next 18 months as a result. Summer is always good for the company as it makes a lot of surf/skate/snowboard gear and clothing and most recently had sold off the floundering Rossignol brand it had purchased last year.

I like the new direction of the company and I’m long on the stock.

I own shares of ZQK.

The talks were scheduled on the 18th led by Vice Minister of Environmental Planning and Administration, Ing. Merly Garcia and assisted by legal advisor Dra. Lucy Vidal.

Should the result of these talks prove successful and the mine is allowed to open, it could mean huge revenues for the company and a boon for the stock. I don’t like to recommend many speculative plays but seeing how commodities have been hot lately, this may be happening at just the right time for Crystallex. Prudent buyers could see a lot of profit on this trade as it gains momentum into the good news.

Disclaimer: I’ve been holding positions in this stock since it was in the $4 range and bought more during the recent decline. Previously I profited on the stock as it bounced from $2 to $6 on rumors the mine would soon open. That hasn’t been the case so far so this is definitely a speculation. my last purchase of KRY was 600 shares at .94 cents. I’ll be looking to unload my entire position(831 shares) around $5-$6. 

Covestor is a site that allows you to show others the trades you make from your portfolio. This is a cool way to not only keep your public informed of what you are doing but also to be accountable and to have an audit trail of your trades.

One of the things you can really never know about someone is whether they are lying about how much money they make from this or that. I’ve always been truthful on this blog about my trades because without credibility I’d be nothing. Furthermore, it’s important to understand that not all trades make you money. Ideally, yes they do, but it doesn’t always happen that way.

By using Covestor and linking it to your brokerage account, you can show the world your trades in and out of stocks and compare your profit/loss to other indices like the S&P 500. It’s totally free, so sign up today at http://www.covestor.com

I bought 300 shares of AMD yesterday in anticipation of this announcement, but also because I think the company has a lot of upside. After all, this goes along with my bottom fishing description of beat up companies that deserve better.

From BusinessWire:

AMD (AMD, Trade ) today announced ATI XGP(TM) (External Graphics Platform) Technology, a new external PCI Express(R) (PCIe) 2.0 graphics platform, designed to deliver enthusiast-class desktop graphic performance and true multimedia upgradeability to notebooks(1). ATI XGP is an exclusive technology that capitalizes on PCIe 2.0 to deliver enthusiast-class graphics via a connected cable to an externally powered and cooled device. This unique innovation delivers up to 4.0 Gbyte/s in each direction in bandwidth communication between the notebook and external graphics, whereas previous consumer level external solutions were limited in graphics bandwidth(2). ATI XGP is fully optimized for new AMD Turion(TM) X2 Ultra notebook platforms, also announced today.

I think what investors have been waiting for is for AMD to make sense of their acquisition of ATI last year, which I think we are now seeing.

The company can now offer a nearly all in one solution with their processors and graphics chips now and compete at a higher level in the marketplace.

Shares of AMD jumped 6% in morning trading.

I own shares of AMD

I also took down another 300 shares of American Micro Devices (AMD) because I think next quarter’s earnings and full year earnings are going to be a surprise. They just announced a new quad core processor aimed at the mobile market and Computex begins tomorrow in Taipei.

In other news, Crystallex International (KRY) announced the resignation of its president and CEO. Gordon Thompson tendered his resignation likely due to increased pressure from the Venezuelan dictator Hugo Chavez regarding the Las Cristinas gold mine owned by the corporation. Permits to open the mine have been denied by the government which has angered shareholders who have been supporting the company.

Speculation is a healthy part of anyone’s portfolio but you want to make sure your risk/reward suits your investment and/or trading style. Often times I find myself fully vested and unable to make certain trades because of one reason or another. My 6-18 month time window gives me plenty of opportunity to find good entry and exit points however so it pays to be patient. Especially in a market as unpredictable as this.

What this means is the nearly 500 million share float will become a 50 million share float, hopefully helping the company out of the multi-year slump it has been in. At one time, Conexant was on target with the likes of Marvell and Nvidia. Conexant makes set-top semiconductors for broadband devices.

I made a speculative investment in this company initially in January of 2006 when the stock was around $3.25. At the time, things looked good but when figures didn’t pan out, the stock began a downward spiral it hasn’t recovered from. Nevertheless, since then I bought a couple hundred more shares on the way down. Now with the split it should produce a better price action for the company.

Psychologically, people don’t like buying stocks when they are under $1.

Bluefly is starting to recover from their reverse split earlier in the year and I expect Conexant will do the same. Conexant is up 10% in mid day trading on this news.

I own shares of Conexant and Bluefly.

E*Trade (ETFC) has lost $.40 cents in value in the past 4 days of trading. Most recently they announced the sale of 90 million shares on behalf of Citadel, the venture firm that bought a 20% stake in the company following the sub-prime mortgage meltdown.

The last time E*Trade swung to a new low, I bought it and within a couple days was able to book solid profits as it soared from around $3 to $6. I think a similar thing is happening now. The stock has been beat down and is beginning sideways trading. $4.00 looks like the breakout point here with upside of $1-$2 from there. I love these kinds of trades because E*Trade’s core business (brokerage accounts) is stable and is actually thriving which means this is just oversold market panic. I’d like to get this one at $3.50 before pulling the trigger and look for it to spike at $5 maybe $6 then I’d sell it.

Marvel is reaping the rewards of its hard work for weeks now. Iron Man is going to continue raking in dough throughout the summer because word of mouth is much more powerful than Hollywood schmoozing is.

With Narnia opening now, the kid tickets are being siphoned there which steals a little of the Marvel thunder, but not long term. I think Narnia has the family crowd, but Marvel has Iron Man and The Hulk as well as The Watcher coming out this year which puts them in a very good situation to capitalize on the summer/fall market without really breaking waves.

That being said, i didn’t like the negativity on Wall Street regarding Marvel and sold out my position today below my long target price. What I’m looking for here is the parabolic market to crumble and the contrarian investors to get back on board with a $36 target. It’s already there in the earnings.I just want a bigger slice of the pie.

Apple, (AAPL) continues to grow at an alarming pace but providing much needed/wanted tech services. Didn’t anyone else see this coming? I’m a Star Trek fanatic and they basically had the iPod Touch before it was even invented. Gene Roddenberry was a genius and a visionary.

I sold 100 shares of EMC today at $17.50 for a small profit and I’m letting the remaining 50 shares ride. EMC should be a $20 stock. Why sell 100 now and let the 50 ride? I like to take gains on the way up instead of waiting for the top because tops (and bottoms) are hard to predict. It’s better to take the gain when you know the upswing is solid. Now I can play with house money and let my remaining shares ride out the wave.

I own shares of MVL, AAPL and EMC.