Their pretax earnings rose to $.20 per share ($100 million), up from $.11 per share last year and beating analysts’ projections by $.05 per share. However, FIG’s current stock price is nearly two thirds lower than it was during the company’s IPO in 2007 when shares were selling for $18.50. While much of this drop can be attributed to the financial crisis of 2008, it is difficult to see FIG reaching those highs again. That being said, the company’s recent performance over the past year has been encouraging. Though their holdings have decreased by 20% since last quarter, Bill Miller’s Legg Mason Capital Management is currently the largest holder of Fortress Investment Group stock with a volume of nearly 2.5 million shares for a total value upwards of $10 million. Diamond Hill Capital is the second leading hedge fund in FIG holdings with a total value of $8.3 million, up 657% from last quarter and comprising about .1% of their total portfolio. Following Legg Mason and Diamond Hill is Leon Cooperman’s Omega Advisors who control just over a million shares of FIG stock, up by 148% from last quarter and worth $4.8 million.

My trade: Buy the Sept 6 Calls for $1.30
Risk: $130 Per 1 Lot
Reward: Theoretically Unlimited
Break-even: $7.30

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

Paper bought 1,775 CVA Jul 22.5 Calls for $0.10 (10.9 times usual volume) with stock at $20.19
Paper bought 1,500 KRE Jun 34 Calls for $0.14 (3 times usual volume) with stock at $32.47
Paper bought 4,500 HALO Jul 10 Calls for $0.40 (7.9 times usual volume) with stock at $6.96
Paper bought 488 CRUS Jun 17 Calls for $2.25 (3.6 times usual volume) with stock at $18.73
Paper 9,287 P Jun 21 Calls for $0.45 (2.6 times usual volume) with stock at $16.43

The Vortex Indicator is a lower study that plots two lines against each other. These two plots are VI+ (green) and VI- (red). The values of the two plots come from current high and previous low, and current low and previous high. VI+ is the absolute value of current high minus previous low. The VI- is absolute value of current low minus the previous high. Each are then divided by the sum of the true ranges over the period of observation.

The greater positive distance (amount) between the low of one candle and the next candle’s high, the greater the ascending or positive Vortex movement (VI+). Contrarily, the greater the negative distance between the candle’s high and the next candle’s low, the greater the descent or negative Vortex movement (VI-).

The Vortex Indicator is displayed in the graph below. Away from congestion areas, where choppy action skews the study, the VI+ moving and staying over the VI- is bullish and the opposite for the bears.

This indicator can be another great tool traders can look at in order to determine if a breakout or breakdown is in the process or on the horizon.

salerno.mark.a@gmail.com

During a conference call on May 9^th, regarding MNKD’s first quarter earnings, Mr. Mann said that he believes Afrezza could end up being the most influential pharmaceutical product in history. The optimism surrounding Afrezza and its expected influence on the health industry, combined with Mr. Mann’s age (he’s currently 87) and history of building up successful companies and then selling them off is why many people believe the MNKD will be bought up by a pharmaceutical giant like Pfizer or Bristol-Meyers. Pfizer is currently in the need for a blockbuster drug since their moneymaker, Lipitor (the highest grossing drug of all time), has seen its sales decline by 59% in the past year since its patent expired. Afrezza could be the answer to Pfizer’s needs if it lives up to expectations.

Glenn Russell Dubin’s Highbridge Capital Management is currently the leading hedge fund in MNKD stock owning 15 million shares, comprising .14% of their total portfolio. Second to Highbridge is Chou Associates Management who despite contracting their holdings by 10% during the last quarter of 2012, still own 8.9 million shares, making up 1.64% of their portfolio. Brian Taylor’s Pine River Capital Management is the third leading holder of MNKD shares with 5.8 million but Aqr Capital Management, after increasing their holdings by 30% last quarter, is hot on their heels at 5.7 million shares.

The Trade: Buying the MNKD Jan 2014 5-9 Call Spread for $1.16
Risk: $116 per 1 lot
Reward: $284 per 1 lot
Breakeven: $6.16

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

—
Andrew Keene
President/Founder
Andrew@KeeneOnTheMarket.com