The FTC is unlikely to act on the allegations made by Ackman, which only reinforces the confidence of those betting against Ackman’s short position.  Robert Chapman, of Chapman Capital, is one fund manager who has gained notoriety for being on the opposite side of Ackman.  The short interest ratio for HLF was nearly 27% according to Nasdaq, which released this number on December 14^th, prior to the Ackman’s presentation.  If the ratio is even higher than that now then it would be even more unlikely for the shares to fall.  HLF also has an attractive dividend, which is around 3.1%.  The dividend payout should keep investors interested in buying the stock.  Daniel Loeb, of Third Point LLC, recently took an 8.2% stake in HLF, that’s roughly 8.9 million HLF shares. Third Point is the most recent firm to bet against Ackman’s claims.  Tim Ramey, an analyst from D.A. Davidson and Co., stated that Loebs investment “sounds incredibly wise to us.”  Ramey went on to state, “The Ackman case doesn’t have any merit.  It attempts to prove the company’s a pyramid scheme when the prima facie evidence is that it’s not.”  The bets against Ackman have been stacking up and are providing support for HLF shares.  Shares of HLF are more likely to hit $55 a share rather than falling to $25.  Today, January 10^th, is HLF’s analyst day.  The meeting should provide investors with a better understanding of what exactly is going on inside the company.  The company is likely to spend a majority of the meeting defending itself against Ackman’s allegations.

Author: Tyler Sciortino

Contact for questions or inquiries at tsciortino312@aol.com

CLX shares recently suffered a 5.8% pullback starting 12/19/12 and bottomed out 12/31/12. Historically speaking, CLX suffered a similar short-term move from 6/21/10 to 7/6/10. In both cases, CLX rebounded quickly after the dive. The next supposed move is horizontal consolidation for a few bars before moving back up to the top of the channel; as the CLX chart below displays with various annotations and highlights.

In both cases, CLX has/had its compilation of moving averages below it and moving with a positive slope. Additionally, in each case, the aforementioned bottom was found when the equity came close to the 200 day moving average and bottom of the channel. The parallels in the chart are very interesting, however one does not even have to believe that the two instances will mirror each other perfectly. The bottom line is that CLX is in a powerful channel that it has historically respected and traded along with and considering the massive moving average support below us, a test of the upper bound may be in order.

Fundamentally, CLX recently announced that they will hold a webcast discussion disclosing their second-quarter, fiscal year 2013 results on Monday February 4th 2013 at 1:30pm ET.

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author salernoma@mx.lakeforest.edu

Yes, that’s all they put out for us to drool over of what it could possibly be. You can really stretch your imagination with this one, as there are just a couple rumors out so far as to what it could be. The most popular rumor is that we will be seeing some type of phone. Personally, I don’t see this happening for one second. First off, if they can barely make an app that works for the droid marketplace… how are they going to build an entire phone?! Come on, think is that REALLY logical for Facebook to go into that market?! Competing against Apple, Samsung, Nokia, HTC etc…. its not going to happen. Also, would you even buy the phone? This means dumping your iPhone… I really doubt it.

So, what do I think they are stirring up over at Facebook? Easy, let me call up Mark and ill get back to you in a timely manner….

But in all seriousness, that’s a really tough question to answer, but let’s look at this from what would make the most sense for Facebook right now. As you know, I think you can scratch the phone off the list of possibilities. What I am looking at that would make sense for them, is an update to the site itself that would allow it to be more user friendly. From my own user experience it seems to be getting very clustered with all the pages, apps, groups, favorites and notifications. If they cleaned this mess up, and allowed it to be more customizable to a users wants/needs it would make it easier to navigate around. Especially with the older generation (35-60yrs old) joining, they have no idea what a lot of the features even do, or care for that matter.

Now that we’ve covered the announcement itself, lets move on to how the stock will react when the announcement is made….

With so much anticipation for this date, and such high expectations already placed on Facebook…. It seems like it’s going to be tough to please the crowd. A phone is not going to impress investors, making them want to jump on the bandwagon. At this point I don’t see anything that will impress us to really make us want to go crazy over Facebook for.

Technically, on the hourly chart, the MACD is showing obvious negative divergence with an RSI reading of 78.54. Sure, RSI readings can stay overbought for quite sometime in a bull market…but I wouldn’t count this as a bullish move for Facebook just yet. When putting together my expectations for the announcement and the bearish technicals, I am looking for a selloff at the announcement on January 15th. I am looking for a re-test of the 28.65-27.30 region in the short-run.

Author: Peter Nitso

pnitso@yahoo.com

Twitter: @PeterNitso

Currently, the iPhone 4 is offered in a 4inch display with the iPhone 3G being offered at 3.5inches. If Apple continued to increase or decrease its screen sizes by .5 inches, I would imagine we would be seeing a 3inch or 2.5inch iPhone mini.

Right now on the market there are no ‘small’ smartphones offered and everything seems to be getting ‘bigger’. Nokia’s new Microsoft phone is getting a lot of ‘buzz’ around it about how fast and elegant its is. Personally, after viewing the phone it seems extremely heavy and just as fast as any other smartphone on the market. Sure, it has some nice features, but when does the point come when consumers are fed up with the same smartphone coming out, just with some small tweaks?

For example, the Samsung Galaxy is just like any other smartphone being released on the market but has one small difference…. a stylus. Now, is the stylus going to create enough ‘buzz’ around it to drastically increase sales for Samsung? Probably not…the stylus is not some revolutionary idea, its been around since the Palm.

Is decreasing the size of a product a revolutionary idea? No. But, Apple thought it would be a good idea to introduce the iPad mini. Sure, it’ll be successful since it has Apples brand backing it up, but its not the Apple that we know that is coming up with its own rules and shocking consumers every year with revolutionary products.

I believe the iPhone Mini will be a hit since there is currently no product like it on the market, and of course it still has Apples brand backing it up. It’s not the Apple we saw two years ago…but nonetheless, it’s Apple.

Author: Peter Nitso

pnitso@yahoo.com

Twitter: @PeterNitso

HLF refuted by stating that it was not an illegal pyramid scheme and plans to give a presentation in its defense on its scheduled analyst day, January 10, 2013.  The question is how much can HLF shares gain on the doubts of Ackman’s claims?  Shares of HLF may continue to rise as the company prepares to defend itself against Ackman’s acqusations.  HLF CEO, Michael Johnson, has called Ackman.s allegations “bogus”.   HLF has hired the financial advisor Moelis & Co. and the law firm Boise Schiller to help defend the company.  Taking such steps to defend the company may attract more support from investors who, as a result, have become more confident that the company is not an illegal pyramid scheme.  Many investors bet against Ackman after he announced his large short position because they believed that the large bets against HLF would act as a catalyst for a larger rebound when the stock bounced back up.  Ackman would also have to buy back shares he bet against, which could cause the stock to rise even higher.  Activist investor Robert Chapman took a 35% position in response to Ackman’s bear raid.  Chapman believes that the FTC will not take any action against HLF and, as a result, the company’s shares will not fall to critical levels.  Chapman stated, “Without the FTC taking injunctive actions against HLF, Ackman’s crusade towards ’zero’ is doomed.”  Hedge fund managers Robert Chapman of Chapman Capital and John Hempton of Bronte Capital both feel that HLF is running a legitimate business.  The support of Chapman and Hempton, along with the lack of action taken by the FTC, may cause HLF shares to continue to rise amidst the short squeeze.

Author: Tyler Sciortino

Contact for questions or inquiries at tsciortino312@aol.com