EMAN OMIBs and macro market pricing notes ?3

11:26 23-Mar-18

eMagin has reported a boatload of open market insider buys, however the conformity and timing of the purchases makes me wonder if this is actually scheduled options grants that are resulting in direct purchases because of the low stock price or else just a filing error.  Accordingly, EMAN shares continue to languish and my poor outlook persists.

I've been getting lots of questions on other stock price moves, though, and I think some of them are interesting in the macro context.  Following the FOMC meeting, where the FOMC stuck with projections for 2 more hikes this year, utilities like AES, which got a new Fluence order, and NYLD, which is reorganizing its debt, have seen a bounce.  Note that CVA has been (improperly, in my opinion) left out of the utility bounce.  What we're seeing is the market outlook coming more in line with my own.  There is always some amount of yield arbitrage in the market, so if treasury yields go up, so does the bar for dividend paying stocks.  Despite that, I still think the interest rate and political environment is more favorable to high yield than non-dividend paying stocks, which leaves me on the sidelines for FIT.  ERII, which continues to announce desal wins, is a tougher question and depends mostly on how much volatility and risk one wants to take on.  If so, RESN might be a somewhat better option at current prices, in light of the slight overreaction to its capital raise.

Then there's CTL, which always seems to get the most questions.  I see that as anecdotal evidence of continued over-extension.  So, while I see current pricing as an opportunity, I would have my doubts about it being the last.  Whether or not it will be the best remaining depends largely on how one measures opportunity.  It could easily be argued that a higher price at a later date with more certainty represents a better opportunity.  Volatility related to uncertainty about the business and market cap plus trade volume being large enough for Big Money games to be played probably mean that volatility will continue.  That doesn't always mean declines, but it does mean lack of predictability.  FCC and DoJ moves should continue to help, but no matter what, we wind up back at what I've been saying all along... that I just need to keep seeing CenturyLink execute well enough to maintain its dividend in order for the stock to be a screaming buy in the teens, but still, reasonable position sizes!

That's all the more true during a period when macro news could easily be more important than stock-specific news.  Did anybody have Trump's lawyer on their administration bingo card?  Unlike trade policy, particularly with China, the bingo game won't actually matter unless it comes to affect the length of the president's term and, as I've already covered,  that may not develop as quickly as some are expecting.  Without impeachment, my view is that it winds up being political theater that surfaces right before the mid-terms.  Even if impeachment were possible, the players in this game would be considering the effects of elevating Pence, and that may not be considered a win.  Removing both would be a big ask.