Economy—Stock Report #5
10 December 2012
The CEO of my largest investment, Smith and Wesson Holding Corporation, was caught doctoring accounts and I had to sell all of my stock. As well as selling my shares in Smith and Wesson, I chose to sell my stock in Lions Gate Entertainment and Cannabis Science. I chose to invest my money in to Pandora Media Inc., Walt-Mart Stores, Inc., and Sturm, Ruger & Company, and I held my previous stock in the Hershey Company and Quicksilver Resources. Only two out of my five stocks are doing well. My stocks have not been doing well and I have lost over $10,000 since I reinvested.
Pandora Media Inc. (P)
I chose to invest $49,996 in to Pandora Media Inc. because of how popular their online radio service they offer to the public. The company has become so popular because their radio is personalized to an individual’s tastes. Pandora Media Inc. is an internet radio company and they make their revenue from ads that are included throughout the music service. The CEO of the company is Joseph Kennedy and his total annual compensation is $210,000. The company’s address is 16th Floor Suite 1650, 2101 Webster Street Oakland, CA. Phone #: 510-451-4100 Fax #: 510-451-4286. The company has 530 employees. The price of the stock appears to have been relatively stable despite slight dips, and the number of people who use Pandora has significantly increased in a year. Even though Pandora was making me a lot of money last week, this week my overall return percentage is horrible at -10.83%. The cause of this sudden drop is due to the quickly approaching fiscal cliff that will cause tax rates to go up and spending to go down. The company, after reporting its success in their 3rd quarter, announced their predictions for overall losses in the 4th quarter. The company claims that because of the fiscal cliff, advertisers are being more cautious, and without advertisers, Pandora has no way to make any revenue. The 4th quarter prediction caused investors to sell, and the price dropped $7.77. I originally purchased 5,580 shares at a price of $8.96, which makes my cost basis $49,996. Despite the current positive stock price, I predict that this stock will continue to result in heavy losses, and until investors and Pandora see how the fiscal cliff will affect the company in January, the stock will not be a safe bet. I plan on selling this stock immediately before I lose any more money. I have lost 5,400, and my market value is now at $44,584.20.
Wal-Mart Stores, Inc. (WMT)
I put $57,240 in to Wal-Mart Stores stock. I chose to invest in to this particular company because I knew that Wal-Mart stores would profit even more than usual because of the holliday season. Wal-Mart is known for their cheap prices, and because money is tight most people will choose to shop at Wal-Mart to get better deals. For example, Wal-Mart store workers have been protesting for better pay and benefits, but even though people might stop and think about the strike for a moment, they won’t stop buying from Wal-Mart. The CEO of Wal-Mart Stores, Inc. is Michael Duke and his total compensation is about 23 million dollars a year. The overall worth of the company is about 650 billion dollars and about 2.2 million employees keep this massive company running. The company’s address is 702 Southwest 8th Street Bentonville, AR. Phone #:479-273-4000 Fax#:479-2771830. For the past month, the price of a share has risen by about four dollars, but now the price seems to have reached it’s high at around $72.20. I bought 795 shares of Wal-Mart Stores, Inc, and at the time of purchase, the price was at $72.00. At the moment, my stock is in the black, but I haven’t lost money, yet. My total gain is $120, and because I have lost that same amount just today, I plan on selling so I don’t lose my little profit. The lack of money that people have to spend at Wal-Mart, the strike, and the recent factory fire in Bangladesh have all contributed to the losses of my investment. I suspect that I invested to late, and I missed the profits that other investors gained from the results of Black Friday. I predict that this is a good time to sell before the stock unexpectedly drops. My market value is now at $57,359.25, and my overall return percentage is at a meager 0.21%.
Sturm, Ruger & Company (RGR)
I was disappointed that I had to sell Smith and Wesson Holding Company because it was my biggest investment as well as being my most profitable stock. I figured that if that gun company was making me a lot of money, that Sturm, Ruger & Company would be equally as profitable. The CEO of the company is Michael Fifer and he makes 4.5 million dollars a year. The address of the company is Lacey Place Southport, CT. Phone #: 203-259-7843 Fax#: 203-256-3367. The overall worth of the company is 700 million dollars and there are 1,224 people employed. For the entire month of November the stock had been rising steadily to a high of $59.00. The prices had been at an all time high because of the fear of more gun control after the election. I had hoped that the price would continue to rise, but the day after I bought it the price dropped by seven dollars. I unfortunately invested $40,367 in to the company and bought 685 shares at a price of $58.93. This stock has lost me the most amount of money and my overall return percentage is -17.3%. The price had seemed to have plateaued and a lot of investors decided to sell their shares out of fear that the profits were too good to be true. I purchased my shares when they were up and since then I have lost a total of $6,987. Even though the stock is currently in the black, I don’t think that it will make it back up to the original price I purchased it at, and therefore I am going to sell my shares.
The Hershey Company (HSY)
I had origanlly invested $38,775 into the Hershey Company. I bought 550 shares at a price of $70.50. The price has risen to $73.31 and I have made a total of $1,545, making my market value $40,320. I bought this stock because I knew the holiday season was quickly approaching and various Hershey products are a must. From baking cookies to buying candy for stocking stuffers, December is a good month for this company. Despite the uncertainty in the stock market becuase of te looming fiscal cliff, The Hershey Company hasn’t showed any drastic signs of weakness. I predict that this stock will continue to do well for the rest of the year and I will probably hold on to it.
Quicksilver Resources (KWK)
Quicksilver Resources has been a tricky and unpredictable stock ever since I purchased it. It has resulted in both losses and gains. My cost basis for this stock is $40,900 and I originally bought my 13,150 shares when they only cost $3.04. After dropping multiple times, the stock has recently gone back in to the black this week. As a result, I have earned $1,795. I predict that this stock is just at a temporary high, and if I keep it, I will end up losing my profit. I plan on selling this stock because for weeks it has proved to be highly unstable. I am just glad that I caught it at a high price so I can sell my shares at their new market value of $42,699.
The stocks that I thought would be highly profitable, Pandora Media and Ruger, Sturm & Company, resulted in my largest losses. Even Wal-Mart Stores only made me $100. I obviously either don’t have good timing or good luck. I lost $10,500 in the two weeks since I reinvested into my three new stocks. I decided to sell Pandora Media, Sturm & Ruger, Wal-Mart Stores, and Quicksilver Resources. The only stock I still hold at the moment is The Hershey Company. I might reinvest my money, but I want to find good stocks that will result in large profits. My total portfolio value is now worth about $223,500.
The Hershey Company(HSY)
I chose not to sell my stock in the Hershey Company, and it proved to be a good decision. I had originally invested $38,775 of my money, on November 9th, into shares that were priced at $70.50 each. The Hershey Company’s stock stayed relatively stable in these past few weeks, and now that investors aren’t afraid of the “fiscal cliff”, the stock rose even higher today. Despite the claims made a month ago about possible forced child slave labor being used in West Africa, Hershey just recently released its plans to invest $10 million in to West Africa. The money, Hershey claims, will boost and benefit around 750,000 small family-owned cocoa farms. The company also stated that it will use only 100% certified cocoa by 2020 because of their plans to get their cocoa from private and public sources. The price of a share is now at $72.55, which is turn has made my overall return percentage go up to 2.91%. I predict that the Hershey Company’s performance will continue to be above what is expected, especially as sales increase for the holiday season, so I plan on keeping this stock. I have gained $1,127.50, making my market value $39,902.50.
I also did not end up selling my shares of Quicksilver Resources. Since I purchased my shares of stock for $400,900, the stock has not been doing well and was losing me money for at least two weeks. However, for the past week the stock has gradually risen, and I am now making profit on this stock once again. The price that I originally bought the shares for was $3.04. Quicksilver was in the red because investors were selling their shares out of fear that Quicksilver Resources was a hyped up stock and was only a good day-trading stock. But what even hurt the company more was weak natural gas prices, less production from lack of money, and regulatory laws are not allowing the company to do as much drilling as they would like to do. All of these factors, debt being a big one, are causing the growth of the company to stop. The entire stock market took a boost today, raising the share price to $3.11, and it caused me to gain a total of $987.00. My market value is now worth $41,891. Even though this stock made me some profit from my original investment and my overall return percentage is 2.4%, I predict that this is just temporary and because of the company’s lack of money and recent performance I will probably sell.
These last few weeks proved not to be that profitable for my investments. Fear of the upcoming fiscal cliff caused the stocks that were doing well because of the election to fall, and the prices did not rebound until today. My losses from my taxes, along with my losses from Cannabis Science made it so that what profit I made with my successful stocks, lackluster. I had unfortunately sold my shares in Cannabis Science the day before the stock market boosted because I had lost $8,000 from my original investment. However, seeing that the price had gone up so much, I chose to buy back all of the shares I had just sold the previous day in order to try and make back some money. My overall market value is now at a total of $197,432. I haven’t been doing too well, but at least I have made some significant profit.