Cal Gary -
Sorry for the late reply, I've been muchos preoccupied elsewhere.
About the RAX - I guess I get the benefit of a few day's hindsight on your question - the recent price action doesn't look like any deal is in the works to me. Problems abound, and no one should be surprised to read reports of directors attempting to appear like they're doing something about it.
From most of what I've read about RAX for the past 6-12 months, it is generally disliked within the group by institutions for its poorer performance and metrics in comparison to its peers. That would tend to suggest that so-called big money logic thinks RAX is no bargain, making it an unlikely takeover target on a valuation basis.
Having said that however, someone inside the patch might get the idea that they could grab RAX cheap here, and then get the value out by kicking some butt and getting the operation to straighten up and fly right. So I guess you can make a case in either direction as to whether RAX being in the institutional doghouse is good news or not.
Fundamentals aside, I don't know whether I ever posted my TA opinion on RAX here, but I'm on record on some other forums for a $12-13 target on it going back to last summer when it was in the low $20s. I haven't changed my mind.
I continue to await NG's moment of truth as winter ends. If we see the price weakness that I anticipate will prevail through spring shoulder season, one would have to expect an already weak stock like RAX would suffer even more than it already has.
Consequently, I'm still in cash playing cat and mouse with the producers. Still, it wouldn't be a bad idea to pick your spots now and establish a scaling-in plan ahead of the predicted slide, as I also expect those prices to be the lows for the year, and possibly even multi-year lows going forward.
All JMHO - I'm very mindful that waiting for a slide that never comes could leave me out of the sector, and not everyone is going to think that's the way to play this. Good luck to ya. |
