The comments from KIS indicate that his investment decisions are about as good as if they were made at random (well, maybe not quite as good as that). I find it difficult to make large profits on SNDK in the short run, but I'm considering the sale of put options with a July or October expiration and a striking price of $27.50. The risk is more related to interest rates and their overall impact on stocks than to anything particularly related to SNDK or the flash memory group of companies.
The strategy in selling put options is that, even if the stock barely moves, the investor can make a little profit on the loss of premium as the option approaches expiration. A possible argument against the strategy is that if you sell a put, your broker doesn't automatically add what you received to your account. That only happens when you buy it back, or when the put expires worthless (we hope). That is, ideally the stock recovers and reaches or exceeds $27.50 before expiration, making the puts worthless or almost worthless by the time you close out your position.
Looking at SNDK from a value point of view, the shares now sell at less than three times book value, and book value does not include the intrinsic value of the patents. Three times book value is about what you might expect for a company with a modest amount of debt and earnings growth of around 15 percent or less. My point is that because of the sound financial condition of SNDK, the stock has low downside risk, whether you are considering a long term investment or a short term movement.
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