Short City: American Eagle Outfitters, Las Vegas Sands

Posted May 7th 2009 6:00PM by Joseph Lazzaro
Filed under: Las Vegas Sands (LVS), Stocks to Sell, American Eagle Outfitters (AEO)

Investor and trader Mishko Janusevich had a mantra that he used to repeat while outlining the top, new stock shorts that appeared that day, as determined by technical indicators.

He would stand next to the overhead projected stock chart at the front of the trading room and recite, "You see this stock? You see that it's dropped $8 in past two days? You think it can't drop any more? SELL THAT STOCK it's dropping more!!!"

Short these shares if you can tolerate high-risk and are an experienced investor that does not remove Buy/Stop Losses:

American Eagle Outfitters (NYSE: AEO): A lack of a growth catalyst, a re-positioned girls apparel line that's not taking hold, and light mall traffic point to downward revisions for FY 2010 earnings estimates. Cover Short on a bounce off $10 or $7. Buy/Stop Loss if you were to sell shares in this company: $22.

Las Vegas Sands (NYSE: LVS): It's awfully hard to make money in a discretionary business far away when Americans aren't even allocating money to go out to dinner regularly. Cover Short on a bounce off $5. Buy/Stop Loss if you were to sell shares in this company: $16.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

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Reader Comments (Page 1 of 1)

5-07-2009 @ 10:06PM

mmg said...

is that worth to make a $4.49 or probably less with a risk of $6.51 loss. to short LVS at 9.49 or less.

5-08-2009 @ 10:06PM

Jo said...

It makes me laugh how off you guys can be, by simply not being out there in the real world, or by sticking to some class-room analysis methodology. By shorting LVS you are taking a suicidal risk, simply because the stock could shoot up incrementally following the following bits of news:
1) Betlehem PA opens on time and is a success (I would say 10%-15% up on that), and 5 months later:
2) Singapore opens on time, and I can tell you it is going to outperform expectations beyond belief (I would say a par by that point).

But the following are your REAL doom's-day scenarios:
1) The Chinese ease Visa restrictions on travel of mainland Chinese to Macau. The stock will double over night after and if it happens.
2) Rich Chinese partners (mainland developers are enjoying easy access to state-owned banks credit and have wads of cash otherwise), as being whispered to my sensitive ear, Are going to get in on the action in City Of Dreams.
3) A simple anouncement on a near planned resumption of construction in sites 5,6 (following, but not necessarily, events in pts 1 and/or 2) will decimate your position in a heart beat as well.

The debt is of no consequence. Adelson knows it, but he does not want to create a further hype at this point.

Given the above, it is all too clear that taking a short position on this stock is wishful thinking at best, and rampant gambling with somebody else's money at worst.
Just do me a favor, please publish a follow-up article...