Aggressive Trade in Computer Accessories

By Travis Johnson, Stock Gumshoe, January 8, 2009

I don’t think I’ve ever written about Stephen Leeb, and it’s not because he spells his own name two different ways in his ads …

“Since we started Steven Leeb’s Aggressive Trader on July 9, 2004, our median return is 26% on all closed positions, with the median holding period being 26 days.

“We’re not after the rare out-of-the-park home run and we don’t promise you recommendations that are going to double or triple overnight. Stephen Leeb’s Aggressive Trader is about stringing together quick, realistic gains of 7%…10%…maybe even 18% or 25%.”

It’s mostly because, though he does run this rapid trading service, he doesn’t advertise very aggressively with teasers. He promotes himself just fine, thank you very much, but doesn’t send out a lot of “buy this top secret company” foofaraw that I enjoy so much.

Today, however, is different — I just got an ad from Stephen Leeb for his Aggressive Trader service, and it says that the collapse of Intel shares has unfairly dragged down another tech stock, a hardware company that makes accessories. Though he often uses options for this rapid trading service, in this case he’s telling folks to just buy the shares for a lower-risk trade … so I thought y’all might be interested.

Of course, he didn’t tell us the name of the stock — that’s where your subscription to Aggressive Trader comes in, or, if you’re as wise as I believe you to be, you just read on for a few paragraphs and find out the name from your friendly neighborhood Stock Gumshoe, and then you can research it yourself and see if it puts the cream in your coffee.

So what clues does he toss our way about the computer stock he thinks you should buy?

I thought you’d never ask — looks like we’ve got plenty to feed into the mighty Thinkolator:

“We want to use this opportunity to pick up shares of a unique computer accessory manufacturer. This stock has etched out a nice looking basing pattern in the last month and a half. Although we don’t look for the stock to return to its 52-week high of $40 anytime soon, it could very easily move from the low to upper teens in short order.

“At just 8 times June ’09 full-year earnings, 1 times sales and with nearly $5.50 a share in cash on the books the stock is quite cheap, limiting our downside risk. Nevertheless, we’re playing this somewhat cautiously by purchasing the stock outright.

“We rate this a medium-risk trade as we will be holding an equity position in a healthy company.”

So what have we here?

Well, this is one where what looks like the best fit is not a perfect fit for those clues, so take it with a grain of salt, but my best guess on this is …

Logitech (LOGI)

You’ve probably heard of Logitech, or at least used one of their mouses or keyboards or headsets or other peripherals — they’re the biggest stand-alone pure-play computer peripherals and accessories company, and they’ve been touted by other advisers in the past, too (I think they were a Motley Fool pick at one point, but don’t quote me on that). They’ve also been around for a while, and have driven innovation in some areas (particularly computer mice — they just sold their one billionth mouse a couple months ago). They consistently win prizes at events like the current Consumer Electronics Show, and they do seem to have good relationships with most of the computer makers.

Why is this a guess? Well, they are trading at about 1X sales and with a current PE of about 9, but their fiscal year ends in March, not in June. And they don’t have $5.50 a share in actual cash on the books, but their book value is almost exactly $5.50 a share, so perhaps there’s some wiggle room there. They also didn’t quite reach $40 in the last 52 weeks, but they did hit an intraday high of about $37 just over a year ago, so again, not sure how precise they are in their ads but this may be “close enough.”

Is Logitech right for you? Well, that’s something only you can decide, of course — the shares may well be “basing” off of their lows of the last couple months, but they certainly came down hard along with the rest of the market before that. Recent weeks have seen Logitech cutting workers, withdrawing their estimates for this year, and, as recently as yesterday, getting downgraded by at least one analyst. None of this is specific to Logitech, all the other manufacturers of electronics gear are also slashing or skipping forecasts and worrying about what customers will do in this environment. I’m very glad that I’m not responsible for planning inventory this year, I have no idea how someone could accurately guess the number of computer mice that will be purchased in 2009. Will hiring return at some point, or will unemployment hit 10% and IT budgets get slashed?

Logitech seems to be a nice, solid company, certainly not as wild as a lot of the small makers of accessories and peripherals (one that makes the newsletter and chat board rounds quite a bit, for example, is Mad Catz, a penny stock that makes gaming accessories). That said, it’s hard to imagine margins or sales being great this year.

The company releases earnings on January 20, so there may be a catalyst for something in the near future — bad or good, I don’t know, but certainly there isn’t a particularly huge level of optimism about these shares right now. There were rumors last year that Microsoft would take over Logitech, but they were consistently denied, and may have run into trouble with the Justice Department anyway (Microsoft and Logitech dominate the aftermarket for mice and keyboards). LOGI itself is perennially active in the merger and acquisition space, but that generally takes the form of them buying out small private companies to pick up new business lines or technologies.

Is this Stephen Leeb’s pick for a short term trade? Most of the time I can tell you these things with 100% certainly, but today I can’t quite be sure — it’s just the best guess I’ve got. If you think you’ve a better match for those clues … or a better idea for a short term trade … or just a thought or two about Logitech, by all means, chime in below.

Happy Investing!

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ShowHide Comments (26)
    1. A. Nony Mouse
      Jan 8 2009, 01:11:11 pm

      Don’t know what this particular stock is but I will say I’m a subscriber to his Complete Investor Newsletter and am making money following his advice in that service. I would suggest that anyone interested in a particular stock advisor wait until you get an ad offering the service for a bargain basement price. I subscribed to The Complete Investor last Summer when it was on sale …”intro offer” for $49 for 12 months. It seems Robert Hsu and Navellier don’t quite undertand what’s going on in the maket and their “best deals” tend to be 2 years for the price of 1 at full subscription price for the 1 year service. NO THANKS

    2. peik van waveren
      Jan 8 2009, 01:24:32 pm

      I just wanted to make sure that i have the right e-mail address to forward all these teasers I get. I have been forwarding to , but the letters i send never seem to get a response. We OK?

    3. EYOUNG
      Jan 8 2009, 01:27:31 pm

      What I can’t figure out, Gumshoe, is why Leeb headed his spiel, “Intel unnecessarily brought down this stock”,,, Pardon me for asking, but what does Intel have to do with it? UNLESS, it is Intel sinking because of lower NTBK / PC sales??? And yes, Logitech IS a “MOTLEY FOOL HIDDEN GEMS” recommendation, but from what I read earlier today, they are in a holding attitude on LOGI,,, MAINLY because of withdrawn guidance for the year,,,
      So, yes, I would have to agree, it is LOGI
      Happy New Year to you, and our fellow Gumshoe’rs,,, May this year see a return, or a start, of integrity in our Financial and Economic realities~!

    4. Leeb Group
      Jan 8 2009, 03:13:10 pm

      Dear Mr. Gumshoe

      We enjoyed reading you article about our ad about Leeb’s Aggressive Trader investment recommendation, but unfortunately your guess – Logitech is close but not correct. We wanted our readers to pick up shares of disk drive manufacturer Western Digital (WDC). Thank you Mr. Gumshoe for trying to uncover a great stock story. Below is our actual recommendation for Leeb’s Aggressive Trader readers.


      The Leeb Group

      P.S. Please note our outstanding performance record at the bottom.

      Buy Western Digital (WDC) at the market.

      Stocks are taking a breather today after a nice run last week. Tech shares in particular have gotten hit today to a large degree on lowered fourth-quarter guidance from Intel. The Intel news wasn’t really all that bad, however, and the stock is recovering from the initial wave of selling, which is why we’re sticking with our April call option on the stock.

      We also want to use this opportunity to pick up shares of disk drive manufacturer Western Digital (WDC). The stock has etched out a nice looking basing pattern in the last month and a half. Although we don’t look for the stock to return to its 52-week high of $40 anytime soon, it could very easily move from the low to upper teens in short order.

      At just 8 times June ’09 full-year earnings, 1 times sales and with nearly $5.50 a share in cash on the books the stock is quite cheap, limiting our downside risk. Nevertheless, we’re playing this somewhat cautiously by purchasing the stock outright.

      We rate this a medium-risk trade as we will be holding an equity position in a healthy company.



      SLAT Stephen Leeb Aggressive Trader, LLC. is not registered as a broker dealer or investment adviser with the U.S. Securities and Exchange Commission or any state securities authority. SLAT and its information and content providers make no representations or warranties of any kind in connection with the subject matter of SLAT or the suitability of the information contained in SLAT for any purpose and are not liable for the timeliness, accuracy, or completeness of the information contained herein. The information contained in SLAT is provided for general informational purposes, and are not a substitute for obtaining professional advice from a qualified person, firm or corporation familiar with your personal circumstances. SLAT is not responsible for any trades placed by the recipients of SLAT based on the information included therein. Investment recommendations are not intended to be construed as personal advice and readers should consider their personal situation before making any investment. All opinions expressed and information and data provided therein are subject to change without notice. SLAT, its officers, directors, employees, and/or associated entities may have positions in and from time to time make markets, purchases, or sales of the securities discussed or mentioned in SLAT.

      SLAT shall have no liability for any newsletter that is lost, intercepted or not received by you in a timely manner, or at all, for any reason.

    5. Aloha Art
      Jan 8 2009, 04:29:45 pm

      Thank you Mr. Leeb, I also appreciate your openness. For the past few weeks I’ve been deleting your emails before opening them.

      Please send me another one. I’ll open it this time.

      Sincerely, Art

    6. A. Nony Mouse
      Jan 9 2009, 12:41:11 am

      BTW Leeb has a book, titled, GAME OVER, coming out later this month. I plan to give it a look and suggest anyone else curious about his ideas on “making money in a shattered economy” (I think that may be a cover blurb or sub-title) do the same.

    7. Mike
      Jan 9 2009, 01:44:56 am

      The Leeb group are indeed honest with their input, and as the old adage goes, honesty is the best policy, Leeb will surely benefit from this. Well done to both Leeb group and Stockgumshoe.

    8. SageNot
      Jan 9 2009, 11:31:44 am

      Stephen Leeb Aggressive Trader costs $995./yr. discounted, not $39./yr. If you’ll read the Google blurb I believe you’ll find that this is his 2nd service for aggressive trading.

      I too read his books & reports about the coming oil debacle & his conclusions turned out t/b NOT long lasting. $35./brl was a pipe dream, & maybe the Leeb group would like to own up to this call, or not.

      “The Coming Economic Collapse” was mostly about $200./brl oil, not lack of credit flows & the Wall St. derivative frauds. A funny thing happened on the way to $200./ oil, the world’s consumers decided to cutback & the hedge funds were forced to cover their bets as the commodity bull went off the cliff.

      Happy New Year!

    9. Elissa Stein
      Jan 11 2009, 01:37:19 pm

      I subscribe to Complete Investor and love its format, which contains cogent analysis together with a running tally of where each recommendation stands. Obviously, not every pick is a winner. However, The Leeb group advises when to get out of a particular investment, rather than hold. There have been times when their timing has been off. As an example, last year, they recommended AYR (Aircastle Limited). When it went into freefall, I wrote to them and asked if they still endorsed it, given the fact that AYR is highly leveraged and so closely tied to the airlines. I received a letter back from one of their analysts, stating Dr. Leeb still felt it was a good pick. Two or three days later, they sent an alert to ditch the stock. I remember feeling a bit aggravated at that, but ultimately, we are each responsible for our decisions-whether to listen to an advisor, or go with our gut instincts and sell if a stock has breached our own personal loss control criteria. In other words, just because you pay for investment advice doesn’t mean you abdicate your personal responsibility for making investment decisions.
      At any rate, I like the Complete Investor and feel it is well worth the subscription price.

      I would also like to comment on some of the observations about Leeb. Leeb is not a “doom and gloom” guy. Although he believes in the peak oil theory, he clearly states that we are not running out of oil now, just out of cheap oil, and, as oil becomes more expensive, alternatives and better extraction methods will be employed. Leeb and his team recognize opportunities when they see them.

    10. Computer Stationery
      Jan 22 2009, 05:44:35 am

      Manufactured Using Best Grade Products, We Offer Clients OMR (Optical Marking Recognition) Sheets, That Makes Form Processing A Easy And Fast Process. These OMR Sheets Find Usage By Various Educational Institutions Across The World. These Meet The Needs Of.

    11. anonymous
      Sep 15 2009, 03:42:18 pm

      Aggressive-trader was the worst option news letter i had ever used.

      However, if i just did the opposite of what he said, the return would be huge.

      Use your due instinct.

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