TWO FREE PLAYS FOR YOU!!!! Read below - AAMRQ & GRPN get STRONG BUYS From Michael Waxie Parness and Affinity Trading! Free $219 value 2-Week TRIAL to LIVE Chat Room, Option ideas daily and more! Go to; trendfund/trial Weve been beyond ON FIRE! Yesterday for the second time I POUNDED THE TABLE on AAMRQ. I myself now own 5500 and its likely if it dips on a bad market day Ill add more...(its also possible Ill lighten up, Im a trader, but this is my larger stock position by far at this point...) I think this is a $10+ layup unless the deal doesnt go through, which is the only way I can see, I believe at least, this is a loser. That is possible, or its possible Im wrong all around obviously. I feel STRONGLY, however, that this is a stock you MUST OWN here with the risk/reward being HUGELY favorable. Doesnt mean its guaranteed obviously, but I am risking a lot on it as of now, so clearly I feel good about it. See below for some analyst comments recently! Im not the only one(s) who loves this idea here... AAMRQ is once again the STOCK PLAY OF THE WEEK as I reiterate my STRONG BUY BUY BUY on it with 2/3rds off at $10 stops to $8.50 on rest if it gets there, final upside target if all goes right is $13 to $15. Stock is $7.03 here NOW! I also LOVE GRPN here. Yes, I gave it out as an Earnings Runner play and its down from there. Good, Ive added more to my position and feel that this one should get a really nice move back to $11 to $12 area into earnings. So, calling next weeks $9.50 calls at $.50 cents here. With AMZN, and more importantly ZNGA getting HUGE spikes higher, and GRPN down around 20% the last few days, I think if it can reclaim that $10 level we should see $12 into earnings, depending on market conditions. Since we are SO overbought, I want to suggest buying some $53 EBAY puts for next week as a hedge against our Call Option trades. And, btw, how did my AAPL $520 at least into earnings Call go? Hmm, only about $40 on that baby, tho I was wrong, it hit nearly $535 on it! Question is, does it continue. Tough call, the easy money clearly has been made, same as with FB, so please take some profits and trail the rest! Someone asked me what to do with the FB $35 and $40 calls we have from ideas we generated. Id sell them out COMPLETELY and add back a FEW FB $50 calls for earnings, VERY few, the easy money has been made, lets not give it all back being greedy! Here is that info on AAMRQ - enjoy and lets gather powder for next week, should be interesting to say the least! - terms of valuations here are two reports I have seen on the Sum-of-the-Parts here is a Wolfe Trahan report on their valuations: So what are shares worth? AAMRQ’s ultimate value varies significantly depending on an unknowable event: the outcome of the DoJ suit. Until then, there really isn’t much opportunity for black and white “arb math.” If a merger occurs then the value of AAMRQ will be determined by LCC’s share price around the time of the merger close. If the merger falls apart AAMRQ could possibly be worth zero or perhaps about $2.50/share on our estimates. That, however, is dependent on a number of factors including EBTIDAR estimates, the size of the claims pool, and the treatment of the ~$2.4B intercompany claim in the BK process, and other factors. Deriving our $11 TP. If a merger occurs we believe AAMRQ could be worth ~$13, which we get to by assuming a $22 price for LCC immediately following a merger announcement. If AMR emerges from BK as a standalone entity we believe AAMRQ could be worth ~$2.50 based on likely EV/EBITDAR comps in the group. We derive our $11 target price by assuming a 75/25 weighting to the ~$13 and ~$2.50 valuation. J.P. Morgan on October 17 was much more upbeat and offered this commentary: We are boosting our estimated likelihood of a merger by AMR/US Airways this winter from 50% to 60%, with a verdict expected no later than January 18, 2014. We’ve also refreshed the claims math supporting our long-standing AAMRQ analysis (adjusting for potential lack of liquidity and the impact of AMR’s convert). Given our YE14 LCC price target of $29 (discounted back to $25 to reflect 1H14 potential deal closure), we can envision an AAMRQ share price as high as $13 in the event of a court win or value-preserving negotiated solution. More importantly, we believe AAMRQ could still be worth at least $3.50 in a stand-alone scenario (with some material caveats), assuming comparatively modest EBITDAR and multiple assumptions. This suggests current fair value nearing $10, in our view justifying an upgrade from Neutral to Overweight and establishment of a $9.50 price target. 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Posted on: Fri, 25 Oct 2013 16:56:19 +0000