Maytag... Buying stocks for the first time.

[Dirk Gently]

This stock has been tanking lately so I figure it would be a good place to learn a quick lesson in putting all my eggs in one basket. What do you educated people think about Maytag right now?

Also, what is the best way for me (a canadian) to purchase about $2000 worth of stock like this using money in my neteller account? I really have no clue how any of this works... Do I just deposit it onto an online trading site like I would a poker site and then withdraw from the trading site when I want to sell? If it were only that easy...

[adios]

[ QUOTE ]
This stock has been tanking lately so I figure it would be a good place to learn a quick lesson in putting all my eggs in one basket. What do you educated people think about Maytag right now?

[/ QUOTE ]

I wrote an essay that I posted on this forum in evaluating the risk and expected returns when putting all your eggs in one basket. I realize when you say your putting all your eggs in one basket it's not a lot of eggs though /images/graemlins/smile.gif. Generally speaking you'd be better off using some leverage and buying something like SPY than betting it all on Maytag IMO although I wouldn't necessarily recommend either.

[ QUOTE ]
Also, what is the best way for me (a canadian) to purchase about $2000 worth of stock like this using money in my neteller account? I really have no clue how any of this works... Do I just deposit it onto an online trading site like I would a poker site and then withdraw from the trading site when I want to sell? If it were only that easy...

[/ QUOTE ]

Never tried it through NetTeller but just contact someone and find out.

[Dirk Gently]

I just want to use money from my neteller account to buy the stocks... How do you get money to the online trading companies when you want to buy a stock?

[Dirk Gently]

Odds are I'll be making a few trades a month once I get into it... Something cheap, quick and easy. I just graduated from school and have a decent job that's supporting me so I've decided to gamble all my poker winnings in stocks since I really have no use for it right now.

[adios]

I'd pick a few brokers and call 'em, tell them what you want to do, and take it from there. I realize you're only taking a few grand and gaining experience which I think is a good thing FWIW.

[James Boston]

At a glance, Maytag doesn't look good at all. Their price may be going down, which is usually a good time to buy. However, they seem to be LOSING money...as opposed to a price decline that is the result of market undervaluation.

[meow_meow]

Maytag....where to begin?

Down about 75% from it's all-time high, seems cheap right?
Just cut their dividend in half - A more ominous sign of a company on it's last legs I can hardly imagine.
Whopping debt.
Negative book value.

On the plus side they are generating some cash flow, and are projecting a profit for the full year. I'd wait and see how that pans out before touching this with a ten foot pole.

[Dirk Gently]

Just an update, thanks partly to all your advice I look for a new stock to purchase... Bought 75 shares of CQB today at 27.49. Comments?

[AceHigh]

[ QUOTE ]
This stock has been tanking lately so I figure it would be a good place to learn a quick lesson in putting all my eggs in one basket. What do you educated people think about Maytag right now?

[/ QUOTE ]

First lesson is don't try and catch a falling knife. Would you buy Enron or Worldcom when it was tanking?

If you want to learn something and have a decent chance of making some money, I recommend you buy 10 shares of Google (GOOG/200+ per share). But wait a little, market is on a high now, it might drop down below 10200, that would be a good time to buy GOOG.

[James Boston]

I wouldn't have bought it, but it's not as bad as Maytag.

[Dirk Gently]

Why not?

[Dirk Gently]

P.S. Had I not listened to the forum and gone with my original gut feeling I would had a 30% return in four days. /images/graemlins/laugh.gif So what's wrong with the banana stock?

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20050519&ID= 4465473

[James Boston]

Well, I'm no expert on CQB, or really any stock for that matter. I briefly looked at it after I read your post. It just didn't impress me. If you know something about the stock that I might have missed, I'll admit I'm wrong. I just wasn't initially impressed.

[player24]

Investing, when done right, has some similarities with poker. The best cases scenario for Maytag, an acquisition, has in fact occurred - but it was a gut straight draw with poor odds. There was not enough upside potential in Maytag stock to bet on this low probabability outcome - but the owners of the stock hit their straight. nh...

[Dirk Gently]

I don't really know anything about stocks either... Chiquita filed for bankruptcy a few years ago and seem to have escaped it, they seem to have some cash at hand and have been able to secure some long term financing to acquire America's biggest bagged salad company.

I just looked at them and saw a company that was rebuilding and buying up things to diversify a bit out of "only bananas". There is lots of profit variance in the company right now but if they're getting into other consumer goods it should become more reliable and a less risky investment... Which I believe leads to a higher stock price.

But again, this is my first investment and I haven't read any books or anything, it just seems like a growing company to me but others haven't seemed to notice that yet P/E ratio is only 9.90 /images/graemlins/smile.gif

[James Boston]

[ QUOTE ]
others haven't seemed to notice that yet P/E ratio is only 9.90

[/ QUOTE ]

239 publicly traded companies, at this moment, have a P/E below 9. 181 are below 8. P/E is an important figure, but not the only figure.

[RocketManJames]

Often times a P/E that is much too low (relative to its peers) is indicative of bigger problems. It often means that the investment community does not see strong earnings growth. P/E is often times a vote on how strongly the earnings will grow over time. The investment community is often inaccurate, and this is why there is money to be made. But, when the P/E is way too low, then something bigger is at play.

That said, CQB does not carry a P/E that is "way too low" compared to its competitive peers. But, like what the other guy said, while P/E is an important metric, it's not the only one.

-RMJ

[Dirk Gently]

I know it's not the only one... The company is showing growth and it appears to be strong. If the P/E ratio were 50 then I would say "well the market has probably already realized it's growth potential". Looking at the P/E ratio is a quick and dirty way I used to verify if the market has realized what all of my research made me realize.