Good morning and welcome back to the diner, where you better stick with the stuff on the first couple pages of the encyclopedia-length menus that include things like Crab-stuffed Oysters. There’s a time and place for everything, see? And the time and place for crab-stuffed oysters isn’t at the 96th Street Diner where I worked for a day back in 1996. Great place for a “Burger Deluxe” though, which on the east coast means you get fries and lettuce and tomato with your burger, but in New Mexico it usually means you get green chile on the burger itself because it already comes with lettuce and tomato and a side of fries standard.

You might think I digress, but this is actually on topic for The Trader’s Thought of The Day today. And that is indeed, that you have to remember that there’s a time and place for everything, including being aggressively long, being aggressively short, being mostly in cash, being outright defensive, and so on. When the markets are crashed, you’ve seen me order all the crab-stuffed oysters you can get. And for the last month or so, I’ve been sticking with the burger and fries instead because I don’t want to dine on something that could really make me sick simply because I ordered it at the wrong place.

When I launched my hedge fund back in October 2002 and I was crazy bullish about the timing because so many of the tech stocks I wanted to buy at the time had crashed and were trading like Apple was — below the net cash balance on their sheets. Which means, you got their business for free and that the market was expecting the company to destroy value rather than create it. I had a powerpoint presentation about what made CL Willard Capital, LP unique and one of the things I highlighted in that presentation was phrased thusly:

Bet big when the odds are heavily your favor.

Bet smaller when the odds are “just good”.

Don’t bet at all when the odds are bad.

I’ve been doing a lot of trading and cleaning and portfolio maintenance since the new year started even as I’ve been less than aggressive with my overall exposure in the stock portfolios of late. We did a bunch of trimming of the Facebook and FB calls back when it was in the $30s and I’d like to start scaling back into it near $25 a share or so, but I’m in no rush and will probably wait to see it put in some bottoming action before buying any of it back. Likewise, we trimmed some Lindsay for big gains back when it was spiking to new highs and now that it’s pulled back 15% or so and has started to act like it’s bottoming, I’m going to buy back a tranche of the Lindsay here this morning.

Zagg was good, here’s an analyst note that’s full of good info about last night’s report and the future of the company:

• Impressive Q4 and 2012 Year – ZAGG reported Q4 2012 results with revenues of $87.5 million, up 29.6% from the year ago period. Revenues were well ahead of our $83.5 million estimate and company guidance. 2012 revenues climbed to $264.4 million representing a 47.6% increase from calendar 2011. Gross margins were somewhat lower than anticipated due primarily to air freight expenses to restock the keyboard products and the lower percentage of revenues coming from the invisibleSHIELD product line. Additionally, operating expenses (ex. one-time items) came in below our estimates and operating income climbed to $16.7 million. Adding back all of the non-cash charges in the quarter the adjusted EBITDA totaled $20.9 million.

• Revenue Growth Drivers for 2012 – We anticipate revenue growth in 2013 to be driven primarily by increased SKU counts with existing retail accounts, new distribution channels (education, government, travel) and new products from both the iFrogz and ZAGG brands.

• Our Outlook Based on the impressive new products, the excellent consumer acceptance of the ZAGG keyboard/case accessories, and expanding retail relationships, we anticipate continued strong revenue growth for 2013. Management is now guiding for calendar 2013 revenues to be in the range of $313 to $318 million, gross margins in the low to mid 40% range and adjusted EBITDA to be in the range of $69 to $71 million. With this outlook we are now modeling for revenues of $315.5 million, up about 20% from calendar 2012. With gross margins down somewhat from 2012 we are estimating GAAP earnings of $29.3 million or $0.92 per share and non-GAAP cash earnings of $44.3 million or $1.39 per share.

If ZAGG earns $1.39 this year, that stock will have doubled or more from the current quote. I’m holding my ZAGG common steady and am going to buy a small tranche of longer-dated ZAGG calls, out in August 2013 with strikes between $8 and $9.

And don’t forget this week’s Live Q&A at 2pm EST at https://tradingwithcody.com/chat. Or email me your question to support@tradingwithcody.com.