Sunday, July 29, 2007

My Stocks

Thought I'd start writing some comments about my portfolio of MFI stocks. I'll start with my 13 stocks thta are in current Top 25 - BBSI, CHKE, FTO, IVAC, KSWS, NOOF, PACR, PNCL, USHS, EGY, VPHM, WNR and WSTG.

BBSI - In their recent earnings, their revenues were actually below a year ago. However, their operating income was about 16% higher. As expected from their name, they provide HR services to companies. They acquired a UT staffing company and it looks like an accretive acquisition. They expect revenues to be 9% higher and income 19% 3rdQ 07 over 3Q 06. The business services segment is still highly fragmented, so there always exist opportunities for acquisitions or to be acquired. They also pay a little dividend.

CHKE -A middleman company. They make money by licensing their brands to businesses such as Target. But they do not manufacture. So as you might expect, they have a high ROIC as the business takes very little capital. They pay a 75 cent dividend, which is over 8%. I don't know if they'll be able to maintain the dividend as they're only expected to make $2.03 per share. The dividend is part of a finder's fee from a year ago associated with MOSS. But they know what they're doing. They have had insider buying. This stock will not go up 40%, but it is a solid holding.

FTO - one of my two refining companies. I have written about the business in the past. I expect they will have a monster quarter, but I suppose the bigger quetsion is what will happen over next 12 months? They have $454m in cash and that will likely go over $500m after this quarter. Their refineries are in Denver, Cheyenne and Kansas. That is important should hurricanes hit other company's refineries on the Gulf Coast.

IVAC - They were over $30 earlier this year and have fallen to $19. Below I show their income for the past 5 quarters, it seems pretty clear what happened:

Operating Income After Depreciation

13.077

22.256

9.144

9.968

6.631


They blew the numbers away in 4q2006 and the stock spiked to $30. They have returned more to "normal" since then. The backlog at 12/31 was about $125m. It is now $93m (14 machines). It looks like they have only received orders for two since then. Things may be looking a bit bleak for the third quarter.

KSWS - We all know their shoes. Hopefully a few are still being bought, though Crocs and Heely's seem like the latest craze. The stock has tumbled from around $30 to under $24. They are certainly in turn-around mode. Sales were down 17% this quarter. They do have over $7 cash per share. Again, this isn't a high-flier, but I am hoping all the bad news is priced in,

More later

2 comments:

Kevin said...

Not to be too much of a stickler, but If one of the rules of the contest is to choose 15 stocks (no more, no less), why are there players allowed in it not following this rule?
Thanks.
Kevin

Marsh_Gerda said...

I threw out the most egregious rule breakers. I think AK just didn't have an order filled and never checked. I may cut him. I am not too concerned about the one or two that have a couple more than 15.

Next year I will likely track myself instead of relying on people following rules correctly. I have no way (besides posting messages) to communicate with people.