Make It a Struggle

Well, I decided today to replace ASEI (which hits its one year anniversary tomorrow) with HSII. I appreciate everyone's input on the choice. I think the tie-breakers for me were these two points:

1. They just initiated a dividend for the 1st time. To me that signals a company is comfortable with its future as once given a dividend is painful to take away.
2. The 2nd point is that close to 50% of their revenues come from overseas. This is a theme I am trying to look for in my stocks as the US economy slows down.

Toss on top of these points the fact that they have had solid growth and they recently increased guidance. Given all these positives, it was amazing to me they were about 28% off their 52 week high. I bought them at $39.92.

It'll be "interesting" tomorrow to see what the jobs report shows for September. A good report and I might see my trifecta of GVHR, HSII and KFY go up nicely. Another negative number and well...

The hard part in the decision was being a little concentrated in similar stocks (toss in BBSI as well). But I think that goes with the territory in MFI as certain sectors do fall out of favor at the same time (check out the refiners). Also, in the grand scheme I do have a great deal of diversification.

My little China Group (CHCG.OB) is trying to be the little train that could... "I think I can, I think I can...". As faithful readers may recall, the stock dropped off the table last month from over $5 a share to as low as $2.85 as rumors were swirling. I did step in an increased my holdings 50% a notch over $3 a share (wish I'd bought more). It is now at $4.84 and I think it still has plenty of upside... one good earnings report, not to mention moving off the bulletin board. So with my cheapo purchase, despite the sharp stock price drop I am virtually back to break even and any more upwards movement is gravy. I should note that the additional shares I bought are not counted in my MFI portfolio as I don't double-down there.

Wow! Great news. Check out this headline this evening for KSW: (KSW Awarded Two Downtown Projects Totaling $14,600,000). That is big stuff for a company that had $19m in revenue in the quarter ending June 30th. If there was a "Jason's Bubble Gum Company" in the real stock market, KSW might be it (or else CHCG). These are both cheap companies that have good returns on capital AND room to grow, they can turn that income into more China stores and more GC opportunities. I get goosebumps just writing about it! Anyway, I see KSW closed at $6.83 and has a bid/ask of $6.95 and $7.59. Could easily be up +5% tomorrow.