As I have mentioned several times on these pages, I keep a mechanical portfolio that simply takes new stocks to the top 25 that appear over the weekend. I then track this portfolio against the S&P 500 and (for fun) Steve Alexander's Magic Diligence portfolio.
So far, my portfolio has not exactly been great shakes, I trail the S&P by about 2 points. However, I added 4 stocks over the weekend and they have been pocket rockets in the first three trading days this week:
BIDZ from $2.39 to $4.19
KBR from $10.45 to $13.72
OPTV from 0.94 to $1.20 and
IBAS from $1.21 to $1.38.
I don't have my calculator handy, but I think the 4 stocks are up an AVERAGE of 36%. I thought the action on EGY on Wednesday was very positive. On what should be a light volume day, they traded 72% more shares than normal and the stock was up 24%. I wondered whether there was some rumor about some oil being found through their exploration wells. They keep hyping in their press releases about the potential for discoveries. I'd feel better about that if there was some inside buying going on... but perhaps the trading windows have been closed for insiders of late as they have material non-public info.
My big non-MFI buys of late were a split decision - STP (my Chinese Solar company) warned of lower upcoming production and they crashed one day, but have moved up some since. Then VR has gone from $18 to pushing $23... which was a very profitable move for me, and I collected a 20 cent dividend to boot. Wednesday I bought a ton of FSUMF, which was selling for a paltry $1.25. Again, this is a basic resource play, but they have a huge competitive advantage with their proximity to China, which saves them a ton in shipping costs compared with their South American rivals. Jim Jubak is big on this company, as is Ian Cumming.
Thursday, November 27, 2008
Wednesday, November 26, 2008
Biggest Day?
I think today may have been my best day ever as a percentage, if not on an absolute basis on a relative basis compared to market averages. I was up 8.8% as I had about 10% stocks up more than 10%, led by QXM and EGY, both up over 20%.
Sadly, I am still far in the hole... I don't even think the past week (in which I have gained about 20%) has gotten me to where I was on November 1st... which wasn't exactly a stellar number. I do think the Chinese rate cut was a big impetus, as it seemed to push oil and basic resources up along with construction stocks like PCR, KBR and KHD.
I believe this 20% increase I have had is a bear market rally... it'll be fun while it lasts but I expect more blood-letting in early January. Hope I am wrong, but I am trying to look with a longer horizon... so I'll just ride out the jolts. Not much else to say, hope everyone has a nice Thanksgiving!
Sadly, I am still far in the hole... I don't even think the past week (in which I have gained about 20%) has gotten me to where I was on November 1st... which wasn't exactly a stellar number. I do think the Chinese rate cut was a big impetus, as it seemed to push oil and basic resources up along with construction stocks like PCR, KBR and KHD.
I believe this 20% increase I have had is a bear market rally... it'll be fun while it lasts but I expect more blood-letting in early January. Hope I am wrong, but I am trying to look with a longer horizon... so I'll just ride out the jolts. Not much else to say, hope everyone has a nice Thanksgiving!
Saturday, November 22, 2008
The Ultimate MFI Stock!
I found yesterday the perfect MFI stock. Drumroll please....
MicroFinancial Incorporated. Why is this the perfect stock, you may ask? The ticker symbol is MFI! Sounds like a sign from the big guy himself, and I am not talking about Greenblatt. I looked at the ratios, and they technically don't qualify as the ROIC is too low per the formula. But that is all due to receivables, not exactly a capital-intensive part of the formula. Heck, they also pay a nice dividend.
MicroFinancial Incorporated. Why is this the perfect stock, you may ask? The ticker symbol is MFI! Sounds like a sign from the big guy himself, and I am not talking about Greenblatt. I looked at the ratios, and they technically don't qualify as the ROIC is too low per the formula. But that is all due to receivables, not exactly a capital-intensive part of the formula. Heck, they also pay a nice dividend.
| mfi | ||
| + | Operating Income After Depreciation | 10.99 |
| - | Minority Interest - Income Account | - |
| = | Income for Calculation | 10.99 |
| Market Cap Yahoo | 34,770 | |
| Share Price | 2.48 | |
| + | Market Cap Calc | 34.77 |
| + | Preferred Capital | - |
| + | Debt in Current Liabilities | - |
| + | Long-Term Debt | 41.20 |
| Cash and Short-Term Investments | 19.91 | |
| - | Excess Cash | 19.91 |
| = | Enterprise Value | 56.06 |
| + | Property Plant and Equipment - Net | 0.82 |
| + | Receivables | 89.80 |
| + | Inventories | - |
| + | Other Current Assests | - |
| + | Working Cash | - |
| - | Accounts Payable | 1.40 |
| - | Current Liabilities - Other | - |
| = | Invested Capital | 89.22 |
| Earnings Yield | 20% | |
| ROIC | 12% |
Tuesday, November 18, 2008
Brutal Stretch
wow, I thought MFI was struggling before, but it seems to be exacerbated recently. SDA's MD diligence site pretty much says it all, he is trailing the S&P 500 by 1.4 points AND only 29% of his picks (which are generally insightful and well-reserached) are beating the index.
My automated approaches are trailing by a bit more, I think between 2 and 3 points. That being said, I still have optimism about the future. Companies with strong balance sheets and a steady cash flow will surivive this downturn and likely be the stronger for it as weaker competitors are acquired or go bankrupt.
I encouage everyone to read John Hussman's post this week (The Stock Market is Not in "Uncharted Territory"). He makes a tremendous point when he discusses the impotance for investors not to confuse short-term earnings risks with long-term valuations. He empasizes the point saying when you buy a stock, you are not buying next quarter's earnings, but rather an indefinite stream of earnings into the future. We will get past the rough waters, as he mentions the economy has had problems before and to say we're in uncharted waters is to say you know nothing anout history before 1990. Good stuff.
To illustrate, I pulled a list of the top 50 companies over $2b. There are some fabulous companies out there right now, that will be giving investors that stream of earnings way, way into the future. Here are some: ACN, BA, COH, DELL, XOM, GD, HPQ, INTC, MSFT, NOV, NUE, VIA and EBAY. Wow. Remember Warren Buffet has said that he would want to buy stock in a company where he would not mind if the markets stopped trading for 5 years. The implication being that he is investing in the company.
My automated approaches are trailing by a bit more, I think between 2 and 3 points. That being said, I still have optimism about the future. Companies with strong balance sheets and a steady cash flow will surivive this downturn and likely be the stronger for it as weaker competitors are acquired or go bankrupt.
I encouage everyone to read John Hussman's post this week (The Stock Market is Not in "Uncharted Territory"). He makes a tremendous point when he discusses the impotance for investors not to confuse short-term earnings risks with long-term valuations. He empasizes the point saying when you buy a stock, you are not buying next quarter's earnings, but rather an indefinite stream of earnings into the future. We will get past the rough waters, as he mentions the economy has had problems before and to say we're in uncharted waters is to say you know nothing anout history before 1990. Good stuff.
To illustrate, I pulled a list of the top 50 companies over $2b. There are some fabulous companies out there right now, that will be giving investors that stream of earnings way, way into the future. Here are some: ACN, BA, COH, DELL, XOM, GD, HPQ, INTC, MSFT, NOV, NUE, VIA and EBAY. Wow. Remember Warren Buffet has said that he would want to buy stock in a company where he would not mind if the markets stopped trading for 5 years. The implication being that he is investing in the company.
Sunday, November 16, 2008
Last Two China Companies
My final 2 Chinese companies announced this week. It was a case of good news and bad news. First the bad news.
KHD - this is a Hong Kong-based supplier of commercial building supplies. They announced their earnings and they were actually very, very good (KHD Humboldt Wedag International Ltd. Reports Third Quarter and Nine-Month Results). They made a blazing 80 cents a share versus analyst estimates of 55 cents. Of course the problem was their outlook. With the credit crisis, it is making it more difficult for their customers to borrow money and they are canceling orders. KHD has suspended guidance going forward until they get more visibility. Then again,
QXM, the Chinese cell phone company had what I felt was a stellar earings report on Friday (Qiao Xing Mobile Reports Third Quarter 2008 Financial Results). They made 39 cents a share (this is a $2.85 stock) for the quarter. What I found extremely positive was they think the 4th quarter will be better than 4q last year, when they made 45 cents per share.
They have $435m in cash with no LT debt. Their market is is a measley $141m, which is 36% of their market cap. Not sure why they are so cheap, and despite the strong earnings and guidance, the stock was only up 4 cents on Friday. Another one I won't be selling any time soon.
PCR announced that they would begin buying back their shares with their excess cash (Perini to buy back up to $100 million in shares). I think if some of my other cash-rich MFI stocks do the same, the stock prices will start to climb. These are companies with extremely strong balance sheets.
KHD - this is a Hong Kong-based supplier of commercial building supplies. They announced their earnings and they were actually very, very good (KHD Humboldt Wedag International Ltd. Reports Third Quarter and Nine-Month Results). They made a blazing 80 cents a share versus analyst estimates of 55 cents. Of course the problem was their outlook. With the credit crisis, it is making it more difficult for their customers to borrow money and they are canceling orders. KHD has suspended guidance going forward until they get more visibility. Then again,
- they have a $1.1b backlog (which will likely get pared back),
- they have $399m in cash (very strong balance sheet) and
- the analysts still expect them to earn over $1 per share in 2009.
QXM, the Chinese cell phone company had what I felt was a stellar earings report on Friday (Qiao Xing Mobile Reports Third Quarter 2008 Financial Results). They made 39 cents a share (this is a $2.85 stock) for the quarter. What I found extremely positive was they think the 4th quarter will be better than 4q last year, when they made 45 cents per share.
They have $435m in cash with no LT debt. Their market is is a measley $141m, which is 36% of their market cap. Not sure why they are so cheap, and despite the strong earnings and guidance, the stock was only up 4 cents on Friday. Another one I won't be selling any time soon.
PCR announced that they would begin buying back their shares with their excess cash (Perini to buy back up to $100 million in shares). I think if some of my other cash-rich MFI stocks do the same, the stock prices will start to climb. These are companies with extremely strong balance sheets.
Friday, November 14, 2008
Look Who Is Buying!
I just saw some of the purchases of Mr Greenblatt himself as of September 30th. The good news: He is buying pretty much the who's-who from his own lists. The bad news: He has lost a bunch as well. But it is heartening to see him buying. I think it was 156 stocks and he bought the same amount of each. I will say that for Mr Greenblatt that he didn't put THAT much money in: $64m. Here is the list of buys:
Also Warren Buffett bought COP as his big new buy. Probably worth a look, they pay a 4.2% dividend. He also bought Eaton, which ironically was profiled tonight on Mad Money.
Have a great weekend everyone!
Also Warren Buffett bought COP as his big new buy. Probably worth a look, they pay a 4.2% dividend. He also bought Eaton, which ironically was profiled tonight on Mad Money.
Have a great weekend everyone!
Tuesday, November 11, 2008
CHCG Earnings aka All Things Must Pass
CHCG announced their earnings in the mid(China 3C Group Reports Third Quarter 2008 Financial Results)dle of this lame trading day. They earned 12 cents a share, which is pretty good for an "off-quarter" for a $1.08 stock. Of course the price went nowhere, but that isn't bothering me any more, I accept that the markets are irrational with fear right now.Here are some of the highlights, for those of you interested in joining my foray into China.
- Sales were up 36%
- Sales split is 32% wholesale and 68% retail
- Gross profit margin was way done from 22% to 15% (likely explains no move)
- The expected gross margin going forward is 14 to 16%
- Quarterly net income was about the same a year ago ($6.5m)
- They have $32m in cash with no debt
- They expect 4q sales to be higher than last year, with a lower tax rate and that cash will continue to grow
- Their market cap is $60m
- They have a market cap of $60m.
- They have $32m of cash, so Enterprise value = $28m.
- They are making over $6m (after taxes) a quarter!
See, I am not bothered any more by the market going nuts on my stocks. That is because I am i-n-v-e-s-t-i-n-g, a concept that seems to be forgotten. The short term will not matter and the long-term will take care of itself. Stocks like this, when (if) they demonstrate that they are for real, could easily go up 400% from today's prices.
About the current malaise over the market, remember the title of George Harrison's first album: "All Things Must Pass".
Earnings Pouring In
Wow, active couple of days for my stocks. Generally very good news, and I am starting to gain some ground on the benchmarks.
EGY - they beat the estimates handily, making 38 cents per share versus 32 cent estimate (VAALCO Energy Announces Third Quarter 2008 Earnings). No real news, they commented that their exploration efforts continue.
CSKI - this Chinese drug company really had a strong quarter (China Sky One Medical, Inc. Announces Record Third Quarter 2008 Results). Revenues were up 77%. They made 60 cents a share for the quarter (this is a $9.82 stock). Then here is what the CEO said about 2009:
"we expect to see a significant increase in our top- and bottom-line performance in 2009 and beyond."
If you believe any of this data, this stock is extremely cheap. They did give guidance that they expect to earn $2 per share for 2008. Finally they have $59m in cash and equity of 95m.
CAST - this is my Chinese educational company. As readers may recall, I spoke with their IR guy this past quarter. They are also ridiculously cheap, with a share price of $2.36 and market cap of 74m despite making about 36 cents per share in 2008 (ChinaCast Education Corporation Reports Third Quarter 2008 Results). They have $72m of cash and a tangible BV of about $95m.
While the market continues to drift downwards, the malaise will eventually pass. The depressed stock prices, in my opinion, offer investors with a long-term view tremendous protection.
EGY - they beat the estimates handily, making 38 cents per share versus 32 cent estimate (VAALCO Energy Announces Third Quarter 2008 Earnings). No real news, they commented that their exploration efforts continue.
CSKI - this Chinese drug company really had a strong quarter (China Sky One Medical, Inc. Announces Record Third Quarter 2008 Results). Revenues were up 77%. They made 60 cents a share for the quarter (this is a $9.82 stock). Then here is what the CEO said about 2009:
"we expect to see a significant increase in our top- and bottom-line performance in 2009 and beyond."
If you believe any of this data, this stock is extremely cheap. They did give guidance that they expect to earn $2 per share for 2008. Finally they have $59m in cash and equity of 95m.
CAST - this is my Chinese educational company. As readers may recall, I spoke with their IR guy this past quarter. They are also ridiculously cheap, with a share price of $2.36 and market cap of 74m despite making about 36 cents per share in 2008 (ChinaCast Education Corporation Reports Third Quarter 2008 Results). They have $72m of cash and a tangible BV of about $95m.
While the market continues to drift downwards, the malaise will eventually pass. The depressed stock prices, in my opinion, offer investors with a long-term view tremendous protection.
Sunday, November 09, 2008
All China, All theTime
Another Chinese company has craked onto the list. CDS. Aactually as I read their profile, the are not Chinese per se, but a Florida company that has a good chunk of their operations in China. Like many China-associated companies, they are cheap, cheap cheap, selling below book value. I have enough Chinese exposure with KHD, STP, CHCG, CSKI, CAST and QXM in my portfolio... not looking to add more. All of these companies are so cheap, that I feel there is a good chance of several of them popping. But I am sure that there is a lot of competition in China and perhaps not big moats for these firms.
Faithful readers may recall that 5 weeks ago I started a China-value portfolio. It is down 19% since I started it, but the Russell 3000 is down 26% in the same stretch. Aha! The best stocks have been XIN (a real estate company) and ADY (a baby formula company). They are up 12% and 25% respectively. The worst has been STP, down a whopping 66%. Thankfully I have bought them at the bottom (I hope).
Now I know some people think I am crazy for investing in these Chinese companies, and perhaps I am. But here are some thoughts: many of them are audited by big 4 accounting firms (I called CAST and verified), China is growing 8 to 10% per year, China has a fed rate of about 6.5% - so they have more levers to use to prime growth and they just passed a huge (600b) stimulus package (China moves to boost economy). While the consumer in the States is pretty much tapped out, Chinese consumers are not knee-deep in debt and consumer spending should ramp up steadily over the next decade. Jubak agrees (Global economy depends on China). So there!
Faithful readers may recall that 5 weeks ago I started a China-value portfolio. It is down 19% since I started it, but the Russell 3000 is down 26% in the same stretch. Aha! The best stocks have been XIN (a real estate company) and ADY (a baby formula company). They are up 12% and 25% respectively. The worst has been STP, down a whopping 66%. Thankfully I have bought them at the bottom (I hope).
Now I know some people think I am crazy for investing in these Chinese companies, and perhaps I am. But here are some thoughts: many of them are audited by big 4 accounting firms (I called CAST and verified), China is growing 8 to 10% per year, China has a fed rate of about 6.5% - so they have more levers to use to prime growth and they just passed a huge (600b) stimulus package (China moves to boost economy). While the consumer in the States is pretty much tapped out, Chinese consumers are not knee-deep in debt and consumer spending should ramp up steadily over the next decade. Jubak agrees (Global economy depends on China). So there!
Friday, November 07, 2008
Recession to the Mean
Wow, I looked at the MagicDiligence site today and guess what? He is less than 1% ahead of the S&P 500. I think at one time, SDA was 10% ahead. Still many years to go until we can really judge whether it is possible to beat the indices, but so far it has been a struggle all-around. It is funny (in an ironic way, not a "ha-ha" way), but my mechanical approach is also leading the S&P by the exact same margin. You will note of my three new stocks last week, PRGX had a big week. Next week it looks like we'll have at least two new entries: HLF and GHM. HLF has been cut in half (ha,ha) recently and is about $20. That seems like a pretty good deal as they now have a 4% dividend and even with lower guidance, they expect to earn $3.5 next year. GHM has had a real roller coaster ride in 2008. They were $16-$17 a share back in January and then spiked as high as $50 in the summer (I just noticed that they split as well). Now they are back to $13.60.
| Symbol | Date | Original | Current | Dividend | S&P O | S&P D | Stock Chg | S&P Chg | Diff |
| DTPI | 2/2/08 | 4.75 | 3.58 | - | 139.58 | 2.00 | -24.6% | -31.3% | 6.7% |
| AIRV | 2/13/08 | 5.08 | 4.92 | - | 136.37 | 2.00 | -3.1% | -29.7% | 26.6% |
| CITP | 2/16/08 | 9.98 | 5.09 | - | 135.14 | 2.00 | -49.0% | -29.1% | -19.9% |
| PRXI | 2/16/08 | 4.29 | 1.10 | - | 135.14 | 2.00 | -74.4% | -29.1% | -45.3% |
| CAST | 2/23/08 | 5.06 | 2.25 | - | 135.62 | 2.00 | -55.5% | -29.3% | -26.2% |
| GSB | 3/12/08 | 2.08 | 1.15 | - | 131.36 | 2.00 | -44.7% | -27.0% | -17.7% |
| IGC | 3/12/08 | 3.70 | 2.77 | - | 131.36 | 2.00 | -25.1% | -27.0% | 1.9% |
| LGTY | 3/12/08 | 6.70 | 5.05 | - | 131.36 | 2.00 | -24.6% | -27.0% | 2.4% |
| MRX | 3/12/08 | 19.45 | 13.21 | 0.08 | 131.36 | 1.36 | -31.7% | -27.5% | -4.2% |
| DEPO | 3/22/08 | 2.74 | 1.90 | - | 132.08 | 1.36 | -30.7% | -27.9% | -2.7% |
| NVTL | 3/22/08 | 8.98 | 5.32 | - | 132.08 | 1.36 | -40.8% | -27.9% | -12.8% |
| VRGY | 3/22/08 | 17.42 | 12.83 | - | 132.08 | 1.36 | -26.3% | -27.9% | 1.6% |
| DLX | 4/6/08 | 19.58 | 11.54 | 0.50 | 136.89 | 1.36 | -38.5% | -30.4% | -8.1% |
| NTRI | 4/6/08 | 14.94 | 14.78 | 0.36 | 136.89 | 1.36 | 1.3% | -30.4% | 31.8% |
| IUSA | 4/6/08 | 5.28 | 3.82 | - | 136.89 | 1.36 | -27.7% | -30.4% | 2.8% |
| LRCX | 4/11/08 | 41.08 | 21.04 | - | 133.38 | 1.36 | -48.8% | -28.6% | -20.2% |
| SLXP | 4/11/08 | 6.47 | 10.17 | - | 133.38 | 1.36 | 57.2% | -28.6% | 85.8% |
| CHRD | 4/19/08 | 5.03 | 3.47 | - | 138.48 | 1.36 | -31.0% | -31.2% | 0.2% |
| QXM | 4/26/08 | 6.26 | 2.52 | - | 139.60 | 1.36 | -59.7% | -31.8% | -28.0% |
| MDP | 5/9/08 | 33.79 | 18.43 | 0.43 | 138.90 | 1.36 | -44.2% | -31.4% | -12.7% |
| OMPI | 5/9/08 | 7.11 | 5.58 | - | 138.90 | 1.36 | -21.5% | -31.4% | 9.9% |
| PPD | 5/9/08 | 43.45 | 38.15 | - | 138.90 | 1.36 | -12.2% | -31.4% | 19.3% |
| ELNK | 5/25/08 | 9.21 | 6.70 | - | 137.64 | 1.36 | -27.3% | -30.8% | 3.6% |
| FTAR.ob | 5/25/08 | 4.37 | 3.12 | - | 137.64 | 1.36 | -28.6% | -30.8% | 2.2% |
| CHKE | 5/31/08 | 27.25 | 19.11 | 0.50 | 140.35 | 1.36 | -28.0% | -32.2% | 4.1% |
| APKT | 7/5/08 | 4.62 | 4.17 | - | 126.31 | 0.69 | -9.7% | -25.1% | 15.4% |
| CSKI | 7/5/08 | 11.06 | 9.76 | - | 126.31 | 0.69 | -11.8% | -25.1% | 13.4% |
| VALU | 7/5/08 | 32.00 | 33.50 | 0.80 | 126.31 | 0.69 | 7.2% | -25.1% | 32.3% |
| QCOR | 7/26/08 | 4.84 | 8.46 | - | 125.48 | 0.69 | 74.8% | -24.6% | 99.4% |
| MSTR | 8/1/08 | 60.56 | 37.54 | - | 126.16 | 0.69 | -38.0% | -25.1% | -13.0% |
| NVDA | 8/8/08 | 11.00 | 8.72 | - | 129.37 | 0.69 | -20.7% | -26.9% | 6.2% |
| SWIR | 8/8/08 | 12.41 | 8.30 | - | 129.37 | 0.69 | -33.1% | -26.9% | -6.2% |
| CF | 8/8/08 | 134.65 | 60.84 | - | 129.37 | 0.69 | -54.8% | -26.9% | -27.9% |
| SIGM | 8/8/08 | 15.93 | 9.86 | - | 129.37 | 0.69 | -38.1% | -26.9% | -11.2% |
| EGMI.OB | 9/5/08 | 0.69 | 0.33 | - | 124.42 | 0.69 | -52.2% | -24.0% | -28.2% |
| KHD | 9/15/08 | 20.68 | 14.71 | - | 126.09 | 0.69 | -28.9% | -25.0% | -3.9% |
| TTWO | 9/22/08 | 16.57 | 11.74 | - | 124.12 | 0.69 | -29.1% | -23.8% | -5.3% |
| SCMP | 9/29/08 | 8.29 | 7.36 | - | 120.85 | - | -11.2% | -22.3% | 11.1% |
| DTLK | 9/29/08 | 4.34 | 2.89 | - | 120.85 | - | -33.4% | -22.3% | -11.1% |
| TRA | 9/29/08 | 28.42 | 19.93 | - | 120.85 | - | -29.9% | -22.3% | -7.5% |
| MSB | 10/10/08 | 11.37 | 10.95 | 1.25 | 88.50 | - | 7.3% | 6.1% | 1.2% |
| UEPS | 10/10/08 | 14.58 | 12.25 | - | 88.50 | - | -16.0% | 6.1% | -22.0% |
| TSCM | 10/17/08 | 3.67 | 3.62 | - | 93.21 | - | -1.4% | 0.7% | -2.1% |
| EME | 10/31/08 | 17.77 | 16.27 | - | 96.83 | - | -8.4% | -3.1% | -5.4% |
| CTCM | 10/31/08 | 7.40 | 6.02 | - | 96.83 | - | -18.6% | -3.1% | -15.6% |
| PRGX | 10/31/08 | 4.24 | 4.92 | - | 96.83 | - | 16.0% | -3.1% | 19.1% |
| Totals | -23.3% | -24.1% | 0.9% | ||||||
| 53.7% of stocks beat the S&P 500 Benchmark | |||||||||
| S&P C | 93.86 | ||||||||
Thursday, November 06, 2008
Bloodbath XXIV
Y'know, I have stopped looking at the markets going down as a negative. I am instead starting to view it as a once-in-a-opportunity to build wealth over the next 4 years. I am focusing on what Jim Jubak recommended recently.
In the #2 category, I have two MFI stocks: EGY and HBMFF. EGY is cheap and has upside potential via their current exploration. HBMFF is simply cheap beyond belief, though surely no longer a true MFI stock. I have also bought TC (they announced very good earnings tonight) and FSUMF (a supplier of iron ore to China). These are both Jubak recommendations.
In #3 I have STP, a Jubak recommendation that is a true blue light special at $12 today. This is a company growing at 30 or 40% and is priced like acompany simply growing with inflation at 3 to 4% annually.
Three of my MFI stocks reported earnings this morning, a bleak day indeed.
FTO - I was actually pleased (Frontier Oil Reports Third Quarter 2008 Results). With the sharp drop-off in oil prices, the refiners are making strong margins again. But their stocks are priced as if it is short term. WNR is a great example of this. They are a former MFI stock and selling at $7 bucks. Yet they earned $1.61 per share this quarter. Clearly the markets expects that to be short term (or doesn't think WNR has the balance sheet to last).
BR - their earnings were almost upbeat (Broadridge Reports First Quarter Fiscal Year 2009 Results). They went up 8%, which was a rarity today.
KG - with generic competition, their earnings are down, but not terrible (King Pharmaceuticals swings to third-quarter profit). The stock held up well today, but I may have to cut them lose pretty soon as other oportunities look better.
After the bell PCR reported earnings. They actually had a record quarter (Perini Corporation Announces Record Results for Q3 2008), but then guided lower for 2009. As the stock is down 50% in the past 6 months and has a strong balance sheet and a substantial backlog AND still expects to earn over $3 a share in 2009, a rational person would say the decrease in guidance is already priced in... of course they'll sell-off tomorrow! A buying opportunity.
Well it is getting late and I have rambled long enough. Call me in 5 years and see if I am happy!
- get stocks with high yields
- get some commodity stocks while they are incredibly undervalued
- have a couple growth plays.
In the #2 category, I have two MFI stocks: EGY and HBMFF. EGY is cheap and has upside potential via their current exploration. HBMFF is simply cheap beyond belief, though surely no longer a true MFI stock. I have also bought TC (they announced very good earnings tonight) and FSUMF (a supplier of iron ore to China). These are both Jubak recommendations.
In #3 I have STP, a Jubak recommendation that is a true blue light special at $12 today. This is a company growing at 30 or 40% and is priced like acompany simply growing with inflation at 3 to 4% annually.
Three of my MFI stocks reported earnings this morning, a bleak day indeed.
FTO - I was actually pleased (Frontier Oil Reports Third Quarter 2008 Results). With the sharp drop-off in oil prices, the refiners are making strong margins again. But their stocks are priced as if it is short term. WNR is a great example of this. They are a former MFI stock and selling at $7 bucks. Yet they earned $1.61 per share this quarter. Clearly the markets expects that to be short term (or doesn't think WNR has the balance sheet to last).
BR - their earnings were almost upbeat (Broadridge Reports First Quarter Fiscal Year 2009 Results). They went up 8%, which was a rarity today.
KG - with generic competition, their earnings are down, but not terrible (King Pharmaceuticals swings to third-quarter profit). The stock held up well today, but I may have to cut them lose pretty soon as other oportunities look better.
After the bell PCR reported earnings. They actually had a record quarter (Perini Corporation Announces Record Results for Q3 2008), but then guided lower for 2009. As the stock is down 50% in the past 6 months and has a strong balance sheet and a substantial backlog AND still expects to earn over $3 a share in 2009, a rational person would say the decrease in guidance is already priced in... of course they'll sell-off tomorrow! A buying opportunity.
Well it is getting late and I have rambled long enough. Call me in 5 years and see if I am happy!
Monday, November 03, 2008
Quickie Earnings
My portfolio is doing a little bit better ("can't get any worse"). Two companies announced earnings today.
KSW : They did great (KSW, Inc.'s Third Quarter Revenue up 21.4% to $25.5 Million), but I did notice that there was no specific discussion of their backlog, and they usually brag about that. They made 21 cents in the quarter and now have $19m in cash. As they are only worth $31m in total, that is a lot of cash.
TRID: They announced earnings, or lack thereof (Trident Microsystems Reports Results for First Quarter of Fiscal Year 2009), after the bell. They are clearly no longer an MFI stock. However they are trading for $1.85 a share (and perhaps lower tomorrow), yet they have $3.80 in cash per share and are trading at 50% of book value. If you have any belief that they will make a profit again, they seem like a steal.
We'll see how they fare tomorrow. I will say that outside of MFI that there seem to be tremendous opportunities for some fast money out there right now. I bought STP (quite a bit) last week when they crashed 25% to $14. Today in the after hours they are trading at $18.50. The other fast money stock I have out there is Validus (VR), they announce their earnings on Friday, I'll be waiting with baited breath. After IPC (a competitor) announced earnings last week, they jumped 30% when the market realized they hadn't had a meltdown in their investment portfolio. A lot of insurance companies have been painted with the same brush as banks, which has not always been fair (check out PFG this evening).
KSW : They did great (KSW, Inc.'s Third Quarter Revenue up 21.4% to $25.5 Million), but I did notice that there was no specific discussion of their backlog, and they usually brag about that. They made 21 cents in the quarter and now have $19m in cash. As they are only worth $31m in total, that is a lot of cash.
TRID: They announced earnings, or lack thereof (Trident Microsystems Reports Results for First Quarter of Fiscal Year 2009), after the bell. They are clearly no longer an MFI stock. However they are trading for $1.85 a share (and perhaps lower tomorrow), yet they have $3.80 in cash per share and are trading at 50% of book value. If you have any belief that they will make a profit again, they seem like a steal.
We'll see how they fare tomorrow. I will say that outside of MFI that there seem to be tremendous opportunities for some fast money out there right now. I bought STP (quite a bit) last week when they crashed 25% to $14. Today in the after hours they are trading at $18.50. The other fast money stock I have out there is Validus (VR), they announce their earnings on Friday, I'll be waiting with baited breath. After IPC (a competitor) announced earnings last week, they jumped 30% when the market realized they hadn't had a meltdown in their investment portfolio. A lot of insurance companies have been painted with the same brush as banks, which has not always been fair (check out PFG this evening).
Saturday, November 01, 2008
My Mechanical Approach
My mechanical approach, which is where I add a stock every weekend if it is new to the top 25 list in the past year is down 20.3%, but is beating the S&P 500 by 2.9%. As a further benchmark, the MagicDiligence portfolio is beating the S&P by 3.42% and is down 20.8% (we're extremely similar).
Here are my stocks and how they're doing. You'll note a couple small pharma, QCOR and SLXP are doing the best.
Tomorrow I will be adding two new stocks. This is the time of the quarter when stocks tend to get added more frequently as it is the heart of earnings season, and stocks are falling off the lists for short stretches and there is (if it is possible) more volatility for individual stocks than normal.
The first stock is CTCM. I have to confess that I have never heard of these guys, although they have over $1b in market cap. WOW, they offer television programming in Russia! Far out! I mean it, far out! They have dropped from over $30 to under $8 in the recent bloodletting. Hey their mailing address is even in Moscow. Might serve as a nice counter-balance to my Chinese stocks (which I still think will work, as a "recession" in China is growth slowing to 7%). I took a quick look at them, not that I have spare cash right now, but I am not tempted by Russian broadcasting plays.
PRGX is the 2nd new addition. I also have not heard of them. They are smaller cap (under $100m). Kind of an interesting profile, they provide recovery audit services... helping business recognize when they've been over-charged. I suppose if they're good at their job, they pay for themselves. Wait, here is a red flag! They have dropped 75% in past year from over $16 to around $4. But they recently lost a large medicare account. I've been down this road before and these smallish companies that are reliant on a couple larger accounts can really be rocky.
Here are my stocks and how they're doing. You'll note a couple small pharma, QCOR and SLXP are doing the best.
| Symbol | Date | Original | Current | Dividend | S&P O | S&P D | Stock Chg | S&P Chg | Diff |
| DTPI | 2/2/08 | 4.75 | 3.98 | - | 139.58 | 2.00 | -16.2% | -29.2% | 13.0% |
| AIRV | 2/13/08 | 5.08 | 4.39 | - | 136.37 | 2.00 | -13.6% | -27.5% | 13.9% |
| CITP | 2/16/08 | 9.98 | 6.08 | - | 135.14 | 2.00 | -39.1% | -26.9% | -12.2% |
| PRXI | 2/16/08 | 4.29 | 1.03 | - | 135.14 | 2.00 | -76.0% | -26.9% | -49.1% |
| CAST | 2/23/08 | 5.06 | 2.40 | - | 135.62 | 2.00 | -52.6% | -27.1% | -25.4% |
| GSB | 3/12/08 | 2.08 | 0.97 | - | 131.36 | 2.00 | -53.4% | -24.8% | -28.6% |
| IGC | 3/12/08 | 3.70 | 3.15 | - | 131.36 | 2.00 | -14.9% | -24.8% | 9.9% |
| LGTY | 3/12/08 | 6.70 | 5.30 | - | 131.36 | 2.00 | -20.9% | -24.8% | 3.9% |
| MRX | 3/12/08 | 19.45 | 14.27 | 0.08 | 131.36 | 1.36 | -26.2% | -25.3% | -1.0% |
| DEPO | 3/22/08 | 2.74 | 2.16 | - | 132.08 | 1.36 | -21.2% | -25.7% | 4.5% |
| NVTL | 3/22/08 | 8.98 | 5.21 | - | 132.08 | 1.36 | -42.0% | -25.7% | -16.3% |
| VRGY | 3/22/08 | 17.42 | 14.50 | - | 132.08 | 1.36 | -16.8% | -25.7% | 8.9% |
| DLX | 4/6/08 | 19.58 | 12.16 | 0.50 | 136.89 | 1.36 | -35.3% | -28.3% | -7.1% |
| NTRI | 4/6/08 | 14.94 | 14.15 | 0.18 | 136.89 | 1.36 | -4.1% | -28.3% | 24.2% |
| IUSA | 4/6/08 | 5.28 | 4.46 | - | 136.89 | 1.36 | -15.5% | -28.3% | 12.7% |
| LRCX | 4/11/08 | 41.08 | 22.36 | - | 133.38 | 1.36 | -45.6% | -26.4% | -19.2% |
| SLXP | 4/11/08 | 6.47 | 9.20 | - | 133.38 | 1.36 | 42.2% | -26.4% | 68.6% |
| CHRD | 4/19/08 | 5.03 | 3.32 | - | 138.48 | 1.36 | -34.0% | -29.1% | -4.9% |
| QXM | 4/26/08 | 6.26 | 2.63 | - | 139.60 | 1.36 | -58.0% | -29.7% | -28.3% |
| MDP | 5/9/08 | 33.79 | 19.37 | 0.43 | 138.90 | 1.36 | -41.4% | -29.3% | -12.1% |
| OMPI | 5/9/08 | 7.11 | 8.32 | - | 138.90 | 1.36 | 17.0% | -29.3% | 46.3% |
| PPD | 5/9/08 | 43.45 | 39.48 | - | 138.90 | 1.36 | -9.1% | -29.3% | 20.2% |
| ELNK | 5/25/08 | 9.21 | 6.90 | - | 137.64 | 1.36 | -25.1% | -28.7% | 3.6% |
| FTAR.ob | 5/25/08 | 4.37 | 2.95 | - | 137.64 | 1.36 | -32.5% | -28.7% | -3.8% |
| CHKE | 5/31/08 | 27.25 | 20.65 | 0.50 | 140.35 | 1.36 | -22.4% | -30.0% | 7.7% |
| APKT | 7/5/08 | 4.62 | 4.74 | - | 126.31 | 0.69 | 2.6% | -22.8% | 25.4% |
| CSKI | 7/5/08 | 11.06 | 8.98 | - | 126.31 | 0.69 | -18.8% | -22.8% | 4.0% |
| VALU | 7/5/08 | 32.00 | 38.55 | 0.40 | 126.31 | 0.69 | 21.7% | -22.8% | 44.5% |
| QCOR | 7/26/08 | 4.84 | 7.74 | - | 125.48 | 0.69 | 59.9% | -22.3% | 82.2% |
| MSTR | 8/1/08 | 60.56 | 39.37 | - | 126.16 | 0.69 | -35.0% | -22.7% | -12.3% |
| NVDA | 8/8/08 | 11.00 | 8.76 | - | 129.37 | 0.69 | -20.4% | -24.6% | 4.3% |
| SWIR | 8/8/08 | 12.41 | 8.75 | - | 129.37 | 0.69 | -29.5% | -24.6% | -4.9% |
| CF | 8/8/08 | 134.65 | 64.19 | - | 129.37 | 0.69 | -52.3% | -24.6% | -27.7% |
| SIGM | 8/8/08 | 15.93 | 11.09 | - | 129.37 | 0.69 | -30.4% | -24.6% | -5.8% |
| EGMI.OB | 9/5/08 | 0.69 | 0.36 | - | 124.42 | 0.69 | -47.8% | -21.6% | -26.2% |
| KHD | 9/15/08 | 20.68 | 17.08 | - | 126.09 | 0.69 | -17.4% | -22.7% | 5.3% |
| TTWO | 9/22/08 | 16.57 | 11.86 | - | 124.12 | 0.69 | -28.4% | -21.4% | -7.0% |
| SCMP | 9/29/08 | 8.29 | 8.23 | - | 120.85 | - | -0.7% | -19.9% | 19.2% |
| DTLK | 9/29/08 | 4.34 | 3.08 | - | 120.85 | - | -29.0% | -19.9% | -9.2% |
| TRA | 9/29/08 | 28.42 | 21.99 | - | 120.85 | - | -22.6% | -19.9% | -2.7% |
| MSB | 10/10/08 | 11.37 | 13.44 | 1.00 | 88.50 | - | 27.0% | 9.4% | 17.6% |
| UEPS | 10/10/08 | 14.58 | 14.00 | - | 88.50 | - | -4.0% | 9.4% | -13.4% |
| TSCM | 10/17/08 | 3.67 | 3.94 | - | 93.21 | - | 7.4% | 3.9% | 3.5% |
| Totals | -20.3% | -23.3% | 2.9% | ||||||
| 57.9% of stocks beat the S&P 500 Benchmark | |||||||||
| S&P C | 96.83 | ||||||||
Tomorrow I will be adding two new stocks. This is the time of the quarter when stocks tend to get added more frequently as it is the heart of earnings season, and stocks are falling off the lists for short stretches and there is (if it is possible) more volatility for individual stocks than normal.
The first stock is CTCM. I have to confess that I have never heard of these guys, although they have over $1b in market cap. WOW, they offer television programming in Russia! Far out! I mean it, far out! They have dropped from over $30 to under $8 in the recent bloodletting. Hey their mailing address is even in Moscow. Might serve as a nice counter-balance to my Chinese stocks (which I still think will work, as a "recession" in China is growth slowing to 7%). I took a quick look at them, not that I have spare cash right now, but I am not tempted by Russian broadcasting plays.
PRGX is the 2nd new addition. I also have not heard of them. They are smaller cap (under $100m). Kind of an interesting profile, they provide recovery audit services... helping business recognize when they've been over-charged. I suppose if they're good at their job, they pay for themselves. Wait, here is a red flag! They have dropped 75% in past year from over $16 to around $4. But they recently lost a large medicare account. I've been down this road before and these smallish companies that are reliant on a couple larger accounts can really be rocky.
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