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.

1. get stocks with high yields
2. get some commodity stocks while they are incredibly undervalued
3. have a couple growth plays.

In the #1 category I am holding ENH-PA (about a 14% yield), OKS (7.7%), NRGY (11.3%), USB (5.3%) and VR (4.6%). It is amazing what is out there right now. I think the key is to try to find the stocks where the dividends are safe. Even some of my MFI stocks are starting to have high yields, though I don't know about safety: VALU (4.2%), BID (6.5%) and BBSI (2.6%).

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!