Sunday, March 08, 2009


Two new stocks will get added to my top 25 mechanical portfolio. The portfolio is still doing relatively well, although the stocks that were added last week are off to a rocky start. I don't have the worksheet with me right now, but overall still out-performing the S&P 500 by about 6 points.

QLTI is the first of the new stocks. It is a very strange company, I can not really determine whether it "belongs" or not. At quarter-end they had a 105m market cap, but had 230m of excess cash! They do expect to make money in 2009, analysts have them at 7x forward earnings. They are a biotech compnay that has traded over $4 and now is $1.41. It looks to me like they went through major restructuring in 2008, laying off 45% of their EEs and selling off parts of their business.

Reading some headlines, it sounds like they are embroiled in some patent disputes and have some issues. I am not smart enough about bio-tech issues, but given all their changes and uncertainty going forward I would say this is not a true "mfi" stock as the future may be extremely different from the past. Not to say at $1.41 it may be a good buy. I will add it to my mechanical portfolio, but will not buy in real life.

EXBD - never heard of this stock. It seems to me that they are consultants. What immediately struck me about EXBD is that they have $190m in current assets and $355m in current liabilities. That is not exactly the type of fortress balance sheet I am looking for as we head into the turbulent recession. They do pay an 11% dividend, though I am not sure that is the best use of their earnings given their liabilities. The share price has dropped from $35 to $13 in the past 6 months.

I won't be in any rush to buy shares here either!

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