New Mechanical Stocks - Feb 26 2010

First, we need to bid adieu to the stocks from a year ago. It was a very good year. Check 'em out!

Top 50

Symbol		Original	Current	Dividend	S&P O	S&P D	Stock Chg	S&P Chg	Diff
DECK	2/28/09	41.27	120.20	-	73.93	2.18	191.3%	52.7%	138.5%
KTII	2/28/09	55.48	149.46	-	73.93	2.18	169.4%	52.7%	116.7%
INT	2/28/09	29.01	52.84	0.15	68.92	2.18	82.7%	63.8%	18.8%
ICAD	2/28/09	0.90	1.47	-	77.42	2.18	63.3%	45.8%	17.5%

Top 30

Symbol		Original	Current	Dividend	S&P O	S&P D	Stock Chg	S&P Chg	Diff
DECK	2/28/09	41.27	120.20	-	73.93	2.18	191.3%	52.7%	138.5%
FWLT	2/28/09	15.04	24.63	-	73.93	2.18	63.8%	52.7%	11.0%
HCKT	2/28/09	2.56	2.75	-	73.93	2.18	7.4%	52.7%	-45.3%
MWW	2/28/09	6.59	13.95	-	73.93	2.18	111.7%	52.7%	59.0%
PTIE	2/28/09	4.53	6.05	-	73.93	2.18	33.6%	52.7%	-19.2%
TRLG	2/28/09	10.22	24.56	-	73.93	2.18	140.3%	52.7%	87.6%

If you had bought all ten (note Deck is in both), you'd be up a snappy 105%! S&P 500 was up 53%, so that is a 52 point drubbing. If you had bought all 50 of the MFI stocks greater than 100m, you'd be up about 93%. The mechanical approach continues to "win".

A lot of new stocks this weekend. New to the top 30 include UIS (weird, they were new to top 50 a couple weeks ago, have gone up in price and now make the top 30?). The top 50 has HRB, TNDM and DEXO. As I mentioned, I bought TNDM during past week. I would like to buy another stock next week as I am 20%+ in cash. After my JTX fiasco, I am not sure I have stomach for HRB. And DEXO, is just emerging from bankruptcy. I suppose I should at least look at them. I may come back to ODSY, the new stock from last week or else ARRS. I am actually tempted to double down on UIS with its recent addition to top 30 list... I like their profile and they were headlined in Barron's last week.

Tomorrow I'll profile the February 26 2009 monthly portfolio which came of age and was an all-time record setter!

Back Above Breakeven

Definitely treading water thus far in 2010. Good news is that I have bounced back from 3 weeks ago. Here is the update of my chart:


I continue to be heavy in cash, about 17%. Here are my current holdings, note my newest stock: TNDM.

WILC	222%
KHD	44%
SHE	71%
CBI	59%
AMED	61%
UEPS	41%
CMFO	44%
ENDP	36%
UTA	25%
BR	29%
AGX	27%
HCKT	20%
RTN	25%
PFE	28%
CF	19%
BIOC	18%
CYTK	17%
FRX	29%
ESI	16%
CEU	13%
BKE	18%
RGR	12%
PRIM	13%
IDCC	9%
QKLS	8%
TNDM	5%
GTLS	4%
GXDX	3%
UIS	2%
CBPO	2%
KSW	3%
PVSW	3%
CSKI	1%
WTW	0%
RAI	-1%
TRMS	-2%
LIWA	-2%
JCOM	-6%
QCOR	-14%
TSRA	-25%
GIGM	-42%
CHCG	-54%
JTX	-56%

I can't recall if I profiled TNDM. I bought them this week as a "mechanical" stock. They will surely be on the list this weekend. They are involved with broadband connectivity between compteting networks. Here are their stats, prior to their 12/31 earnings:

		tndm
+	Operating Income After Depreciation	59.65
-	Minority Interest - Income Account	-
=	Income for Calculation	59.65
	Diluted Shares Outstanding	34.181
	Share Price	16.12
+	Market Cap Calc	551.00
+	Preferred Capital	-
+	Debt in Current Liabilities	0.70
+	Long-Term Debt	-
	Cash and Short-Term Investments	158.23
-	Excess Cash	158.23
=	Enterprise Value	393.46
+	Property Plant and Equipment - Net	45.66
+	Receivables	22.03
+	Inventories	-
+	Other Current Assests	21.03
+	Working Cash	-
-	Accounts Payable	2.30
-	Current Liabilities - Other	10.42
=	Invested Capital	76.00
	Earnings Yield	15%
	ROIC	78%

Ok, but not ungodly. It used to be my formula (which uses Fidelity financials) was in perfect sync with MFI website, but not so any more. It does look like 4q 09 is about 25% higher than 4q 08, so that improves the ratios a bit. They are definitely making money, past year the shareholder equity has gone from 180m to 240m.

There is definitely starting to be some turnover on the lists... it will be my chance to put some of that 17% to work. I will post the new stocks this weekend.

Lotsa Earnings

I will say that with a 40 stock portfolio, it is much more difficult to stay on top of earnings season. IDCC, GTLS, WTW, JCOM, GXDX, RGR all reported earnings recently. I felt GXDX and IDCC were pretty solid, but the market said, "ho-hum". Then I thought GTLS was poor, and they went up 13%.

So my advice is don't take my advice!

I did buy a new stock today (recall I am about 20% in cash). I went with a new one TNDM. Don't know much about them, but they look decent (Neutral Tandem: Oversold and Underpriced). I have not pulled the trigger on Odyssey yet... we'll see.

Weekend is coming up (hooray!). Got another monthly tracking portfolio coming of age and she looks like a doozy! We should have all taken every penny we could have laid our hands on a year ago and spread it across the top 50 over 100m! Up 92%!

Finally, here is the latest peek at the top 50 mechanical portfolio:

Symbol		Original	Current	Dividend	S&P O	S&P D	Stock Chg	S&P Chg	Diff
DECK	2/28/09	41.27	106.16	-	73.93	2.18	157.2%	52.6%	104.6%
KTII	2/28/09	55.48	149.47	-	73.93	2.18	169.4%	52.6%	116.8%
INT	2/28/09	29.01	48.48	-	73.93	2.18	67.1%	52.6%	14.5%
ICAD	2/28/09	0.90	1.44	-	77.42	2.18	60.0%	45.8%	14.2%
EXBD	3/6/09	12.96	22.92	-	68.92	2.18	76.9%	63.7%	13.1%
DISH	3/6/09	9.27	19.87	-	68.92	2.18	114.3%	63.7%	50.6%
QLTI	3/6/09	1.41	4.74	-	68.92	2.18	236.2%	63.7%	172.4%
SRDX	3/6/09	16.87	19.22	-	68.92	2.18	13.9%	63.7%	-49.8%
INFI	4/16/09	5.83	6.14	-	87.08	1.62	5.3%	28.9%	-23.6%
CRAY	5/1/09	3.98	5.25	-	87.89	1.62	31.9%	27.8%	4.2%
TWX	5/1/09	22.84	28.86	-	87.89	1.62	26.4%	27.8%	-1.4%
RST	5/1/09	29.83	17.34	-	87.89	1.62	-41.9%	27.8%	-69.6%
ulcm	5/1/09	8.72	9.66	-	87.89	1.62	10.8%	27.8%	-17.0%
AAV	5/15/09	3.41	6.86	-	88.71	1.62	101.2%	26.6%	74.6%
AMED	5/29/09	30.43	57.48	-	92.53	1.62	88.9%	21.3%	67.5%
UTA	5/29/09	7.90	9.75	-	92.53	1.62	23.4%	21.3%	2.1%
PFE	6/5/09	14.51	17.69	-	94.55	1.62	21.9%	18.8%	3.2%
VM	6/5/09	4.55	5.50	-	94.55	1.62	20.9%	18.8%	2.1%
ONTY	6/11/09	2.60	4.79	-	95.08	1.62	84.2%	18.1%	66.1%
BPI	6/19/09	16.74	16.86	-	92.04	1.10	0.7%	21.4%	-20.7%
GME	6/19/09	22.95	17.51	-	92.04	1.10	-23.7%	21.4%	-45.1%
SHAW	7/10/09	23.69	34.91	-	87.96	1.10	47.4%	27.1%	20.3%
RTN	7/24/09	45.39	55.85	0.62	98.06	1.10	24.4%	14.0%	10.4%
CBZ	7/31/09	6.54	6.28	-	98.81	1.10	-4.0%	13.1%	-17.1%
CBI	7/31/09	13.95	21.66	-	98.81	1.10	55.3%	13.1%	42.2%
DRC	7/31/09	29.11	31.85	-	98.81	1.10	9.4%	13.1%	-3.7%
JEC	7/31/09	40.98	39.40	-	98.81	1.10	-3.9%	13.1%	-17.0%
NPSP	7/31/09	3.89	3.52	-	98.81	1.10	-9.5%	13.1%	-22.6%
ASGN	7/31/09	4.23	6.80	-	98.81	1.10	60.8%	13.1%	47.6%
AGX	8/7/09	12.35	15.48	-	98.81	1.10	25.3%	13.1%	12.2%
BBND	8/7/09	4.00	2.86	-	98.81	1.10	-28.5%	13.1%	-41.6%
LHCG	8/7/09	24.55	30.12	-	98.81	1.10	22.7%	13.1%	9.6%
RGR	8/7/09	11.45	11.60	-	98.81	1.10	1.3%	13.1%	-11.8%
PRIM	8/7/09	6.95	8.28	0.05	100.79	1.10	19.9%	10.9%	9.0%
SEPR	8/7/09	18.12	23.00	-	100.79	1.10	26.9%	10.9%	16.0%
CEU	8/21/09	5.10	5.96	-	102.96	1.10	16.9%	8.6%	8.3%
CYTK	8/21/09	3.04	3.15	-	102.96	1.10	3.6%	8.6%	-4.9%
CMFO	8/28/09	4.55	6.17	-	102.96	1.10	35.5%	8.6%	26.9%
NAVR	9/4/09	1.79	1.93	-	102.60	1.10	7.8%	8.9%	-1.1%
WTW	9/11/09	26.00	30.15	0.35	104.77	1.10	17.3%	6.7%	10.6%
MIPS	9/18/09	3.72	4.24	-	106.72	1.10	14.0%	4.7%	9.2%
ESI	10/30/09	90.35	107.20	-	103.56	0.59	18.6%	7.4%	11.2%
VRSK	10/30/09	27.43	27.98	-	103.56	0.59	2.0%	7.4%	-5.4%
APOL	11/6/09	55.99	59.69	-	107.13	0.59	6.6%	3.9%	2.7%
CBST	11/6/09	17.60	20.83	-	107.13	0.59	18.4%	3.9%	14.5%
SNTA	11/6/09	3.20	4.02	-	107.13	0.59	25.6%	3.9%	21.8%
IMMU	11/6/09	3.61	3.86	-	107.13	0.59	6.9%	3.9%	3.1%
PBH	11/13/09	6.95	8.04	-	109.62	0.59	15.7%	1.5%	14.2%
IDCC	11/20/09	23.56	25.96	-	109.43	0.59	10.2%	1.7%	8.5%
PDLI	11/27/09	6.63	6.98	-	109.57	0.59	5.3%	1.5%	3.7%
CBPO	12/4/09	9.06	8.85	-	111.01	0.59	-2.3%	0.2%	-2.5%
XOMA	12/4/09	0.72	0.47	-	111.01	0.59	-34.7%	0.2%	-34.9%
SHE	12/31/09	5.15	8.44	-	111.44	-	63.9%	-0.7%	64.6%
RAI	1/15/10	53.81	53.14	-	113.64	-	-1.2%	-2.6%	1.4%
TRMS	1/15/10	2.45	2.42	-	113.64	-	-1.2%	-2.6%	1.4%
SAI	1/15/10	18.90	19.39	-	113.64	-	2.6%	-2.6%	5.2%
NATH	1/28/10	14.70	15.00	-	108.57	-	2.0%	1.9%	0.1%
SMED	2/5/10	6.74	7.53	-	106.66	-	11.7%	3.8%	8.0%
SPMD	2/5/10	36.63	40.50	-	106.66	-	10.6%	3.8%	6.8%
UIS	2/5/10	34.25	35.56	-	106.66	-	3.8%	3.8%	0.1%
QKLS	2/12/10	5.69	6.06	-	108.04	-	6.5%	2.4%	4.1%
MGIC	2/12/10	1.78	1.81	-	108.04	-	1.7%	2.4%	-0.7%
ESIC	2/19/10	2.07	1.98	-	111.14	-	-4.3%	-0.4%	-3.9%
ODSY	2/19/10	17.89	17.86	-	111.14	-	-0.2%	-0.4%	0.3%
						Top 50 Portfolio
						Totals	20.3%	1.2%	19.1%
57.% of stocks beat the S&P 500 Benchmark						Closed	17.7%	-4.4%	22.1%
S&P C			110.67			Open	33.4%	20.1%	13.2%

Say What?

Sometimes the stock market out and out befuddles me. AMED had what I thought (and the headline writers thought) a blow-out quarter and gave great guidance for 2010. On top of that was a large amount of shorts... looked like a powder keg. Check out early headlines:

1. Amedisys Reports Fourth Quarter Revenue and Earnings and Issues 2010 Guidance
2. InPlay: AMEDISYS beats by $0.04, beats on revs; guides FY10 EPS and net services revs above consensus
3. UPDATE - Amedisys Q4 profit beats Street; FY outlook tops view
4. Amedisys 4Q profit jumps 43 percent

But it was a big bust, down 1.5% on the day. CBI was down 4.5%, I knew I didn't feel good about their earnings. HCKT reported this evening (The Hackett Group Announces Fourth Quarter and Fiscal Year Results), they didn't exactly knock the cover off the ball...

CSKI update: I did buy back into CSKI today, I had seen this song and dance several times. They were up about 9%. I will likely hold about 3 weeks post their earnings in March.

One Good, One Not So Good

Two of my stocks reported earnings today. ENDP has superb earnings, and a strong 2010 outlook (UPDATE - Endo Pharma Q4 easily beats Street, sees strong 2010). They were up YoY by 10% and think 2010 will be up another 10%. This is such a cheap stock, earning about $3.00 a share and a strong balance sheet... at under $22 share.

Then CBI had okay earnings after the bell (InPlay: CB&I beats by $0.02, misses on revs; guides FY10 EPS in-line, revs below consensus) we'll see what happens tomorrow. They are up 64% for me, so I suspect expectations are pretty high.

I mentioned some time ago that I sold CSKI post earnings as they always had great earnings, popped and then crashed back down. I sold them around $18 and was kicking myself for the past two months as they climbed to about $22. Today they dropped 18% to $14.64. I am not entirely sure what drove the drop (looks like some rumor-blog). But for the brave, it may be a buying opportunity. CSKI has historically been one of my best stocks ever, I have been fortunate to buy low and sell high several times... we'll see, I have to say I am pretty negative on stocks in general right now. Cash is looking pretty good right now.

Barron's Bounce?

Two of my MFI stocks were profiled in Barron's over the weekend. Hope that works out well!

GTLS: How to Catch Lightning
UIS: In Search of a Durable Good

Top 30 Snapshot

Every now and then, I like to take a snapshot of the top 30 stocks over 50m and look at their relative values over time. Here is the current list.

	Stock	EY	ROC
	SNTA	56%	1354%
	PDLI	21%	145094%
	QCOR	20%	10939%
	EME	27%	343%
	SMED	22%	338%
	ENDP	18%	821%
	VSNT	16%	914%
	USMO	39%	153%
	UEPS	15%	1257%
	FRX	22%	176%
	KHD	35%	140%
	TSRA	20%	277%
	SOLR	17%	590%
	IMMU	15%	731%
	CBI	159%	99%
	XOMA	31%	119%
	PRGX	18%	321%
	PPD	20%	188%
	JCOM	14%	672%
	CHKE	13%	725%
	RGR	26%	103%
	PVSW	14%	526%
	CBPO	20%	120%
	SPMD	19%	160%
	LO	13%	650%
	JTX	16%	171%
	UTA	19%	111%
	VCLK	10%	513%
	MGIC	15%	242%
	IDCC	15%	122%
19-Feb	Average	25%	5599%
	Median	19%	329%
November 6th 33	Average	46%	770%
	Median	16%	229%
July 31st	Average	37%	588%
	Median	20%	212%
April 16th	Average	45%	740%
	Median	27%	228%

So April 2009 was a great time to buy, but right now looks decent as well as the median earning yield has gone up 3 points and the median roc is up a bunch from November. Of course everyone should do their own due diligence.

I find that looking at the "average" can be misleading as you can get some very extreme Return on capital numbers as the denominator moves towards zero. But the medians are a better indicator, in my opinion.

New Mechanical Stocks February 19 2009

Before I introduce the new stocks this week, I'd like to bid adieu to the stocks from a year ago. It was an incredible group:

Symbol		Original	Current	Dividend	S&P O	S&P D	Stock Chg	S&P Chg	Diff
DELL	2/21/09	8.41	13.47	-	77.42	2.18	60.2%	46.4%	13.8%
SOLR	2/21/09	4.22	5.62	-	77.42	2.18	33.2%	46.4%	-13.2%

Symbol		Original	Current	Dividend	S&P O	S&P D	Stock Chg	S&P Chg	Diff
FRD	2/21/09	4.95	5.61	-	77.42	2.18	13.3%	46.4%	-33.0%
SOLR	2/21/09	4.22	5.62	-	77.42	2.18	33.2%	46.4%	-13.2%
MTXX	2/21/09	17.90	4.92	-	77.42	2.18	-72.5%	46.4%	-118.9%
TYPE	2/21/09	3.02	9.61	-	77.42	2.18	218.2%	46.4%	171.8%
PTIE	2/21/09	5.41	6.22	-	77.42	2.18	15.0%	46.4%	-31.4%
PDO	2/21/09	3.19	4.70	-	77.42	2.18	47.5%	46.4%	1.1%
SAPE	2/21/09	3.38	9.11	-	77.42	2.18	169.5%	46.4%	123.2%
VDSI	2/21/09	5.25	7.96	-	77.42	2.18	51.6%	46.4%	5.3%
IGTE	2/21/09	2.99	9.07	-	77.42	2.18	203.3%	46.4%	157.0%

The average is up about 23% over the 46% benchmark bounce.

Had some new stocks added this week to the mechanical portfolios. Not sure if I'll be a buyer. MCIC is new to the top 30 list. I wasn't crazy about them in the top 50. ESIC is a new repeater in the top 50. let me see, it was on there 6/21/08 and went down 54%. They are an ISP that seems to be in decline... kind of like ELNK and UNTD. Then the third new stock is ODSY. This is a nursing home stock, a la CNU, AHCI and AMED. Of the 3 new stocks, they are the one I will be most likely to buy. Here are the nursing home stock stats:

odsy	cnu	ahci	amed
66.39	32.24	13.66	214.31
0.56	-	-	0.14
65.83	32.24	13.66	214.17
33.332	61.330	45.417	27.912
17.89	4.64	2.78	60.40
596.31	284.57	126.26	1,685.88
-	-	-	-
27.60	-	-	43.78
89.18	-	-	179.44
98.80	27.02	35.81	45.16
98.80	27.02	35.81	12.10
614.29	257.55	90.45	1,897.00
21.76	12.40	7.83	87.02
122.41	12.91	32.51	141.01
-	-	-	-
16.36	2.25	2.32	14.74
-	-	-	33.06
3.95	0.48	0.98	19.00
106.18	4.82	22.64	169.81
50.40	22.26	19.04	87.02
11%	13%	15%	11%
131%	145%	72%	246%