New Blood to Mechanical Portfolios

Every week I check to see if there are any new stocks in the past 52 weeks to the top 30 or top 50 screen. It has been a bit of a slow slog lately. But this week we have some activity.

New to top 30: ABC
New to top 50: ABC, MD and LOV.

I went ahead and ran my calc of the key statistics for all three stocks. It appears to me that there is an error associated with ABC (too bad). I do not think they should be in the top 30 screen. (The income statement shows Cost of Goods Sold = 0.). I show two columns for ABC. The first is with what I think it should be based upon their press release and the second column is the figures per Compustat. I will include them in my mechanical portfolio, as that has been my approach on other mistakes such as RST, BPI and VRSK (it is supposed to be a mechanical approach).

		abc	abc	lov	md
+	Operating Income After Depreciation	1,019.97	19,428.53	7.98	288.93
-	Minority Interest - Income Account	-	-	-	-
=	Income for Calculation	1,019.97	19,428.53	7.98	288.93
	Diluted Shares Outstanding	287.162	287.162	20.582	47.054
	Share Price	31.13	31.13	3.45	57.02
+	Market Cap Calc	8,939.35	8,939.35	71.01	2,683.02
+	Preferred Capital	-	-	-	-
+	Debt in Current Liabilities	0.50	0.50	-	0.23
+	Long-Term Debt	1,358.51	1,358.51	-	50.21
	Cash and Short-Term Investments	1,199.87	1,199.87	6.90	31.88
-	Excess Cash	741.14	741.14	-	-
=	Enterprise Value	9,557.23	9,557.23	71.01	2,733.46
+	Property Plant and Equipment - Net	665.80	665.80	2.28	43.27
+	Receivables	3,948.48	3,948.48	0.68	170.15
+	Inventories	4,980.90	4,980.90	-	-
+	Other Current Assests	37.79	37.79	1.07	90.63
+	Working Cash	458.74	458.74	7.98	85.69
-	Accounts Payable	8,434.93	8,434.93	1.42	11.20
-	Current Liabilities - Other	990.96	990.96	8.33	335.27
=	Invested Capital	665.80	665.80	2.28	43.27
	Earnings Yield	11%	203%	11%	11%
	ROIC	153%	2918%	350%	668%

ABC still had an excellent quarter and may very well make the top 50 screen. ABC is involved in drug distribution for pharmas and healthcare providers. They were last on the list in Sept 2008 (pre crash) and are up 33% (not shabby) since then. I will consider buying them.

LOV must be borderline, they have flitted on and off the list mid week several times of late. They provide online matchmaking services. We'll see about buying them.

MD was also on the list a while back. They had a different symbol at one point. They were on at 1/3/09 and have close to doubled since then. As I recall they are involved with delivery of babies, perhaps those that are problematic... neonatal care I think they are also worthy of considering.

Hmm, I am really on the fence MD vs ABC. I would like to buy one of them. I have HCKT coming up in a week or so and I still have spare cash. Digging into LOV a bit as well, looks like someone made an unsolicited bid to buy them which has been "jilted" (no shortaage of pun possibilities with this stock!). Nah, LOV doesn't look promising to me. They really had a poor 4th quarter. Looks like I am back in the healthcare segment. I'll let people know next week which stock I picked.