Let me start the second part of my analyses of potential stocks to buy in my next tranche. From the Best of the Rest Part 1, I liked STX and KLIC. From Made In China, I liked RDA and CYOU. Finally, from For Profit Education, I like CPLA. So I already like 5 stocks. We will see if it stops there.
| Ticker | Rank | Date | Stock Price | Market Cap | Earnings Yield | ROIC | Yahoo Yield | Country |
| KLIC | 1 | 5/4 | 11.39 | 872 | 44% | 111% | 0.0% | USA |
| SIMO | 2 | 5/4 | 11.45 | 387 | 26% | 117% | 1.4% | Taiwan |
| LPS | 3 | 5/4 | 28.09 | 2,392 | 13% | 265% | 1.5% | USA |
| USNA | 4 | 5/4 | 56.73 | 789 | 14% | 171% | 0.0% | USA |
| STX | 5 | 5/4 | 41.23 | 15,214 | 17% | 102% | 3.2% | Ireland |
| RGR | 6 | 5/4 | 51.07 | 1,011 | 13% | 145% | 3.0% | USA |
| XLS | 7 | 5/4 | 11.25 | 2,132 | 24% | 83% | 3.8% | USA |
| NVDA | 8 | 5/4 | 13.87 | 8,627 | 14% | 105% | 1.1% | USA |
| EXPR | 9 | 5/4 | 18.63 | 1,590 | 16% | 90% | 0.0% | USA |
| SAI | 10 | 5/4 | 14.91 | 4,995 | 15% | 98% | 3.3% | USA |
| CA | 11 | 5/4 | 27.73 | 12,562 | 10% | 407% | 3.7% | USA |
| AVG | 12 | 5/4 | 16.83 | 919 | 10% | 778% | 0.0% | Netherlands |
| CF | 13 | 5/4 | 184.00 | 11,702 | 25% | 72% | 0.9% | USA |
| UTHR | 14 | 5/4 | 65.81 | 3,447 | 14% | 93% | 0.0% | USA |
Let us just start talking, typing and thinking.
RGR is a stock I owned a few years ago and frankly should have never sold. I bought 800 shares in October 2009 for the paltry amount of $10.59. I felt good at selling for $14.80 and getting a 42% gain with dividends. Since I sold, they have raced to $51.07 and paid another $2.22 in dividends. That pre-mature sale cost me (51.07+2.22-14.80) x 800 = about $30,000! If you buy a good company that is growing, it can often stay "cheap" and make you lots of money. A social note, I have never owned a gun. I am not against people owning guns, but am in favor of some limits on going beyond what is needed for basic protection and sport. I am also in favor of proper training and background checks. Ok, enough politics. They have about 46m of excess cash. Operating income has risen sharply in past three years, from 44m in 2010 to 112m in 2012. They have retained that momentum, with $37m in q12013. They do pay a dividend that varies with earnings (that is why cash doesn't pile up too much. I am going to stop here. I think RGR is a decent stock. I do worry that the spike in sales is short term (people reacting to fear on gun control post Ct School shooting).
XLS - this is Exelis, kind of a boutique defense contractor that was created when ITT subdivided into three companies. I have been watching them ever since the spin-off. They have about a $2b market cap and pay a nice 3.8% dividend. Of course defense contractors run the risk of budget cuts in the face of potential austerity. I thought I would like these guys as they are a good size to be acquired, they pay a nice dividend and they should have a dependable cash flow. But as I pull up their balance sheet, I see they have same problem as LPS. Their equity is negative when you remove intangible assets like goodwill. They have $5.2b of assets, but $2.2b (astounding) is goodwill. That leaves $3b of tangible assets. Their liabilities (unfortunately) all appear to be tangible at $4.2b. That math doesn't work for me, I am not buying a company, irregardless of income stream or dividends that has TBV of -1.2b. Next.
NVDA - I know I will most likely like these guys as I previewed them the other day. These newer tech companies are so much cleaner than older established companies like XLS. God only knows if XLS has a fully funded pension... I would guess no. Wow, like night and day. NVDA has equity of $4.8b, and tangible BV of $4.2b. They have $3.7b of excess cash against $8.6b of market cap. They are flush with cashola. They pay a medium dividend of 2.2%, that could clearly be increased. Operating income (before depreciation) has steady ramped up past three years (580/880/914). You always have to be a little careful of tech stocks in the event they are not keeping up with the curve. I have lost plenty of money on tech stocks that were cash rich but saw their earnings dry up and had no new "design wins". If anyone has ideas why NVDA is on their way out, let me know. But they look pretty decent from my angle and will make the cut.
EXPR - since selling KSS last fall (good short term move, but wish I had bought back in around $44), I have been devoid of retail stocks. Part of this was by design. I was worried that Sandy had tapped NE consumers out a bit and I was worried about payroll tax increases. We seem to be past the worst of it, so I am trolling. EXPR is the highest scoring retailer. Hmm, balance sheet looks a bit dicey. Just 371m of s/h equity and only $171m after backing out goodwill. Sales are increasing by basically 5% a year... so not exactly on fire. Operating income up by 10% as well, so at least they are not backsliding. I like to look at inventory for retail as well, Increased past two years by 10% (plus a bit) as well (185m to 215m). I don't know, I am having trouble calling a company that is essentially increasing with inflation and a weak balance sheet "good". Next.
SAI - Geesh, I hope they turn out ok as I own a lot of them. Wow, they have the same sort of weaker balance sheet. $2.6b of total s/h equity, but $2.2b is in goodwill. Extremely steady eddy operating earnings. Pretty much $1b a year in each of past 4 years. That is good for a $5b, which is essentially why I am owning them. I am a bit bothered by balance sheet. I will certainly not buy more and I will consider selling. I bought most my shares in March/April of last year and am up 20%. I did also buy a tranche in October that is up 29%. I don't know, might be a good time to sell. See, you never know what'll come out of this analysis.
Well, that is round 2 of the "other" stocks. I think NVDA has made it to the next round. I also think SAI may be sold next week. Good stuff!
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