Sunday, March 16, 2014

Seven Days In May

Seven Six Days in May

My May 6th MFI tranche is in countdown mode.  Always exciting, I know.  It has been a very solid tranche.  If I could clone it, I would.  Looking at the expiring stocks, CYOU would clearly still qualify, though they appear to be struggling lately.  CF still qualifies as well, though they seem not cheap to me right now.  That is actually a common theme for me, very few stocks actually seem cheap to me.

KLIC could be renewed, though they are a bit of a stretch.  I rank them #186 on my recent top 200 list. RDA is getting bought (still waiting for Chinese approval).  I will be happy to get my 86% and run.  Finally, NVDA is #222. Again, a stretch to renew.

Here are the five as a reminder:

5/6/2013 Start Current Dividend Pct Gain R3K Gain
KLIC $11.40 $12.33 $0.00 8.2% 17.4%
CYOU $29.24 $27.83 $0.00 -4.8% 17.4%
RDA $9.74 $17.94 $0.10 85.3% 17.4%
NVDA $13.85 $17.82 $0.32 31.0% 17.4%
CF $183.97 $252.32 $2.80 38.7% 17.4%
Totals 31.7% 17.4%

Now I have commented before that I am strongly considering going larger cap stocks (maybe like MSFT or AAPL) as the mid cap section feel over-extended and my experience has been that if things start going a bit downhill, the larger caps hold up better.  So to review, I had mentioned

May 14 Ideas Rev Growth Short Ratio next year eps chg Next year Rev Change
AAPL 5.7% 1.8 8.2% 5.8%
BWC -7.2% 25.3 17.3% 3.1%
K -1.7% 3.5 6.0% 1.5%
WSTC 1.1% 4.6 6.0% 2.5%
BR 5.6% 2.9 9.9% 5.3%
MSFT 14.3% 2 7.4% 6.5%
CSCO -7.8% 1.4 5.0% 3.6%
PFMT 7.1% 2.5 42.5% 11.9%
HPQ -0.7% 2.4 3.5% -0.6%
NSR 11.0% 8.8 -2.4% 0.0%
PM -1.3% 1.8 9.2% 4.5%
SNDK 12.1% 4.3 4.7% 7.5%

Note that the stocks in yellow are the 5 I have been leaning the strongest toward.  But part of me is tempted to be a contrarian.  What if I picked the five stocks that I feel are really despised and beaten down?  What would that list look like?

Looking at the stocks I have listed above, PFMT would likely make the hated list. They are down 24% this year and even further from their high.

NSR on this list has also had some tough sledding. They started the year right at $50 and are now a smidgen under $34. There are a lot of rumors about their going forward earnings, but again that may largely be baked in their share price.

NUS is an old favorite that may surprise many that I am actually reconsidering.  Recall they dropped from $130 to a bit north of $70 today on allegations that they are not following proper protocol in China.  I am starting to wonder if that is the bottom (recall I sold at $115).  Analysts have dropped 2015 from $8.79 to $7.03, but 10x forward earnings with some growth potential, a solid balance sheet and a 1.9% dividend doesn't seem so awful.

PETS is a online pharmacy for animals.  The pay a great dividend.  I have always felt this company should do better than it does.  They actually have a moat as it is not easy to get approved across the US as an animal pharmacy. Then being online should give them a cost advantage.  They just need to "make it work".

CALL is a highly shorted stock. But I am starting to seriously consider putting my money where my blog is. Sure, they are up 86% since I first profiled them. But despite that, they are growing, trade at 12x next year's earnings and have extra cash on the balance sheet.  Call them, Irresistible!


O Junker said...


I am just wondering do you have a set limit on the number of stocks you own at anyone time? I know some say you should only own 5-10 that you can't keep track of any more than that, others have 40 stocks. Just wondering what you have found a comfortable number.

Marsh_Gerda said...

I guess I think about # of stocks in buckets. I have the 4 tranches of MFI stocks - so that is 20 positions there. Then I have 13 dividend stocks - I would not want more than that. Then discretionary plays. So 30 to 40 is generally where I am at. Some of the positions are not stocks (I have 3 closed end funds and a mutual fund). I would suggest I have too many stocks. 20 to 30 would be more optimal - not because I cannot track 35, but you would believe my 20 best ideas are better than #20 to 35.