Saturday, August 02, 2014

August 15th 2014 Tranche - Initial Thoughts

August 15th, 2014 MFI Tranche

Before I think about the new tranche, we should tip our cap to the retiring tranche:

8/15/2013 Start Current Dividend Pct Gain R3K Gain
CF $187.26 $252.59 $3.00 36.5% 17.3%
FLR $66.06 $73.25 $0.53 11.7% 17.3%
AGX $15.60 $34.80 $0.75 127.9% 17.3%
KLIC $11.29 $13.85 $0.00 22.7% 17.3%
RPXC $15.92 $15.50 $0.00 -2.6% 17.3%
Totals 39.2% 17.3%

You have got to be pleased with a 39% gain over a year.  RPXC was the clear mistake, but AGX with a 128% gain makes up for a lot of mistakes.

A lot of my recent studies have been showing that larger cap MFI stocks (say $900m and greater) from the over $100m screen have outperformed.  Not sure why that is, one thought is that is typically a more stable universe of stocks. Another thought might be that they have been an attractive alternative to treasuries during this stretch of unprecedented low fixed income rates.  If it is #2, that could make it more of a function of current environment and subject to change if/when rates normalize.

Here are some quick stock ideas:

AGX - hey, they are up 128%, but they still look cheap. Great balance sheet, in a nice profitable niche (building natural gas power plants), earnings about $2 per share.  They are shareholder friendly, paying a special dividend most years.

CTCM - yes I know they are Russian. But they pay a dividend approaching 7%. They are profitable and reasonably cheap.

TNH - I am really tempted here.  This is a fertilizer MLP that pays a dividend based on earnings.  I love the agriculture business.

COH - this has been on my watch list two or three straight quarters and in hindsight I am glad I have not pulled the trigger.  But some of the biggest gains are made from out of favor stocks. COH  has dropped from $57 to $34.

RGR - gun manufacturers do seem to have uneven earnings.  RGR has dropped from over $80 at the start of this year to $50 currently.  They look REALLY tempting at that price. they have a 3% dividend as well (though that flucuates with earnings). Strong balance sheet.  I am very tempted.

NUS - talk about out of favor.  They were $140 earlier this year and now tip the scale just over $59. It will be extremely interesting to see what their earnings look like next week. If I was a true gambler, I would buy right now pre-earnings.  Of course you do have the HLF drama in the background, if the FTC has negative report on them, could splash over industry. But that seems somewhat priced in. Again, a bit risky but they could become a $80 to $90 stock.

NSR - I bought in May and am awaiting FTC ruling.  While I do think they are still undervalued, I have to think hard about how many eggs I want in this basket as the outcome may be binary.

CSCO _would be a safe pair of hands in my view. Very tempting.

HRB - see CSCO.

CA - quite a few of these decent dividend stocks out there.

AVG - cheap by most metrics. I do already have a largish position.

HSII - this is actually a very interesting stock to bubble onto my watchlist.  I owned them a long time ago, they are a competitor with KFY.  They are a recruiting firm and if employment does pick up in 2015, could be a solid pick. They also pay a 2.9% dividend. Very interesting.


John Carney said...

RGR seems to have fallen off the top 50? Happen just after they reported so maybe they will be back.

Took the new cruiser out for 25 miles and can't wait to reboot.

I may copy your list if they have dividends of +2.6. But that would probably change your good streak.

Probably just buy 2 each month for a total of 24.

John Carney said...

Top 30 +1 billion caps with OK EMA of 35 days and 105 days are: AAPL,HRB,BAH,CSCO,GME,MSFT,PDLI.

O Junker said...

Marshall, would you consider WSTC for your next tranche? Had nice quarter and pays good dividend.