Hello Friends! It is the weekend and I for one could use a break from all of the bearish trading activity we have witnessed the past few days. I like to use the weekend to review some past stock picks. The week of November 17, 2003 was not a busy week on my blog, Stock Picks Bob's Advice. In fact, I only discussed three stocks: Sybron Dental Specialties (SYD), Daktronics (DAKT), and Hot Topic (HOTT). Of these, I purchased shares of SYD for my Current Trading Portfolio, and still own some shares. As always, remember that I am an amateur investor, so PLEASE consult with your professional investment advisors prior to making any investment decisions based on information on this website. If you have any comments or questions, please feel free to email me at email@example.com.
On November 18, 2003, I posted Sybron (SYD) on Stock Picks at a price of $25.80. (I know that is the price, as that is the price that I purchased shares that day even though as I sometimes have done, left out the price on the post!). SYD closed at $33.23 on 1/7/05, for a gain of $7.43 or 28.8% since the post.
So are they still worthy of a spot on this blog? Well, taking a look at the latest quarterly report, SYD reported 4th quarter 2004 results on November 15, 2004. For the quarter ended September 30, 2004, net sales came in at $145.7 million, a 5.8% increase over the $137.7 million in net sales the prior year. Net income for the quarter was $16.1 million or $.40/diluted share, compared with $17.3 million, or $.43/diluted share the prior year. This is nothing to "write home about" with a small growth in revenue and a small drop in earnings per share. While I wouldn't run out and sell this stock based on the news (and I haven't), I wouldn't run out and be buying any shares at this point either!
On November 19, 2003, I picked Daktronics (DAKT) for Stock Picks at $17.74. DAKT closed at $23.34 on 1/7/05, for a gain of $5.60 or 31.6%.
And how does their latest quarter look? Well, on November 17, 2004, DAKT reported 2nd quarter results. For the quarter ended October 30, 2004, net sales came in at $59.5 million, compared with net sales the prior year of $58.3 million. Net income worked out to $5.2 million or $.26/diluted share vs. $6.7 million, or $.34/diluted share last year. Just like with SYD, we have a company with a quarter with a slow growth in revenue associated with a decline in earnings. Again, I wouldn't sell on this but I wouldn't be buying either!
Finally, on November 20, 2003, I posted Hot Topic (HOTT) on Stock Picks at $28.61. HOTT closed at $17.48, for a loss of $(11.13) or (38.9)%.
Insofar as their latest quarterly report, on November 17, 2004, HOTT reported 3rd quarter 2004 results. Net sales for the quarter ended October 30, 2004, came in at $180.8 million, a 12% increase from $161.5 milllion the prior year. However, this was done on new store openings, as comparable store sales DECREASED 4.2% during the quarter. I hate lower same store sales reports! Net income for the quarter decreased to $12.6 million or $.27/diluted share, down from
$15.3 million, or $.31/diluted share the prior year. Thus, we have a miserable report, imho, with declining revenue AND declining earnings AND declining same store sales. That was strike 1, 2, and 3, in my book! They would be OUT if I had any!
So how did we do that week if we had purchased those shares and held on? Two of the three stocks (SYD and DAKT) both had significant gains of approximately 30%, and HOTT had a 40% loss. Thus, the average performance worked out to a 7.2% gain since the pick week. Not too bad, considering all three have just had fairly mediocre earnings reports and would not be my first choices for this blog at this time!
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