Stock Picks Bob's Advice
Friday, 30 May 2003
After writing up that piece on ELAB, I couldn't NOT buy some shares! I went ahead and sold 50 of my 200 HIBB for a 30% gain....and bought 250 of ELAB...I paid $29.33. I wanted to let any reader know that I had bought some so that this would be an honest post.
May 30, 2003 Eon Labs, Inc. (ELAB) NASDAQ
Happy Friday everyone. A short week for investors but a great month and another great start on the market today.
Usually mid-morning, I break away from work for a second or two to check the CNN.money lists of greatest gainers. This is a bit of a new one for me. I don't own any shares but sure am tempted.
Eon Labs, Inc., according to CNN.money "is a generic pharmaceutical company engaged in developing, licensing, manufacturing, selling and distributing prescription pharmaceutical products." Sounds a little like two other of my favorites, AAII and LCI.
The stock is currently having a GREAT day, trading up $2.53 at $29.55 (10:09 CST), this is a 9.36% jump.
On April 24, 2003, (6 days ago), ELAB reported their first quarter results with net income of $15.1 million in the first quarter compared to $6.3 million for comparable quarter in 2002. (per NYTimes on the web). Net Sales were $70.9 million for the first quarter compared to $48.2 million in comparable quarter in 2002...an increase of 47.0% (!). They guided higher with expectations in the second quarter of 2003 to be between $70 and $75 million.
Looking at Morningstar.com on ELAB, we find STEADY revenue growth from 1997 of $49.7 million, $55.8 million in 1998, $78.0 million in 1999, $119.7 million in 2000, $165.4 million in 2001. Currently with $70 million/quarter, we are looking at a revenue rate of approximately $280 million. IMHO these are AWESOME numbers!
Looking at free cash flow, we find a steady IMPROVEMENT from -14 million in 2000 to +$26 million in 2001, but down to +20 million in 2002.
Assets/Liabilities picture on Morningstar is BEAUTIFUL. Cash on hand totals $87.3 million which is MORE than current liabilities of $64.3 million and long-term liabilities of $7.4 million combined! In addition they have and additional $120.1 million in other current assets.
This stock paints a very PRETTY picture. I don't own any shares as I write, but as I review the numbers as I write, I am tempted to add a little to my portfolio....but I will try to keep to my own rules....and wait. Have a GREAT WEEKEND everyone.
Thanks for stopping by. Please leave comments here or contact me at firstname.lastname@example.org if you have any comments, criticisms, suggestions, etc.
Thursday, 29 May 2003
May 29, 2003 Medical Staffing Network (MRN) NYSE
The market is drawing to a close....9 minutes to close at 2:51 pm cst....and it may take me that long to get this post together.
Came across this one on the largest percentage gainers on the NYSE...MRN...according to CNN.Money, MRN "is a provider of healthcare staffing services in the United States."
Currently MRN is trading at $7.52 up $.46 or 6.52% on the day. This in the face of a Dow nown 70+ points...while NASDAQ up about 10. This leg of the rally is getting a bit tired.
On May 12, 2003, (17 days ago) MRN reported record revenues of $144.4 million for the first quarter of 2003 which is a 39.9% increase over revenues of $103.2 million for the first quarter of 2002...per the NYTimes on the Web. Net income increased to $5.2 million or $.17 per diluted share compared to $2.8 million or $.13 per diluted share for the prior year's first quarter.
The stock has performed rather poorly in light of the stellar earnings report due to the company's reticence to forecast 2003 earnings due to 'poor visibility'. CS First Boston cut them to 'underperform' from 'outperform' on 5/13/03 per CBS Marketwatch report. There was some question about the possible contraction of demand for temporary nurses.
Looking at Morningstar.com we find that revenue grew from $33.1 million in 1998 to $96.5 million in 1999, to $182.0 million in 2000, and $338 million in 2001 with $403.4 million in the trailing twelve months.
During the four months prior to the current reported quarter, revenue growth was STRONG with increases of 93.97%, 60.15%, 46.47% amd 38.82% growth sequentially.
Free cash flow is still negative at $-5 million. However the Assets/Liabilities picture is about 2:1 assets to liabilities.
Overall an interesting stock, our second temporary medical help stock in our watch list...but not perfect numbers and difficulty in 'visibility' into 2003.
May 29, 2003 Dollar General (DG)
Yesterday we had Abercrombie and Fitch, and today Dollar General. Both of these are fast growing retail ventures hitting very different parts of the retail market.
According to CNN.money, Dollar General "is a discount retailer of general merchandise at everyday low prices through 6,192 stores located primarily in small towns in the midwestern and southeastern U.S."
Dollar General hit the biggest advances list today and is currently trading at $17.80, up $1.27 or 7.68% (1:02 pm CST). The stock is fairly reasonably valued at 22.53 times earnings (p/e), and is a large company with a market cap. of $5.9 Billion with 333.5140 Million shares outstanding.
What pushed the stock up today was the announcement of first quarter of fiscal 2003 results. Net income for the first quarter "increased 31.4% to $60.3 million or $.18 per diluted share, compared with $45.9 million or $.14 per diluted share in the first quarter of fiscal 2002." per the NYTimes on the Web.
Net sales grew to $1.57 billion for the first quarter of 2003 compared to $1.39 billion in the first quarter of 2002. During the year they reported 589 net new stores and a same-store sales increase of 4.2%.
Looking at a 5 year record on Morningstar.com, we find that sales grew from $3.2 billion in 1999 to $3.9 billion in 2000, $4.6 billion in 2001, $5.3 billion in 2002, and $6.1 billion in 2003. Excluding the current quarter just reported, we see solid growth in revenue the last four quarters at 15.54%, 18.65%, 14.41%, and 10.94%.
The assets/liabilities balance is in favor of assets....and the free cash flow reported has been steadily improving from a -1 million in 2001 to $140 million positive in 2002 and $300 million for the year ending 1/03.
This is a GREAT stock by almost all parameters. I don't own any shares at this time but would not hesitate to purchase some soon at these levels.
Good luck investing and thanks for stopping by.
May 29, 2003 Hovnanian Enterprises (HOV)
The market continues to push ahead this morning. Our stocks are doing fine except EXAC down a point today...on no news...and SYNO resting after a 30% gain in a week. Not too bad.
Hovnanian Enterprises (HOV)"designs, constructs and markets multi-family attached condominium apartments and townhouses and single-family detached homes in planned residential communities" according to CNN.money. The stock showed up on the greatest gainers in the market this morning trading at $56.29 up $3.98 or 7.61% at 9:45 am (cst).
Yesterday (5/28/03), HOV reported a 103% increase in earnings for the quarter ending April 30, 2003. Revenues increased 21% to $679.8 million. In addition, very importantly, management guided higher, "increasing its projection of fiscal 2003 earnings to the range of $6.50 to $6.75 per share from $5.25 to $5.50 per share...and is providing an initial projection of $7.50 in earnings per share for fiscal 2004" as reported by the NYTimes on the web.
Morningstar shows HOV with an excellent 5 year growth in revenues from $0.9 billion in 1998 to $0.9+ billion in 1999, $1.1 billion in 2000, $1.7 billion in 2001, $2.6 billion in 2002, and extrapolating the quarter....not very accurate in a somewhat seasonal business....but still....should be at least at 2.7 billion for 2003. Revenue growth in the prior four quarters (prior to just announced quarter) has grown by 54.94%, 39.55%, 38.37%, and 54.76%.
Interestingly, free cash flow has improved from a NEGATIVE 76 million in 2000 as reported in Morningstar.com, to a positive 30 million in 2001, and improving to a positive WHOPPING 242 million in 2002.
I don't own any shares at this time...but the whole picture is quite attractive especially with the stock selling at a p/e of 11.15.
I hope everyone has a great day and email me at email@example.com if you have any questions or comments or go ahead and post them here.
Wednesday, 28 May 2003
May 28, 2003 Abercrombie & Fitch Co. (ANF)
If any of you have teenagers, then you will know about ANF. The stock is having a nice day today and made the largest percentage gainers list. I do not own any shares of this nor does any member of my family.
ANF is currently (12:46 pm CST) trading at $29.07 up $1.33 or 4.79% on the day.
On May 13, ANF reported first quarter earnings ending May 3, 2003, rose 13% to $.26 from $.23 for the comparable period last year.
Looking at Morningstar, we find a 5 year growth from 0.5 billion to 0.8 in 1999, 1.0 in 2000, 1.2 in 2001, 1.4 in 2002 and $1.5 billion for the trailing twelve months. This company is cash-flow positive generating 200 million in the past 12 months...almost double the 107 million reported by Morningstar in 2002.
Another great pick for a beautiful late spring day.
Regards to my friends! Bob
By the way, at 10:51 CST, KKD is trading at $34.35, up $2.49, or 7.82% on the day. The p/e is indeed a bit pricey at 61.34 and the market cap is 2.0 billion.
May 28, 2003 Krispy Kreme Doughnuts (KKD)
The market paused this morning as if it wanted to correct as the bears came out growling....but the bulls resumed their push and the momentum on the upside continues. As I write (10:43 am CST) market up 45 points.
An old favorite of mine, Krispy Kreme Doughnuts, hit the list today. They had a GREAT earnings report today as they continue their explosive revenue and earnings growth....all on the back of a glazed doughnut! (so much for low carb dieting)....earnings reported today with earnings up a strong 47%, their sales rose 34% to $148.7 million from $111.1 million last year.
As reported by the CEO on CNBC this morning same store sales growth continued in the double digit area up about 11% year over year. (These are the stores that have been open at least a year).
On Morningstar we see sales growing from $80.9 million in 1999, $220.2 million in 2000, $300.7 million in 2001, $394.4 million in 2002, and now with a $148 million for the quarter we have about an extrapolated $600 mnillion level for the year 2003 if everything continues at the same rate.
Looking at cash flow we do see a NEGATIVE 34 million number but with all the rest of the figures so good, I guess we can look over this for a good doughnut or two. Maybe with a cup of their new coffee!
I do not at this time own any shares but have in the past and am not planning at this time to purchase new shares. Nobody in my family owns shares either.
Have a great day investing! Did anybody besides me snag some SYNO? Bob
Tuesday, 27 May 2003
May 27, 2003 Westcorp (WES)
Continuing to scan the lists tonight before checking out for the day, I was hoping to find something sexier than another financial. However, using out criteria, that was all that I could find. Please feel free to suggest other issues anytime!
According to CNN.money, WestCorp is "a financial services holding company providing automobile lending through WFS Financial, and community and mortgage banking through Western Financial Bank."
Last month, on April 23rd, WestCorp reported their earnings for the first quarter of 2003. In summary, per the NYTimes on the Web, net income rose 40% to a record $23.5 million for the quarter, EPS increased 30% to $60 for the quarter, and total revenues grew 22% to $194 million for the quarter. An outstanding last quarter....one of the main criteria of our selection methodology.
For the last 5 years, looking at Morningstar, we see STEADY growth (another criterion), from $0.4 billion in 1998, to $0.5 billion in 1999, $0.8 billion in 2000, $1.0 billion in 2001, and $1.2 billion in 2002.
Unfortunately, the entries on cashflow and assets and liabilities are NOT included in complete form on Morningstar but the rest of the numbers look excellent.
WES closed the day ar $24.41 or up $1.70 (7.49%).
Have a great evening and please stop by again soon!
May 27, 2003 Dearborn Bancorp (DEAR)
It is after the close. I like to post mid-day if possible but yikes I have to make a living too! Got back to my office and saw the market was up some 179 points today at the close. And our stocks did great. Looking at last week's pick of SYNO, boy was that ever timely. I know I broke my rules buying it but sometime you just have to!
Looking at our lists of greatest % gainers on the NYSE/NASDAQ/AMEX, I have come across a bank. Dearborn Bancorp in particular. I do not, nor does anyone in my family own any shares...nore do I plan to buy at this time.
Dearborn had a GREAT day closing at $22.50 on the day, up $3.00 or 15.38%. That's a lot better than my CD at Wells Fargo which auto-renewed this past month at 0.8%....after-hours the stock is up further to $23.00 or up $.50 or another 2.22%. So what is the news?
Today, Dearborn announced a 5% stock dividend. Doesn't really mean any cash in your pocket....in reality stock dividends are dilutional....but psychologically, in the strong market, I guess someone thought it was a pretty good idea.
In addition, on April 16th, Dearborn Bancorp, 'the holding company for Community Bank of Dearborn', reported earnings of $580,000 for the quarter ending 3/31/03. This 'represented a 21.6 percent increase over the Corporations cearnings of $477,000 in the same quarter of 2002.' per the NYTimes on the Web. Fully diluted, eps was $.20 vs $.18 a little over a 10% increase.
Total assets increased 35.2% during the same period and total deposits were up 36.2%, and total loans grew by 38.1% in the same period. This bank is making money! Technically the stock has been quite strong the past few months.
Looking at Morningstar for a 5 year review, we see that revenues have grown from $5.7 million in 1997, to 8.8 million in 1998, 10.2 million in 1999, 13.3 million in 2000, 16.0 million in 2001 and 18.7 million in trailing twelve months.
EPS have grown the last four quarters (prior to current reported quarter) by 44.64%, 61.54%, 199.58% and 58.66%. We do not have a cash flow assessment on this on Morningstar.
There may be other people who are better at assessing bank stocks which have their own group of analysts. However, on our little system, Dearborn showed up today on the list and it deserves a mention! Bob
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