Stock Picks Bob's Advice
Friday, 13 June 2003
June 13, 2003 Looking Back...How are we doing??
Not a lot of stocks showed up on the list...the Dow was down 79.40 at 9,117.10 and the Nasdaq closed down 27.13 at 1,626.49.
It has been suggested to me that we should review some of our past suggestions. Well Happy Birthday to us. This site is only one month old now and we have already 58 entries! I hope you can read all of them.
Our first pick on 5/12/03 was Saint Jude Medical, the medical equipment maker. Trading at that time at $55.30, it has closed today at $61.89. Unfortunately, even I didn't buy any shares. That is a $6.59 gain in the month or an 11.9% appreciation.
JCOM was out second pick, and being a NEWBY at posting I don't have the price on the post. It is now trading at $33.50, and looking at a graph of the price of JCOM, I believe it was around $30...but we won't count this one officially.
On May 14th, I posted HLEX at $5.70. Healthextras, Inc. ...HLEX closed today at $7.06. This is a HUGE gain of $1.36/share or a 23.8% gain since our post.
May 15th was the post date for AHS at $10.05. AHS closed today at $12.27. This is a pick up of $2.22, or 22%.
On May 16th, we posted Agree Realty, ADC, at $23.41. ADC closed today at $24.70 a gain of $1.29. This is a 5.5% gain on the month.
May 19th we posted DNA, Genentech, at $53.04. DNA closed today at $72.90 or a gain of $19.86 or 37.4% on the month.
Next week will try to review some of the later posts. I think it is wise to give each of these picks at least a month before we review them...like this but WOW, I know it was a good month in the market....but look at this performance!
Have a great weekend!
June 13, 2003 Lannett Company, Inc. (LCI)
Lannett is a company that I am familiar with and have purchased shares in the past. Unfortunately I was stopped out by my 8% rule....and no longer own any shares. However, it is the best stock on the lists today and deserves a once-over.
It really did feel like Friday the 13th if you are a long-term investor and not selling short. The market had a rather small correction today, perhaps again suggesting the underlying bullish sentiment that appears to continue to drive the indices higher.
LCI had a great day today. It closed at $21.53 up $.92 or 4.46% on the day.
Lannett is another generic drug manufacturer...a little like ELAB and AAII that we already own...they "manufacture and distribute, throughout the United States, pharmaceutical products sold under generic names and its own trade or brand names, and also manufacture and develop products for other companies."
On April 24, 2003, Lannett reported results for their fiscal 2003 3rd quarter: compared to 2002, net sales jumped 28%, and net income was up 7%. Results that are nice but not overall earth-shattering.
Morningstar shows a steady growth in revenue going back to 1998 when it was $9.5 million, increasing to $10.6 million in 1999, $11.6 million in 2000, $12.1 million in 2001, up to $25.1 million in 2002 and $35.0 million in the trailing twelve months.
The company turned cash flow positive in 2002 with $5 million free cash flow positive but only $4 million free cash flow positive in the trailing twelve months.
There is only $0.5 million in cash on hand per Morningstar.com, but $13.0 million in total current assets compared to $5.0 million in current and long-term liabilities combined.
The numbers are nice if not fabulous, stock is not what I would call cheap with a trailing p/e of 41.06 per Morningstar.com. However, it is a stock to know about and watch and is what appears to be the best stock on the lists of advancers.
Thursday, 12 June 2003
June 12, 2003 Charles River Associates Incorporated (CRAI)
I saw this one and I thought it was the Towel maker. I guess that is James River or something....or was it James Taylor....lol.
O.K. so I am better at picking stocks than telling jokes and I should stick to it. Anyhow, I don't own any of these shares, have no plans right now to buy any and nobody in my family or stock club owns any that I know. In fact, I don't think I ever even heard of this company until 5 minutes ago!
CRAI "is an economic and business consulting firm that applies analytical techniques and industry knowledge to complex engagements for a range of clinents, including law firms, corporations and governments." Yikes, almost sounds like Arthur Andersen.
Charles River Associates had a GREAT day today and made the most-up list as well. It closed at $27.95 up $4.03 or 16.85%. In fact, after hours it is trading up another nickel. (But a nickel won't even buy you a candy bar these days.)
What drove the stock up was an EARNINGS report. If the three most important things in real estate are "location, location, and location" then in MY book, the three most important things for a stock investment is "earnings, earnings, and EARNINGS!"
Today, CRAI reported financial results for the fiscal 2003 second quarter ended May 16, 2003.
Revenues for the quarter increased 43.7% to $40.2 million compared to $28.0 million last year. Net income increased 40.9 percent to $2.8 million or $.30/share from $2.0 million or $.22/diluted share last year (2002). This is all from the NYTimes on the Web article. By the way the NYTimes site is a free site but you do have to register.
Checking Morningstar.com, we find steady revenue growth from $53.0 million in 1998, $74.0 million in 1999, $109.8 million in 2001, $130.7 million in 2002, and extrapolating (I love that word!) from the present quarter, assuming no seasonality, we can estimate about $160 million for 2003. Aren't these BEAUTIFUL numbers? Don't you just LOVE this company?
Free cash flow has been improving steadily, although the numbers are SMALL, the TREND is wonderful: $-1 million in 2000, $+2 million in 2001, $9 million in 2002 and $12 million in the trailing twelve months.
The company is very solvent per Morningstar with $23.7 million in Cash, $48.2 million in other current assets as opposed to $30.5 million in Current Liabilities. Long-term assets total $44.0 million compared to a miniscule $4.5 million in long term debt.
This stock trades at a trailing p/e of 28.52 and does not pay a dividend. If I had some free cash....I know the same old story....but HONESTLY...this is a beautiful picture and looks like a GREAT investment.
Goodnight again and keep those cards and messages coming at firstname.lastname@example.org.
Posted by bobsadviceforstocks at 10:55 PM CDT
Updated: Thursday, 12 June 2003 10:57 PM CDT
June 12, 2003 Oshkosh Truck (OSK)
It is late in the evening as I take to the task of scanning for a great pick for the day. This market sure does want to go up~! Probably wouldn't hurt to have a bit of a correction in here...although it is said that a bull market does climb a wall of worry.
The stock today that showed up is an old favorite of mine. Ask my buddies in Investnuts where we own a few shares...Oshkosh Truck. I also have a few shares in one of my accounts other than my trading account. So how is that for transparency?
Anyhow, Oshkosh Truck, "engineers, manufactures, and markets a broad range of fire and emergency apparatus and specialty commercial and military trucks under the Oshkosh, Pierce, McNeilus and MTM trademarks." In other words they make peacetime vehicles like firetrucks, garbage trucks, ambulances and military vehicles such as tanker trucks.
The stock had a great day trading at $62.5 up $3.11 or 5.22% on the day. Looking for news to explain the jump, the best I can see on the NYTimes on the web is that the Pacific Exchange (PCX) announced yesterday that they will begin trading options on OSK. I think there must be something more than this to explain the jump....
Anyhow, earnings look nice. On April 24, 2003, according to NYTimes on the Web, Oshkosh Truck reported their second quarter results for the period ending March 31, 2003. In a nutshell, things were solid: net income increased 16.0% to $14.1 million, or $.81/share. This compares with net income last year of $12.2 million or $.70/share. Revenue was up from $415.6 million last year to $453.4 million for the current year.
Examination of financials on Morningstar.com shows that revenue growth has been steadily improving from $0.9 billion in 1998, $1.2 billion in 1999, $1.3 billion in 2000, $1.4 billion in 2001, $1.7 billion in 2002, and $1.8 billion in the trailing twelve months.
The company even pays a SMALL dividend of $.35/share that has increased from $.33/share in 1998.
Looking at free cash flow we find that the company, while dropping a little over the last twelve months to $196 million positive from $248 million in 2002 is still spinning off lots of real money.
Current assets are at $430 million vs $385 of current liabilities, and 'long-term assets' measure $604.7 million vs $216.7 million in long-term debt.
The stock IMHO appears to be reasonably valued with a trailing p/e of 17.40. This looks like a GREAT company to me....should do well in both peace and wartime industries....and has been growing steadily since 1997 if not longer. That is why I own some of these shares....and if I had some available cash....would be happy to add to my position at this point.
Have a great evening. Drop me a line at email@example.com and let me know if you like all of this commentary and if it is helpful to you. Bob
Wednesday, 11 June 2003
June 11, 2003 WebEx Communications
Time to be wrapping up the day. WebEx Communications deserves mention. WEBX closed at $14.41 up $1.40 on the day a gain of 10.76%.
It sounds a little like a dot-com again...yikes...but the numbers are good. WEBX provides "a global network and scalable platform for real-time interactime multimedia communications services on the Internet using a standard Web browser."
Did you get that? Anyway, they are making money.
Last quarter, WebEx reported revenue of $41.8 million up 41% from the prior year. EPS was $.15 compared to $.03 last year.
Morningstar.com documents the explosive growth in revenue for this company. Trailing p/e is reasonable at about 26. The company which was cash flow negative in 2001, is now cash flow positive.
I don't own any shares of this issue, and think probably this is a more speculative company...but perhaps this will be where we will find our greatest results as we look for investments!
Regards to all. Bob
June 11, 2003 Lennar Corporation (LEN)
Trying to make a quick post here, LEN shows up on the list. This, I believe, is our second home builder...the first being Hovnanian (HOV).
LEN had a GREAT day today, closing at $75.45 up $5.70 or 8.17% on the day. Yesterday, LEN released news on its second quarter earnings. Needless to say this was OUTSTANDING. Revenue recorded was $2.1 billion up 35%. Earnings per share increased to $2.05 this quarter from $1.37/share last year. They raised estimates for 2004 and 2003, and reported a record backlog. All the 'ducks were in a row'.
Morningstar shows a steady 5 year growth in revenue from $2.4 billion in 1998 up to $5.1 billion in 2001 and $7.3 billion in 2002. Free cash flow, while taking a dip in 2001 was back up to $200 million in the trailing twelve months. They have $4 billion in current assets...more than the combined $3.5 billion in current and long-term liabilities. In other words their financial health appears excellent.
There doesn't seem to be anything NOT to like in this stock except the price is a bit high to buy loads of shares...it even pays a SMALL dividend and the p/e is a reasonable 10.75 per Morningstar.
I do not at this time own any shares but if I had some cash would be happy to own some of this home builder's stock!
Have a great Wednesday! Bob
Tuesday, 10 June 2003
June 10, 2003 Caremark Rx (CMX)
It's 2:35 pm and just 25 minutes on the trading day left. Looking through the most-up list this afternoon, with a special emphasis on the $10 and up stocks, I came across CMX...Caremark Rx. At first I thought it was CarMax...another stock I have commented on earlier....but this is a pharmacy stock.
Currently, per the NYTimes on the web, CMX is trading at $24.66 up $1.21 or 5.16% on the day.
Caremark, according to CNN.Money, "provides pharmacy benefit management services and therapeutic pharmaceutical services."
Looking at the last reported quarter which came out on April 29th, 2003, Caremark reported revenues of $2.16 billion an increase of 34% over the $1.61 billion in revenues reported for the same quarter in 2002. EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) increased 46% to $126.0 million from $86.4 million for the same period in 2002.
Looking at Morningstar.com, we find that revenues have increased steadily from $2.4 billion in 1997 to $5.6 billion in 2001 and $6.4 billion in the trailing twelve months.
Free cash flow has been progressively improving from a healthy $198 million positive in 2002 up to $360 million positive in 2002.
Assets and liabilities are fairly evenly balanced with a slight advantage to assets.
This stock looks very nice to me. I don't own any shares but if you are looking for one to pick up, this might be a nice choice!
The p/e is a very reasonable 7.05 but the stock does not pay a dividend.
Happy Tuesday! Bob
Posted by bobsadviceforstocks at 2:43 PM CDT
Updated: Tuesday, 10 June 2003 2:44 PM CDT
June 10, 2003 Packteer (PKTR)
Just a quick update. Sold MWRK after hitting the 8% loss. Stock a great company but rules are rules and out it went.
Packeteer (PKTR) is on the list today. They are up $1.14 or 8.17% to $15.10. Everything in line on this stock. Morningstar looks great, cash flow is positive, last quarter was superb, assets far outnumber losses. Only thing is since it is just becoming profitable, the current p/e is steep at 78.
I don't own any shares of this or Pediatrix.
Regards to my friends! Bob
June 10, 2003 Pediatrix (PDX)
It is 9:39 here and I am showing my buddies in the doctor's lounge how to pick stocks. Maybe I should stick with surgery?
Anyhow, Pediatrix showed up today on the CNN.money most active up list today. Fits our criteria.
PDX is trading at $38.80 up $1.64 on the day. Last quarter was just reported on May 6, 2003. Net patient service revenue was $126.2 million up 17.6 percent from $107.3 million for the quarter ending March 31, 2002. Earnings increased 23.4% to $29.2 million for the same quarter (EBITDA)....compared to 2002.
By the way PDX "provides physician management services to hospital based neonatal intensive care units."
Looking at Morningstar, we see steady revenue growth from $128.9 million in 1997 up to $354.1 million in 2001. They also have steady free cash flow growth and their assets/liabilities are in balance favoring assets.
Looks great to me. Anyhow, they are calling me to surgery! No kidding.
Monday, 9 June 2003
June 9, 2003 Accredited Home Lenders Holding Co. (LEND)
It is Monday morning. I was GOING to update the main page on this site....but didn't get to it. This weekend was graduation weekend for my senior and well.....enough excuses!
Anyhow, market a little soft today, getting a bit of a rest. This stock showed up on the NASDAQ top gainers and is worth a look. I have never heard of it before, it is actually a relatively new issue, and nobody in my family including me has any shares.
LEND is according to CNN.money, "a nationwide mortgage banking company that originates, finances, sells, securitizes and services subprime mortgage loans secured by single-fammily residences." Sounds a little like our New Century Finance...and look how well THAT one has done.
The stock is currently trading at $19.58 up $1.63 on the day or 9.08% to the upside.
On April 29th, LEND reported first quarter results. As noted on the news report from NYTimes on the web, LEND was founded in 1990, and came public in the first quarter of the year.
Total revenues for the quarter increased by 111% to $79.1 million from $37.5 million for the prior year (!). Net income was $14.8 millionl, or $.85/share, a 170% increase from the $37.5 million for the comparable quarter in 2002 (!!!).
Morningstar shows a steady improvement in annual revenue from $12.6 million in 1997, $18.3 million in 1998, $39.3 million in 1999, $56.6 million in 2000, and $96.5 million in 2001. Based on the $79.1 million in revenue for the first quarter, 2003 could bring in up to $300 million. This is a very pretty progression!
Morningstar is a bit spotty on the results regarding free cash flow and assets/liabilities...but watch this site for updates as the company is public longer.
The stock jumped today on guidance from the company, with second quarter eps raised to $1.20-$1.25 and full year eps guidance raised to $3.50-$3.75.
This is a very interesting stock, and if it performs anything like NCEN, represents a good buying opportunity right here.
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