Stock Picks Bob's Advice
Saturday, 2 August 2003
August 2, 2003 "How are we doing?" Looking back at week of 6/23/03
We had a up and down week during the period of 6/23/03 to 6/27/03. However during the week we made some stock selections. Five weeks isn't a lot of time to give an investment, but let's take a look at how these picks have done this past month. (That is what we USUALLY do on weekends around here!)
On June 23, 2003, we picked two stocks: FDCC at $19.18 and FDP at $26.14. Factual Data Corp. (FDCC) has dropped to $17.25 on Friday 8/1/03. FDCC is being acquired by Kroll and we will not be following this stock much longer. In fact, shortly after our selection, Kroll announced its acquisition plans at a below-market price! How about that for bad timing? Anyhow, at $17.25, this represents a $1.93 loss or 10.06% drop.
Fresh Del Monte Produce (FDP) closed Friday, 8/1/03, at $27.67. This is a $1.53 gain or a 5.85% move to the upside.
Biosite (BSTE) was selected when it was trading at $48.15 on 6/25/03. BSTE closed at $42.04 representing a loss of $6.09 or a 12.6% drop. Not too thrilling this first month!
Digital Insight (DGIN) was picked on 6/25/03 at $17.96. Friday, 8/1/03, DGIN closed at $19.86, a gain of $1.90 or a gain of 10.5%.
Bankrate (RATE) was selected on 6/25/03 while trading at $10.40. This probably is one of our best performers...which now may be under pressure due to interest rate concerns....but it still closed on Friday 8/1/03 at $14.39. This represents a nice gain of $3.99 or a gain of 38.3% for this time period.
Biovail (BVF) was picked on 6/26/03 at $49.30. The company unfortunately posted a loss on 7/29/03 due to acquisition costs and the stock price suffered accordingly. The stock closed Friday, 8/1/03 at $38.31 a loss of $10.99 or a drop of 22.3%.
Online Resource Corp (ORCC) was picked on 6/27/03 at $6.17. Currently, as of Friday, 8/1/03, ORCC closed at $5.27, a loss of $.90 or a drop of 17.1%.
CACI International (CAI) was the last pick for the week when it was trading at $34.27. This stock had a nice month and it closed at $39.23 on 8/1/03, a gain of $4.96 or a gain of 14.5%.
Overall for the week we had four stocks up with gains ranging from 5.85% to 38.3%, and four stocks down with losses ranging from (10.06%) to (22.3%). The average performance for the eight issues was a gain of .88%. Pretty much a wash for the month.
Thanks for stopping by and visit again soon. Would love to hear from more of you about the usefulness of this site and questions, comments, or words of encouragement! You can reach me by posting right on the site or emailing me at email@example.com
Friday, 1 August 2003
August 1, 2003 United Online, Inc. (UNTD)
O.K. how about one more before I call it for the evening? I am a big fan of cable modems and DSL and have not been very impressed with AOL and dial-up services but perhaps this company deserves a second look....
United Online, Inc. (UNTD), according to CNN.Money "...is an Internet Service Provider formed as the result of the merger of NetZero and Juno. The Company offers billable dial-up Internet access services in more than 5,000 cities for $9.95 per month."
United had a wonderful day today closing at $33.64 up $2.25 or 7.20% on the day. They reported their fourth quarter results yesterday (7/31/03) as reported on Yahoo.com: revenue for the quarter was $79.6 million up 46% from $54.4 million for the year ago quarter. Total pay subscribers increased by a net 142,000 during the quarter reaching a record 2.55 million. Excluding a one time tax benefit, net income was a record $10.3 million or $.23/share vs a loss of ($2.7) million or ($.07) per share for the year-ago quarter.
Morningstar.com shows a pretty picture of revenue growth starting with a miniscule $5 million in 1999, $55.5 million in 2000, $57.2 million in 2001, $167.5 million in 2002, and $168 million in 2002. The latest quarter earnings report also reported that 2003 revenue was $277.3 million.
Free cash flow has been improving and is now turning positive: ($104) million in 2000, ($103) million in 2001, ($6) million in 2002 and $53 million in the trailing twelve months.
The balance sheet is pristine with $171.5 million in cash reported with $18.9 million in other current assets. This can be compared to the liabilities picture with $62.8 million of current liabilities and NO long-term liabilities at all.
Per Yahoo.com, UNTD has a market cap of $1.32 billion with 42.1 million shares outstanding, while 37.8 million of those float. There is no dividend.
The p/e while steep at 138.24 represents a company that is just now turning profitable and should come down quickly if growth continues. As of July 8, 2003, there are 5.47 million shares out short, representing 4.63 days of trading for average volume days.
Overall, this company is very attractive with the only negative I could see is that it is a dial-up service...and the p/e is steep. However, with the company just now turning profitable, we can hope that earnings growth will quickly drop the p/e into reasonable territory. Otherwise, lots of cash on hand and an explosive growth story!
Have a great weekend friends! Thanks for stopping by.
Posted by bobsadviceforstocks at 6:02 PM CDT
Updated: Friday, 1 August 2003 6:03 PM CDT
August 1, 2003 Alliance Data Systems (ADS)
Quite a lousy day in the market today! Could feel it yesterday when the Dow sold off and today it followed through with continued selling. Even so, market has had a big run and needs a rest....wish it wasn't so!
Now that my day is done, I have a chance to run through the lists of stocks and see if anything looks nice for our pick list. I came across Alliance Data Systems which I think fits the bill (ADS). Alliance, according to CNN.money "...provides electronic transaction services, credit services and loyalty and database marketing services. The Company develops and executes programs designed to help its clients target, acquire & retain loyal customers."
ADS had a nice day today closing at $28.45 up $1.05 on the day or 3.83%. They reported their earnings on July 16, 2003, for the quarter ending June 30, 2003. At the same time, according to NYTimes on the web, they "...raised guidance for the full year."
By the way, I do not own any shares of this nor do any members of my family!
According to the NYTimes article, total second quarter revenue increased 20% to $247.6 million compared to $205.5 million in the same period a year ago. Net income increased 250% to $11.9 million or $.15/share compared to $3.4 million or $.04/share for second quarter of 2002.
The morningstar.com 5 year financial graph is equally impressive. Revenues have grown sequentially from $411 million in 1998, to $583 million in 1999, $678 million in 2000, $777 million in 2001, $871 million in 2002...and extrapolating the current quarter we should get near $1 billion for 2003.
Free cash flow has been improving from $54 million in 2000, $132 million in 2001, $85 million in 2002, and $206 million in the trailing twelve months.
Financial balance sheet not quite as pretty as the previous facts: $99.7 million in cash, $358.7 million in current assets and $492.2 million in current liabilities and $503.0 million in long-term liabilities. Morningstar.com reports $1.09 billion in long-term aseets. Lots of debt apparently but the cash flow is good and improving, so this hopefully shouldn't be a problem.
Yahoo.com shows a market cap of $2.16 Billion with 78.7 million shares outstanding and 62.2 million that float. The p/e is a steep 49.73 and there are only 966,000 shares out short representing 2.97 days of average volume.
The stock looks nice to me although debt is a bit steep imho, and the p/e is a bit rich. Otherwise the revenue growth and the latest earnings picture as well as the free cash flow generated is all attractive. May be worth your consideration and further investigation!
Thanks for stopping by. Be sure to drop me a line at firstname.lastname@example.org if you have any questions or comments.
Thursday, 31 July 2003
July 31, 2003 Chico's FAS, Inc. (CHS)
How about this for a change....from National Security and Defense to women's clothing? I have followed Chico's for some time in my 'peripheral vision' but do not currently own any shares. The stock looks EXCELLENT though and should be considered for investment purposes!
Chico's is having a great day in the market trading at $27.22 up $1.68 on the day or 6.61%. (The rest of the market is doing quite well also...at least up to 11:00 CST).
They reported their same sales results for June which were quite good: overall sales increased 41.7% to $65.9 million from $46.5 million, and more importantly for a retail company, comparable sales for the company-owned stores increased 16.5% (!).
Yahoo.com describes Chico's as "...a specialty retailer of exclusively designed, private label, sophisticated, casual-to-dressy clothing, complementary accessories and other non-clothing gift items under the Chico's and Pazo brand names."
As of April 18, 2003, the company operated 401 retail stores in 41 states and the District of Columbia, with a significant concentration in California, Florida, Texas and the northeast United States.
Morningstar.com shows a BEAUTIFUL growth picture with revenues increasing from $75.3 million in 1998, $106.7 million in 1999, $155.0 million in 2000, $259.4 million in 2001, $378.1 million in 2002.
Free cash flow has been improving recently from ($1) million in 2001 to $28 million in 2002, and $44 million in 2003.
The company has lots of cash with $99.9 million reported on Morningstar.com, more than enough to pay off the current liabilities of $54.9 million and the $6.6 million in lon-term liabilities combined.
Yahoo reports that Chico's has a market cap of $2.19 Billion with 85.7 million shares outstanding and 77.0 million that float. The p/e is a bit steep at 31.49 and perhaps more revealing is the price/sales ratio of 3.88. A little expensive for this company but look at those growth figures!
Bullish for this stock is the huge short position of 20.6 million shares representing 26.8% of the float or 14.27 average days of trading. If the stock moves much higher, we may see a short squeeze.
The stock price is not cheap. In no ways is this a value investment, but the company is doing terrific and has been doing well for some time. I like the shares and certainly would consider investing in it if the opportunity should arise!
Regards again to all of my friends!
July 31, 2003 ManTech International Corporation (MANT)
From Guitars to National Security....this site covers a lot of companies! What all of these stocks have in common is their underlying financial health and growth. If you believe that there is a relationship between the earnings that a stock generates and its eventual stock price, you will understand what we are doing here.
ManTech Int'l (MANT) "...delivers a broad array of information technology and technical services solutions to U.S. federal government customers, focusing primarily on critical national defense programs for the intelligence community & Department of Defense." according to CNN.Money.
MANT as we write is having a nice day and is trading at $24.86 up $2.32 on the day or 10.29%. As with virtually all of our recent posts, the price rise comes in conjunction with an earnings release yesterday after the close of trading: Revenues were $177.1 million up from $119.2 million an increase of 48.6%. (Actual growth was 13.2% when done on a pro forma basis....that is I believe I have it right....when comparable business entities are compared as there have been acquisitions!). Net income for the quarter rose 82.6% to $8.9 million from $4.9 million in 2002. On a full diluted EPS basis they were $.28 in 2003 vs $.18 in 2002.
This company has shown steady revenue growth the last several years: $223 million in 1996, $286.1 million in 1997, $314.3 million in 1998, $353.9 million in 1999, $378.8 million in 2000. I don't have any 2001 figures (or 2002!) on Morningstar.com. Extrapolating from the current revenue quarter would get us to about $600 million in 2003!
Free cash flow figures are also old on this site...showing $4 million in 1998, $7 million in 1999, $19 million in 2000. Again the balance sheet is unfortunately not updated on Morningstar.com as far as I know.
Overall, the company looks nice....Yahoo.com reports a market cap of $719.8 million with 31.9 million shares outstanding with only 17.4 million that float. The p/e is 25.17, and there are 972,000 shares out short representing 9.17 days of average trading volume. I wish we had some newer numbers from Morningstar.com to help us with this...but if you would like a National Security type stock with lots of Defense business...this might be a good choice.
Thanks for stopping by! Bob
Wednesday, 30 July 2003
July 30, 2003 Charles River Laboratories (CRL)
That Charles River must be one heck of a water way! I mean this is the SECOND Charles River company we are posting on this site. BTW I have seen this river and it runs through Boston....beautiful area to visit near Harvard and MIT. Must be a real source of new companies! (Our other company on this site is Charles River Associates).
CRL is having a very nice day today trading at $35.60 up $2.89 or 8.84%. Like so many of our recent selections, CRL is climbing on earnings news.
The company announced today (BUSINESS WIRE on NYTimes on the Web) that second quarter revenues were $154.4 million, a 13.1% increase over the $136.5 million reported in 2002. Net income increased 25.9% to $20.6 million or $.42/diluted share compared to $16.3 million or $.34/share last year.
I do not own any shares but this company is very intriguing and it certainly is on my shopping list!
According to CNN.Money, CRL "...is a provider of research tools and integrated support services that enable drug discovery and development, including genetically and virally defined purpose-bred rats and mice."
Reviewing Morningstar.com, my usual method of evaluating the fundamentals behind this stock, we find that revenue has grown steadily from $205 million in 1998, to $231 million in 1999, $307 million in 2000, $466 million in 2001 and $555 million in 2002. A very nice progression!
Free cash flow has grown steadily as well: $18 million in 2000, $35 million in 2001, $96 million in 2002 and $97 million in the trailing twelve months.
The company has a nicely balanced financial condition (imho), with $114.0 million in cash against $103.7 million in current liabilities. In addition, Morningstar reports an additional $172.2 million of other current assets, nearly enough to cover the entire long-term liabilities of $222.1 million. There are prettier financial pictures on the website that I have posted but this one looks reasonably solid.
Reviewing some of the numbers from Yahoo.com on the financial section under 'profile' we find that the market cap is $1.48 Billion and there are 45.3 million shares outstanding with 44.8 million that float. No dividends are paid. The p/e is a reasonable 21.66. In addition, there are quite a few shares out short at 3.10 million representing nearly 7% of the float as of 7/8/03. This would require 7.62 days of average volume....quite a bit of purchasing pressure that will develop if there is a short squeeze.
I like this company a lot as it continues to crank out revenue and earnings growth. This certainly is worthy of your consideration...not as musical as the Guitar Center...but then rats and mice aren't really that sexy an investment are they?
Regards to all of my friends! Thanks for visiting and come back soon. Please feel free to post comments right here on the website or drop me a line at email@example.com if you have any questions, comments, or words of encouragement!
July 30, 2003 Guitar Center (GTRC)
Now this is a change of pace! How about a retail guitar shop? No kidding. This company looks nice to me. I don't own any shares and haven't looked closely before but let's take a gander at these numbers:
Guitar Center, Inc. "...operates a chain of retail stores that sell musical instruments primarily guitars, keyboard, percussion and pro-audio equipment." according to CNN.Money.
GTRC is strumming along nicely today trading at $33.26 up $3.56 or 11.99% on the day.
Like so many stocks making nice moves this time of year, earnings was the reason behind the price appreciation today. Our whole theory of picking stocks with long history of earnings increases is based on the premise that the price will ultimately follow the earnings...and so forth.
The earnings report showed that sales for the second quarter ending June 30, 2003, increased 14.9% to $291.6 million compared to $253.9 million in the second quarter last year. Net income increased 50.0% to $6.2 million compared to $4.1 million in the same quarter last year and on a per share basis the increase was $.25 in 2003 vs. $.18 in 2002.
Morningstar.com shows a steady growth in revenue from $400 million in 1997 to $500 million in 1998, $600 million in 1999, $800 million in 2000, $900 million in 2001 and $1.1 billion in 2002.
Free cash flow has been a bit inconsistent ranging from $17 million in 2000, ($8) million in 2001, ($14) million in 2002 and positive $7 million in the trailing twelve months.
Assets and liabilities are fairly well balanced in favor of assets (in my simplified view of the balance sheet on Morningstar.com)...with $5.5 million of cash and $324.4 million of other current assets compared to $212.8 million of current liabilities and $75.9 million in long-term liabilities. I would rather see more cash and less current liabilities...but the long term debt appears nominal and the company has significant 'other current assets.'
Looking on Yahoo we find that this company has a relatively small market cap of $682.5 million with 23.0 million shares outstanding and 17.5 million shares that float. No dividend is paid. Recently was educated regarding the price/sales ratio of a company on a Yahoo stock chat site....and I confess I am paying more attention to this.
GTRC has a price/sales ratio of 0.61 which is quite reasonable. The p/e is at 25.65 which is reasonable considering the growth...ye olde GARP concept. And good news for those long on this issue...there are LOTS of shorts out there...about 4.78 million representing 27.3% of the float as of July 8, 2003, and it would take 12.82 days of average trading volume for all of those borrowed shares to get covered.
I actually like this company a lot. At least it is not another usual tech stock or medical supply or HMO company....a little variety is nice!
Thanks for stopping by. Hope all of your investments are profitable. Please contact me at firstname.lastname@example.org if you have any questions, comments, or words of encouragement!
Tuesday, 29 July 2003
July 29, 2003 Coventry Health Care (CVH)
It is getting late and I would like to get another entry online. I do not own any shares of this company...and have not really looked at it closely before now: Coventry Health Care (CVH). This is another medical stock....scanning the lists these medical stocks and hospital groups appear to have all moved together higher today.
CVH closed today at $55.77 up $2.64 on the day, a 4.97% gain. They reported their second quarter earnings today and they looked nice: Revenues for the quarter totaled $1.1 billion a 23% increase over the second quarter of 2002. Net earnings were $63.4 million or $1.05/diluted share, a 73% (!) increase over net earnings for the second quarter of 2002. This was reported by Business Wire on NYTimes on the Web today.
According to CNNMoney, Coventry Health Care, Inc. "...is a managed health care company that provides comprehensive health benefits & services to employer- & government-funded groups in the Midwest, Mid-Atlantic & Southeastern U.S."
Morningstar.com shows that this quarter's results were NOT a fluke. Revenue has grown from $2.1 billion in 1998, $2.16 billion in 1999, $2.6 billion in 2000, $3.1 billion in 2001, $3.47 billion in 2002 and extrapolating the current quarterof $1.1 billion we would get $4.4 billion in revenue for 2003.
The company is managing this growth well as free cash flow has improved from $89 million in 2000, to $170 million in 2001, $196 million in 2002 and $234 million in the trailing twelve months.
Like the previously mentioned health care firm, this one too has a lot of debt....$297.7 million in cash with $299.4 million in other current assets. Unfortunately, Morningstar reports $844.8 million in current liabilities and $197 million in long-term liabilities. This is a bit heavy on debt but the fact that the company is growing its free cash flow suggests that they are able to manage this debt load....imho.
Yahoo.com shows a market cap of $5.13 Billion with 59 million shares outstanding at 47.8 million that float. No dividend is paid, the p/e is a reasonable (imho) 19.21. There are 1.20 million shares out short representing a bit over a day and a half of average trading volume.
Except for the debt, this is a pretty picture and an outstanding earnings report...deserving of your consideration! Regards to all of my friends and readers.
July 29, 2003 Community Health Systems (CYH)
I was busy today. Getting to work the futures were positive, the market opened up...and then when I took a look at the end of the day it all turned around. The decreasing interest rates has ignited this market from its lows....could it be that the interest rate pressure on the record bond offerings by the Treasury to pay off increasing Federal deficits will drive interest rates higher and squelch the rally? I hope not.
Anyhow, scanning the lists for something that might fit our investment style, I came up with Community Health Systems (CYH). CYH had a great day today closing at $19.79 up $1.76 on the day or 8.89%.
According to CNN.Money, Community Health Systems "...is a non-urban provider of general hospital healthcare services in the United States. CHS owns, leases or operates 63 hospitals, geographically diversified across 22 states." Another medical stock!
Morningstar shows steady growth in revenue from $855 million in 1998, $1.08 billion in 1999, $1.33 billion in 2000, $1.69 billion in 2001, $2.2 billion in 2002 and $2.32 billion in the trailing twelve months.
On July 23rd, 2003, according to NYTimes on the Web (Business Wire): CYH reported results for the second quarter ending June 30, 2003. Net operating revenues totaled $657.3 million a 23.9% increase compared with $530.6 million for the same period last year. Net income increased 26.2% to $30.6 million or $.30/share compared with $24.2 million or $.24/share in 2002.
According to Morningstar.com, free cash flow has improved from a ($33 million) deficit in 2000, to $71 million in 2001, $182 million in 2002, and $127 million in the trailing twelve months.
The balance sheet shows a lot of debt...only $19.6 million in cash and $582.3 million in current assets compared to $320 million in current liabilities and $1.36 billion in long term liabilities. Morningstar also reports $2.3 billion in long-term assets as they report it....but the long-term debt load and the large amount of current liabilities...imho....and not being an accounting whiz....is not as pretty a picture as some other stocks we have examined.
Yahoo.com 'profiles' shows that CYH has a market cap of $1.95 Billion with 98.2 million shares outstanding and 53.0 million that float.
The p/e is a reasonable 16.89 in light of the solid growth...but there is only $.26/share in cash. There are 3.35 million shares out short representing 5.01 days of average trading....a bit of a bullish statistic..(again imho).
The stock is growing strongly and certainly has been spinning off some nice free cash that can be directed at paying down debt if needed...not my favorite pick on this site but certainly we need watch this stock....maybe even buy some shares...if this is the kind of company you are looking for.
Regards to all of my friends. Please drop by soon and leave some comments here or drop me a line with any questions or comments at email@example.com
Posted by bobsadviceforstocks at 9:30 PM CDT
Updated: Saturday, 2 August 2003 3:47 PM CDT
Monday, 28 July 2003
July 28, 2003 Trading Transparency QSII for DRIV
QSII looked SO nice that I went ahead and bailed out of my DRIV at a 6% loss....not quite the 8% I like...but I always push on my rules...and picked up 300 of QSII. Let's hope it continues its strong performance. Regards again.
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