Stock Picks Bob's Advice
Friday, 7 November 2003
November 7, 2003 LeapFrog Enterprises, Inc. (LF)
I don't really know how this FROG has gotten away from this website for so long. Maybe because my kids are getting older and they don't play with the electronic learning games....anyhow, LeapFrog made the best percentage gainers list and deserves a spot on this site. As always, I must remind you to consult with your own investment advisor before making any investment decisions based on what I say on this website.
According to money.cnn.com, LeapFrog (LF) "...is a designer, developer, and marketer of technology-based educational products and related proprietary content, dedicated to making learning effective and engaging." Sounds like an advertisement doesn't it?
Anyway, as I write, LF is trading at $35.71 up $1.49 on the day or 4.35%. I do not own any shares of LF nor do any members of my family.
On October 21, 2003, LF reported their third quarter results for the quarter ended September 30, 2003. I picked this up on the NYTimes on the Web which utilized PRNewswire-Firstcall via COMTEX. Net sales for the third quarter were $203.9 million up 12% from the same period last year. Net income for the quarter was $33.4 million or $.55/share up 25% from net income of $26.7 million or $.50/share last year.
Looking at Morningstar.com, we find that LF has increased revenue from $31 million in 1998, $71.9 million in 1999, $160.1 million in 2000, $314.2 million in 2001, $531.8 million in 2002 and $575.3 million in the trailing twelve months.
Free cash flow has improved from ($39) million in 2000, ($49) million in 2001, $8 million in 2002 and $17 million in the trailing twelve months.
The balance sheet, as reported on Morningstar.com, looks excellent with $115.0 million in cash--more than enough to cover both the current liabilities of $59.0 million and the small $3.4 million in long-term debt. In addition LeapFrog is reported to have an additional $192.8 million in other current assets.
Looking at "key statistics" on yahoo.com, we find that LeapFrog has a Market Cap of $2.08 billion with a trailing p/e of 37.50 and a forward p/e (2004) of 23.28. The PEG ratio isn't too bad at 1.25 but the price/sales a bit steep at 3.32. There are 57.87 million shares outstanding with only 19.50 million of them that float. A full 66.31% of shares are held by insiders. Currently there are 4.40 million shares out short...which is quite significant...as of 10/8/03. This represents 7.24 days of average trading volume for these short sellers to cover.
No dividend is paid.
This is a nice picture overall for LF...however, it appears that sales may be slowing somewhat. Also, the valuation re: price/earnings and price/sales is a bit rich for my diet. The recent price move up may represent a bit of a short squeeze which may propel the stock higher...as there are apparently a ton of shares out there that need to be rebought and returned to their rightful owners (short-covering!)
Thanks again for stopping by! If you have any questions or comments, please feel free to leave them here by clicking on the "no comments" note under each entry or send me an email at email@example.com
Thursday, 6 November 2003
"Trading Transparency" JCOM, RSTI
JCOM, a great stock, but quite volatile, hit a 9% loss this afternoon and I went ahead and sold 150 shares at $28.79. In light of the nice evaluation this morning on Rofin Sinar (what a name!), I purchased 200 of RSTI at $30.20 (100), and $30.21 (100). (We broke our trading rules AGAIN, I should always use proceeds from losses towards margin balance but...am still trying to get to that 25 position portfolio). Regards to All!
November 6, 2003 Rofin-Sinar Technologies (RSTI)
Hello Again! I like this particular stock a bit more than my prior listing. I do not own any shares of this company nor do any members of my family.
Rofin-Sinar Technologies (RSTI), according to money.cnn.com "...designs, develops, engineers, markets and manufactures laser products for cutting, welding and marking a wide range of materials." Currently, as I write, RSTI is trading at $28.87 up $2.26 or 8.49% on the day.
What sparked the price move today was a nice earnings report. As reported by the NYTimes on the Web from BUSINESS WIRE, RSTI reported today their fourth quarter and fiscal year 2003 results which ended September 30, 2003. Sales for the quarter grew 15.4% to $74.1 million from $64.2 million last year. Net income for the quarter was $4.85 million vs $2.36 million last year, a 105% increase. On a per share basis, the results were $.39/diluted share vs. $.20 last year. These are very nice results!
Looking at Morningstar.com, we find that revenue has grown steadily from 1998 when $117.6 million was reported, to $124.0 million in 1999, $171.2 million in 2000, $220.6 million in 2001, $221.9 million in 2002, and as just reported $257 million in 2003.
Earnings per share have increased from $.58/share in 1998 to $1.29 as just reported today. Free cash flow has been improving lately with $2 million reported in 2000, $4 million in 2001, $12 million in 2002 and $16 million in the trailing twelve months.
The balance sheet looks nice with $36.2 million in cash and $158.8 million in other current assets vs. $94.2 million in current liabilities and $55.3 million in long-term liabilities.
Looking at Yahoo.com for "key statistics" we find a market cap of $351.27 million, a trailing p/e of 27.29 with forward p/e of 21.29. The PEG ratio isn't bad at 1.23, and price/sales nice at 1.26. There are 11.76 million shares outstanding with 11.50 million of them that float. As on 10/8/03, only 182,000 shares are out short representing less than one trading day at a ratio of 0.871.
You know, if I WASN'T so heavily in margin, this is one I would buy today. Could be wrong, but the latest results are nice, the p/e isn't too bad, the PEG just over 1.2, and price/sales over 1.2, progressive increase in free cash flow....all of these sound to me to be a recipe for success. Remember however, I am just an amateur, so if you like this stock, go and talk it over with your own investment advisor!
Thanks for stopping by. If you have any questions, comments, or words of encouragement, please feel free to write me at firstname.lastname@example.org
November 6, 2003 Aceto Corporation (ACET)
Hello Friends. Well the market is turning to the red now, so we may see a bit of a correction. I broke one of my rules yesterday, bought IGT after selling another stock for a loss. I am supposed to RAISE cash whenever we sell for a loss....well we will see if we get by on that one.
Aceto Corporation (ACET) is having a nice day today trading as I write at $17.42 up $1.25 or 7.73%. According to Money.cnn.com, Aceto "...is engaged in the marketing of fine and industrial chemicals used principally in the agricultural, color producing, pharmaceutical and surface coating industries."
As picked up from BUSINESS WIRE, and reported on NYTimes on the Web, ACET reported results today for its first quarter ended September 30, 2003. Net sales grew 5% to $72.3 million and Operating income grew 17% to $4.2 million. By the way, I do not own any shares of ACET.
Looking at Morningstar.com, we see a steady, if not rapid, growth in revenue from $170 million in 1999, to $271 million in the trailing twelve months. Earnings per share have grown from $.60 to $.75 over the same period. Free cash flow has improved the last few years from $1 million in 2001 to $9 million in the trailing twelve months.
The balance sheet looks quite healthy with $21.1 million in cash and $89.4 million in other current assets vs. $39.0 million in current liabilities and no long-term liabilities.
Looking at Yahoo.com for some "key statistics", we find a trailing p/e of 18.62, a forward p/e of 14.18, no PEG ratio, and price/sales of 0.62. So not very expensive in general on a valuation scale.
Currently, there are 10.34 million shares outstanding with 10.0 million of them that float. As of 10/8/03, there are 86,000 shares out short. This is only a 0.585 trading days worth...so not much short interest. The company does pay a small dividend...yielding 1.42%. The last stock split was in 1985 when a 3:2 split was declared.
Overall, a fairly reasonable stock to invest but not one that gets me overall very interested. The growth rate is a bit slow for me. There are just too many other companies really hopping to get me focussed on this particular stock. But then again, this might be suitable for someone else!
Thanks for stopping by! As always, please check with your own financial advisor before taking any action on any of my commentary on this and related sites!
November 6, 2003 "Almost 6 months and still counting!"
Good morning everyone! Looks like Cisco might help the techs, but the NYSE isn't quite as strong today! Was thinking this morning (not a frequent past-time!), and realized I was approaching a 6 month anniversary on this website. Bob's Advice started out here on May 12, 2003, with our first post, a timid two or three liner!. I have gotten a bit verbose since then...and now can fill two or three paragraphs easily.
Anyhow (to get that second paragraph in...), on days when there aren't any stocks worth listing here (IMHO), I will try to look back at our posts six months out....see how they have done, see what their latest earnings are, etc., and see if I still think they are good ideas.
Finally, I really want all of you to check with your financial advisors before acting on any of my "ideas". I have received advice from some that say I shouldn't even write a BLOG as I am not truly qualified to suggest anything, and others who tell me that I can. In any case, I try hard to let you know WHERE I get my information, WHETHER I own shares or not, and PLEASE due your own due diligence as well before acting on anything here. Phew. Got that out of the way.
Thanks again as always for stopping by. If you have any questions, comments, or words of encouragement, as always, you can email me at email@example.com
Wednesday, 5 November 2003
"Trading Transparency" IGT
Stocks have been moving back up late in the session. A previously mentioned stock on this site is International Game Tech (IGT)...they came out with strong quarterly results and the stock was up nicely today. I bought into the strength and started a new 200 share position in my trading account. I keep working towards the 25 position portfolio!
November 5, 2003 Beazer Homes (BZH)
I probably would be remiss if I didn't mention Beazer today. However, I again must stress I would be remiss if I didn't advise you, best Bob's advice I got, to check with your own financial advisor before making any decisions on the stocks and ideas I post. Anyhow, Beazer came out with good earnings today and several of the home-building stocks are participating in this sector rally. According to money.cnn.com, Beazer (BZH) "...designs, constructs, markets and sells single family homes in AZ, CA, FL, GA, MD, NV, NJ, NC, PA, SC, TN, TX and VA." BZH is currently trading at $106.34, up $5.17 or 5.10% on the day.
As reported today, via the NYTimes on the Web, from PRNewswire-FirstCall, Beazer reported that for the fourth quarter ended September 30, 2003, revenue of $1.0 billion up 15%, earnings per share of $4.18, up 38% vs $3.03 in the prior year, and record net income of $57.2 million, up 41% year-over-year.
Morningstar.com shows a steady growth in revenue from $977 million in 1998, $1.39 billion in 1999, $1.52 billion in 2000, $1.8 billion in 2001, $2.6 billion in 2002, and $3.04 billion in the trailing twelve months.
Earnings/share have grown from $2.66/share in 1998 to $11.70/share in the trailing twelve months.
Free cash flow has also been positive recently with ($23) million reported in 2000, ($31) million in 2001, $51 million in 2002 and $14 million in the trailing twelve months.
Balance sheet looks healthy with $15.4 million in cash but $1.7 billion in other current assets vs. $350.4 million in current liabilities and $764.4 million in long-term liabilities.
Looking at some key statistics from Yahoo.com, we find that the company has a market cap of $1.40 Billion, trailing p/e is 9.09 and forward p/e is cheap at 7.36. The PEG ratio is one of the lowest on this site at 0.53, and price/sales also cheap at 0.44.
There are 13.31 million shares outstanding with 12.50 million of them that float. Currently there are 3.07 million shares out short as of 10/8/03, representing 5.923 trading days. We may be witnessing a 'short squeeze' as some of these short sellers scramble to cover...? The company just announced a $.10/share quarterly dividend....with over $4.00 in earnings this quarter, maybe they could have been more generous??...no stock splits reported on Yahoo.
The numbers are GREAT on this company, like all of our other homebuilders we list. Unfortunately, like many other investors, I am concerned that this may be more of a cyclical business and we are late in the cycle. Home buying, along with home refinancing, appears to be very interest-rate dependent. If rates STAY low, then we may be in for continued growth, but if the rates start to climb???then we may see home sales slip significantly. Of course, that also is speculation.
Thanks again for stopping by! If you have any questions, comments, or words of encouragement, please feel free to email me at firstname.lastname@example.org As always, please consult with your own investment advisor before taking any actions based on what I have written here. Many of these investments and investment style may not be appropriate for all people!
November 5, 2003 Watson Pharmaceuticals (WPI)
Hello Friends! We have had a bit of a dry spell the last few days as the market rotated into different types of stocks and indeed is absorbing its latest advances the last few months. We got into and out of HealthExtras (HLEX) probably before the stock purchase even settled! But rules are rules and sometimes I even follow them. But before YOU follow any ideas on this website, please check with your own financial advisor as I am not a financial advisor and do not know if any of these investments are suitable for you!
Watson Pharmaceuticals hit the 'best advances' list today on news of good earnings. Watson, according to money.cnn.com "...is engaged in the development, production, marketing and distribution of both branded and off-patent pharmaceutical products." Currently, as I write, Watson (WPI) is trading at $41.01 up $2.57 or 6.69%.
As reported today on CBS MarketWatch.com, Watson (WPI) announced third quarter results. They earned $51.5 million or $.47/share compared with $40.7 million or $.38/share in the 2002 third quarter. Revenues increased nicely to $358.8 million, a 17% increase from $307.9 million last year.
Looking at Morningstar.com, we find that Watson has been increasing revenue steadily from $0.6 billion in 1998, $0.7 billion in 1999, $0.8 billion in 2000, $1.1 billion in 2001, and $1.2 billion in 2002. In the trailing twelve months, they are at $1.3 billion in revenue.
Earnings have grown somewhat erratically from $1.22 in 1998 to $1.69 in trailing twelve months. Free cash flow has also improved last few years from ($76) million in 2000, $139 million in 2001, $220 million in 2002 and $207 million in trailing twelve months.
At first glance, as reported on Morningstar, Watson's balance sheet also looks healthy with $582.6 million in cash and $624.1 million in other current assets vs. $330.7 million in current liabilities and $882.7 million in long-term debt.
Looking at Yahoo.com for some basic statistics, we find that WPI has a market cap of $4.42 Billion, the trailing p/e is 24.23 with forward p/e of 18.30. PEG ratio is at 1.52, Price/sales at 3.11.
There are 107.73 million shares outstanding with 96.5 million of them that float. Currently, as of 10/3/03, there are 4.75 million shares out short (down from 5.69 million the prior month) representing 6.388 trading days. This would be quite a bit of buying in order to cover these pre-sold shares. No dividend is paid. The last stock split reported on Yahoo was in October, 1997, when a 2:1 split occurred.
Overall, I like Watson. It is not cheaply priced with a PEG at 1.52, but then again, it isn't too badly valued. The stock isn't growing rapidly but it has had a steady growth the last five years.
Something to think about! Thanks again for stopping by. If you have any questions, please feel free to leave them right here on the website (let me know if you have problems doing that) or email me at email@example.com
"Trading Transparency" HLEX
Quick note: HLEX unfortunately hit our 8% loss level, and we sold 200 this morning at a 9% loss. As often is the case, with a market correction, we sell the stocks we most recently purchased as they are the most vulnerable to hitting our 'stop'.
Monday, 3 November 2003
"Trading Transparency" DVA, JCOM
I sold 150 shares of my DVA today on what I initially felt was an inadequate quarterly report. In retrospect, the report may have been more than adequate, and I may have jumped the gun on this one. In its place, I purchased 150 shares of JCOM which also recently reported an outstanding earnings report.
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