Stock Picks Bob's Advice
Sunday, 7 December 2003
"Six Months Ago" A longer term view from the week of May 26, 2003
Hello Friends! I hope everyone is having a great Sunday. Last week was hard on our trading portfolio. I suspect there was a lot of 'profit taking' as the experts say...but then again the market never moves just in one direction! As always, please remember to consult with your own investment advisor as stocks mentioned here may or may not be suitable for you and may in fact result in losses.
This is the third post looking at six months out. In awhile, if I have the stamina (!), we will start posting a year out (!) but that is still a few months away. During the week of May 26, 2003, I "picked" eight stocks: Westcorp (WES) at $24.41 on 5/27/03, Dearborn Bancorp (DEAR) at $22.50 on 5/27/03, Abercrombie & Fitch Co. (ANF) at $29.07 on 5/28/03, Krispy Kreme Doughnuts (KKD) at $34.35 on 5/28/03, Medical Staffing Network (MRN) at $7.52 on 5/29/03, Dollar General (DG) at $17.80 on 4/29/03, Hovnanian Enterprises (HOV) at $56.29 on 5/29/03, and Eon Labs (ELAB) at $29.55 on 5/30/03.
As always, you can refer to the 'original' posts, by clicking on the appropriate date on the calendar at the left of this column of posts...and by clicking on the months to get to May, 2003. Of these stocks, I currently only own shares of Eon Labs (ELAB) which has been very good to me. I was in and out of Krispy Kreme (KKD) and actually hit my 8% loss or so, and sold my shares.
Let's see how these stocks are doing as of close of business on Friday, 12/5/03. Westcorp closed Friday at $36.95. This was a gain of $12.54 or 51.4%. Looking at Yahoo for news, we find that WES reported net income of $29.3 million for the third quarter ended 9/30/03. This was a 35% gain from the prior year or $.64/diluted share this year vs $.55/diluted share last year. It appears they are right on track!
Dearborn closed on 12/5/03 at $19.35. This is a loss of ($3.15) or (14%). On October 21, 2003, as picked up by Yahoo.com, DEAR reported earnings for the third quarter ended 9/30/03. Earnings per share were up at $.36/share vs $.32/share last year. However, the stock price has not appreciated like some of our other stocks!
Abercrombie & Fitch has also struggled since our 'selection'. Currently ANF closed at $25.30 on 12/50/03. This is a loss of ($3.77) or (13%). In November, as reported by Motley Fool on Yahoo.com, ANF had same store sales DECLINES of 13%. As I have always emphasized, same store sales figures are key to future performance. We can see what is holding back this stock!
Krispy Kreme closed 12/5/03 at $38.66. This represents a gain of $4.31 or 12.5%. While there ARE concerns posted in the advisories on KKD, KKD did report results on 11/21/03 for the third quarter, as reported by Yahoo: net income was $14.5 million or $.23/share vs $10.1 million or $.17/share last year. Revenue was up 31% to $169.6 million from $129.1 million. So while some analysts may be correct in questioning the future performance of KKD, thus far, they are bringing in the "dough".
Medical Staffing Network closed 12/5/03 at $9.33. This is a gain of $1.81 or 24.1%. On 11/6/03, MRN reported thid quarter results: revenue was $123.7 million, a DECREASE of 2.0% from $126.3 million for the third quarter of 2002. Net income was $1.1 million or $.04/diluted share vs. $6.1 million or $.19/diluted share last year. These are NOT exciting results, and although can be explained, would qualify us to sell this stock as the growth in revenues/earnings are not continuing.
Dollar General closed 12/5/03 at $19.00. This is a gain of $1.20 or 6.7%. On December 4, 2003, per Yahoo.com from PRNewswire, DG reported same store sales growth of 1.7%, overall sales growth of 10.1%. Again, positive is better than negative, and this is not much to write home about. Would also put this on my watch-list to consider selling on any additional questionable developments.
Hovnanian has been a big winner for us (although I do not personally own any shares shucks). HOV closed Friday 12/5/03 at $95.16. This is a gain of $38.87 or 69.1%. On November 5, 2003, as reported on Yahoo.com, HOV reported net contracts were up 36% to 3,274 homes and that contract backlog had increased 49% to 5,764 homes compared to the same period in 2002. Again, I am but an amateur, but it appears that HOV is on track continuing its superb performance.
Finally Eon Labs (ELAB) has been a big winner for this website, and for my trading portfolio. ELAB closed Friday 12/5/03 at $52.99. This is a gain of $23.44 or 79.3%.
For our eight stocks that week over the six month period we have an average performance of a gain of 27.01%. Not too shabby for six months! But then again, the market was most cooperative!
Thanks again for stopping by. If you have any questions, comments, or words of encouragement, please feel free to email me at email@example.com
Saturday, 6 December 2003
"How are we doing?" A look back on the week of October 13, 2003
Hello Friends! Thanks for dropping by. Please feel free to browse and make yourself at home on this website. Remember, as always, please discuss any investment ideas you may pick up on this website with your investment advisor before taking action on them as they may or may not be suitable for you!
I posted just five stocks on the week of October 13th: International Game Technology (IGT) at $30.17 on 10/13/03, aQuantive (AQNT) at $13.34 on 10/14/03, BioLase (BLTI) at $13.47 on 10/14/03, Pharmaceutical Product Development (PPDI) at $29.16 on 10/16/03 (PPDI and IGT are the only stocks of the group that I purchased and which I still own shares), and Image Sensing Systems (ISNS) at $10.00 on 10/17/03.
IGT closed Friday, 12/5/03, at $34.10 for a gain of $3.93 or 13%. AQNT closed Friday at $9.96 for a loss of ($3.38) or (25.3%). BLTI closed Friday at $12.68 for a loss of ($.79) or (5.9%). PPDI closed Friday at $29.94 for a gain of $.78 or 2.7%. Finally, ISNS closed Friday at $10.40 for a gain of $.40 or 4%.
Averaging the group, we find that we had an average LOSS of (2.3%) during the past 7 weeks on these five stocks. Not an exciting performance, but we will continue to call them as they turn out. It will be interesting to see how they do long turn, and it does help to hold losses to 8% which would have been a great help if we had stopped out of AQNT at (8%) instead of (25.3%)!
If you have any comments, questions, or words of encouragement, please feel free to contact me at firstname.lastname@example.org
Friday, 5 December 2003
December 5, 2003 ResMed Inc. (RMD)
Hello Friends! I don't usually post twice in a morning....except when I do. And I could have sworn that I already had posted this one on my BLOG. I had to go over to the list of past picks...that you can link to on the main webpage...and scan them. How does that Santa Claus song go..."He's making a list and checking it twice...gonna find out which stock is naughty or nice?"...or something like that. Anyhow, I cannot find ResMed on the list so here goes. Further, always remember to consult with your investment advisor befoe taking any investment action on anything listed here. It may or may not be suitable or profitable for you!
ResMed (RMD) is having a nice day today trading at $41.76, up $1.56 or 3.88% on the day. According to money.cnn.com, ResMed "...designs, manufactures and distributes medical equipment for treating and diagnosing sleep disordered breathing, primarily obstructive sleep apnea." Personally, I know about this sleep apnea thing...and wear a mask each night (!)...I think there are a LOT of other snorers out there (schnorers?)...and this sleep apnea thing is going to grow unless we all go on a diet and lose a few of those extra pounds.
The latest quarter results were reported on October 28, 2003, and carried by PRNewswire-FirstCall and reported by Yahoo.com. Revenue for the first quarter ended September 30, 2003, was $72.9 million, an increase of 24% over the same quarter last year. Net income for the quarter increased 28% from the prior year to $12.2 million, and earnings per share for the quarter was $.35, an increase of 25% from last year's results.
Reviewing the Morningstar.com website, we find that revenue was $89 million in 1999, $116 million in 2000, $155 million in 2001, $204 million in 2002, and $274 million in 2003.
Earnings per share have increased from $.52/share in 1999 to $1.33/share in the trailing twelve months.
Free cash flow has also improved recently with $2 million reported in 2001, $7 million reported in 2002, and $34 million reported in 2003.
Morningstar.com reports that RMD has $121.0 million in cash and this combined with their $120.9 million in other current assets is WAY more than enough to cover both their current liabilities of $50.6 milllion and the long-term liabilities of $122.6 million.
Checking "key statistics" on the Yahoo site for RMD we find that the Market Cap is currently $1.42 Billion, the trailing p/e is 29.96, forward p/e is 20.94 (fye 30-June-05), and the PEG ratio is nice at only 1.16. However price/sales a bit steeper at 4.74.
Yahoo reports that there are 33.96 million shares outstanding with 32.50 million of them that float. Currently there are a LOT of shares out short, in my opinion, at 1.94 million as of 11/10/03. This represents 7.007 trading days of volume to cover.
No dividend is paid and the last stock split was in April, 2000.
In conclusion, I do like this stock a lot. I guess that is why I am posting it! The growth is steady, there is growing free cash, the balance sheet is excellent, the p/e is still in the 20's, the PEG is just a bit over 1.0...and I know the problem they are treating first hand. (That is the Peter Lynch portion of the analysis). The ONLY thing stopping me from buying this stock is MONEY (lol).
Thanks again for stopping by. If you are a repeat visitor, I sure appreciate your loyalty and if you have any questions, comments, or words of encouragement, please feel free to drop me a note at email@example.com
Posted by bobsadviceforstocks at 10:53 AM CST
Updated: Friday, 5 December 2003 10:54 AM CST
December 5, 2003 Medical Action Industries (MDCI)
Hello Friends! Thanks for stopping by. I hope you enjoy your visit here and please remember to always consult with your investment advisor before taking any action regarding my posts here as they may or may not be suitable or profitable for you!
I came across this stock this morning scanning the lists of best gainers. Medical Action Industries, Inc. (MDCI) is having a nice day today trading as I write at $17.25 up $1.20 or 7.48% on the day. I do not own any shares of this stock.
According to Money.cnn.com, MDCI "...develops, manufactures, markets & distributes disposable surgical-related products, including disposable laparotomy sponges, towels and related products to physician, dental and veterinary offices."
On November 10, 2003, MDCI reported results for the three months ended September 30, 2003. This was reported by Yahoo.com and picked up from BUSINESS WIRE. Net sales for the second quarter were $32.36 million an increase of $8.78 million or 37% over the $23.58 million the prior year. Net income for the period increased 33% to $2.38 million or $.23/diluted share compared to $1.79 million or $.18/diluted share last year.
Looking at Morningstar.com, we find a fairly nice record of increasing revenues starting with $58 million in 1999, $71 million in 2000, $75.4 million in 2001, $82.8 million in 2002, $104.8 million in 2003 and $112.9 million in the trailing twelve months.
Earnings/share have grown steadily from $.21/share in 1999 to $.85/share in the trailing twelve months.
Free cash flow has been a bit erratic but has stayed positive lately ranging from $4 million in 2001 to $6 million in the trailing twelve months.
Balance sheet wise, the company does not have much cash at $200,000 reported on Morningstar, but DOES have $28.2 million in other current assets, more than enough to cover the $10.5 million in current liabilities and also make a dent on the $27.1 million in long-term debt.
This is truly a small-cap firm with a Market Cap currently at $173.0 milllion. The trailing p/e is reasonable at 19.31, with a forward p/e (fye 31-Mar-05) at 15.74. The PEG is nice at 1.07, and price/sales also dirt-cheap at 1.31.
Yahoo statistics goes on to report 9.97 million shares outstanding with 8.00 million of them that float. There are only 82,000 shares out short representing 1.367 trading days.
I actually like this stock a lot. If I get some cash somewhere today, might considering buying (that is, if I have to sell some stock at a loss lol)...the valuation is excellent, I like the field they are in...that is medical/surgical disposables...and the steady trend of revenue growth is exciting as well. Latest quarter was a blow-our quarter for them.
Something to think about don't you think? Thanks again for stopping by. If you have any questions, comments, or words of encouragement, please feel free to contact me at firstname.lastname@example.org
Thursday, 4 December 2003
December 4, 2003 Pogo Producing (PPP)
Hello Friends! It is getting late and I need to get up early tomorrow. Wanted to post a quick note on Pogo (PPP) and explain why it caught my eye. As always, please check with your financial advisor before investing in anything mentioned here.
Pogo Producing (PPP) had a nice day today closing at $46.66 up $3.38 on the day or $7.81%. According to money.cnn.com, Pogo "...and subsidiaries are engaged in oil and gas exploration, development and production activities on its properties located offshore in the U.S. and Canada and internationally in the Gulf of Thailand and the U.K."
On October 14, 2003, per PRNewswire-First Call as picked up by Yahoo.com, PPP reported their third quarter results for the period ended September 30, 2003: Revenue in 2003 was $277.9 million vs $207.8 million last year. Net income was $67 million vs $31.6 million last year, and on a per share basis was $1.07/share vs. $.52/share last year.
Morningstar.com shows a steady rise in revenue from $200 million in 1998 to $300 million in 1999, $500 million in 2000, $600 million in 2001, $800 million in 2002 and $1.0 billion in the trailing twelve months.
Earnings have grown from ($1.14)/share in 1998 to $3.72/share in the trailing twelve months.
Free cash flow has improved from $92 million in 2000 to $297 millin in the trailing twelve months.
Balance sheet is slanted in favor of liabilities with $229.8 million in cash and $170.1 million in current assets, plenty to cover the $204.8 million in current liabilities however, the $1.1 billion in long term debt does appear manageable in light of the improving free cash flow.
Pogo is reasonable priced with a p/e of 12.34, and a yield of 0.43%. For more infomation, check yahoo for statistics. I liked this stock today, and especially with a little better diversification in the portfolio, I decided to buy some shares!
Thanks for stopping by!
"Trading Transparency" PPP
Good Afternoon my friends! Having unloaded two stocks today at 8% losses, was down to a 24 position portfolio...so coming across a new stock in a different area that fit our criteria, I thought I would give it a chance. I purchased 200 shares of Pogo Producing at $46.93/share today. I will follow this post later with a bit of a profile on PPP and why I liked it! Thanks for stopping by!
"Trading Transparency" PRAA
Well the market is doing o.k., barely in the green on the NASDAQ with the Dow up a few points, but our stocks...lol MY stocks...are pulling back a bit. Portfolio Recovery Associates, a relatively recent purchase, hit the 8% loss and was sold today at $24.84. (I manually watch the stocks and don't have STOPS placed which would in fact be helpful.) We purchased 150 shares of PRAA just a month ago on 10/28/03 for $26.99 cost per share. Easy come and easy go I guess. Have to stay with the 8% loss limit so that we don't let our losses accumulate (my losses lol) too fast!
Thanks again for stopping by and will keep you posted if KNSY hits that stop as well!
December 4, 2003 Gevity HR, Inc. (GVHR)
Hello Friends. Thanks for stopping by. Our heady gains the last week or so was making me feel a bit invulnerable to any correction. What is that old saying? 'pride cometh before the fall." Must be Shakespeare (?). Anyhow, we have backed off a bit and have sold some Odyssey Healthcare shares this morning on a bit of a pullback. This shows how while p/e is not necessarily a good indicator of future performance, a relatively steep p/e may put a stock at a bit of risk in corrections. Remember, always discuss with your financial advisor any information you may glean from this website as it may or may not be a suitable investment for you!
Came across Gevity HR, Inc. (GVHR) today. I do not own any shares but it is an interesting stock. Currently GVHR is trading at $23.87, up $1.46 on the day or 6.51%. According to money.cnn.com, Gevity "...provides professional employer services, including payroll administration, risk management, benefits administration, unemployment services and human resource consulting services, typically to small and medium-sized businesses."
On October 23, 2003, Gevity reported their third quarter results for the quarter ended September 30, 2003. This was picked up from PRNewswire-FirstCall via COMTEX, and placed on the internet where I viewed it on NYTimes on the web. In this report, they related that revenues in the third quarter increased 8.9% to $102.8 million compared to $94.4 million in the third quarter of 2002. Net income increased 307.1% to $4.1 million in the quarter compared to $1.3 million in the third quarter of 2002. On a per share basis, this was $.16/diluted share compared to $.06/diluted share last year. Very nice results!
Reviewing Morningstar.com, we find steady revenue growth from $256.2 million in 1998, $286.7 million in 1999, $322.3 million in 2000, $332.8 million in 2001, $374.7 million in 2002 and $395.5 million in the trailing twelve months.
Earnings/share, however, while increasing from last year have been quite erratic with $.97/share reported in 1998 dropping to a loss of ($.76)/share in 2001, but improving steadily since then to $.39/share in the trailing twelve months. Extrapolating the current quarter would get us to $.64/share in 2003.
Free cash flow has stayed mostly positive but is also a bit erratic from $35 million in 2000 to ($3) million in 2001, back positive at $34 milion in 2002, and $10 million in the trailing twelve months.
The balance sheet looks fine with $134.2 million in cash and $100.9 million in other current assets vs $13.8 million in current liabilities and $173.2 million in long-term liabilities.
Checking Yahoo.com for "key statistics" on this company, we find that the market cap is only $453.6 million. The trailing p/e is a bit rich at 48.34 but the forward p/e (for fye 31-Dec-04) is only 27.00. This reasonableness in the price is reflected in the PEG which is a bit over 1.0 at 1.36, and the price/sales very reasonable at 1.05.
Yahoo reports 19.0 million shares outstanding with 12.20 million of them that float. Currently there are only 605,000 shares out short as of 11/10/03, representing 1.551 trading days. The company does pay a small dividend of $.20/share yielding 0.89%.
This is an interesting stock. I certainly don't have a place for it in my portfolio...remember I have to stay at 25...the stock is doing well, has grown its revenue consistently, has a reasonable PEG at 1.36, but its p/e is a bit rich although appears to be dropping quickly. It is certainly a stock for me to consider!
Thanks for stopping by! Please email me at email@example.com if you have any questions, comments, or words of encouragement!
"Trading Transparency" ODSY
Well I am back to 25 positions anyhow. ODSY, the hospice company, that we actually briefly talked about in the stock club as well, as dropped sharply the last two trading days and hitting our 8% stop, was sold this morning at $31.62. I had just recently purchased ODSY at $35.54 on 11/24/03. Well, that is one rule I have kept to at least...selling on the 8% stop. Unfortunately, yesterday's purchase, KNSY, is also flirting with a 5+% loss...so that may go soon as well!
Wednesday, 3 December 2003
December 3, 2003 Kensey Nash (KNSY)
Hello Friends! Thanks for stopping by. Please feel free to make yourself home here and browse through the various posts that you can find through the calendar on the left...just click on the dates and enjoy! Almost sounds like some kind of financial theme park? Anyhow, please do remember to discuss any ideas you may extract from this website with your financial advisor as it may or may not be suitable for your investment needs, and may or may not be profitable!
First, I got around some of the sitebuilder issues yesterday and sat at the iMac at my local coffee house and updated the main website. You can click on the link to the left of the BLOG to get there. Secondly, as my previous post reveals, I broke my resolve to stay at 25 stocks and purchased 400 shares of Kensey Nash this morning. Don't worry, it is actually DOWN a bit from where I bought it as I write, so my timing isn't perfect, and if after consultation, you feel you would like to buy some, looks like you may get and even BETTER price than me!
Currently KNSY is trading at $22.20 up $.63 or 2.92% on the day. According to money.cnn.com, KNSY "...designs, develops, manufactures and processes biomaterials products for the orthopedics, cardiology, drug/biologics delivery, dental and wound care markets."
On October 15, 2003, KNSY reported their first quarter results. This was carried by PRNewswire-First Call and reported by Yahoo.com. For the quarter ended September 30, 2003, total revenue was $12.4 million vs $8.9 million last year. Operating Income was $3.0 million vs $1.8 million last year and earnings/share were $.20 vs $.13 last year. These are all nice results from my perspective.
Looking at Morningstar.com for the "5-Yr Restated" results, we find that revenue has grown from $16.2 million in 1999, $19.8 million in 2000, $23.2 million in 2001, $29.0 million in 2002 and $44.0 million in 2003.
Earnings, however, have grown less rapidly from $.43/share in 1999 to $.76/share in 2003.
Free cash flow has been improving recently from $2 million in 2001 to $10 million in 2003. The Balance sheet looks beautiful with $15.0 million in cash per Morningstar, more than enough to pay off both the current liabilities of $6.1 million and long-term liabilities of $0.2 million combined. In addition, they report $50.4 million of other current assets.
Looking at Yahoo.com, we find that this is a small company with a market cap of $251.05 Million, the trailing p/e is reasonable at 26.29 (in my opinion), and the forward p/e (based on year ending 6/05) is at 21.79. However, with the fast growth rate, we find that the PEG ratio is at 0.90. Price/sales a bit steeper at 5.16.
There are only 11.45 million shares outstanding and 10.30 million of them that float. There are a LOT of shares out short as of 10/10/03 at 1.07 million, representing 10.4% of the float or 5.487 trading days. This is actually an improvement from the prior month when 1.12 million shares were reported out short per Yahoo. No dividend is paid.
I like this stock a lot. The growth is there, and the p/e is reasonable in the 20's with a PEG under 1.0. I am concerned that the stock price has not been as strong as the numbers seem to warrant and we shall certainly stay with our 8% stop and unload if the stock does not move in the right direction. As I have already noted, I am now a stockholder of this company, having purchased 400 shares this morning!
Please remember to consult with your investment advisor prior to taking any investment decision based on information presented on this website. You know I worry about you guys!
Thanks again for stopping by and if you have any questions, comments, or words of encouragement, please drop me a line at firstname.lastname@example.org
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