Stock Picks Bob's Advice
Friday, 26 March 2004
March 26, 2004 National Med Health Card Sys (NMHC)
Hello Friends! Thanks so much for stopping by. I have started my "housework" on the blog for the week and have now updated my Website as well...the prices listed on past picks are a little more recent now. As always, do your homework on all of the stocks mentioned on this blog and make use of your own investment advisors to know if investments discussed are appropriate or timely for you!
National Medical Health Card System (NMHC) came up on the list of top NASDAQ gainers
. As I write, NMH is trading at $25.06, up $1.89 or 8.16% on the day. According to the Profile for NMHC
on Yahoo finance, NMHC "...provides pharmacy benefit management (PBM) services under the name NMHCRX through its network of licensed pharmacies throughout the United States."
On February 2, 2004, NMHC reported Second Quarter 2004 results
. Revenue for the 2004 second quarter was $163.9 million, compared to revenue of $151.0 million for the same period the prior year. Net income for the 2004 fiscal quarter increased 35.4% to $2.2 million or $.25/diluted share vs. $1.6 million or $.20/diluted share the same period last year.
If we check the "5-Yr Restated" financials
on Morningstar.com we can see that revenue has been growing steadily from $128.3 million in 1999, to $573.3 million in 2003 and $576.7 million in the trailing twelve months. Earnings have grown steadily from 2001 when they were $.16/share, increasing to $.82/share in the trailing twelve months. Free cash flow has also been improving nicely, increasing from $8 million in 2001 the $20 million in the trailing twelve months.
One of my concerns with this data is the balance sheet. NMHC has $4.9 million in cash and $89.2 million in other current assets, but also has $128.8 million in current liabilities that need to be paid ASAP. Their long-term debt is low at $4.4 million.
It is interesting to see these balance sheet and anticipate financial issues that need to be dealt with. The latest piece of news on NMHC
is a story about the placement of $80 million in convertible preferred stock with "New Mountain Partners, L.P.". This should take care of any liquidity problems and I believe with the growing free cash flow, NMHC shouldn't be having additional problems unless their business results should deteriorate.
How is NMHC 'valued'? Let's take a look at "Key Statistics"
from Yahoo.com on NMHC. The Market Cap is a small $199.36 million. The trailing p/e is reasonable at 28.87, the forward p/e is 24.78 (fye 30-Jun-05). No PEG is reported (for anticipated 5-yr growth) probably because no analysts have estimates that far out! The company does sell at a reasonable 0.31 for price/sales.
Yahoo reports 7.96 million shares outstanding with 4.30 million of them that float. I do not own ANY shares of this stock. As of 3/8/04, there are 125,000 shares out short representing 2.91% of the float or 1.923 trading days. No dividend is paid and no stock splits are reported.
Checking a "Point and Figure" chart
from Stockcharts.com, we can see that the stock broke through its last resistance level in February, 2003, at about $9.0 and has headed higher steadily over the last year.
Overall I like this stock. I like the industry they are in...pharmacy management, the revenue growth, the earnings growth, the expanding free cash flow, the reasonable p/e. I didn't like all of those current liabilities...but management took care of that with a sale of a convertible issue.
Of course, I do not have any cash to buy anything (LOL) and will not be buying anything if I have any self control...until I sell a portion at a gain! Same old story.
Thanks again for stopping by! If you have any comments, questions, or words of encouragement, please feel free to email me at firstname.lastname@example.org
March 26, 2004 "A reader writes" Comments about Varian (VAR)
Hello Friends! Thanks so much for stopping by! Remember to always do your own due diligence as I AM a fellow amateur investor, so please check on all the stocks I post with your investment advisors.
I received an email from Jody who "stumbled into your web site while googling VARIAN" and writes "I've gotten accustomed to VAR going up by steps, but it has been dropping lately, especially today (3/25/04), when I expected it to be up a buck or more. Is something negative happening? I can't find anything. The forthcoming stock split should be a positive factor and they have an important cancer killer which hasn't been bruited about as yet. Do you have any ideas?"
First of all, I do not own any shares of VAR or have any options, etc. I first posted VAR
on this BLOG when it was trading at $60.78/share on 10/20/03. Currently, as I write this, VAR is trading at $83.00/share up $.43 today or 0.52%. This is a gain of $22.22/share or 36.6% so at least the selection in October, 2003, was a good post. What about now though?
Looking first at its latest quarterly report, Varian Medical Systems (VAR) reported First Quarter 2004 results
on January 28, 2004. First quarter sales were $267 million, up 29% from the year-ago quarter. Net earnings were $29 million, $.41/diluted share vs. $21 million or $.30/diluted share the prior year. These are great results! In fact, VAR reported that their backlog stood at a record $850 million, up 14% from the total at the end of the first quarter in fiscal 2003.
If we look at the latest "5-Yr Restated" financials
on Morningstar, the report looks even nicer than the posting six months ago. The revenue growth is uninterrupted, the earnings are growing, the free cash flow is up to $205 million in the latest twelve months.
So why didn't the stock move up yesterday? Quite frankly, I cannot figure out day to day activity in stock prices. I concentrate on the bigger picture and hopefully, as in this case, can identify stocks that have the potential to appreciate significantly over the intermediate and longer-term period.
When thinking about stock-price activity, it is sometimes helpful to look at point and figure charts
which sometimes give us a bit of a better understanding of the ebb and flow of the price. With this chart from Stockcharts.com, you can see that the long-term upward trend of this stock is NOT interrrupted at this time yet the stock you could say has gotten a bit ahead of itself and has over the short-term backed off its recent high of about $89/share.
Good-luck investing! I cannot predict whether VAR will go up or down in price in the immediate future. I can tell you that the underlying company appears to be doing superbly and usually the stock price will follow these fundamentals over the longer periods of observation! Let me know how you do!
If you have other questions, comments, or words of encouragement, please feel free to email me at email@example.com
Posted by bobsadviceforstocks at 10:03 AM CST
Updated: Friday, 26 March 2004 10:04 AM CST
Thursday, 25 March 2004
March 25, 2004 Avon Products (AVP)
Hello Friends! What a difference a day makes. It sure was nice having a bit of a rally after all of these down days. However, it will be interesting to see if we can maintain this more than one day...as always remember to do your own due diligence on all of the stocks discussed on this BLOG and use your financial advisors to make sure that investments mentioned are suitable and timely for you!
I came across Avon Products (AVP) today on the biggest gainers list. You could say it was "Avon Calling". AVP closed today at $75.35, up $4.78 or 6.77%. According to the "Snapshot" on money.cnn.com
, Avon's "...principal activity is to manufacture and market beauty and related products globally."
What boosted Avon, besides the overall very strong market, was comments
released this morning that upped the estimates to the current quarter up to $.59/share instead of the $.50/share estimated in February, 2004. In addition, they anticipated "...strong gains in every geographic region, with exceptional strength in Latin America and Europe." This is certainly a very bullish outlook.
On February 3, 2004, AVP reported
Fourth Quarter 2003 results of $1.09/diluted share vs. $.80/diluted share in the fourth quarter of 2002. These results were $.05-$.06 ahead of previous guidance due to a multitude of reasons given including currency exchange rates and lower net interest. They also reported
that sales in fourth quarter grew 14% to $2.09 billion, up from $1.84 billion in the prior year. Excluding the positive affect of currency exchange rates, sales were still up a strong 9%.
If we check the "5-Yr Restated"
financials on Morningstar.com we see some interesting information. Sales have grown steadily from 1998 when they were at $5.2 billion, and have increased to $6.6 billion in the trailing twelve months. Earnings/share have also grown but not quite as significantly with a bit of a hiccup between 2000 and 2001, however, since 1998 have increased from $1.02/share to $2.49/share in the trailing twelve months. In addition, dividends have also been rising, increasing from $.68/share in 1998, to $.83/share in the trailing twelve months.
Free cash flow has been quite solid for Avon. They reported $129 million in free cash flow in 2000, and this increased to $451 million in free cash flow, almost 1/2 of a billion dollars, in the trailing twelve months.
The balance sheet is adequately solid with $384.6 million in cash and $1.65 billion in other current assets as opposed to $1.4 billion in current liabilities and $1.8 billion in long-term debt.
If we check the "Key Statistics"
on Avon from Yahoo.com, we find that the Market Cap for Avon is a large $17.74 Billion, the trailing p/e is 27.08 with a forward p/e (fye 31-Dec-05) of 21.29. The PEG is moderate at 1.90 and price/sales also moderate at 2.42.
Avon has 235.40 million shares outstanding with 169.50 million of them that float. There are 3.41 million shares out short representing 2.016 trading days and only 2.01% of the float. AVP currently pays a dividend of $1.12/share yielding 1.59%. The last stock split was a 2:1 split back in September, 1998.
If we look at a "Point and Figure" chart
from Stockcharts.com, we can see that AVP broke through a resistance level at about $39/share in June, 2001, and has traded fairly steadily higher since that time.
Overall, I like this stock. I do NOT own any shares or leveraged positions on this company. The recent earnings have been nice, the company has been RAISING expectations recently, they are spinning of gobs of free cash flow and the balance sheet is good. I am NOT going to buy any shares because frankly I like smaller, faster growing companies, but MORE important, I am SITTING ON MY HANDS with my 20 positions in my trading account, waiting for a sale of a portion of a stock on a gain before adding anything else new.
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
Wednesday, 24 March 2004
March 24, 2004 Artisan Components Inc (ARTI)
Hello Friends! When the market starts acting healthier, as it is at least a little today (?), I find that my kind of stocks start coming to the top of the heap! As always, let me start with the disclaimer, and remind all of you to do your own due diligence before making any investment decisions based on information on this website and to consult with your investment advisor on the suitability of any investment you might wish to make.
I came across Artisan Components (ARTI) a few moments ago on the list of stocks moving higher and it seems to fit my requirements for stocks to list here. As I write, ARTI is trading at $18.88, up $1.36 or 7.76% on the day. I do not own any shares of this stock nor own any options or other leveraged positions.
According to the "Snapshot" on cnn.money.com
, Artisan's "...principal activity is to develop high performance, low power and high density embedded memories and other intellectual property components. Semiconductor companies utilize these products to design and manufacture complex integrated circuits in high volume applications such as portable computing devices, cellular phones, consumer multimedia products, automotive electronics, personal computers and workstations."
On January 26, 2004, ARTI reported 1st quarter 2004 results
. Revenue came in at $20.1 million for the three month period ended December 31, 2003, a 43% increase over the $14.0 million reported in the first quarter of fiscal 2003. GAAP earnings came in at $3.7 million or $.15/share vs $2.2 million or $.11/share the prior year.
Looking at the "5-Yr Restated" financials
on Morningstar.com, we can see that revenue growth has been beautiful with $14.9 million in revenue in 1999, $20.3 million in 2000, $25.8 million in 2001, $37.2 million in 2002 and $68.5 million in the trailing twelve months.
Earnings have not been quite as steady, ranging from $.07/share in 2000, dropping to a loss of $(.88)/share in 2001, back to $.12 in 2002, and $.34 in 2003.
Free cash flow has also been inconsistent with $1 million reported in 2001, $7 million in 2002, but $(1) million reported in 2003. The drop in 2003 is attributable to 5-fold increase in "capital spending" from $1 million in 2002 up to $5 million in 2003. The balance sheet is solid and this variability in free cash flow is not a big concern to me.
According to Morningstar.com, ARTI has $98.8 million in cash, enough to pay off the current liabilities of $15.8 million and the long-term liabilities of $5.2 million more than four times over! In addition, ARTI has $30.5 million in other current assets.
Looking at "Key Statistics" on Yahoo.com
, we can see that ARTI has a market cap of $422.36 million. The trailing p/e is a bit rich at 50.05, but due to the rapid estimated growth we have a forward p/e (fye 30-Sep-05) of 22.92. Thus, the PEG is very reasonably priced at 0.91. The price/sales is still a bit rich at 5.22.
Yahoo reports 22.21 million shares outstanding with 20.60 million of them that float. There are a LOT of shares out short--3.81 million as of 2/9/04--representing 18.48% of the float or 5.605 trading days. No dividend is paid and not stock split reported on Yahoo.
How about the technicals on this stock? Here is the "Point and Figure Chart"
on ARTI. The stock appears to be trading relatively sideways since mid 2002 and recently DID drop through a support level at about $18. However, you will need to decide for yourself on this graph!
I actually like this stock a lot. The p/e is a bit rich but the PEG is reasonable (under 1.0) so the pricing isn't too bad. The balance sheet is superb but I cannot tell you intuitively about the particular business this company is involved in. What about the shorts? Well, if this stock continues to move up, we will see a squeeze which may really generate some buying interest as the short-sellers scramble to cover their borrowed and pre-sold shares!
Thanks so much for stopping by! If you have any questions, comments, or words of encouragement, please feel free to leave them right here on the blog or email me at email@example.com
March 24, 2004 Red Hat (RHAT)
Hello Friends! Thanks so much for stopping by! It has been a couple of days since I posted and I was both very busy as well as frankly not finding much to post on these dismal trading days. Please remember, like always, to do your own due diligence on all of these stocks and consult with your investment advisors before making any decisions based on this website to determine whether investments discussed are appropriate and timely for you!
I was scanning the lists of greatest gainers this morning and came across Red Hat (RHAT). As I write, RHAT is trading at $21.44, up $2.03 or 10.46%. I do not own any shares or have options or futures on this stock. According to the money.cnn.com "snapshot"
, Red Hat's "...principal activity is to provide open source solutions for the information technology infrastructure. The Group offers a common platform for developing, deploying and managing open source software across Internet infrastructure and devices that connect to the Internet." In other words, LINUX.
On March 23, 2004, RHAT reported 4th quarter 2003 results
for the quarter ended February 29, 2004. Revenue for the quarter grew 43% to $37 million from $25.9 million. Net income for the quarter was $5 million compared with 'break-even' results the year earlier.
Looking at "5-Yr Restated" financials
on Morningstar.com, we can see that revenue growth while not entirely consistent followed a strong growth trend with revenue increasing from $58.6 million in 1999 to $115 million in the trailing twelve months.
This company has been losing money since 2001, when first public results reported on Morningstar, losing $$(.53)/share gradually improving to a loss of only $(.03)/share in 2003 and turning profitable at $.05/share int he trailing twelve months.
Free cash flow has also been improving recently with a negative $(51) million in 2001, improving to $(14) million in 2002, $(8) million in 2003, and a positive $23 million in the trailing twelve months.
The balance sheet, as reported on Morningstar.com, looks excellent with $97.6 million in cash, more than enough to cover the $71.6 million in current liabilities and the $6 million in long-term debt combined. In addition, RHAT is reported to have $40.9 million in other current assets.
What about valuation issues? If we take a look at "Key Statistics"
on Yahoo.com with a Market Cap of $3.77 billion. Since the company is JUST turning profitable the p/e is steep at 107.45. However, using the PEG as a parameter, we still see a PEG of 3.08, also suggesting the price is at a premium, and the price/sales, which when a stock is cheap is closer to 1.0, is actually at 29.58. This stock is no bargain!
Yahoo reports 175.2 million shares outstanding with 161.2 million that float. Currently there are 10.03 million shares out short representing 2.174 trading days of volume or 6.22% of the float. No dividend is paid. And the last stock split was in January, 2000.
Taking a brief look at "technicals" with a chart from Stockcharts.com
, we can see that RHAT broke through a resistance level in late 2003 at about $16 and has been heading higher since! Technically, the stock is trading higher. I do not wish to analyze this further but defer to others who might have opinions on the graph!
What do I think? The company is doing just fine. They are growing their revenue, and maybe reacting to the Microsoft problem with the EU (?) in a bullish move to the upside today. The company just is selling at a premium to its intrinsic valuation imho. I like the stock but am cautious as I do not want to be the last one "to the party."
Thanks so much for stopping by! If you have any comments, questions, or words of encouragement, please feel free to email me at firstname.lastname@example.org
Sunday, 21 March 2004
"Seven months ago" A longer term view examining the week of August 25, 2003
Hello Friends! Welcome to Part II of the "Weekend Retrospective". Short-term our performance here has been absolutely lousy. And so has the market's! Longer term, we still look pretty good. As always, please remember to always do your own investigation of all of the stocks mentioned on this website and use your investment advisors prior to making any investment decisions based on information on this website!
During the week of August 25, 2003, I listed eight stocks on this Blog: Electronic Clearing House (ECHO), Invivo Corporation (SAFE), Engineered Support Systems (EASI), Netflix (NFLX), SupportSoft (SPRT), Quiksilver (ZQK), Michaels Stores (MIK), and Wilson Greatbatch (GB).
ECHO was posted
on Bob's Advice on August 25, 2003, at a price of $6.36. ECHO closed on 3/19/04 at $9.36 for a gain of $3.00 or 47.2%.
On February, 12, 2004, ECHO reported 1st quarter 2004 results
for the quarter ended December 31, 2003. Revenue for the quarter increased 22.1% to $11.4 million from $9.3 million the prior year. Net income was $589,000 or $.09/diluted share in the quarter compared to $518,000 or $.08/share in the prior year. Overall, this appears to be a solid quarter for ECHO and the company is still on track.
Invivo (SAFE) was posted on Bob's Advice
on 8/25/03 at a price of $20.39. SAFE last traded on 1/27/04 when it closed at $21.97. SAFE was acquired by Intermagnetics for $152 million or $22/share in cash. This was a gain of $1.61/share or 7.9% at the time of acquisition.
EASI was selected for Bob's Advice
on 8/26/03 at $54.77. EASI split 3:2 on 11/3/03 for a net effective selection cost of $36.52. EASI closed 3/19/04 at $49.16 for a gain of $12.64 or 34.6%.
On February 26, 2004, EASI reported 1st quarter 2004 results
. Revenues surged 60% to $195.1 million "helped by three acquisitions completed over the past nine months." Net income was $15.7 million or $.57/share compared with $8.6 million or $.34/share the prior year. This company is doing great!
On August 27, 2003, I posted NFLX on Bob's Advice
at a price of $32.66. NFLX split 2:1 on 2/12/04 for a net selection price of $16.33. NFLX closed on 3/19/04 at $30.73 for a gain of $14.40 or 88.2%.
On January 21, 2004, NFLX reported 4th quarter 2003 results
. Revenue jumped 80% year over year to $81.2 million. "GAAP" net income was $2.3 million or $.07/diluted share vs a net loss of $(3.3) million or $(.10)/share the prior year. The company appears to be on track.
On February 26, 2004, NFLX announced revenue/earnings estimates revisions
for 2004 and beyond. They announced that revenues should hit $480-$505 million in 2004, up from its previous estimate of
$450-$475 million made the prior month. Revenue came in at $272.2 million in 2003. However, NFLX cut estimated net income down to an estimated $4 million to $10 million in 2004 from $14.6 million to $21.6 million estimated a month earlier. Net income was $6.5 million in 2003. This was a "mixed-bag" for reports and the stock has traded a bit sideways but still above support levels
since that time.
On August 28, 2003, I posted SupportSoft (SPRT)
on Bob's Advice at a price of $8.94. SPRT closed on 3/19/04 at $11.00 for a gain of $2.06 or 23%.
Looking for the latest quarterly report, I found that SPRT reported 4th quarter 2003 results
on January 20, 2004. Revenue for the fourth quarter was $15.1 million, a 28% increase from $11.8 million for the same period the prior year. In addition this was a 12% increase from the $13.5 million the previous quarter. Net income was $3.4 million or $.08/diluted share compared to $.9 million or $.03/diluted share the prior year and ALSO a sequential increase from the $2.6 million or $.07/share the prior quarter. This company is doing GREAT!
Hang in there sports fans...just three more to review!
On August 28, 2003, I posted Quiksilver (ZQK) on Bob's Advice
at a price of $18.42. Quiksilver closed at $20.84 on 3/19/04 for a gain of $2.42 or 13.1%.
Looking through the news, we can see that ZQK reported 1st quarter 2004 results
on March 10, 2004. Consolidated revenues increased 33% to $256.1 million compared to first quarter 2003 results. Consolidated net income for the quarter jumped 40% to $9.2 million compared to $6.6 million in the first quarter of 2003. Fully diluted earnings per share were $.16 vs $.12/fully diluted share in 2003. Also bullish for the stock, in the same report Quiksilver increased its guidance to new ranges of $1.10 billion to $1.12 billion for revenue in 2004, and $1.22 to $1.25 for earnings per share. Things look 'just fine' for this company!
O.K....two more to go!
Michaels Stores (MIK) was posted on the blog
on 8/28/03 at $43.01. MIK closed at $47.71 on 3/19/04 for a gain of $4.70 or 10.9%.
On March 3, 2004, MIK reported fourth quarter 2003 results
. Total sales for the quarter ended January 31, 2004, increased 9% to $1.063 billion. Same store sales for the fourth quarter increased 4%. Net income for the quarter increased 25% to $94.6 million from
$75.4 million last year. Diluted earnings per share jumped 26% to $1.35/share in 2003 vs $1.07/share in 2002. These are great results!
On March 16, 2004, MIK announced
that their quarterly cash dividend was increasing from $.10/share to $.12/share effective on the dividend payable on April 30, 2004. This is also bullish for the stock.
In addition, the latest "same-store sales" report for February
was excellent with total sales up 18% and same-store sales up a very strong 12%. Everything seems to be "in line" for MIK.
Hang in there...just one more to review!
And last, but not least, I posted
Wilson Greatbatch (GB) on 8/29/03 at $39.24/share. GB closed at $36.13/share on 3/19/04, for a loss of $(3.11) or (7.9)% during this period.
On February 10, 2004, GB announced 4th quarter 2003 results
. Net sales for the quarter were $49.4 million, a 4.3% increase over sales in the same quarter in 2002. Diluted net income was $4.5 million, or $.21/diluted share vs $5.0 million or $.23/diluted share the prior year. Overall, this is a bit anemic of an earnings report. Recently, GB announced an acquisition
of NanoGram Devices Corporation...which should be a nice fit in their medical device business...but overall, I would find it difficult to be too enthusiastic over the results reported by GB and would not be adding to any positions based on these results. This does not mean that the stock price will not rise from this point...just that the earnings results are not as exciting as some of our other stocks we have watched.
So during this week seven months ago, we selected eight stocks of which one was acquired. However, even taking this into consideration, I had an average gain on the selections of 27.1% over the approximately seven month period. This is a great performance during this time period and much better than our more recent seven week showing which was at a loss...during a more difficult market period.
Thanks so much for bearing with me and reading the post! As you know, past performance is NO guarantee of future results...but it is nice to know that sometimes we DO get it right!
Regards to all!
"How are we doing?" A look back on the week of January 5, 2004
Hello Friends! I have not found much exciting to post the last couple of days and have thus not posted anything! (Is that circular reasoning or what?) It IS the weekend, and it is time to do a little retrospective work and see if the picks we have posted have done well since our listing. As always, remember to do your own due diligence and homework before investing in any of these stocks and consult with your investment advisor to make sure they are suitable investments for you!
During the week of January 5, 2004, I posted six stocks: Applied Films (AFCO), Dollar Tree (DLTR), UniFirst (UNF), Kenneth Cole Productions (KCP), Resources Connection (RCN), and American Medical Systems (AMMD). Of these stocks, I purchased and still own shares of AMMD in my trading account.
Applied Films was selected on Bob's Advice
on January 5, 2004, at a price of $37.46. AFCO closed 3/19/04 at a price of $31.91, for a loss of $(5.55) or (14.8)%.
Dollar Tree (DLTR) was selected for the BLOG
on 1/6/04 at a price of $31.85. DLTR closed at $29.06 on 3/19/04, for a loss of $(2.79) or (8.8)%.
UniFirst was posted
on this blog on 1/7/04 (one of two posts for UNF actually!), at $27.11. UNF closed on 3/19/04 at $24.87 for a loss of $(2.24) or (9.0)%.
Kenneth Cole Productions (KCP) was picked
for this website on 1/7/04 at a price of $31.95. KCP closed on 3/19/04 at $32.36 for a gain of $.41 or 1.3%.
On January 8, 2004, Resources Connection (RECN) was selected
for the blog at $34.50. RECN closed at 3/19/04 at $33.96 for a loss of $(.54) or (1.6)%.
Finally, American Medical Systems (AMMD) was picked
for Bob's Advice at $25.96 on 1/9/04. AMMD closed on 3/19/04 at $26.17, for a gain of $.21 or .8%.
Overall, it was a very difficult two months for our selections, with an average loss of (5.35)%.
Thanks so much for stopping by. If you have any questions, comments, or words of encouragement, please feel free to leave them right on the blog or email me at email@example.com
Wednesday, 17 March 2004
March 17, 2004 Autobytel (ABTL)
Hello Friends! We certainly are having a nice day in the market. And it even seems like it may hold into the last hour for a change. The Dow as I am writing, is at 10,301.85, up 117.18 on the day, and the NASDAQ is at 1973.81, up 30.72 points.
Scanning through the lists again, I came across Autobytel (ABTL). I do not own any shares but it seems like an interesting selection.
According to the money.cnn.com "snapshot"
, ABTL's principal activity is to "...provide automotive marketing services over the Internet. It provides the services through four web-sites it owns and operates: Autobytel.com, Autoweb.com, CarSmart.com and AutoSite.com. The sites help automobile dealers to sell cars using marketing and customer relationship management tools and programs."
Currently, as I write, ABTL is trading at $12.93, up $.96 or 8.02% on the day.
On January 29, 2004, ABTL reported fourth quarter 2003 results
. Revenue for the quarter ended December 31, 2003, totaled $23.9 million, a 4% sequential increase and a 20% increase over the prior year revenues of $20.0 million in 2002. Net income for the fourth quarter was $3.8 million or $.09/share, compared to net income of $0.5 million or $.01/share in 2002.
Looking at "5-Yr Restated" financials
on Morningstar.com, we see that revenue has been steadily increasing from $23.8 million in 1998 to $85.0 million in the trailing twelve months. Earnings have increased from a loss of $(1.45)/share in 2000 to a profit of $.11/share in the trailing twelve months. Free cash flow has also improved with $(26) million reported in 2000, $(22) million in 2001, $(4) million in 2002 and $7 million in the trailing twelve months.
The balance sheet presented on Morningstar looks great with $58.9 million in cash as well as $9.7 million in other current assets, balanced against $13.4 million in current liabilities and only $200,000 in long-term liabilities.
Looking at "Key Statistics"
on Yahoo.com, we can see that the Market Cap is a small $488.16 million. The trailing p/e is steep at 67.96, but the growth is so RAPID that the forward p/e (fye 31-DEC-04) is only 27.09, giving a PEG (5 yr anticipated) of only 0.91. Price/sales still rich at 5.06.
Yahoo reports 37.61 million shares outstanding with 35.30 million of them that float. As of 2/9/04, there were 1.70 million shares out short representing 4.82% of the float or 2.084 trading days. This is up from the prior month's level of 1.18 million shares out short. No cash dividend is paid and no stock dividends are reported on Yahoo.
Looking at a point and figure chart
, we can see that this stock was heading lower when it first broke through resistance in January, 2002, when it passed through the $3 level. Again, in early 2003 it broke through a similar resistance level at about $3.25 and has headed higher steadily since then.
Overall, I like this stock. It is growing nicely and we are catching it as it first turns positive in terms of earnings. The expected earnings growth is quite high as noted by the PEG under 1.0. The company is now spinning off positive cash flow and has a wonderful balance sheet.
Remember to please do your own due diligence and investigate this and all other stock picks on this BLOG prior to committing any of your own money. Use Investment Professionals as well! If you have any questions, comments, or words of encouragement, please email me at firstname.lastname@example.org
March 17, 2004 VCA Antech, Inc. (WOOF)
Happy St. Patrick's Day everyone! Probably should give you something green today....:). Anyhow, the market is up a bit today, seems like the recent sell-off is now giving way to an attempt to provide some support to the market...kind of a see-saw between the bulls and the bears you could say.
I came across this one this morning. I love the symbol WOOF! I mean this guy MUST have had some kind of a sense of humor don't you think? Anyhow, VCA Antech (WOOF) is currently, as I write, trading at $34.69, up $2.53 or 7.87% on the day. And guess what...according to the profile on USAToday.com
, WOOF's "...principal activity is to operate veterinary diagnostic laboratoris and free-standing, full-service animal hospitals in the United States." Now who would have guessed?
If we look at their fourth quarter 2003 results
, we see that revenue increased 14.0% for the quarter ended December 31, 2003, to $132.4 million. The fully diluted earnings per share for the quarter was $.23/share vs a loss of $(0.06)/share in the 2002 comparable quarter.
Longer-term, looking at "5-Yr Restated" financials
on Morningstar.com, we can see that revenues have grown steadily from $281 million in 1998 to $488 million in the trailing twelve months. Earnings/share on Morningstar start in 2002 (? when they went public?), at $.56/share, increasing to $.77/share in the trailing twelve months.
How about free cash flow? Morningstar shows this improving steadily from $36 million in 2000, $43 million in 2001, $49 million in 2002 and $58 million in the trailing twelve months. This is a very nice picture!
Assets and liabilities are not quite as pretty but appear adequate, imho. They have $18.4 million in cash and $44.9 million in other current assets. This is plenty to cover the $52.1 million in current liabilities but does not touch the sizeable $342.3 million in long-term liabilities. With the growing free cash flow, I would anticipate this long-term liabilities picture to be improving....time will tell!
What about valuation? Checking "Key Statistics" on Yahoo.com
, we can see that this is a nice sized company with a market cap of $1.43 Billion. The trailing p/e is moderate at 33.06, but the forward p/e drops considerably (for fye 31-Dec-04) to 21.65 and the PEG is reasonable at 1.17. Price/sales a little higher at 2.55.
There are 40.67 million shares outstanding with 30.20 million of them that float. Only 575,000 shares are out short as of 2/9/04, representing 2.638 trading days but only 1.90% of the float. No dividend is paid and no stock dividends are reported.
This stock has been trading very nicely. If we look at a Point and Figure chart
on WOOF, we can see that the stock broke through resistance levels of about $14.50 in December, 2002 and has been trading higher since then.
Overall, I like this stock a lot. I mean it has such a CUTE symbol too....like WOOF! (I wonder if MEOW has been considered?)....there already is CAT :). OK seriously, the stock looks nice, the valuation is reasonable, the free cash flow is improving, the price is appreciating, the PEG isn't bad....but I will SIT ON MY HANDS....I promise. Waiting for a bit more confirmation in the market before adding a position.
Please be sure to do your own investigation of this and all stocks on this website before making any investment decisions. Be sure to use your financial advisors as well! If you have any questions, comments, or words of encouragement, please feel free to post them here or email me at email@example.com
Tuesday, 16 March 2004
"Trading Transparency" SMTS
O.K. I did this in public. I broke the rules that I had set up and bought a stock because that nickel was BURNING a hole in my pocket and guess what? Stock drops IMMEDIATELY on GOOD NEWS!!! What is a fellow going to do. I better get back to the black board and write 100 times: I will follow my rules, I will follow my rules........
And to do it in the public eye as well. Just goes to show how vulnerable I am as an average trader. So what am I talking about? This morning I bought a WONDERFUL COMPANY Somanetics (SMTS), 600 shares at $12.95. Right at the PEAK on the open. The stock announced great earnings, and, like it so often does, SOLD OFF on the good news. This afternoon checking the stock price, I realized it was trading at $11.20/share, down $(1.75) or (13.5)%. Now I could BREAK the rules again, but deciding to get back on the wagon, sold the stock this afternoon, managing to LOSE 11% on my investment in about 6 hours.
I guess that is why I have rules. Now, if I can ever get myself to STICK TO THEM!!! Hope you are doing better with self-control!
I will TRY to sit on my hands and WAIT, no matter how nice a stock I see, until I sell one of my holdings or a portion of it AT A GAIN. That way, knowing that the current correction would be over. NASDAQ as I write, has faded back into the RED....is down a few points....so this rally this morning is less than impressive. There may be some more room on the downside!
Thanks so much for stopping by. I hope I haven't discouraged you from reading the REST of the picks...but it does go to show, that I am pretty darn normal like all the rest of you :)....at least I hope so!
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