Stock Picks Bob's Advice
Tuesday, 3 June 2003
June 3, 2003 United Financial Mortgage UFM
It is far tooo late to be writing a BLOG but it is a long story. My son the high school senior had his buddy Craig over and they decided to teach me how to play a new type of Poker. Anyway, being down only about $2, I finished up and asked them if they wanted to learn more about stocks instead. I pulled up this CNN.money site and sure enough tried the AMEX since I had scanned the NYSE and NASDAQ earlier. Looking at stocks near $10, I saw United Financial Mortgage....and it pretty much fits the bill.
UFM had a great day...closed at $8.05 on volume of 139,400 shares (ave volume 6,545 shares.) Stock is of a SMALL company with market cap of $31.5 million. That is how much it would cost you if you bought ALL the shares!
Anyhow, the stock was up $1.25 for the day (representing an 18.38% gain!) Reasonably priced, it trades at a p/e of 11.53...but does not pay a dividend.
On March 17th, UFM announced results for the third quarter. Revenues, per Yahoo, "increased 148.6% to $15,879,449 from $6,388,773 for the quarter ended January 31, 2002. Net income rose 199.5% to $1,543,193 or $.39 per diluted share for the most recent quarter, as compared with $515, 330 or $.13 per diluted share for the corresponding period last year." This stock ROCKS. I mean these are HUGE numbers...what with all the refinancing and home purchase one can understand where THIS came from.
This is also a very YOUNG company so the risk is also increased....but probably so is the OPPORTUNITY. Looking at the last few years on Morningstar.com we find NO revenue in 1999, $10.9 million in revenue for 2000, $14.9 million revenue for 2001, and $22.6 million revenue for 2002. This is a 50% gain each year!! With $15 million reported for the latest quarter...this works out if we extrapolate to $60 million/year rate.
There are ONLY 4 million shares outstanding so this is a TINY company. Per Yahoo only 1.4 million shares float. The p/e is CHEAP, the news is GREAT and the stock is on fire. Sounds like a deal to me...I don't own any shares...but I am tempted to pick up some in the a.m. if there is something I need to sell....otherwise I will just need to sit on my HANDS! Good night everyone. Bob
June 3, 2003 Select Medical (SEM)
It is 7:05 pm CST and I thought I was done for the day but hadn't finished scanning the lists of most actives. Our 'Investnuts' club met and we had a presentation on School Specialty (listed previous to the meeting), and Paychex and HMA. We bought some School Specialty and some Paychex....so for transparency sake, I guess I own some of both of those....at least 10% of the total!
To get to the point, Select Medical Corp. (SEM on NYSE), had a pretty nice day today up $.84 to $22.10 or a 3.95% gain.
Looking at cnn.money, for the profile, we find that Select Medical "is an operator of long-term acute care hospitals in the United States and outpatient rehabilitation clinics in both the United States and Canada." By the way, I do not own any shares of this nor do any members of my family or stock club (!).
Looking at the most recent quarter, on April 28th, Select Medical reported earnings for the quarter ending March 31, 2003. They reported net operating revenues increasing 14.9% to $312.3 million compared to $271.9 million for the same quarter prior year. Income from operations increased 28.3% to $30.8 million compared to the same quarter the prior year. These are nice solid numbers.
Checking out Morningstar.com we find that Select Medical had NO revenue in 1997, first year with revenue was 1998 with $0.1 Billion, $0.5 billion in 1999, $0.8 billion in 2000, and $1.0 billion in 2001 with $1.1 billion in the trailing twelve months. With the $312 million reported in the latest quarter it looks like, if we extrapolate a $1.2 billion year in 2003.
Select has had improving free cash flow, a nice measure of what I think of as true profitability with a -$6 million in 2000 going to $39 million in 2001 and $68 million in 2002. I like the level as well as the improving profitability this represents.
Assets and Liabilities pretty well-balanced and hopefully, the free cash flow will start helping Select pay down some of their longterm debt.
This is a nice, fairly steadily, and fast-growing health care concern. Have a great Tuesday evening! The market actually didn't do too badly today in light of the tremendous pessimism expressed that the market was way too high after its current run...and the overall expectations of a sell-off today!
June 3, 2003 School Specialty, Inc. (SCHS)
Looking at our stocks, it wasn't too bad a day....but a crummy day for ACS...which I JUST PICKED UP YESTERDAY. Oh well, these things happen and down 5% it is still under our 8% sell-point.
School Specialty Inc. is a new name for me and hit the list with a nice move: up $3.76 or 17.34% (!) on the day to $25.45. Even more impressive, is after-hours it is continuing to move higher...at $26.57 up $1.12 or another 4.40%. Wow.
I don't own any shares of this stock...but it certainly had a nice move today.
If we look under the profile section of cnn.money, we find that SCHS "is a distributor of non-textbook educational supplies and furniture for grades pre-kindergarten through 12 districts, administrators and teachers through its catalogs."
Today, SCHS reported record revenue for 2003, with $870.0 million, a 13.4 percent increase over last year, and net income grew 81.8% to $39.6 million over 2002.
Fiscal 2003 fourth quarter revenues increased $10.5 million to $144.1 million, a 7.9% increase over the corresponding quarter in 2002. Apparently this is a very seasonal business....(like school!)...and the net loss per share this quarter improved 10.3% from $.29 net loss to $.26 per share loss in this ' seasonally light fourth quarter' as reported in the NYTimes on the Web.
Checking out the 5 year financials on Morningstar.com, we see the pretty bar graphs showing sequentially revenue of $310.5 million in 1998, $521.7 million in 1999, $639.3 million in 2000, $692.7 million in 2001, and $767.4 million in 2002.
Free cash flow has improved from 2000 when it was a positive $14 million to $21 million in 2001, and $64 million in 2002.
Overall, the company is a little heavy on debt with approximately 203.8 million in current liabilities while showing only $5.4 million in cash and $178.9 million in other current assets. Long-term liabilities are at $190.9 million.
The stock is very interesting and technically has quite a bit of price momentum as well as earnings momentum although a shade heavy on debt.
Have a great evening!
June 3, 2003 Walgreen (WAG)
This is one of my favorites and I DO own some of this but not in my trading account and have not purchased any recently.
Walgreens is having a great day today. Currently trading at $32.17 up $1.48 on the day. Like so many retail ventures, much of the future growth of the company is dependent not only on opening NEW stores but how the OLD stores are doing. This is called the same store sales number that comes out each month and reports on how stores that have been open for at least a year are performing compared to the prior year. Walgreen reported today (6/03) that their same store sales jumped 8.1% for the month of May. Total sales (including stores open LESS than a year) jumped 12.3% to $2.81 billion from $2.51 billion in 2002.
On March 24, 2003, Walgreen reported their results for the quarter ending February 28, 2003. Net earnings were up 13.6% to $370.9 million. Sales increased 12.8% to a record $8.4 billion.
Looking at Morningstar we see annual sales growth from $15.3 billion in 1998, $17.8 billion in 1999, $21.2 billion in 2000, $24.6 billion in 2001, $28.7 billlion in 2002, and $29.6 billion for the trailing twelve months.
Walgreens is also starting to POUR out free cash flow, although negative in 2000 and 2001, they moved to a positive 539 million in 2002, and a positive 734 million (almost $1 billion) in the trailing twelve months.
Assets are greater than liabilities by almost 50%. This stock is a BEAUTY on this page. If you don't own any, buy some you will like it! Hoping your Tuesday is peaceful and profitable. Bob
Monday, 2 June 2003
June 2, 2003 Express Jet (XJT)
Should really be going home at this hour. But now that the day's work is done I can take a look at the lists of stocks that were greatest % gainers. The market opened up nicely today and the Dow did hang onto a 50 point gain with the NASDAQ pulling back a bit. Not too bad in light of the run on the leg of the rally. Is this another bull market? Who knows.
We are not involved in any timing. We just want to find the fastest 'horses' on the track!
Anyhow, Express Jet showed up on the list today.
XJT, according to CNN.money, "operating as Continental Express, is a regional airline offering scheduled passenger service with approximately 874 daily departures to 98 cities in 33 states, the District of Columbia, Mexico and Canada."
XJT had a great day today. One could say it really "took off" but that would be a groaner of a pun. The stock closed at $12.60 up $.86 on the day or 7.33%.
Looking at the NYTimes on the Web site, we can search through the headlines for the latest earnings which were reported on April 15th...about two weeks ago. They reported that first quarter net income was $25.6 million or $.40/diluted share...an increase of 28% over the prior year period.
The first quarter operating revenue increased 16 percent to $306.6 million, from $265.2 million in the first quarter of 2002...and available 'seat-miles' increased 24% over the same period.
If we look at the Morningstar.com website for information, we find that a look at the 5 year financials shows an increase in revenue from $419 million in 1997 to $528 million in 1998, $650 million in 1999, $844 million in 2000, and $980 million in 2001. I do not see the 2002 results there....but with $306 million in the first QUARTER of 2003, we can extrapolate an over $1 billion rate for the year.
Earnings have grown but have been a bit inconsistent as many airlines experience with different stresses on the performance...like terrorism and oil prices....the assets/liabilities shows lots of debt...typical of an airline...but there is $15 million in free cash flow as reported on Morningstar.
If you would like to own an airline stock, this might be a good one for you to consider. I do not own any shares of this issue....and do not see any compelling reason to invest at this time....but definitely worth watching for the future.
Have a great evening! Bob
June 2, 2003 Affiliated Computer Services (ACS)
This one showed up today on the list and I purchased some for my trading account already.
Affiliated Computer Services is currently trading at $49.18, up $2.84 or 6.13% on the day.
According to CNN.Money site, "ACS provides a full range of information technology services including business process outsourcing, technology outsourcing, and professional services to the commercial sector and federal government.
The company is doing quite well--on April 22, 2003, according to Yahoo online site (http://biz.yahoo.com/prnews/030422/nytu095_1.html), ACS reported earnings per share of $.57 for the third quarter ended March 31, 2003. This was an increase of 24% compared to $.46 per share for the prior year. In addition, this EXCEEDED analysts expectations by $.01.
Revenues for the third quarter increased 26% to a record $1.01 billion compared to $801 million for the prior year.
Looking at Morningstar.com for 5 year financials, we find that ACS has grown from $1.2 billion in 1998 to $1.6 billion in 1999, $2.0 billion in 2000, $2.1 billion in 2001 and up to $3.1 billion in 2002. If we extrapolate the current $1.01 billion for the quarter in revenue, we get a $4 billion estimate for 2003. Very nice indeed!
Looking at the four prior quarters to one just reported we revenues growing from 24 to 50% each of the quarters and earnings per share growing by 26 to 43% each quarter as well.
Free cash flow has been improving recently...although down from $86 million in 2000 to $43 million in 2001, it jumped to $228 million in 2002 and shows as $299 million for the trailing twelve months.
A check on assets/liabilities shows a slight edge for liabilities....but overall this is a very PRETTY picture we have just painted.
In order to pay for this purchase of 150 shares this morning, I sold 50 shares of Cooper, 100 shares of Synovus, and 50 shares of NCEN in my trading account...all with significant 30% + gains...except NCEN with a 70% gain.
These represented 1/4 positions in my holdings as I have suggested on this website.
Good luck with ACS and all your investments today. Things are moving pretty strong....can it hold up?
June 2, 2003 Coach (COH)
I was in a panic earlier today and last night. I was checking the counter on the website (now 3 weeks old!)...and realized I couldn't get to this BLOG.
I thought of all the entries down the tube and gone into the emptiness of cyberspace....but then realized I couldn't get anybody elses BLOG up either....so guess it was just one of those things.
Anyhow, taking a break from work and looking through the most active/gainers on CNN.Money....realized that Coach had shown up. As you will see elsewhere on the site, I am an owner of Coach stock that I picked up earlier this year. I have already sold about 1/4 of my holdings when it was up 40% so the stock is really quite strong.
Let me tell you why I like it. First of all, Coach is trading at $51.53, up $2.40 or 4.88% on the day.
On April 22, 2003, as per the NYTimes on the web, Coach reported a 113% increase (!) in earnings per share for its third fiscal quarter ended March 29, 2003. ($.34 vs $.16 last year)
Net sales were $220.4 million, a 36% increase from the $161.6 million recorded in the prior year. Significantly, they exceeded analysts expectations of $.29 for the quarter.
Gross margin improved from 68.8% to 72.5% showing increased profitability on each $ of sales.
Comparable sales "rose 14.1%" during the quarter an outstanding (!) same store sales rate.
Looking at Morningstar, we find a beautiful pattern of revenue growth starting with $513.9 million in 1998, dropping (oops) to $500.9 million in 1999, the up to $537.7 million in 2000, $600.5 million in 2001 and $719.4 million in 2002. With $220 million in revenue latest quarter....extrapolating (?) would get us over $800 million for 2003. COH is on track!
COH is spinning off approximately $65 million in free cash flow and the assets/liabilities picture is slanted significantly in favor of ASSETS.
This is a great company. Although p/e a little high at 35+, everything else looks beautiful and deserves a spot on todays web log. As I noted above, I DO own shares of this as of the first of the year.
Happy Monday everyone!
Friday, 30 May 2003
After writing up that piece on ELAB, I couldn't NOT buy some shares! I went ahead and sold 50 of my 200 HIBB for a 30% gain....and bought 250 of ELAB...I paid $29.33. I wanted to let any reader know that I had bought some so that this would be an honest post.
May 30, 2003 Eon Labs, Inc. (ELAB) NASDAQ
Happy Friday everyone. A short week for investors but a great month and another great start on the market today.
Usually mid-morning, I break away from work for a second or two to check the CNN.money lists of greatest gainers. This is a bit of a new one for me. I don't own any shares but sure am tempted.
Eon Labs, Inc., according to CNN.money "is a generic pharmaceutical company engaged in developing, licensing, manufacturing, selling and distributing prescription pharmaceutical products." Sounds a little like two other of my favorites, AAII and LCI.
The stock is currently having a GREAT day, trading up $2.53 at $29.55 (10:09 CST), this is a 9.36% jump.
On April 24, 2003, (6 days ago), ELAB reported their first quarter results with net income of $15.1 million in the first quarter compared to $6.3 million for comparable quarter in 2002. (per NYTimes on the web). Net Sales were $70.9 million for the first quarter compared to $48.2 million in comparable quarter in 2002...an increase of 47.0% (!). They guided higher with expectations in the second quarter of 2003 to be between $70 and $75 million.
Looking at Morningstar.com on ELAB, we find STEADY revenue growth from 1997 of $49.7 million, $55.8 million in 1998, $78.0 million in 1999, $119.7 million in 2000, $165.4 million in 2001. Currently with $70 million/quarter, we are looking at a revenue rate of approximately $280 million. IMHO these are AWESOME numbers!
Looking at free cash flow, we find a steady IMPROVEMENT from -14 million in 2000 to +$26 million in 2001, but down to +20 million in 2002.
Assets/Liabilities picture on Morningstar is BEAUTIFUL. Cash on hand totals $87.3 million which is MORE than current liabilities of $64.3 million and long-term liabilities of $7.4 million combined! In addition they have and additional $120.1 million in other current assets.
This stock paints a very PRETTY picture. I don't own any shares as I write, but as I review the numbers as I write, I am tempted to add a little to my portfolio....but I will try to keep to my own rules....and wait. Have a GREAT WEEKEND everyone.
Thanks for stopping by. Please leave comments here or contact me at firstname.lastname@example.org if you have any comments, criticisms, suggestions, etc.
Thursday, 29 May 2003
May 29, 2003 Medical Staffing Network (MRN) NYSE
The market is drawing to a close....9 minutes to close at 2:51 pm cst....and it may take me that long to get this post together.
Came across this one on the largest percentage gainers on the NYSE...MRN...according to CNN.Money, MRN "is a provider of healthcare staffing services in the United States."
Currently MRN is trading at $7.52 up $.46 or 6.52% on the day. This in the face of a Dow nown 70+ points...while NASDAQ up about 10. This leg of the rally is getting a bit tired.
On May 12, 2003, (17 days ago) MRN reported record revenues of $144.4 million for the first quarter of 2003 which is a 39.9% increase over revenues of $103.2 million for the first quarter of 2002...per the NYTimes on the Web. Net income increased to $5.2 million or $.17 per diluted share compared to $2.8 million or $.13 per diluted share for the prior year's first quarter.
The stock has performed rather poorly in light of the stellar earnings report due to the company's reticence to forecast 2003 earnings due to 'poor visibility'. CS First Boston cut them to 'underperform' from 'outperform' on 5/13/03 per CBS Marketwatch report. There was some question about the possible contraction of demand for temporary nurses.
Looking at Morningstar.com we find that revenue grew from $33.1 million in 1998 to $96.5 million in 1999, to $182.0 million in 2000, and $338 million in 2001 with $403.4 million in the trailing twelve months.
During the four months prior to the current reported quarter, revenue growth was STRONG with increases of 93.97%, 60.15%, 46.47% amd 38.82% growth sequentially.
Free cash flow is still negative at $-5 million. However the Assets/Liabilities picture is about 2:1 assets to liabilities.
Overall an interesting stock, our second temporary medical help stock in our watch list...but not perfect numbers and difficulty in 'visibility' into 2003.
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