Stock Picks Bob's Advice
Tuesday, 17 June 2003
June 17, 2003 Outback Steakhouse (OSI) and update
The market won't quit. Just when I thought the market was going to rest, the bulls come storming back. Our E-Loan (EELN) stock that I picked up June 4th at $5.15 closed at $6.81 up another 7+%. Synovis that I picked up on May 21, 2003, at $14.54 (!), closed today at $24.68 up another $.84. I went ahead and sold 150 of my EELN for a quick 30% gain and another 50 of SYNO for about a 70% gain (!) in a month. Unbelievable! With the money, I made an initial purchase of 150 shares of DKS....Dick's Sporting Goods. We have reviewed DKS in this Blog earlier.
Looking through the lists on CNN.Money, Outback Steakhouse showed up. This has been an old favorite of the growth stock crowd...and is the home of the famous 'bloomin' onion'. If you haven't had one of those, it is worth the trip to the Outback!
I sound like an advertisement and no, I don't own any shares of this stock. I mean, I really can't own them all, can I?
Outback had a great day closing at $39.76 up $2.43 or 6.51%. I don't see any news to explain the jump. They did report on May 29th that same store sales were up about 1.4% for domestic Outback restaurants....is that anything to write home about?
On April 22nd, Outback reported their first quarter results, and per the NYTimes on the Web, reported net income was $45,067,000 or $.58/share compared to $36,963,000 or $.46/share for the same period ending march 31, 2002. Revenues for the quarter were up 12.6% to $651,678,000. Now that's a lot of Chicken on the Barby.
Morningstar shows a steady growth in annual revenue from $1.4 billion in 1998, $1.6 billion in 1999, $1.9 billion in 2000, $2.1 billion in 2001, and $2.4 billion in 2002. Free cash flow has been a bit erratic with $100 million in 2002 dropping to $28 million in 2001 and back up to $156 million in 2002.
Assets and liabilities appear pretty evenly balanced.
The company looks nice fundamentally and is behaving quite well technically. Definitely a possible purchase for your portfolio.
Hope everyone has a Happy Tuesday! Bob
Please email me at firstname.lastname@example.org if you have any questions, comments, or wish to give me any words of encouragement! Thanks for stopping by.
Monday, 16 June 2003
June 16, 2003 Whitman Education Group (WIX)
It is late and the market is closed. A last glance at the largest advancers includes checking the AMEX. I found one here in the educational market, an are that has been fairly strong recently.
Whitman Education Group (WIX)"operates degree and non-degree granting proprietary schools devoted to career training primarily in the medical, technical, and business fields."
WIX had a nice day today closing at $14.89 up $.83 or 5.90% on the day. I do not own any shares of this company nor do any members of my family.
On May 30, 2003, WIX reported their fourth quarter results: (for the fourth fiscal quarter ending March 31, 2003) revenue increased 17% to $30.1 million compared to $25.7 million in last year's fourth quarter. Net income for the quarter increased to $2.8 million or $.17/share compared with $1.1 million or $0.08 per diluted share for the same period last year.
Morningstar shows that this growth has been consistent even back to 1998 when revenue was $60.3 million, $74.0 million in 1999, $77.6 million in 2000, $79.6 million in 2001, $91.9 million in 2002, and $105.4 million in the trailing twelve months.
Free cash flow has been improving, although dropping from a positive $5 million in 2000 to $1 million in 2001, it was back up to $12 million in 2002.
Assets and liabilities are weighted heavily in favor of assets with $48.7 million in cash and other current assets compared to a total of $41.4 million in current AND long-term liabilities combined.
This is a small company with only a $230 million market cap. They have a trailing p/e of 30.39 and do not pay a dividend.
If you are looking for a stock investment in this area, this is a very nice looking company both on technical and fundamental grounds.
Happy investing everyone. Again, please drop me a line at email@example.com if you have any questions, comments, or just want to share some words of encouragement! Thanks for stopping by.
Posted by bobsadviceforstocks at 6:38 PM CDT
Updated: Monday, 16 June 2003 6:39 PM CDT
June 16, 2003 American Home Mortgage (AHMH)
I hate doing this but while I was looking for stocks to post, I found AHMH....American Home Mortgage and the stock looked SOOO GOOOD to me, I went ahead and bought some...about 300 shares. So let me tell you about this company, and you can see if you would like to buy some as well.
We have seen a lot of these mortgage companies popping up on our lists....stocks like New Century Financial (NCEN), and UFM....stocks we have already discussed here and have been doing quite well.
AHMH "is an independent retail mortgage banking company that sells loans and related servicing rights to institutional buyers. AHMH also operates a mortgage website at MortgageSelect.com." (per CNN.Money)
On April 23, 2003, AHMH reported earnings for the first quarter of 2003. Per NYTimes on the Web, 2003 earnings rose 143% (!) to $16.3 million from $6.7 million. Revenue rose 179% (!) to $94.6 million for the first quarter from $33.9 million for the same perior in 2002. They also announced an increase in their dividend.
The company DID warn that if interest rates rose, their revenue/earnings would most likely drop accordingly. However, if you follow the interest rate scene....rates are hardly rising.
The company is small but growing quickly. Revenue growth, according to Morningstar.com, was $11.3 million in 1997 going to $20.2 million in 1998, $24.9 million in 1999, $58.3 million in 2000, $128.1 million in 2001, and $189.8 million in the trailing twelve months.
Free cash flow DOES appear to be negative and the assets-liabilities statement is incomplete on Morningstar.com.
Currently, the stock is trading at $19.49, up 11.18% on the day. They have a reasonable (!) p/e of 7.35, and yield 1.25% in dividends.
Anyhow, I bought before I posted so I apologize....but I liked the explosive growth in revenue/earnings on this little one which coupled with a low p/e sounds like a recipe for a continued price appreciation.
Have a great day...and please drop me a note at firstname.lastname@example.org and let me know if you find this site useful!
June 16, 2003 Dominion Homes (DHOM)
Another homebuilder has shown up on the lists that meet our criteria.
Dominion Homes "offers three sizes of single-family homes that are different by size, price, standard features and available options in Central OH and Louisville, KY."
DHOM is having a great day today. Currently trading at $24.50, it is up $2.47 or 11.21% on the day.
Last quarter results were announced on April 30, 2003, per the NYTimes on the web: Net income increased 19% to $4.8 million from $4.1 million last year for the quarter ending March 31, 2002.
Revenues increased to $104.0 million, based on the delivery of 569 homes, from $98.4 million based on the delivery of 518 homes during the first quarter of 2002.
Reviewing the Morningstar.com financials, we find that revenue has grown from $207.9 million in 1997, $264.9 million in 1998, $277.6 million in 1999, $326.4 million in 2000, $395.7 million in 2001 and $487.5 million in the trailing twelve months.
Unfortunately, cash flow is a negative six million which is one of the only flaws for this company.
The company, however, is fairly flush with cash with $4.1 million in cash and $272.8 million in other current assets compared to current liabilities of $39.3 million and Long-term liabilities off $115.5 million.
I do not own any shares of this and am not anticipating a purchase at this time. The stock is interesting and may be an excellent way to participate in the housing boom with a relatively small company. (compared to HOV and LEN discussed elsewhere on this site.)
June 16, 2003 Quest Diagnostics (DGX)
The bull is running.
Today's pick for the morning is Quest Diagnostics (DGX) on the NYSE. Quest is having a geat day trading at $64.28 up $2.78 on the day. The p/e is reasonable at 19.90 and they don't have a dividend.
Last quarter results were posted on April 22, 2003, per the NYTimes on the web. Earnings per share increased 28% to $.86 from $.67 in the quarter ending March 31, 2003, and revenue of $1.1 billion for the quarter grew 15.4% over the prior year. This includes acquisitions of Unilab and American Medical Laboratories. Pro Forma revenue growth (assuming that these were both part of Quest for both periods) acually grew just 3.2%.
By the way, DGX "is a clinical laboratory testing company which offers testing services used by the medical profession in the detection, diagnosis, monitoring and treatment of diseases." per Cnn.money.
Looking at Morningstar.com, we find revenue growth very consistent, starting at $1.5 billion in 1998, increasing to $2.2 billion in 1999, $3.4 billion in 2000, $3.6 billion in 2001 and $4.1 billion in 2002.
Extrapolating the current quarter we would get about $4.4 billion in 2003.
The company spins off lots of free cash flow starting at $253 million in 2000, increasing to $317 million in 2001 and up to $441 million in 2002.
DGX has about $820 million in current assets vs $636 million in current liabilities and $919.4 million in long term debt. They also report $2,499 million in other long term assets. A little heavy on debt perhaps but with all the free cash flow this shouldn't be a problem imho.
A very interesting stock and should be at the top of all of your potential picks. I do not own any shares of this but certainly would be interested in acquiring shares if the opportunity availed itself.
Friday, 13 June 2003
June 13, 2003 Looking Back...How are we doing??
Not a lot of stocks showed up on the list...the Dow was down 79.40 at 9,117.10 and the Nasdaq closed down 27.13 at 1,626.49.
It has been suggested to me that we should review some of our past suggestions. Well Happy Birthday to us. This site is only one month old now and we have already 58 entries! I hope you can read all of them.
Our first pick on 5/12/03 was Saint Jude Medical, the medical equipment maker. Trading at that time at $55.30, it has closed today at $61.89. Unfortunately, even I didn't buy any shares. That is a $6.59 gain in the month or an 11.9% appreciation.
JCOM was out second pick, and being a NEWBY at posting I don't have the price on the post. It is now trading at $33.50, and looking at a graph of the price of JCOM, I believe it was around $30...but we won't count this one officially.
On May 14th, I posted HLEX at $5.70. Healthextras, Inc. ...HLEX closed today at $7.06. This is a HUGE gain of $1.36/share or a 23.8% gain since our post.
May 15th was the post date for AHS at $10.05. AHS closed today at $12.27. This is a pick up of $2.22, or 22%.
On May 16th, we posted Agree Realty, ADC, at $23.41. ADC closed today at $24.70 a gain of $1.29. This is a 5.5% gain on the month.
May 19th we posted DNA, Genentech, at $53.04. DNA closed today at $72.90 or a gain of $19.86 or 37.4% on the month.
Next week will try to review some of the later posts. I think it is wise to give each of these picks at least a month before we review them...like this but WOW, I know it was a good month in the market....but look at this performance!
Have a great weekend!
June 13, 2003 Lannett Company, Inc. (LCI)
Lannett is a company that I am familiar with and have purchased shares in the past. Unfortunately I was stopped out by my 8% rule....and no longer own any shares. However, it is the best stock on the lists today and deserves a once-over.
It really did feel like Friday the 13th if you are a long-term investor and not selling short. The market had a rather small correction today, perhaps again suggesting the underlying bullish sentiment that appears to continue to drive the indices higher.
LCI had a great day today. It closed at $21.53 up $.92 or 4.46% on the day.
Lannett is another generic drug manufacturer...a little like ELAB and AAII that we already own...they "manufacture and distribute, throughout the United States, pharmaceutical products sold under generic names and its own trade or brand names, and also manufacture and develop products for other companies."
On April 24, 2003, Lannett reported results for their fiscal 2003 3rd quarter: compared to 2002, net sales jumped 28%, and net income was up 7%. Results that are nice but not overall earth-shattering.
Morningstar shows a steady growth in revenue going back to 1998 when it was $9.5 million, increasing to $10.6 million in 1999, $11.6 million in 2000, $12.1 million in 2001, up to $25.1 million in 2002 and $35.0 million in the trailing twelve months.
The company turned cash flow positive in 2002 with $5 million free cash flow positive but only $4 million free cash flow positive in the trailing twelve months.
There is only $0.5 million in cash on hand per Morningstar.com, but $13.0 million in total current assets compared to $5.0 million in current and long-term liabilities combined.
The numbers are nice if not fabulous, stock is not what I would call cheap with a trailing p/e of 41.06 per Morningstar.com. However, it is a stock to know about and watch and is what appears to be the best stock on the lists of advancers.
Thursday, 12 June 2003
June 12, 2003 Charles River Associates Incorporated (CRAI)
I saw this one and I thought it was the Towel maker. I guess that is James River or something....or was it James Taylor....lol.
O.K. so I am better at picking stocks than telling jokes and I should stick to it. Anyhow, I don't own any of these shares, have no plans right now to buy any and nobody in my family or stock club owns any that I know. In fact, I don't think I ever even heard of this company until 5 minutes ago!
CRAI "is an economic and business consulting firm that applies analytical techniques and industry knowledge to complex engagements for a range of clinents, including law firms, corporations and governments." Yikes, almost sounds like Arthur Andersen.
Charles River Associates had a GREAT day today and made the most-up list as well. It closed at $27.95 up $4.03 or 16.85%. In fact, after hours it is trading up another nickel. (But a nickel won't even buy you a candy bar these days.)
What drove the stock up was an EARNINGS report. If the three most important things in real estate are "location, location, and location" then in MY book, the three most important things for a stock investment is "earnings, earnings, and EARNINGS!"
Today, CRAI reported financial results for the fiscal 2003 second quarter ended May 16, 2003.
Revenues for the quarter increased 43.7% to $40.2 million compared to $28.0 million last year. Net income increased 40.9 percent to $2.8 million or $.30/share from $2.0 million or $.22/diluted share last year (2002). This is all from the NYTimes on the Web article. By the way the NYTimes site is a free site but you do have to register.
Checking Morningstar.com, we find steady revenue growth from $53.0 million in 1998, $74.0 million in 1999, $109.8 million in 2001, $130.7 million in 2002, and extrapolating (I love that word!) from the present quarter, assuming no seasonality, we can estimate about $160 million for 2003. Aren't these BEAUTIFUL numbers? Don't you just LOVE this company?
Free cash flow has been improving steadily, although the numbers are SMALL, the TREND is wonderful: $-1 million in 2000, $+2 million in 2001, $9 million in 2002 and $12 million in the trailing twelve months.
The company is very solvent per Morningstar with $23.7 million in Cash, $48.2 million in other current assets as opposed to $30.5 million in Current Liabilities. Long-term assets total $44.0 million compared to a miniscule $4.5 million in long term debt.
This stock trades at a trailing p/e of 28.52 and does not pay a dividend. If I had some free cash....I know the same old story....but HONESTLY...this is a beautiful picture and looks like a GREAT investment.
Goodnight again and keep those cards and messages coming at email@example.com.
Posted by bobsadviceforstocks at 10:55 PM CDT
Updated: Thursday, 12 June 2003 10:57 PM CDT
June 12, 2003 Oshkosh Truck (OSK)
It is late in the evening as I take to the task of scanning for a great pick for the day. This market sure does want to go up~! Probably wouldn't hurt to have a bit of a correction in here...although it is said that a bull market does climb a wall of worry.
The stock today that showed up is an old favorite of mine. Ask my buddies in Investnuts where we own a few shares...Oshkosh Truck. I also have a few shares in one of my accounts other than my trading account. So how is that for transparency?
Anyhow, Oshkosh Truck, "engineers, manufactures, and markets a broad range of fire and emergency apparatus and specialty commercial and military trucks under the Oshkosh, Pierce, McNeilus and MTM trademarks." In other words they make peacetime vehicles like firetrucks, garbage trucks, ambulances and military vehicles such as tanker trucks.
The stock had a great day trading at $62.5 up $3.11 or 5.22% on the day. Looking for news to explain the jump, the best I can see on the NYTimes on the web is that the Pacific Exchange (PCX) announced yesterday that they will begin trading options on OSK. I think there must be something more than this to explain the jump....
Anyhow, earnings look nice. On April 24, 2003, according to NYTimes on the Web, Oshkosh Truck reported their second quarter results for the period ending March 31, 2003. In a nutshell, things were solid: net income increased 16.0% to $14.1 million, or $.81/share. This compares with net income last year of $12.2 million or $.70/share. Revenue was up from $415.6 million last year to $453.4 million for the current year.
Examination of financials on Morningstar.com shows that revenue growth has been steadily improving from $0.9 billion in 1998, $1.2 billion in 1999, $1.3 billion in 2000, $1.4 billion in 2001, $1.7 billion in 2002, and $1.8 billion in the trailing twelve months.
The company even pays a SMALL dividend of $.35/share that has increased from $.33/share in 1998.
Looking at free cash flow we find that the company, while dropping a little over the last twelve months to $196 million positive from $248 million in 2002 is still spinning off lots of real money.
Current assets are at $430 million vs $385 of current liabilities, and 'long-term assets' measure $604.7 million vs $216.7 million in long-term debt.
The stock IMHO appears to be reasonably valued with a trailing p/e of 17.40. This looks like a GREAT company to me....should do well in both peace and wartime industries....and has been growing steadily since 1997 if not longer. That is why I own some of these shares....and if I had some available cash....would be happy to add to my position at this point.
Have a great evening. Drop me a line at firstname.lastname@example.org and let me know if you like all of this commentary and if it is helpful to you. Bob
Wednesday, 11 June 2003
June 11, 2003 WebEx Communications
Time to be wrapping up the day. WebEx Communications deserves mention. WEBX closed at $14.41 up $1.40 on the day a gain of 10.76%.
It sounds a little like a dot-com again...yikes...but the numbers are good. WEBX provides "a global network and scalable platform for real-time interactime multimedia communications services on the Internet using a standard Web browser."
Did you get that? Anyway, they are making money.
Last quarter, WebEx reported revenue of $41.8 million up 41% from the prior year. EPS was $.15 compared to $.03 last year.
Morningstar.com documents the explosive growth in revenue for this company. Trailing p/e is reasonable at about 26. The company which was cash flow negative in 2001, is now cash flow positive.
I don't own any shares of this issue, and think probably this is a more speculative company...but perhaps this will be where we will find our greatest results as we look for investments!
Regards to all. Bob
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