Stock Picks Bob's Advice
Thursday, 4 September 2003
September 4, 2003 "Trading Transparency BONZ for LWAY"
As indicated in the latest entry below, I did not like the way LWAY was trading, and down 4%, I went ahead and pulled the plug...motivated partially by my desire to create a position in BONZ, of which I purchased 300 shares. Thanks for stopping by! Bob
September 4, 2003 Interpore International, Inc. (BONZ)
O.K. I apologize. I jumped the gun on this one. Just bought 300 shares for my trading account after clearing out LWAY for a 4% loss...this one looks nice to me...a little like EXAC.
Interpore International (BONZ) is "...a medical device company with a complementary combination of spinal implant and orthobiologic technologies" according to money.cnn.com.
Their last quarter results were announced on July 17, 2003, which, according to the NYTimes on the Web, for the second quarter ending June 30, 2003, including a $1.1 million royalty payment from DePuy AcroMed, total revenues were $18.4 million, a 25% increase from the $14.7 million in the same quarter in 2002. Net product sales rose to a record $17.3 million up 18% from $14.7 million in 2002. Net income was $2.4 million or $.13/share compared to $651,000 in 2002 or $.04/diluted share.
Morningstar shows nice sequential revenue growth of $30.2 million in 1998, $38.9 million in 1999, $44.3 million in 2000, $51.3 million in 2001, $58.9 million in 2002....and extrapolating the current quarter should get us into the neighborhood of $70 million for 2003.
Free cash flow, while erratic, has recently turned positive with $4 million in 2000, 0 in 2001, $(12) million in 2002, and $8 million in the trailing twelve months. The assets/liabilities picture looks nice with $11.9 million in cash reported, more than enough to cover the $11.3 million in current liabilities with NO long-term liabilities reported. In addition, BONZ has, per Morningstar.com, an additional $47.7 million in other current assets.
According to Yahoo.com, the market cap is a small $283.0 million with 17.8 million shares outstanding and 15.7 million of them that float. No dividend is reported. According to Yahoo, the p/e is a reasonable 18.56 with a 4.38 price/sales. Return on assets is a strong 19.19%, and return on equity equally impressive at 22.08%. There are 884,000 shares out short as of 8/8/03 per Yahoo representing 2.54 trading days.
I like this stock a lot. Needless to say, because I just moments ago sold my LWAY, although recently purchased, is acting a bit sick....and bot 300 of BONZ in its place.
Thanks for stopping by! Be sure to leave comments here (is that difficult...nobody has left any comments thus far...maybe it is impossible lol)....or drop me a line at email@example.com if you have any questions, comments, or words of encouragement.
September 4, 2003 "Trading Transparency" HIBB
Going through our lists in the trading account, I realized that HIBB is now sporting a 74% gain. I have already sold 50 shares of HIBB on 5/30/03 and today I sold another 50 shares at $25.42 with an average cost of $14.70. We left 175 shares in the account. Still not much on the greatest percentage gainers to interest us. COO shows up as does PLMD..but these are already on our list. Bob
September 4, 2003 "Trading Transparency COO"
Haven't seen much on the lists today that fit our criteria. Cooper (COO) jumped nicely on an earnings report. With an over 50% gain on COO, I sold an additional 50 shares at $42.18 with a cost of $27.12 puchased a little over 6 months ago. Now have 100 COO remaining and will try to hold tight unless another big move on the upside. Bob
Wednesday, 3 September 2003
September 3, 2003 "Trading transparency"
Quick update. I sold 150 shares of RAD which I bought as a value stock last year before starting this earnings-based purchasing. I bought 200 shares of TTWO with outstanding earnings report, etc., see below. Good luck with all of your trades! Bob
September 3, 2003 Take-Two Interactive Sft. (TTWO)
How about a good game software company? This would seem to be a risky business but then again, maybe all companies have risk! Anyhow, Take-Two (TTWO) "...designs, develops, publishes, markets and distributes interactive software games for use on multimedia personal computer and video game console platforms" according to money.cnn.com. TTWO is having a GREAT day today trading as I write at $35.75 up $6.00 or 20.17% on the day.
As with so many of the stocks we cover on this site, TTWO jumped today on positive earnings news: net sales for the third quarter ended July 31, 2003, were $155.6 million a 27% increase over $122.5 million for the same period a year ago. Net income was $7.7 million, an increase of 60% over last year's $4.8 million with diluted net income per share of $.18, a 50% increase over the $.12 reported last year. All of this was reported on the NYTimes on the Web.
Morningstar.com shows a history of revenue growth from 1998 when $194 million in revenue, $305 million in 1999, $364 million in 2000, $449 million in 2001, $794 million in 2002.
Free cash flow has been solid as reported on Morningstar: $(57) million in 2000, $19 million in 2001, $135 million in 2002 and $130 million in the trailing twelve months.
Looking at assets/liabilities on Morningstar we find this company sitting solidly in a cash position with $188.4 million in cash on hand more than enough to cover both the current liabilities of $129.7 million and the small $6.3 million in long-term liabilities combined. In ADDITION, TTWO has $205.1 million in other current assets.
TTWO has a market cap, per Yahoo, of $1.24 billion with 41.7 million shares outstanding and 40.8 million of them float. No dividend is paid. Considering the growth, the company is downright cheap with a p/e of 13.43 and a price/sales of 1.31.
To top it off, there are LOTS of shares out there short, for me a BULLISH indicator. As of 8/8/03, per Yahoo, there were 8.77 million shares out short representing 21.5% of the float or 10.62 days of average trading volume.
In summary, this stock looks GREAT. They have steady revenue growth, an outstanding latest quarter, gobs of free cash flow, lots of cash easily covering their liabilities, a cheap p/e, and a low price/sales ratio and lots of people betting AGAINST this stock who will need to buy shares to eventually cover their short positions. In fact, if I can find some cash, I may very well buy some shares soon.
As of now, I do not own any shares of TTWO.
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Tuesday, 2 September 2003
"How are we doing?" A look back on the week of July 14, 2003
We were busy the week of 7/14/03 making lots of stock suggestions. On 7/14/03 we discussed COF at $55 (closed today, 9/2/03, at $55.56 a gain of $.56 or a gain of 1%), FNF at $33.66 (closed 9/2/03 at $29.31 a loss of $4.35 or (12.9%)), and ELON at $17.05 (closing today at $15.21, a loss of $1.84 or (10.8)%).
Tuesday, 7/15/03, we selected EPIQ at $19.62 (closed today at $18.73, a loss of $.89 or a loss of (4.5)%), and HDI (Harley) at $43.68 (closed 9/2/03 at $49.01, a gain of $5.33 or a gain of 12.2%.
On Wednesday, 7/16/03 we had one pick: PRX at $52.83. PRX closed today (9/2/03) at $57.10, a gain of $4.27 or 8.1%.
Thursday, 7/17/03, we selected ESI at $36.13 (ESI closed on 9/2/03 at $43.92, a gain of $7.79 or 21.6%), and CLSR at $23.40 (CLSR closed on 9/2/03 at $24.90, a gain of $1.50 or 6.4%).
Friday 7/18/03, we selected BIO at $60.15 (BIO closed at $51.65 today a loss of $8.50 or (14.1)%), and HANS at $5.38 (HANS closed today, 9/2/03, at $6.00, a gain of $.62 or a gain of 11.5%.
In summary, we picked 10 stocks with results ranging from (12.9%) to 21.6% for an average of a gain of 1.85%. Nothing to write home about, but at least positive.
We will have to see how these stocks perform in the future! Thanks for stopping by.
September 2, 2003 Sohu.com, Inc. (SOHU)
O.K. it is Tuesday after a long Labor-Day weekend and maybe the HEAT is getting to me...but here I am recommending another Dot.com and a Chinese one at that! Even with all of the news about how the United States is asking China to reconsider their pegging the Yuan to the dollar....but the stock just looks great from here....so let's look at it together.
First of all, I do not own any shares of SOHU. Sohu is, as we write trading at $33.47, up $3.55 or 11.86%.
According to money.cnn.com, SOHU.com "...is an Internet portal in China that offers Chinese language Web navigational and search capabilities, 17 content channels, Web-based communications and community services and a platform for e-commerce services."
On July 22, 2003, SOHU reported financial results for the second quarter ending June 30, 2003. Revenue rose 216% year-on-year to $19.3 million. Sequentially, revenue grew by $4.9 million or 34% from $14.4 million for the first quarter of 2003. Net Income was $.19/share. As far as I can tell, SOHU had no income or a loss last year. You may want to do more research on that question prior to making your own decision.
Morningstar.com shows an exponential growth in revenue from $0.1 million in 1997, $0.5 million in 1998, $1.6 million in 1999, $6.0 million in 2000, $13.0 in 2001, and $29 million in 2002. With the current quarter at $19.3 million this would get us over $70 million in revenue for 2003.
Free cash flow has been improving as well: $(22) million in 2000, $(14) million in 2001, $3 million in 2002 and $7 million in the trailing twelve months.
The balance sheet presented on Morningstar looks excellent with $27.8 million in cash, more than enough to cover the $9.1 million in current liabilities and NO long-term-liabilities are reported. In addition SOHU has another $10.1 million in other current assets.
Looking at Yahoo.com, we find that SOHU has a market cap of $1.07 billion with 35.8 million shares outstanding and of those, only 12.3 million that float. There is no dividend. The p/e is a rich 83.34 and the price/sales is equally high at 22.34. However, this company is growing RAPIDLY and considering the SIZE of the China market, the sky is virtually the limit. With a company just turning profitable the p/e goes quickly from meaningless to a high number then into a reasonable range....hopefully!
There are 2.67 million shares out short representing a mere 0.65 days of trading....so not many shares out there short.
I like the stock except that I am always cautious about foreign companies where I am not sure about the accounting issues....it is hard enough in the US. But the numbers here are compelling and the potential is enormous. Might just be worth a buy in here!
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Friday, 29 August 2003
August 29, 2003 Wilson Greatbatch (GB)
Now here is an interesting stock for you to consider! I was scanning the lists and was pleased to see AHS one of our early picks make the top of the largest % gainers. Also noted a couple of our other selections but was having a bit of a problem finding any NEW picks....at least until I came across Wilson Greatbatch (GB). I do not own any shares of this stock and in fact have NEVER HEARD OF IT before looking at the numbers the last few minutes!
According to money.cnn.com, Wilson Greatbatch (GB) is "...a manufacturer of power sources, feedthroughs, wet tantalum capacitors and other components used in implantable medical devices." I guess a company similar to this that I have looked at in the past is Surmodics which makes the coatings for the implantable stents for JNJ....but then again that is a DIFFERENT story..so staying on track....
GB is having a nice day in the market, trading as I write, at $39.24 up $1.79 or 4.78% on the day. On August 5, 2003, per the NYTimes on the Web, GB reported record second quarter results: Sales were $55.8 million an increase of 46% compared to $38.3 million reported in the second quarter of 2002. Net income was $5.0 million or $.23/share compared to $3.6 million or $.17/share last year. These results are, in my humble opinion, nothing short of stellar.
Morningstar.com shows a history of past growth consistent with the current quarter: revenue of $77.4 million in 1998, $79.2 million in 1999, $97.8 million in 2000, $135.6 million in 2001, $167.3 million in 2002. With extrapolation of the current quarter, we would estimate at the current rate something north of $200 million in revenue for 2003.
Free cash flow, while inconsistent, had been positive: $14 million in 2000, $12 million in 2001, $7 million in 2002 and $13 million in 2003. Actually, operating cash flow has consistently increased over that same period of time, but capital spending has varied resulting in variable free cash flow.
Assets and liabilities are slightly in favor of liabilities, a minor negative, with $2.2 million in cash and $67.2 million in other current assets vs. $17.9 million in current liabilities and $77.1 million in long-term liabilities.
Looking under Yahoo.com on the net, we find that the Market Cap is $792.7 million with 21.2 million of shares outstanding and only 8.70 million of them that float. No dividend is paid. According to Yahoo, the company is quite flush with cash with $4.84/share of cash...so actually looks nicer than Morningstar report. The p/e is a bit steep at 43.45, and price/sales also pricey at 3.94. There is a WONDERFUL short interest out there as of 8/8/03 of 1.42 million shares representing 8.15 days of average trading volume or 16.3% of the float.
O.K., I know I sound like a cheerleader sometimes...but this IS a pretty stock...I love the nature of the growth business they are in, the implantable device market is sure to continue to grow...especially with the implantable defibrillators, etc., although MDT has had some questions placed on that stock regarding the rate of growth in that business....this company looks like a winner to me.
Anyhow, I have one for you to chew on for the weekend! Thanks for stopping by. Please feel free to email me with any comments or questions at firstname.lastname@example.org or leave your comments right here. Also remember to think about linking to this page if you have a webpage of your own! That WOULD be greatly appreciated!
August 29, 2003 Trading Transparency CHS
Sometimes a person just has to do what he has to do!
Watching the quarterly report on Chicos Fas (CHS) that came out two days ago with reported same store sales in the high teens, I couldn't resist buying 200 shares this morning at $32.19. I expect a short term sell-off but hopefully we will maintain our 8% leeway and not be forced to sell. Another attractive stock is Quiksilver (ZQK) but as I have said many-a-time in this site is that I have eyes for many stocks but money for but a few! Have a great Friday...I will be scanning the greatest percentage gainers more later today...and hopefully will have some new ideas for you!
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