Stock Picks Bob's Advice
Thursday, 23 October 2003
October 23, 2003 SM&A (WINS)
WHERE do I keep finding these companies? lol. Really, it is quite mechanical, just scan the top percentage gainers, emphasize stocks over $10, look at latest quarter, Morningstar.com....and there you have it! Remember, I cannot emphasize enough, I want all of you who read these posts to discuss these ideas with your own professional investment advisor before acting on them!
Anyhow, enough with the lecture, SM&A (WINS) is "...a provider of competition management services, business consulting and program services." They came out with earnings today before the stock opened and even though the rest of the market is down, WINS is up strong. Currently, WINS is trading at $13.248, up $1.218 or 10.12%.
Today, as reported on Yahoo.com from BUSINESS WIRE, WINS reported their third quarter results for the period ended September 30, 2003. Revenue for the quarter was $18.7 million, an increase of 31% over the same period last year. Net income was $2.9 million or $.13/share, an increase of 78% from last year's results.
Morningstar.com shows two different revenue growth patterns. Looking at the "10-Yr Income" tab, we find revenue increasing between 1995 and 2000 and then dropping off significantly to 2001. However, since 2001, things have been looking much better again. Revenue has grown from $39.6 million to $66.4 million in the trailing twelve months.
Earnings have grown from $.25/share in 1999 to $.51 in trailing twelve months. Free cash flow is positive at $3 million in 2000, improving to $8 million in trailing twelve months.
Balance sheet is solit with $10.7 million in cash vs. $9.2 million in current liabilities and only $300,000 in long-term debt. In addition, Morningstar reports an additional $14.4 million in other current assets.
Yahoo.com shows Market Cap of $264.0 million. P/E reasonable at 20.05 with PEG ratio of 1.76, Price/sales at 3.64. There are 20.10 million shares outstanding with 13.4 million that float. There are 210,000 shares out short as of 9/8/03. Due to low trading volume, this represents 2.561 days of average trading.
This company is very interesting and may be worth your consideration. I do not own any shares. Before making any purchases based on information from this site however, please consult with your financial advisor! Thanks for stopping by.
October 23, 2003 Shenandoah Telecommunic. (SHEN)
Market opened down sharply but is trying (?) to come back a bit as I write. Scanning through the lists of greatest percentage gainers on money.cnn.com, I came across Shenandoah Telecommunications (SHEN). SHEN is having a nice day trading at $43.50 as I write, up $2.50 or 6.10%. They announced several things that will tend to boost the stock price: a 2:1 stock split, an increase in dividend, and great earnings for the quarter! I do not own any shares of SHEN.
According to money.cnn.com, SHEN "...is a diversified telecommunications holding company providing both regulated and unregulated services in the Northern Shenandoah valley, including telephone, cable, Internet access, paging, mobile, and other services."
As reported yesterday, after the close of the market, on PRNewsire-First Call and picked up by Yahoo Finance, Shenandoah released results for the third quarter of 2003. Unaudited results for the period ended September 30, 2003 showed net income for the quarter was $2.7 million compared to $0.4 million in the same quarter last year, and total third quarter revenues grew by 12% from the same quarter last year. In addition, as noted above, SHEN announced a stock split for shareholders of record as of January 30, 2004. In addition, they declared a cash dividend of $.78/share, which is a 5.4% increase over the 2002 dividend. Nice report don't you think?
Morningstar.com shows SHEN with a nice sequential revenue growth from $36 million in 1998, $42 million in 1999, $44 million in 2000, $69 million in 2001, $93 million in 2002 and $97 million in the trailing twelve months.
Earnings/share have been a bit erratic but have increased from $1.49 in 1998, to $7.08 in the trailing twelve months.
Free cash flow has also been improving the latest few years: ($34) million in 2000, ($18) million in 2001, $0 in 2002 and $9 million in the trailing twelve months.
The balance sheet is reasonable with cash reported of $36.3 million, enough to cover the current liabilities of $29.3 million with an additional $11.1 million of other current assets. The company does have a bit of long-term debt at $63.2 million.
Yahoo shows a market cap of only $164.86 million. Trailing p/e at 26.11, PEG ratio reasonable at 1.18, and price/sales nice at 1.56.
There are only 3.79 million shares outstanding and 3.30 million of them that float. Only 7,000 shares are reported out short as of 9/8/03. However, this stock is lightly traded and this represents 2.333 days of trading. Per Yahoo, the yield is currently at 1.90%. Last stock split was a 2:1 in March of 1995.
This company is small, but it appears to be doing well. Pays a dividend, is growing its revenue and earnings, positive and improving cash flow, moderate p/e with outstanding PEG ratio and Price/Sales. Looks nice to me!
If you have any questions, comments or words of encouragement, please contact me at email@example.com
Remember, all commentary here is my personal opinion, and you should be aware of the risks of investing including losses and all decisions that you make should involve consultation with your own certified financial advisor.
"Disclaimer" Please read.
This website is a blast for me. I enjoy writing about stocks and the market but I am NOT a professional advisor and do not have the credentials behind me to give me that perspective. Thus, I must urge you to consult with your personal financial advisor whenever you think about acting on any of my "picks" or "ideas". I try to use reliable information from Morningstar.com, Yahoo.com, NYTimes.com and try to let you know where I get this information and whether I am acting myself on this information by buying, selling, or owning the equities involved. Thank you for acting responsibly with this website. If you have any questions about this, please email me at firstname.lastname@example.org
"Trading Transparency" SFCC
The market took a bit of a swoon yesterday and this morning. We hit one loss limit quickly on SFBC International (SFCC) and sold our 200 shares at $30.231. This also eases the margin pressure a little on the account! Please remember, that what I do here on this site is for your entertainment. I am not an investing professional and you need to review all of your investment decisions with your own investing advisors! Have a great day! Bob
Wednesday, 22 October 2003
October 22, 2003 Headwaters (HDWR)
What a LOUSY day in the market. Dow down 100+, Nasdaq down 40+....but here I am scanning the stock lists. I must be in denial. But in spite of all the noise on the street I think we have a good stock that is worth your examination. Headwaters (HDWR), boy I wish I owned this one in my portfolio....is trading at $17.41 up today in this lousy market by $1.82 or 11.67%.
According to money.cnn.com, Headwaters "...is engaged in developing and deploying energy-related technologies to the marketplace. It is focused on coverting fossil fuels into alternative energy products." How about THAT for a timely investment?
Some of the numbers are a little confusing, but I got a good earnings report for the Second Quarter ended June 30, 2003, by going to the Headwaters website. Anyhow, Total revenue (pro forma) which I assume accounts for acquisitions, was $94.1 million in 2002, and $106.4 million in 2003 second quarter. Operating income increased from $17.6 million to $21.7 million in 2003, and on a per share basis, increased from $.31/share to $.37. The stock moved up nicely by being upgraded by Stephens, Inc., and looking at the headlines, we find that Adams Harkness also upgraded this stock on 9/29/03.
Morningstar.com shows a nice picture of rapidly growing revenue from $2 million in 1998, $7 million in 1999, $27.9 million in 2000, $45.5 million in 2001, $119.3 million in 2002 and $250 million in the trailing twelve months.
Earnings from share have improved smartly from a loss of ($1.17) in 1998 to a profit of $1.07 in the trailing twelve months.
Free cash flow, another of my favorite indices, has been increasing nicely from $6 millin in 2000, $19 million in 2001, $42 million in 2002, and $55 million in the trailing twelve months.
The balance sheet is a bit of concern to me with only $10.7 million in cash, $66.5 million in other current assets, enough to cover current liabilities of $61.4 million but not enough to cover long-term liabilities of $189.5 million...but with the increasing free cash flow, this does not appear to be a problem for this company. After all, long-term liabilities are not due NOW....but sometime in the future, when free cash flow should cover them.
On Yahoo.com, we find that the market cap of this company is $484.92 million. The trailing p/e is, get this 13.21, the PEG ratio is 0.53 and price/sales is 1.33. Wow, these are NICE numbers.
There are 27.79 million shares outstanding and 26.5 million of them float. Currently there are 996,000 shares out short representing 3.009 days of average trading volume. No cash dividend is paid and the last stock dividend was a 2:1 in January of 1996.
On a Peter Lynch basis, intuitively, investing in a company involved in coal into alternative energy products makes sense. On a numerical basis, this stock looks GREAT. They have had two recent upgrades and have a REASONABLE p/e, and a PEG ratio under 1.0. Price/sales is also good at 1.33.
Now, if I wasn't already MARGINED to my ears, and actually adding some cash to my account, I would consider buying some of these shares. As you can see, I don't own any of these shares at this time.
Thanks again for stopping by! If you have any questions, please feel free to post them here or email me at email@example.com!
Tuesday, 21 October 2003
October 21, 2003 AirTran Holdings, Inc. (AAI)
This stock is AAI not to be confused with AAII another one of my picks! O.K., I thought I was done for the day. Actually, need to get changed and get a stress test....get on the treadmill and see what I can do to my ST segments....but that is ANOTHER story. Today, lets talk about a discount airliner.
AirTran Holdings (AAI) is having a great day and even if I would rather fly on the regular old-fashioned airlines, these discounters cannot be ignored. Currently AAI is trading at $19.56, up $1.08 or 5.84% on the day.
According to money.cnn.com, AirTran Holdings, Inc. (AAI) "...operates a low-fare scheduled airline serving short haul markets primarily in the Eastern United States." Maybe some of you can comment better on this airline, I can tell you the numbers but you may have flown on it and can give me a personal 'Peter Lynch' endorsement.
I don't see any news to explain the pop in the price but I expect it is the ANTICIPATION of earnings to be discussed in a live conference call tomorrow at 10:00 am ET. Three months ago, AAI released their second quarter results. This was the "fifth consecutive quarter of profitability" for them as reported by Business Wire on Yahoo.com. For the quarter, excluding special items, AAI earned $21.9 million or $.28/share vs $5.1 million or $.07/share in the same period in 2002. Operating revenue was $233.9 million, a 22.7% increase over second quarter operating revenues of $190.6 million.
Checking my favorite website, morningstar.com, we find that revenue has been growing steadily at least since 1998: $439.3 million in 1998, $523.5 million in 1999, $624.1 million in 2000, $665.2 million in 2001, $733.4 million in 2002 and $825.3 million in the trailing twelve months.
During the same period, earnings/share have gone from ($.63) to a profit of $.90 in a non-linear fashion. No dividend has been paid on this stock.
And by the way, I do not own any shares.
Free cash flow, while erratic, has been strongly positive recently: ($8) million in 2000, $64 million in 2001, ($8) million in 2002, and $89 million in the trailing twelve months.
The balance sheet is fairly well balanced, in my opinion, as reported on Morningstar.com, $284.5 million in cash and $110.2 million in other current assets with $213.7 million in current-liabilities and a bit rich $369.2 million in long-term liabilities. Enough cash to cover current debts...but the long-term debt, while manageable, cannot be completely ignored.
"Key Statistics" from Yahoo.com show a market cap of $1.43 billion. Trailing p/e is 20.53, PEG ratio not too bad at 1.49, and price/sales at 1.64.
There are 73.42 million shares outstanding with 66.20 million of them that float. Currently there are 6.67 million shares out short representing 4.761 trading days of volume. This is as of 9/8/03 as reported on Yahoo, and represents a slight increase from the 6.58 million shares out short the prior month.
It will be interesting to see what the earnings report brings. I suspect it will be a positive report...thus the rise in the price today...and this extends a fairly long string of improving financial reports from AAI. I am not big into airline stocks, but if you ARE and are looking for an investment in this area, this might just be a good one for you!
Some time back on this site, we listed XJT, Express Jet Holdings, and if you scan through the blog you will find the listing. That company did well subsequent to our post...even though I never personally bought any shares, darn. And this company might also be a good investment for you!
You be the judge! Thanks for stopping by. Have a great evening and if you have any questions, comments or words of encouragement, please feel free to post them right here...I think if you click on the "no comments" under each post, it will allow you to leave a comment! or if you prefer, drop me a line at firstname.lastname@example.org and I will try to get right back to you.
"Trading Transparency" EXPO
O.K. I loved EXPO so much I wanted to Marry it...jk...but I did push my margin and bought 200 today...a few minutes ago at $19.72/share. Stock is actually down about $.25 from where I posted it but the numbers look in line.
October 21, 2003 Exponent, Inc. (EXPO)
Gosh another medical/science stock! This group continues to show up on our screens. The rest of the market is certainly acting tired as it seems to want to digest the gains of the past 6 months.
Exponent, Inc. (EXPO) is having a great day today. They released their earnings yesterday after the market closed and today the stock is on fire! As I write, EXPO is trading at $20.04, up $3.34 or 19.99%. YOWSERS. I do not own any shares of this stock.
According to money.cnn.com, EXPO "...is a multidisciplinary organization of scientists, physicians, engineers, and business consultants performing scientific research and analysis in over fifty technical disciplines." This sounds a bit like our other picks PPDI, and SFCC.
On October 20, 2003, (yesterday), EXPO released their third quarter results. As reported by PRNewswire-FirstCall on Yahoo, revenues were $35,657,000 up 15% from $30,962,000 last year. Net income increased by 35% to $2.8 million or $.36/diluted share vs $2.1 million or $.28/diluted share in 2002.
Checking Morningstar.com, my favorite site, EXPO shows nice, steady revenue growth from $80.4 million in 1998, $93.3 million in 1999, $113.0 million in 2000, $114.5 million in 2001, $126.1 million in 2002 and extrapolating the current quarter would get us somewhere near $140 million in revenue for this year.
Since 1998, earnings/share have grown from $.51/share to $1.16/share in the last twelve months. No dividends are paid.
Free cash flow, while a bit erratic, has remained positive the last few years. As Morningstar reports, $12 million in 2000, $3 million in 2001, $14 million in 2002, and $12 million in the trailing twelve months.
Looking at the reported balance sheet finds EXPO fairly flush with cash with $26.1 million in cash and $43.9 million in other current assets vs. only $18.2 million in current liabilities and only $2.0 million in long-term liabilities.
This is a small company with a market cap of $143.96 million. Now get this, the trailing p/e is 13.47, the PEG ratio is 1.14, and Price/sales is 0.85. YAHOO!...that is the website! These are really great numbers...you see I am typing them up as I am reviewing them for the first time...you know this is a LOW BUDGET operation!
There are only 7.18 million shares outstanding and 6.10 million of them that float. Only 5,000 shares are out short.
O.K., bottom line, I LOVE THIS STOCK. Well if I love it so much maybe I should marry it? At least BUY a few shares. Hmmm...will have to look at my trading account. Why is this nice-looking to me? Consistent growth in earnings, revenue, positive cash flow, great balance sheet, nice earnings report, recent upgrade by analyst, low p/e, great PEG ratio, and cheap price/sales. WHAT ELSE COULD YOU WANT? Anyhow, sorry about the shouting.
Hey have a GREAT Tuesday everyone! If you buy one of these stocks, remember you are on your own, but I always suggest an 8% stop to prevent losses from piling up and consider selling some shares if your investments advance quickly.
If you have any questions, comments, or words of encouragement, you can leave them right here on the website....when will SOMEBODY leave a message???....or you can email me at email@example.com
Monday, 20 October 2003
October 20, 2003 Varian Medical Systems, Inc. (VAR)
Wow...this is turning out to be a good day for picks and a lousy day to get some lunch! I promise this is it until at least this afternoon....it is after 12 here so I guess that this afternoon is now....anyway, Varian Medical Systems, Inc. (VAR), has a great track record and deserves to be in our list of stocks. According to money.cnn.com, Varian "...is engaged in the design and production of equipment for treating cancer with radiation, x-ray tubes for original equipment manufacturers, replacement x-ray tubes and imaging subsystems."
VAR is having a nice day today trading at $60.78 up $2.96 on the day or 5.12% as I write. What pushed the stock up today, was a management advisory that earnings and revenue should be growing smartly in the fourth quarter. As reported by Business Wire and picked up by Yahoo.com, Varian announced that the upcoming fourth quarter earnings should be up by 26-27% over the $.48/diluted share reported in the fourth quarter of 2002. Sales for the fourth quarter are expected to grow by 16% over the corresponding period in 2002.
This announcement today is NOT an isolated event. As recorded on Morningstar.com, VAR has been producing outstanding results for some time. In 1998, revenue was $541.5 million, this grew to $590.4 million in 1999, $689.7 million in 2000, $773.6 million in 2001, $873.1 million in 2002, and $999.7 million in the trailing twelve months.
Earnings during this time have grown from $.43/share in 1998 to $1.71 in the trailing twelve months. Unfortunately, VAR stopped paying a dividend after 1999.
Free Cash Flow has also shown a significant and consistent improvement: $65 million in 2000, $102 million in 2001, $130 million in 2002, and $182 million in the trailing twelve months.
The Balance Sheet is healthy with $307.8 million in cash and $466.9 million in other current assets. This is more than enough to cover the $386.5 million in current liabilities and the only $77.7 million in long-term debt.
Looking at Yahoo.com for some value measures, we find that the market cap is $4.16 billion currently, the trailing p/e is a bit rich at 33.81, with a forward p/e based on fiscal year 2004 of 27.02. The PEG ratio is 1.40 and the price/sales is 3.95.
There are 68.28 million shares outstanding with 67.80 million of them that float. There are 1.85 million shares out short as of 9/8/03 representing 3.217 trading days. With the current price rise, we may see a bit of a 'squeeze' here of the shorts. No dividend is paid, and the last stock split was a 2:1 split in January, 2002.
This is another GREAT earnings/price momentum stock. The p/e isn't really cheap however but the PEG ratio isn't bad. The company is doing great, and if it continues its outstanding performance, I anticipate the stock price to follow along with it.
Thanks again for stopping by! I hope all of this chatter is helpful to you. If you have any questions, please feel free to post them here or email me at firstname.lastname@example.org
October 20, 2003 Renal Care Group (RCI)
It's lunchtime and I really should be heading out to get a bite to eat, but scanning the lists again I have another one for you. (It is interesting to see some of our other picks like CRDN, and BLTI make the lists today again!). Renal Care Group, Inc., (RCI), is in a business similar to another stock I have examined and have currently in my trading account...Davita (DVA). I do not have any shares of RCI. Currently, RCI is trading at $36.31, up $1.06 on the day or 3.01%. According to money.cnn.com, Renal Care Group, Inc. "...is a specialized provider of nephrology services to patients with kidney disease. The Company provides dialysis and ancillary services to approximately 20,500 patients."
On July 29, 2003, on Business Wire, as reported by Yahoo, Renal Care group announced results for the second quarter ended June 30, 2003. For the quarter, revenues increased 11.2% to $247.1 million compared to $222.2 million in the same period in 2002. Net income for the quarter rose 14% to $25.8 million from $22.6 million in 2002. On a per share basis, this was an increase of 18.2% to $.52 compared to $.44/share last year. All-in-all, this was a very nice quarter for RCI.
Morningstar.com shows a very nice picture: revenues have grown from $441.1 millin in 1998, $541.9 million in 1999, $622.6 million in 2000, $755.1 million in 2001, $903.4 million in 2002 and $963.7 million in the trailing twelve months.
During that same period, earnings per share have grown from $.79/share in 1998 to $1.92/share in the trailing twelve months.
Free cash flow has been improving nicely from $44 million in 2000, $68 million in 2001, $107 million in 2002 and $101 million in the trailing twelve months. Looking at the balance sheet, we find $83.3 million in cash and $211.5 million in other current assets, more than enough to cover the $134.0 million in current liabilities and $58.4 million in long-term liabilities.
Looking at Yahoo.com, we find that the trailing p/e is a reasonable 18.36; forward p/e...looking at fye 31-Dec-04...is even better at 14.87. The PEG ratio is nice at 1.05, and pric/sales...is very nice at 1.80. Currently there are 49.20 million shares outstanding with 48.10 million of them that float. As of 9/8/03, there were 1.32 million shares out short representing 8.449 trading days...with no apparent BAD news that I can see, this is really a lot of shares out short on a stock that is reasonably priced and may very well surprise on the upside. This short interest is BULLISH for this stock. No dividends are paid.
I like this stock a lot as well. Darn, I cannot buy EVERYTHING I like. You know, there ARE limits on Margin!
Thanks for stopping by! If you have any questions or comments, please feel free to post them right here or drop me a line at email@example.com
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