Stock Picks Bob's Advice
Monday, 3 November 2003
"Trading Transparency" HealthExtras (HLEX)
The market is up a bit today and we are looking to move to our 25 position trading portfolio. HealthExtras is a Pharmacy management company that we posted on this website early on. We listed HLEX on 5/14/03 at $5.70, unfortunately we are only NOW buying some stock. Anyhow, they came out with good earnings, moved up nicely this morning, and I thought it was as good a stock as any to pick up a few shares. Unfortunately, it is a non-marginable stock so requires 100% equity ownership...at least on Fidelity. So only bought 200 shares, for prices ranging from $13.35 to $13.44.
Posted by bobsadviceforstocks at 8:59 AM CST
Updated: Monday, 3 November 2003 1:51 PM CST
Sunday, 2 November 2003
Hello Friends! I hope you all had a great weekend. I spent last night with a blue/yellow/green face playing Commander Data at a Murder Mystery Party. That was a first for me and I was glad last night when all of the paint came out in the shower!
Like always, I would like to remind you to PLEASE consult with an investment advisor before using any information on this site as I am an amateur and am not a professional investment advisor!
That being said, let's look back on the week of September 15, 2003, and see how my stock ideas have done. On September 15, 2003, I posted Aeropostale (ARO) at $27.25. It closed on October 31, 2003, at $30.85. This is a gain of $3.60 or 13.2%.
I posted two stocks on September 16, 2003: Lexar Media (LEXR) at $19.73, and Frisch's Restaurants (FRS) at $23.75. LEXR closed 10/31/03 at $22.91 for a gain of $3.18 or 16.1%. FRS closed Friday, 10/31/03 at $24.50 for a gain of $.75 or 3.2%.
Three stocks were mentioned on this site on 9/17/03 : Endo Pharmaceuticals (ENDP) at $20.99, TALX Corp. (TALX) at $26.25, and Gen-Probe (GPRO) at $62.90. ENDP closed Friday, 10/31/03 at $16.30 for a loss of ($4.69) or (22.3%). TALX closed 10/31/03 at $21.63 for a loss of ($4.62) or (17.6%). Finally GPRO closed 10/31/03 at $26.77 ($53.54 adjusted for a 2:1 stock split on 10/1/03). This is a loss of ($4.68) (based on adjusted purchase price of $31.45), representing a loss of (14.9%). Clearly, this was not our BEST day in picking stocks!
September 18, 2003, was a day when we selected Merge Tech. (MRGE) at $18.99. MRGE closed on 10/31/03 at $17.52 for a loss of ($1.47) or (7.7%).
Three stocks were selected on September 19, 2003: StrataSys (SSYS) at $50.04, Navigant Consulting (NCI) at $14.53, and IDX Systems (IDXC) at $26.20. On 10/31/03, SSYS closed at $47.60 for a loss of ($2.44) or (4.9%), NCI closed at $16.43 for a gain of $1.90 or 13.1%, and IDXC closed at $26.20, unchanged over the last six weeks.
The ten stocks had an average loss of (2.1%) during this period, certainly not an exciting performance. Keeping those 8% stops would have eliminated some of those losses keeping the overall performance above water....you can see the validity of using stops....but in this exercise, we examine how stocks actually performed...and this groups was less than exciting thus far!
We shall soon start looking at 6 month performance which will give us a better idea how we are doing over the intermediate term!
Thanks again for stopping by and have a great week.
Posted by bobsadviceforstocks at 8:16 PM CST
Updated: Sunday, 2 November 2003 8:22 PM CST
Friday, 31 October 2003
October 31, 2003
Happy Halloween everyone! I was out for a walk early this morning and I started having some thoughts about the role of margin in the trading account. We have successfully used margin thus far in magnifying our gains without experiencing any apparent undue risk. In addition, I have been adding to my trading portfolio and am now up to 22 positions. O.K. here is the plan. I want to get up to 25 positions in the account, which we will do as we sell off portions of stocks that have gained significantly. After that point, we will only ADD a new position when we have SOLD an old position due to an 8% loss....or other fundamental changes in the company outlook. However, I plan to continue to sell portions of holdings as they appreciate until such time as the margin has been eliminated. At that time we can consider adding additional positions over 25. In addition, an effort will be made to increase the size of new positions in terms of total dollar amount.
Does that sound like a sound strategy? If you have any comments, questions, or words of encouragement, always feel free to drop me a line at email@example.com
Posted by bobsadviceforstocks at 7:28 AM CST
Updated: Sunday, 2 November 2003 2:45 PM CST
Thursday, 30 October 2003
October 30, 2003 NetScreen Technologies, Inc. (NSCN)
Hello Again! We are finding our kind of stocks. I do not own any shares of this company, but frankly, on first examination of the numbers, I am thinking seriously about picking some up. Again, I urge you to discuss all investment decisions of your own with your personal financial advisor as investments I discuss may or may not be suitable for you and may or may not be profitable investments!
Anyhow, back to the story. I have another fast-growing tech stock for you to look at. NetScreen Technologies, Inc. (NSCN), according to money.cnn.com, "...develops, markets and sells a family of network security systems and appliances for enterprises & service providers, delivering integrated firewall, VPN, and network traffic management capabilities." As I write, NSCN is trading at $27.16, up $2.92 or 12.05% on the day.
On October 29, 2003, (yesterday), NSCN reported their fourth quarter 2003 results. For the quarter ended September 30, 2003, revenue was $71.6 million, a SEQUENTIAL growth of 11.3% over the June 30, 2003 quarter and a 74.4% increase over revenue of $41.1 million in the same quarter last year. Fabulous results! Net income was $7.1 million or $.08/diluted share vs a loss of ($925,000) or ($.01)/diluted share last year. (please look at the actual reports as there DOES appear to be a lot of footnotes).
Morningstar.com records the rapid growth of this company from revenue of $700,000 in 1998, $5.9 million in 1999, $26.6 million in 2000, $85.6 million in 2001, $138.5 million in 2002 and $214 milllion in the trailing twelve months.
Net income just turned positive this year at $43 million. Looking at free cash flow on Morningstar, we find a gradual improvement from ($12) million in 2000, ($12) million in 2001, $28 million in 2002 and $61 million in the trailing twelve months.
The balance sheet is beautiful. As reported on Morningstar, this company has $315.2 million in cash, enough to cover multiple times the $79.8 million in current liabilities and $2.2 million in long-term liabilities. In addition, they have $72.4 million in other current liabilities.
From Yahoo.com, we find that the company has a market cap of $2.22 Billion with a trailing p/e of 45.24, a forward p/e of 41.79, and a PEG ratio of 1.38. Price/sales also a bit pricey at 8.04.
This company has 81.41 million shares outstanding with 54.90 million of them that float. 8.73% of the float is out short representing 4.79 million shares out short as of 10/8/03, which would take 2.305 trading days to cover. No dividend is paid.
This is a fast-growing, profitable company with a great balance sheet. Certainly not selling at a discount, the PEG ratio isn't too bad but the rest of the value parameters are a bit steep. Since I am already pretty heavy into margin, I will pass on this right now...but might be a good investment long-term.
Thanks for stopping by. Again, please discuss any of your own investment decisions with your own investment advisor and if you have any questions or comments you can email me at firstname.lastname@example.org
October 30, 2003 Kyphon, Inc. (KYPH)
Hello Friends! Thanks for stopping by. As always, remember to check with your own financial advisor with any stocks I mention. They may or may not be suitable for you and I am not in a position to decide that!
Having gotten that out of the way, I found another orthopedic device manufacturer that looks interesting today. I do not own any shares of Kyphon. Kyphon (KYPH), according to money.cnn.com "...develops devices using its proprietary ballon (sic) technology for orthopedic applications. KYPH's products are used for the treatment of vertebral body compression fractures, primarily caused by osteoporosis." KYPH is having a great day, currently trading as I write at $29.15 up $3.59 or 14.05%.
On October 29, 2003, KYPH was reported by BUSINESS WIRE, and picked up by NYTimes on the Web, to release their third quarter 2003 results. For the quarter ending September 30, 2003, the company reported sales of $35.1 million compared to $20.7 million in 2002 same quarter, and net income of $4.7 million or $.11/diluted share vs ($11.6) million or ($.32)/diluted share last year.
Morningstar.com documents the rapid growth of this company from $300,000 in revenue in 1999, to $6.1 million in 2000, $36.1 million in 2001, $76.3 million in 2002, and now with the current quarter they are running at over a $125 million/year rate.
Free cash flow has improved recently from ($21) million in 2000, ($15) million in 2001, ($2) million in 2002 to $3 million POSITIVE in the trailing twelve months.
Their balance sheet is beautiful: $43.4 million in CASH, way more than enough to cover the $11.1 million in current liabilities and NO long-term liabilities. In addition, KYPH reports $57.3 million in other current assets as noted on Morningstar.com.
Looking at Yahoo.com for other statistics, we find that the market cap is now $1.14 Billion, with a trailing p/e of 137.29 and a forward p/e of 77.45. This company is priced to perfection. The PEG ratio is steep as well at 5.28. Price/sales are rich at 8.66.
There are 38.64 million shares outstanding with 16.60 million of them that float. Other investors must also think this is a bit expensive as there are 1.87 million shares out short, representing 4.151 days of average trading volume to cover. No dividend is paid.
In general, I like this stock a lot. However, you will need to pay top dollar to get shares on this one and one false step and the price is likely to be cut severely. I am not rushing out to buy shares but wish I had them some time ago!
Thanks for stopping by! Again, please discuss any financial investment decisions with your own personal financial advisor! If you have any questions, comments, or words of encouragement, please feel free to post them right here or email me at email@example.com
Wednesday, 29 October 2003
October 29, 2003 SpectraLink (SLNK)
Hello friends! How about another late-night report? Again, as always, check with your own investment advisor before acting on any of these stocks as they might not be suitable for you! (Also, I am just an amateur investor...and this is my hobby...when it comes to really investing...double-check with your own advisor on anything that sounds interesting!)
O.K. back to the BLOG: SLNK had a nice day today. According to money.cnn.com, SpectraLink Corp. (SLNK) "...designs, manufactures and sells workplace wireless telephone systems that complement existing telephone systems by providing mobile communications in a building or campus environment." SLNK had a nice day today closing at $18.54 up $2.01 or 12.16% on the day.
Last week, on October 23, 2003, SLNK announced results for the third quarter of 2003 ended September 30, 2003. Revenues reported were $18.3 million, a 20% increase over 2002 results. Earnings for the quarter were $2.3 million, or $.12/diluted share, representing a 49% increase in earnings over the same period last year.
Revenues have grown, according to Morningstar.com, from $35.1 million in 1998, $41.2 million in 1999, $54 million in 2000, $60.8 million in 2001, $60.9 million in 2002, and $65 million in the trailing twelve months.
Earnings per share have grown, although not linearly, from $.11 in 1998 to $.35 in the trailing twelve months.
Free cash flow has been growing as well: $5 million in 2000, $11 million in 2001, $13 million in 2002 and $10 million in the trailing twelve months.
Looking at the balance sheet as reported on Morningstar.com shows $43.7 million in cash, more than enough to cover both the current liabilities of $12.7 million and the long-term liabilities of $300,000. In addition, SLNK has $22.4 million in other current assets.
SLNK is a small company with a market cap of $339.17 million. The trailing p/e is a little rich at 47.66, but the forward p/e for fiscal year 2004 a bit better at 30.61. The company is growing rapidly commensurate with the p/e with a PEG ratio not too bad at 1.46. Price to sales is no steal at 4.44.
Yahoo.com reports, in addition to the above statistics, that there are 18.29 million shares outstanding and 16.70 million of them float. There are 375,000 shares out short as of 10/8/03 representing 0.5 days of trading...no dividend is paid.
This is another stock with nice numbers but a p/e that isn't exactly cheap. I do not own any shares but this might be a good addition to my portfolio if I had cash available to buy anything. You know, the old story, margin, margin, margin!
Thanks again for stopping by! If you have any questions, comments, or words of encouragement, please email me at firstname.lastname@example.org
Remember, once again, CONSULT YOUR INVESTMENT ADVISOR before making any decisions on what is written here. You might get some ideas you can use, but PLEASE check with your advisor first!
October 29, 2003 OPNET Technologies, Inc. (OPNT)
It is late here and I thought I would check and see if I could get something posted today that fits our criteria. As always, please be sure to check with your own financial advisor prior to making any investment decisions.
OPNET (OPNT), according to money.cnn.com, "...provides network management software solutions that enable organizations to optimize the performance and maximize the availability of communications networks and networked applications." Yesterday after the close, OPNT reported their second quarter results which were good and the stock moved up higher today in response to the news. As of the close, OPNT was at $14.10, up $1.85 or 15.10% on the day.
On October 28, 2003, as reported by BUSINESS WIRE and as picked up by Yahoo.com, OPNT reported results for the second fiscal quarter ended September 30, 2003. Revenue for the quarter grew to $13.4 million from $11.1 million the prior year. Earnings per share for the second quarter of fiscal 2004 were $.07/diluted share compared to $.03/diluted share for the same period last year.
Looking at Morningstar.com, we find that the growth in this company has been steady the last several years. They reported revenue of $12 million in 1999, $19 million in 2000, $33 million in 2001, $45 million in 2002, $46 million in 2003 and extrapolating the current quarter would get us to over $50 million in 2004 fiscal year.
Earnings/share have been a bit erratic with $.22 reported in fiscal 2002 and $.14 in fiscal 2003. Extrapolating the current quarter would get us at $.28/share for 2004.
Free cash flow has been positive and improving recently with $4 million reported in 2001, $1 million in 2002, $7 million in 2003 and $9 million in the trailing twelve months.
The balance sheet as reported on Morningstar looks excellent: $72.9 million in cash, more than enough to cover both the current liabilities of $4.0 million and the long-term liabilities of $12.0 million. In addition, OPNT has $9.3 million in other current assets.
This company, as reported on Yahoo, has a market cap of $275.63 million. The trailing p/e is steep at 71.94, but the forward p/e for the fiscal year ending March, 2005, is much more reasonable at 30.62 due to the fast growth rate. In fact, the PEG ratio is a very reasonable 0.64 when looking at five year estimates.
Yahoo reports 19.55 million shares outstanding with 11.10 million of them that float. Currently 157,000 shares are out short representing 1.963 days of trading as of 10/8/03. No dividend is paid.
I do not own any shares of this stock, but it is another interesting company with steady growth, growing free cash, excellent balance sheet, but a bit pricey insofar as the p/e is concerned. With a PEG ratio under 1.0, however, the p/e should be dropping quickly if the earnings continue to grow as expected.
Thanks again for stopping by! Always remember to consult with your own financial advisor prior to acting on anything on this website! If you have any questions or comments, you can reach me at email@example.com
Tuesday, 28 October 2003
October 28, 2003 Altiris, Inc. (ATRS)
O.K. another stock to consider. Again, as always, please consult with your own investment advisor before making any decisions based on my posts on this site.
According to money.cnn.com, Altiris (ATRS) "...develops, markets and supports information technology (IT) lifestyle management software products that manage software and hardware in IT environments." They reported their earnings after the market close yesterday and the good news is driving this stock higher. Currently as I write, ATRS is trading at $31.93, a gain of $4.46 or 16.24% on the day.
As reported on Yahoo.com, from PRNewsire-First Call, on October 27, 2003, ALTRS reported their financial results for the third quarter ended September 30, 2003. Revenue reported was $25.4 million, an increase of 59% over the third quarter of 2002 and 11% over the second quarter or 2003. Net income was $3.8 million, or $.15/diluted share, compared to a net loss of ($359,000) or ($.02)/diluted share in the same period last year.
Morningstar.com shows a nice growth pattern from $2 million in revenue in 1998, $4 million in 1999, $10 million in 2000, $34 million in 2001 and $63 million in 2002. Extrapolating the current quarter would get us over $100 million for 2003.
Although losing money until the last few quarters, free cash flow improved a couple of years ago from ($4) million in 2000, $1 million in 2001 and $8 million in 2002.
Balance sheet on this one is beautiful! As reported on Morningstar.com, ATRS has $72.9 million in cash, way more than enough to cover both the $20.5 million in current liabilities and $3.4 million in long-term liabilities combined. In addition, they have $12.9 million in other current assets.
Looking again at Yahoo.com, we find that the company has a market cap of $690.62 million with a trailing p/e of 65.36 and a forward p/e (2004) of 39.24. The PEG ratio is 2.03, and price/sales is 6.81. Clearly, this is not a totally undiscovered stock that is still cheap!
ATRS has 21.61 million shares outstanding with only 8.90 million shares float. Again there are a LOT of shares out short. As of 10/8/03, 3.44 million shares are out short, representing 11.332 days of trading. Either bad news is forthcoming...does not appear likely...or there will be a scramble to cover these short sales resulting in a 'squeeze' of those sellers selling short. (in my humble opinion!) No dividend is paid.
I like this stock, but it isn't cheap. The financial results are quite fabulous and might be a good investment in here. But you know the old story, margin, margin, margin....so I have made my purchase today already...will need to wait for the existing stocks to hit some sell points so we can may be add another issue to our portfolio.
Thanks for stopping by. Please as always consult your investment advisor before making any decisions based on what is written here. If you have any questions, you can reach me at firstname.lastname@example.org
October 28, 2003 Portfolio Recovery Associates, Inc. (PRAA)
First of all, I saw this stock some months back and have not posted this as it has not gotten into the most advancing lists. Second, I have just purchased 150 shares of this stock. I always try to let you know when I own a stock or not, and this one I have purchased. Lastly, as I continue to emphasize, I will share with you my thinking on this company. Please consult with your own investment advisor before making any investment decisions based on anything you may read here...I am not an investment advisor but rather a passionate investment amateur!
O.K., enough with the serious stuff, Portfolio Recover Associates, Inc. (PRAA), according to money.cnn.com, "...is a full-service provider of outsourced receivables management who purchases, collects and manages portfolios of defaulted consumer receivables." (If we get through the jargon, they sound like a bill-collector to me!) They reported their earnings yesterday and the stock is making a nice move today trading as I write at $26.93 up $3.33 or 14.11% on the day.
According to Yahoo.com, as reported on MARKET WIRE on October 27, 2003, third quarter results for the quarter ended September 30, 2003, was quite good. Net income for the quarter was $5.5 million or $.35/share compared to $3.2 million or $.27/share last year. Total revenue for the quarter rose to $22.2 million in the third quarter of 2003 from $15.2 million in the same period last year.
Looking at Morningstar.com, we find that revenues have grown from $7 million in 1998, $12 million in 1999, $19 million in 2000, $32 million in 2001, $56 million in 2002, and extrapolating the current quarter would get us over $80 million in 2003.
Free cash flow the last few years has improved nicely from $2 million in 2000, $5 million in 2001, $21 million in 2002.
The balance sheet is excellent with $17.9 million in cash, more than adequate to cover the current liabilities of $5.9 million and long-term liabilities of $1.8 million combined. In addition, they also have $65.5 million in other current assets per Morningstar.com.
Checking Yahoo again for some statistics, we find that the market cap of this company is $406.21 Million, the trailing p/e is quite reasonable at 19.69, the PEG ratio is also nice at 0.94. However, price/sales a bit rich at 5.04.
PRAA has 15.08 million shares outstanding with 13.40 million of them that float. Currently there are 3.60 million shares out SHORT...a HUGE amount with a short ratio of 18.674...meaning it would take 18+ days of average trading volume for the shorts to cover their borrowed shares. This figure was updated on 10/8/03 per Yahoo. Also, the short interest is up from 2.70 million last month. Either the shorts know something I don't see...or they are in for one heck of a squeeze. PRAA does not pay a dividend.
As you can see I like this stock and have purchased 150 shares. This must be a bit of a volatile issue as Fidelity insisted on 100% margin equity...that is NO borrowing allowed to purchase this stock. I would rather not recommend after purchasing, but when I have done this, as this time, I let you know!
Thanks again for stopping by. Please discuss this and all stocks on this site with your own investment advisor prior to making any investment decisions based on what I write here!
If you have any questions, please write me at email@example.com
Sunday, 26 October 2003
"How Are we Doing?" A look back on the week of September 8, 2003
Hello Friends! Thanks again for stopping by. I as always, encourage you to consult with your certified investment advisor before taking ANY actions based on this BLOG. That being said, I appreciate your visit and encourage your comments. You can reach me at firstname.lastname@example.org
During the week of September 8, 2003, about 7 weeks ago, I made four picks: Hi-Tech Pharmacal (HITK) at $28.75 on 9/8/03, Merit Medical Systems (MMSI) at $23.10 on 9/8/03, Hanger Orthopedic Group (HGR) at $14.75 on 9/12/03, and Scientific Games (SGMS) at $11.55 on 9/12/03. Of these stocks, I purchased only MMSI for my trading account, and not having hit any 8% losses, I still own some shares. My son also owns 50 shares of MMSI in one of his accounts that was purchased shortly after my purchase.
HITK closed on 10/24/03 at $22.41. This is a loss of ($6.34)/share or (28.3%). MMSI closed 10/24/03 at $25.48. This is a gain of $2.38 or 10.3%. Hanger Orthopedic Group (HGR) closed Friday, 10/24/03, at $15.98. This is a gain of $1.23 or 8.3%. Finally, Scientific Games closed 10/24/03 at $11.78. This is a gain of $.23 or 2.0%.
Overall, we had three gainers and one loser. Unfortunately, the loss was a big one! Thus, on an average basis, the four stocks suffered an average loss of (1.93%) over the six week period that we have watched them. This once again demonstrates the importance of fairly close stops to prevent losses from building up!
Thanks again for stopping by and please come back and visit again and again!
Have a great week!
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