Stock Picks Bob's Advice
Sunday, 4 January 2004
"Six Months Ago" A longer term view from the week of June 23, 2003
Hello Friends! It is Sunday and we are facing a new week and a new year! In fact, I am going to try to spice up my posts with some actual links to the articles I refer to. I am TOTALLY a newbie with HTML, so bear with me, PLEASE :).
During the week of June 23, 2003, I made a selection of Factual Data Corp.
at $19.18 on 6/23/03, and posted Fresh Del Monte Produce
at $26.14 on 6/23/03, picked Biosite
at $48.15 on 6/25/03, and Digital Insight (DGIN)
on 6/25/03 at $17.96, and BankRate (RATE)
on 6/25/03 at $10.40. On 6/26/03, I posted Biovail (BVF)
at $49.30, and finally I posted Online Resources (ORCC)
at $6.17 on 6/27/03.
FDCC was acquired by Kroll so we can no longer follow. FDP closed at $23.80 on 1/2/04. This was a loss of $(2.34) or (9)% during this period. On October 23, 2003, FDP reported their third quarter earnings
on Yahoo.com. EPS were $.60/share vs $.57/share in 2002. Net sales rose to $563.7 million from $498.5 million last year. The company appears to be on track.
Biosite took a tumble during the past six months and closed 1/2/04 at $29.07. This is a drop of $(19.08) or (40)%. On October 22, 2003, BSTE reported their third quarter 2003 results
which showed that total revenue grew 48% and diluted earnings per share were up 60%. In spite of this price setback the underlying company appears to be doing fine.
Digital Insight closed 1/2/04 at $25.10. This stock has been a star among our other disappointments with a gain of $7.14 or 40% during this period. On October 23, 2003, DGIN reported their third quarter results
on Yahoo. Revenues were up 16% to $39.4 million from $33.9 million, and eps was at $.14/diluted share vs $.05/share last year. These were very nice results!
BankRate closed 1/2/04 at $12.43 for a gain of $2.03 or 19.5%. RATE reported their third quarter results
on October 28, 2003. Revenue for the quarter was up 31% to $9.5 million from $7.2 million last year. On a diluted basis, eps was $.16/share in 2003 vs $.11/share last year. This company is doing fine but certainly is an interest-rate sensitive industry in my opinion.
Biovail (BVF) has been our other disappointment, closing at $22.00/share on 1/2/04. This represents a loss of $(27.30) or (55)% during the last 6 months. Biovail reported their third quarter results
on 10/30/03 at revenue was up 3% from 2002, however eps was $.22/share vs $.47/share last year. However a recent article
on Forbes highlighted the uncertainty on BVF which along with the marginal earnings results, the SEC probe, make this a very questionable prospect going forward.
Finally Online Resources (ORCC) closed 1/2/04 at $6.59 for a gain of $.42 or 6.8%. On October 21, 2003, ORCC released their third quarter results
with revenue up 14%, and eps at $.02/share up from $.01/share. This stock appears to be on track.
In conclusion, this was a rocky week for me for stock picks. We have had lots of GREAT stories on this website, but I try to report the ACTUAL results, and these were mediocre. The average performance for all of these (minus the FDCC which was acquired) was a loss of (6.28)% for the six month period.
In actual practice, it is essential to stop losses as close to 8% as possible, to allow the winners to compensate and grow. However, in our review, we look at stocks as if we would hold all of them through the period without any sales!
Thanks again for stopping by! If you have any comments, questions, or words of encouragement, please feel free to post them here on the site or email me at firstname.lastname@example.org
(I hope all of these links WORK!)
Saturday, 3 January 2004
"How are we doing?" A look back on the week of November 10, 2003
Hello Friends! It is time for the Saturday morning review. Almost sounds like one of my favorite shows, Saturday Night Live! But not quite as funny I don't think. As always, please remember to check with your investment advisor before making any decisions based on information on this website!
During the week of 11/10/03, I selected six stocks for mention on this site. I do not own any shares of these six stocks nor did I own them when I posted them! They are: CollaGenex Pharmaceuticals (CGPI), Fossil (FOSL), Coinstar (CSTR), Medtronic (MDT), Whole Foods Market (WFMI), and Medical Technology Systems.
On 11/10/03, I picked CollaGenex (CGPI) at $10.45. CGPI closed on 1/2/04 at $11.01 for a gain of $.56 or 5.4%.
Fossil (FOSL) and Coinstar (CSTR) were picked on 11/11/03. FOSL closed on 1/2/04 at $27.95, for a loss of $(.47) from its selection price of $28.42 or (1.7)%. CSTR was picked at $17.18 and closed 1/2/04 at $18.19 for a gain of $1.01 or 5.9%.
Medtronic (MDT) and Whole Food Market (WFMI) were picked on 11/13/03. MDT was $46.39 on the selection date and closed on 1/2/04 at $48.42 for a gain of $2.03 or 4.4%. WFMI was picked at $64.68 and closed at $66.45 on 1/2/04 for a gain of $1.77 or 2.7%.
Finally, Medical Technology Systems (MPP) was picked on 11/14/03 at $6.00. MPP closed on 1/2/04 at $6.37 for a gain of $.37 or 6.2%.
In summary, we had six stocks which had an average gain of 3.82%. This isn't too bad considered the time period was only about 7 weeks. This does NOT take into consideration transaction costs and taxes of course which would reduce the theoretical performance!
Thanks again for stopping by! 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
Friday, 2 January 2004
"Trading Transparency" IPAS
As noted in my prior posts, I am carrying a significant margin load that will need to be reduced this year. One of the stocks that I have in my trading account is IPAS which is trading very poorly. With a 100% margin requirement on that stock, and with a 6.5% loss, I pulled the plug on my 200 shares a few minutes ago and sold 200 at $15.52.
Thanks for stopping by! I always try to keep you posted as trades occur in my trading account!
Posted by bobsadviceforstocks at 11:30 AM CST
Updated: Friday, 2 January 2004 11:53 AM CST
"Trading Transparency" KRON
Hello Friends! I am still bumping up against margin issues with my Surmodics purchase! Anyhow, to give us a little more leeway, I sold 30 shares of KRON this morning at $40.41. These shares were acquired on 4/8/03 for a cost basis of $27.49/share. This was a 47% gain on these shares over the past nine months. Not bad, but would rather have sold in the 60% gain area...per plan. Thanks again for stopping by!
If you have any questions, comments, or words of encouragement, please feel free to post them right here on the website or email me at firstname.lastname@example.org
Thursday, 1 January 2004
January 1, 2004 McKesson Corporation (MCK)
Hello Friends! It is nice seeing so many of my friends around here from last year! O.K. THAT is a DUMB joke. I remember how all of my friends used to say goodbye before Christmas vacation and we would all say, "See you next year!" It wasn't very funny then either....but you have to be about 12 to appreciate it. Speaking of DUMB, here I am at 1 a.m. in the morning, double-checking the lists of greatest gainers. As my son would say, "That is PATHETIC!"....but needless to add, I found something. As always, remember to consult with your financial advisor before acting on any stock market ideas on this website!
McKesson Corp. (MCK) had a nice day today closing at $32.16 up $1.06 on the day or 3.41%. I do not currently own any shares. I did have some shares a couple of years ago in a managed account and the stock went nowhere! According to money.cnn.com, McKesson "...is a health care supply management company. The Company also provides software solutions, technological innovations and comprehensive services to the health care industry."
I found their last quarter results for the second quarter of fiscal 2004, posted on Yahoo.com on 10/23/03 from a story in BUSINESS WIRE. Revenues for the quarter ended September 30, 2003, were $16.8 billion, up 23%. Net income was up 25% and diluted earnings per share were $.53 vs $.42 last year, an increase of 23%.
An interesting news story which came out today after the market closed revealed that McKesson was selected by the Department of Veteran's affairs to be the department's prime pharmaceutical vendor "in a two-year pact worth about $2.9 billion per year" quoting from Yahoo.com story: (http://biz.yahoo.com/djus/031231/1617000624_1.html)
Checking Morningstar.com for a longer stretch, we find that revenue has increased steadily the last several years from $30.0 billion in 1999, $36.7 billion in 2000, $42.0 billion in 2001, $50.0 billion in 2002, $57.1 billion in 2003 and $60.0 billion in the trailing twelve months.
Earnings per share have been a bit erratic from $.30/share in 1999 to $2.55/share in 2000, $(.17)/share in 2001 and improving steadily from there to $2.01/share in the trailing twelve months.
Free cash flow on this stock has been very impressive with $167 million in 2001, $195 million in 2002, $580 million in 2003 and $816 million in the trailing twelve months. These are VERY nice figures!
The balance sheet as reported on Morningstar.com is quite solid with $456.9 million in cash and $11.2 billion in other current assets vs $8.2 billion in current liabilities, and $1.9 billion in long-term liabilities. With the EXCELLENT free cash flow, I suspect that the balance sheet should continue to show dramatic improvement.
Looking at Yahoo "key statistics" we find that this is a large cap company with a market cap of $9.37 Billion. The trailing p/e is very nice at 15.13 and the forward p/e (based on estimates for fye 31-Mar-05) is even nicer at 12.24. The PEG ratio is under 1.0 which is GREAT at 0.85, and the price/sales is WAY under 1.0 at 0.14...probably the LOWEST price/sales on this website.
Yahoo reports that there are 291.42 million shares outstanding with a float of 290.1 million of them. There are 4.41 million shares out short....a jump of 1/2 million from the prior month...as of 12/8/03. This represents only 1.52% of the float and 2.159 trading days so this is still just moderate. The company DOES pay a small ($.24/share) dividend yielding 0.77%, and the last stock split was January, 1998, when a 2:1 split was reported.
Overall, what can I say? I like this stock a lot! The value is GREAT, it pays a dividend, it is pouring out free cash, and the balance sheet looks nice. What is there NOT to like? In fact, with the recent contract announcement with the VA, I fully expect this stock to do well in the future. Unfortunately for me, I have LOADS of margin...and am at my 25 position limit to DARN IT ALL...I will NOT be buying any shares!
Thanks again for stopping by! If you have any questions, comments, or words of encouragement, please feel free to post them right here on the website or email me at email@example.com
Wednesday, 31 December 2003
"Trading Transparency" COO
Hello Friends! Ready for 2004? Yesterday I knew I was pushing my margin a bit and purchased 250 shares of Surmodics...today with my margin balance pushing a bit against a call...I sold 25 shares of Cooper Companies (COO) at $47.24. This was about a 74% gain on the purchase at $26.98 on 2/20/03...which is a pretty good performance....one of my resolutions for next year is going to be to REDUCE margin debt and to stay at the 25 position portfolio!
Regards to All!
Tuesday, 30 December 2003
December 30, 2003 SurModics (SRDX)
Hello Friends! As you will read from the previous post, I just purchased 250 shares of Surmodics (SRDX) and promised I would look it over with you so that you could see why I bought shares in this stock. I have been a stock-holder of SRDX in the past in one of my retirement accounts, and last month, my stock club purchased some shares. In fact, with all of this activity around this stock, I could have SWORN that I had already listed it right here! But I didn't. As always, you are free to use any ideas on this site but PLEASE discuss them with your own financial advisors to find out if they are suitable for your investment requirements!
According to money.cnn.com, SRDX "...provides surface modification solutions to the medical device industry through its patented PhotoLink process." Currently, the big product for SRDX is their involvement in the coated stent business for Johnson & Johnson's Cordis division. As I write (25 minutes before the close), SRDX is trading at $24.38/share, up $2.02 or 9.03% on the day.
Looking through Yahoo.com for the latest quarterly results, I found the story of October 29, 2003, on yahoo.com from BUSINESS WIRE for the fourth quarter results. Revenue for the fourth quarter ended September 30, 2003, increased 45% to $12.6 million from $8.7 million last year. Net income increased 71% in the quarter to $4.4 million or $.25/diluted share from $2.6 million or $.15/diluted share last year.
Morningstar.com shows that revenue has been consistently increasing the past five years from $9.8 million in 1998, $13.5 million in 1999, $18.3 million in 2000, $22.7 million in 2001, $29.5 million in 2002 and $39.3 million in the trailing twelve months.
Earnings/share have increased fairly steadily from $.27/share in 1999 to $.68/share in the trailing twelve months. Free cash flow has been positive but inconsistent lately with $4 million reported in 2000 per Morningstar, $6 million in 2001, $1 million in 2002, and $6 million in trailing twelve months.
The balance sheet looks just fine with $5.3 million in cash per Morningstar, with $10.4 million in other current assets vs. $11.0 million in current liabilities and $.2 million in long-term debt.
Looking at "key statistics" on Yahoo for SRDX, I find that the market cap is a small $424.94 million. The trailing p/e is a bit rich at 31.16 but the forward p/e (fye 30-Sep-05) is better at 18.63. In fact the five year PEG is an absolute bargain at 0.53. Price/sales isn't as nice at 9.02!
There are only 17.44 million shares outstanding with 14.10 million of them that float. Fully 36.23% of the float is out short at 5.11 million, which is a HUGE amount for this stock representing 13.921 trading days of short interest...as of 12/8/03.
No dividend is paid and the last stock split was a 2:1 on December 7, 2000.
Overall, I like this stock a lot. I believe that the alliance with JNJ in the coronary artery stent business provides a HUGE opportunity...and SRDX has other products "up its 'corporate' sleeve". I like it so much in fact I BOUGHT shares! I am aware of the one report of bleeding after stent usage but apparently this was a normal event considering the procedure and was not specifically aggravated by this stent. At least that is my understanding.
I do not see anything but disappoingment for all of those short sales! Anyway, that is my take on this stock. If you have any questions, comments, or words of encouragement, please feel free to post them right here (!) or drop me a line at firstname.lastname@example.org
"Trading Transparency" Surmodics (SRDX)
I checked the lists about three times just now because I THOUGHT I had already posted Sumodics on this website. However, I guess not! Anyway, SRDX came up on the lists today...I will review this shortly, and I purchased 250 shares at $24.55/share for the trading account. Unfortunately, this pushes our margin levels as well...and also brings us up to our 25 position portfolio. I look forward to peeling off some gains soon hopefully to start paying down that debt for 2004!
December 30, 2003 Secure Computing (SCUR)
Hello Friends! Thanks for stopping by....I always appreciate a visitor to these parts. As always, I want to encourage you to consult with your investment advisor prior to making any investment decisions based on information on this site. It just might not be suitable for you!
Was going through the biggest movers today, and came across Secure Computing Corporation (SCUR). SCUR is trading as I write at $16.78, up $1.51 or 9.89% on the day. I do NOT own any shares of this stock but wouldn't be adverse to buying some...just that MARGIN balance of mine...I really will need to make a New Year's Resolution to make sure that goes down in 2004! According to Money.cnn.com, Secure Computing "...develops and sells computer software products and services designed to provide secure extranets for companies engaged in electronic business."
For those of you new to these parts, the first thing I like to check is the latest quarter. I eliminate stocks from this site if the latest quarter shows negative revenue growth or negative earnings growth! For SCUR, checking out Yahoo.com, I found that on October 16, 2003, SCUR posted third quarter results. This story was posted on Yahoo, from a story run on BUSINESS WIRE. For the three months ended September 30, 2003, total revenue increased to $20.1 million from $17.6 million in the same quarter in 2002. Net income was $2.6 million vs $.48 million in 2002. On a per share fully diluted basis this amounted to $.08/share in 2003 vs $.02/share in 2002.
Looking at Morningstar.com (my usual second step in a stock screen), I am a little concerned about the drop in revenue between 1998 and 1999. However since 1999, the company appears to be growing steadily again. Revenue dropped from $61.4 million in 1998 to $27.1 million in 1999, but then grew to $39.1 million in 2000, $52.5 million in 2001, $65.8 million in 2002 and $71.0 million in the trailing twelve months. If we extrapolate the current quarter of $20 million in revenue would get us currently at an ongoing revenue rate of $80 million/year.
The company has been losing money up to the current year. $(.20)/share in 1998, finally improving to $.12/share in the trailing twelve months. Free cash flow which was also negative at $(16) million in 2000, improved consecutively to $(12) million in 2001, $(2) million in 2002 and $2 million in the trailing twelve months.
The balance sheet, as reported on Morningstar.com looks just fine at $22.2 million in CASH with only $21.6 million in current liabilities and NO long-term liabilities listed. In addition, SCUR has $18.2 million in other current assets.
Looking at Yahoo "key statistics", we find that the Market Cap is a small $573.65 million. The trailing p/e is very rich at 96.71, forward p/e only slightly better at 36.36 (but company is JUST turning profitable), and PEG ratio is 2.89. Price/sales also no bargain at 7.13.
There are 34.29 million shares outstanding with 32.90 million of them that float. As of 12/8/03, there were 1.86 million shares out short representing 5.39 trading days. No dividend is paid, and no stock split is reported on Yahoo.
This is an interesting stock and deserves a place on our list. Personally, I would rather pay a little less for this stock...in terms of p/e, PEG ratio, price/sales and the like. However, the numbers look nice and it will be interesting to see how this stock performs going forward.
Thanks again for stopping by. 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
Monday, 29 December 2003
December 29, 2003 American Vanguard (AVD)
Hello Friends! Thanks again for stopping by. We had a nice day in the market today with both the Dow and the NASDAQ up sharply. Our stocks participated and my trading portfolio gained almost 2K in value. Now, if we could just do that every week! That portfolio stands at 24 positions....so we have room for one more...but I would like to wait to SELL something, either on a loss or gains before adding any positions...let me see if I can excercise some self-control!
Earlier today, I came across American Vanguard (AVD) on the list of greatest % gainers. I do not own any shares of this issue, it is in a business I really do not fully understand, but it appears to deserve a spot on our list. AVD closed today at $38.69 up $3.49 or 9.91% on the day. According to money.cnn.com, AVD "...through its subsidiaries, is a specialty chemical manufacturer that develops and markets products for agricultural and commercial uses. The Company also acts as a chemical distributor and an environmental consulting firm."
On November 13, 2003, AVD reported results for their third quarter ended September 30, 2003. This was posted on Yahoo.com from a story on BUSINESS WIRE. Net sales increased 10% to $32.9 million. Net income rose 45% to $2.8 million or $.45/diluted share vs $.30/diluted share the prior year.
Looking at Morningstar.com for a bit longer history on the stock, we find that revenues were $67 million in 1998, $69 million in 1999, $75 million in 2000, $83 million in 2001, $101 million in 2002 and $115 million in the trailing twelve months. Extrapolating the current quarter gives us a bit over $120 million/year revenue rate.
Earnings/share have grown CONSISTENTLY during this period from $.39/share in 1998 to $1.32/share in the trailing twelve months. The "free cash flow" however has been a bit erratic with $(2) million in 2000, $9 million in 2001, $0 million in 2002 and $3 million in the trailing twelve months.
Looking at the Morningstar.com balance sheet, we find that AVD has $300,000 in cash but $54.3 million in other current assets, enough to more than cover the $27 million in current liabilities and $24.1 million in long-term liabilities.
"Key Statistics" on Yahoo.com shows a market cap of $230.52 million. The P/E isn't bad at 26.11 and the PEG however isn't available. Price/sales is 1.78 but Price/book is a bit rich at 4.60. There are only 5.96 million shares outstanding and 3.50 million of them that float. There are only 54,000 shares out short, but for this small company, this represents 1.54% of the float and 7.714 trading days as of 12/8/03.
This company DOES pay a small dividend of $.10/share yielding 0.26%. A 3:2 split was last carried out on April, 14, 2003.
This is an interesting, but small company. The numbers are right, the value isn't bad, and if you are looking for a small chemical firm this might be right for you! As for me, I will pass and wait for a sale of stock before extending my margin!
Thanks again for stopping by! If you have any questions, comments, or words of encouragement, please feel free to post on the website or email me at firstname.lastname@example.org
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