Stock Picks Bob's Advice
Sunday, 15 February 2004
"How are we doing?" A look back on the week of December 8, 2003
Hello Friends! Thanks so much for stopping by! I hope everyone had a wonderful Valentine's Day! I am not eating or giving away much chocolate these days...except maybe some of the low-carb stuff. Not quite the same though!
Weekend is a great time for reviewing the stock picks on this website. I have been reviewing things both short-term, we are about two months out with that, and long-term, where we are about 7 months out.
During the week of December 8, 2003, I posted only two selections: Armor Holdings (AH), which was posted on Bob's Advice
on December 8, 2003 at a price of $26.35, and Comtech Telecommunications (CMTL), which was posted on Bob's Advice
on December 9, 2003, at a price of $30.89.
Armor Holdings (AH) closed at $29.15 on 2/13/04, for a gain of $2.80 or 10.6%. Comtech (CMTL) closed 2/13/04 at $31.68, for a gain of $.79 or 2.6%.
For the two stocks during the past two months, they have appreciated 6.6%...which isn't too bad considering the short period involved. I do not own either of these issues.
Thanks again for stopping by! If you have any questions, comments, or words of encouragement, please feel free to email me at email@example.com
February 15, 2004 The Sportsman's Guide (SGDE)
Hello Friends! Thanks so much for stopping by. It seems whenever I check the counters it seems like we continue to get more visitors at this site. I hope that means I am doing something right! Please remember though to always do your own due diligence before using any information on this or any website. Check with your financial advisors to make sure that any investment that I discuss is suitable for you before deciding what to do! If you have any questions or comments please feel free to email me at firstname.lastname@example.org and I will try to get right back to you.
Anyway, that's enough for formalities. I didn't get any posts listed on Friday, so I went back today to the big movers to see if there were any interesting selections. This one, The Sportsman's Guide (SGDE) is worth investigating. I do not own any shares of this issue. According to the "snapshot" on money.cnn.com
, SGDE "...is catalog retailer and Internet e-tailer of outdoor gear and general merchandise, with a special emphasis on outdorr clothing, equipment and footwear."
SGDE had a nice day Friday, closing at $21.64, up $1.64 or 8.18% on the day.
Looking at the fourth quarter 2003 results
as posted on Yahoo on 2/12/04, we find that sales for the quarter were $71.7 million up from $66.3 million for the same quarter the prior year. Net earnings were $3.8 million or $.71/share for the quarter compared to $2.6 million or $.53/share the prior year.
For those of you familiar with my posts, you will know that the next place I go to research a stock is Morningstar.com, in particular I like the "5-Yr Restated" financials
for this stock. Except for a super year in 1999, and the return to the trend in 2000, this stock has grown nicely since 1998. Revenues have increased from $143 million in 1998, to $185.8 million in the trailing twelve months.
Earnings/share have been a bit erratic as well, at least between 1999 and 2000. Except for that, earnings have grown from $.31/share in 1998 to $.89/share in the trailing twelve months.
Free cash flow is for me a nice measure as to the ongoing financial health of a company...that is whether it is generating money or consuming assets in its continued operation. For SGDE, free cash flow has been steady, ranging from $9 million in 2000, $12 million in 2001, $8 million in 2002, and $8 million in the trailing twelve months.
I wouldn't be done without taking a look at the balance sheet, at least as presented by Morningstar.com. In this case, we find that SGDE has $11.5 million in cash and $32.1 million in other current assets, far outweighing the current liabilities of $24.0 million and the small long-term debt reported of $200,000.
Contrary to some momentum players, I do think that valuation is important. After all, if you can get large growth numbers at a discount, why not? Anyhow, for this I like to look at "Key Statistics" on Yahoo
. For SGDE, we see that this is a SMALL, actually micro cap company with a market cap of $104.61 million. The trailing p/e is nice imho at 18.81. The PEG is reasonable at 1.13, and the price/sales is cheap at 0.50.
There are only 4.84 million shares outstanding and of those, there are only 4.30 million that float. Currently, as of 1/8/04, Yahoo reports only 14,000 shares out short representing 0.378 trading days or 0.33% of the float...so the shorts are not much of a factor in this one.
No cash dividend is paid. The only stock split reported was a REVERSE split (which usually is a TERRIBLE sign for a company)...but this was LONG ago in March of 1997.
Finally, I have lately been trying to use Point and Figure charting to get a feel for the overall pricing action of each investment. For SGDE this is the stockcharts.com graph
for SGDE. This stock bounced off its long term support level in late 2001 and has not looked back!
Thanks again for stopping by! I hope that my thoughts and examinations of these investments are useful for you! Again, please do your own work on these investments as they may or may not be appropriate for your investment purposes!
Regards and Happy Valentines Day Everyone!
Friday, 13 February 2004
Trading Strategy Examined
Hello Friends. I don't care if I DO have a nickel burning in my pocket...I am going to SIT ON MY HANDS....I need to examine one trading strategy that I announced on my WEBSITE and have not been following closely at all....WHEN to buy stocks after SELLING a stock at a loss.
I believe that it was William O'Neill, who is big in calling the "M" in CANSLIM, or market, who pointed out that the market TELLS you when there is a correction....and the next day sells are SCREAMING to me to be careful :).
Anyway, I will try to sit on my hands and not SPEND my nickel....until we have another one of our stocks that reaches a sale point for GOOD news!
Thanks for stopping by!
"Trading Transparency" ECHO
One of the BIGGEST problems I have with small cap stocks....especially microcap issues...is their volatility. That is a good reason in itself to avoid them entirely....or at least be AWARE of this.
Anyhow, instead of beating around the bush, let me let you know that I just BAILED OUT of my ECHO this morning....just bought it YESTERDAY (yikes) at a price of $9.931. I had a cost basis of $12.03 for the 200 shares...when I sold it, my account said I was down 17% on the shares...and you know I have that 8% rule...so regardless of whether it bounces right back in the next 15 minutes....out it went.
Oh well, back to 24 positions. You know what that means....I can look for #25. That is ALWAYS the good news for me!
Thanks again for stopping by. Please email me at email@example.com if you have any questions, comments, or words of encouragement!
Thursday, 12 February 2004
"Update" on ECHO
Hello Friends, I promised you a brief explanation of my purchase of ECHO (Electronic Clearing House). ECHO had a nice day in the market closing today at $11.35 up $.82 on the day or 7.79%. (This in the face of a down market!)
I first posted ECHO on Bob's Advice
on August 25, 2003, when it was trading at $6.36. They had recently announced good results for the quarter ended June 30, 2003. Today, they announced results for first quarter 2004
. Revenues increased 22.1% to $11.4 million compared to $9.3 million the prior year. Net income was $589,000, or $.09/share compared to $518,000, or $.08/share the prior quarter (sequential growth), and a loss of $(4.473) million or $(.77)/share the prior year.
Checking the graph on ECHO from stockcharts.com
, we can see a fairly uninterrupted rise in price from the break-out in late 2002.
Anyway, that's the update! Thanks again for stopping by. I hope all of this discussion is useful for you!
February 12, 2004 CyberGuard (CGFW)
Hello Friends! Thanks for stopping by! It looks like the DOW wanted to give back some of those gains yesterday and it sure did! Sort of two steps forward and one back imho. Remember to always do your own due diligence on these any any internet derived stock market idea. Also, use your own financial advisor liberally. (Conservatively if you are a Republican I guess.)
Was looking through the lists of stocks on the move today and came across this one a few moments ago, after the market was closed. I do not own any shares of this but it is worth our examination: CyberGuard Corporation (CGFW). According to Money.cnn.com "snapshot"
, CGFW "...is a developer and marketer of commercial network security products designed to protect data on computer networks from access by unauthorized users."
Looking at the second quarter 2004 earnings results
, CGFW reported on January 27, 2004, that results for quarter ended December 31, 2003, showed revenues of $11.236 million, an increase of $3.003 million, or 36% over the 2003 results of revenue of $8.233 million. Net income for the quarter was $2.344 million or $.08/share vs $1.508 million, or $.06/share, a 55% increase in net income.
If we look at the "5-Yr Restated" financials
on Morningstar.com, we find that revenue has been increasing steadily (except for a small drop in 2002), from $13.9 million in 1999, to $34.9 million in the trailing twelve months.
Earnings per share have also been improving each year from a loss of $(.90) in 1999 to a profit of $.16 in the trailing twelve months. The free cash flow has also improved from $(3) million in 2001, to $2 million in 2002 and $4 million in 2003.
Per Morningstar.com, the balance sheet is very clean with $15.5 million in cash, plenty to cover both the current liabilities of $13.6 million and the fact that there is NO long-term liabilities reported at all on the Morningstar page. In addition, CGFW has $9.0 million in other current assets.
Looking at "Key Statistics" on Yahoo.com
, the Market Cap is listed at $260.61 million. The trailing p/e is high at 77.66, however, the growth is so fast that the PEG is only at 1.74. Price/sales a bit rich at 6.47.
Yahoo lists 21.79 million shares outstanding with 14.10 million of them that float. 532,000 shares are reported out 'short' as of 1/8/04. This represents 3.827 trading days or 3.77% of the float. No cash dividend is paid, and no stock splits are listed on Yahoo.
Taking a superficial look at technical indicators, we can see from the CGFW chart on stockcharts.com
that the company has very steadily been appreciating in price for the last couple of years.
Overall, I like this stock a lot. I just picked up position #25 today...so there is no room in my portfolio for another position...besides the fact that my margin is up to my ears.
Thanks again for stopping by! I sure DO appreciate all of you who stop by and I would love to hear from you if you are a regular, or if you are new to this website....feel free to post right here or email me at firstname.lastname@example.org
Posted by bobsadviceforstocks at 5:30 PM CST
Updated: Friday, 13 February 2004 5:29 AM CST
"Trading Transparency" ECHO
Since Electronic Clearing House is a non-marginable stock, I went ahead and purchased just 200 shares this morning at $11.989/share. I will post a little later about the news on this stock that has moved this one up.
"Trading Transparency" CSC
Computer Sciences (CSC) came in with their earnings and they were a bit light on revenue (per analysts), also, they have been put on notice by the IRS that their contract may be changed to bid out portions of their computer work...that is my take on the news...anyway...stock is down sharply today...trading at $42.87 as I write, down (8.04)% on the day...the loss I have incurred is only about 6.5%, but with my equity still around 39-40%, I pulled the plug and sold 200 shares a few moments ago at $42.84. I had purchased my 200 shares on 1/5/04 at $45.79/share.
P.S., am looking at ECHO, Electronic Clearing House, as they are doing well today and came in with a great quarter...may be adding this as #25. Will keep you posted!
Wednesday, 11 February 2004
February 11, 2004 Netsmart Technologies (NTST)
Hello Friends! Glad to be back again with another idea...sometimes I think I am a never-ending source of ideas...and I am trying to sort things out....hope you can! Anyway, as always, remember to do your own due diligence on all of these and any ideas you pick up on the internet...(Do I sound like your mother?)....and use an investment advisor liberally.
This pick is a bit intriguing to me. I am tempted to break my 25 position and stretch my margin to unbelievable levels (but as I write this I know I won't do that!) As I write, Netsmart Tech (NTST) is trading at $17.60, up $1.54 or 9.60% for the day.
According to money.cnn.com "snapshot"
, NTST "...is engaged in the design, development, marketing and implementation of management information systems for the behavioral healthcare industry."
I will give you the link for the latest quarterly report that I found on NYTimes on the web, but you may need to register for this free service (as I have done) in order to open it: NTST earnings report
. Net Income for the quarter ended September 30, 2003, was $1.5 million or $.33/share (diluted), compared to $202,000, or $.05/share (diluted). Revenue was $7.1 million in 2003 third quarter vs. $6 million in the same quarter in 2002.
Looking at Morningstar.com "5-Yr Restated" financials
, we can see that revenue growth has been good but not consistent from $13.2 million in 1998 to $25.6 million in the trailing twelve months.
Earnings/share have also been all over the board ranging from $.04/share in 1998, up to $.63/share in 2000, dropping to $.08/share in 2001, and increasing to $.70/share in the trailing twelve months.
Free cash flow, while small, has been positive and appears to be growing with $2 million reported in 2000, $0 in 2001, $4 million in 2002, and $6 million in the trailing twelve months.
Balance sheet wise, at least as listed on the most recent Morningstar.com screen, shows $11.8 million in cash, more than enough to cover both the current liabilities of $10.4 million and the small $1.3 million in long-term debt. In addition, NTST has $10.2 million in other current assets.
Looking at "key statistics" on Yahoo.com
, we can see that this is truly a micro-cap stock with a market capitalization of $85.35 million. The trailing p/e is 26.15. No PEG is listed...are there even good estimates going forward? Price/sales is at 3.02.
Yahoo lists only 4.81 million shares outstanding with 4.10 million of them that float. There are, as of 1/8/04, 318,000 shares out short, representing 7.76% of the float or 1.828 days of trading volume.
No cash dividend is reported on Yahoo and no stock dividends or "splits" are listed.
Again, I am NOT a technician, but let's take a look at the point and figure chart for NTST on stockcharts.com
: At the least, this looks bullish with the stock rising above its support level. I defer to others with more experience on the graph...
I will TRY to maintain all self control and not buy any shares of this...I just don't have room on my plate for another piece of "pie"....my mother always said "my eyes were bigger than my stomach." You know how that goes.
Anyway, thanks for stopping by! Please come back and visit again and always, remember always, do your own research and due diligence on all of the information you might pick up here and elsewhere on the internet!
February 11, 2004 Giant Industries (GI)
Hello Friends! Thanks so much for stopping by. I hope that you find my incessant commentary helpful and if you have any comments, suggestions or other words of encouragement, please feel free to email me at email@example.com Also, as always, remember to always do your own due diligence, that is research any ideas you might find on the internet, to make sure they are suitable for you! If you need to, be sure to use an investment advisor. Finally, (am I being too preachy today?), remember to always to try to cut your losses quickly..and let your winners run!
Today I have another oil industry stock to consider. I do not own any shares. In fact, the only stock that I can recall related to the energy business that I have owned has been Pogo Producing (PPP), which unfortunately got caught in a price downdraft shortly after my purchase and out it went. Giant Industries, according to the money.cnn.com "snapshot"
, "...is engaged in the refining of crude oil into petroleum products that are sold through branded retail outlets, distributors, commercial accounts, and major oil companies."
Looking at the latest quarterly report from the Giant Website
, we find results (after signing in with a waiver on the site), for the third quarter ended September 30, 2003. This report was released on November 10, 2003. Net earnings were $7.5 million or $.86/share vs a loss of $(4.6) million or $(0.53)/share the prior year. Net revenues for the quarter were $472 million vs. $382 million for the 2002 third quarter.
Looking at the Morningstar.com "5-Yr Restated" financials
, we can see that revenue has been growing nicely at this company from $0.6 billion in 1998, to $1.8 billion in the trailing twelve months.
Earnings have been erratic, with a loss of $(1.40) in 2002, and a profit of $1.03 in the trailing twelve months.
Free cash flow has been improving nicely the last few years from $2 million in 2000, $3 million in 2001, $25 million in 2002 and $50 million in the trailing twelve months.
The balance sheet is adequate as there are $15.7 million in cash and $202.0 million in other current assets vs. $122.6 million in current liabilities and $423.1 million in long-term liabilities. With the growing free cash flow, hopefully the balance sheet will also show improvements with a decrease in the long-term debt load. (in my humble opinion!)
Looking at "key statistics" on Yahoo.com
for GI, we find that this company has a market cap of $130.9 million, making this a small if not micro-cap company. The trailing p/e is very nice at 9.90. The price/sales is probably the lowest on this site at 0.07. The company has a price/book at 0.88.
Yahoo reports that there are 8.79 million shares outstanding with 5.50 million of them that float. Only 53,000 shares are out short as of 1/8/04, representing 0.96% of the float or 0.51 trading days.
No dividend is paid, and no stock dividend is reported on Yahoo.
Let's take a peak at a technical analysis....I do NOT claim to be expert at this, but at least we can see if the chart looks like this stock price is ascending or 'falling out of bed'. If we use the stockcharts.com Point and Figure chart
, this looks very "bulllish" to me with a lot of horizontal movement and a recent breakout to the upside. Please don't ask much more of me on technical analysis, it is not my forte but an investor SHOULD look at a graph!
Anyhow, I like this stock just fine and if I didn't own 25 positions in my trading account and wasn't up to my EARS in Margin....about a 40% equity position (yikes), I might buy a little.
Thanks again for stopping by!
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