Stock Picks Bob's Advice
Thursday, 4 March 2004
"Trading Transparency" BRLI
Hello Friends. Well sometimes you DO have to buy them right. My recent purchase in the trading account, Bio Reference Labs (BRLI), hit our 8% loss limit today and was sold from the portfolio. I do this manually and check the prices at least daily. I sold 300 shares at $19.05. I had just purchased BRLI on 3/1/04 at a price of $21.24. But you know how those rules go. Escalon, my purchase from yesterday, is also hovering above the 8% limit...so that may go as well :(. We will be watching. Again, I shall not be replacing this stock with a new purchase until I have sold some other partial position at a gain.
Remember to always do your own due diligence, and check with your investment advisors to make sure all investment decisions are timely and appropriate for you! If you have any questions or comments, please feel free to email me at email@example.com
Wednesday, 3 March 2004
"Trading Transparency" ESMC
Hello Friends! That nickel was burning a hole in my pcket again. So after selling some of my IGT for a gain, I felt that I could buy a little something...you know how that is. Anyway, I recently posted ESMC on the BLOG
and with that nickel in my pocket, and ESMC having a second day moving up nicely on great volume....well, I just broke down and bought 300 shares a few moments ago for my trading account. I paid $17.868/share. Hopefull, this doesn't IMMEDIATELY retrace its gain...and we have to sell...but WILL sell at any 8% loss.
Thanks so much for stopping by! Please be sure to do your own due diligence on this and all stocks mentioned on this website/blog and the Internet in general. I am not so trusting of everything I read either. If you have any questions, comments, or words of encouragement, please feel free to email me at firstname.lastname@example.org
Tuesday, 2 March 2004
March 2, 2004 Cantel Medical (CMN)
Hello Friends! It is LATE Tuesday night, maybe it will be Wednesday when this gets posted, but I haven't posted a pick for today and I think I have a nice one for you. As always, please remember to do your own due diligence and research, and consult with your investment advisors to make sure any selection on this site is suitable for a purchase or sale for you!
Cantel Medical Corp. (CMN), according to the money.cnn.com "snapshot"
"...is a healthcare company concentrating in infection prevention and control products and diagnostic equipment, as well as servicing medical equipment. CMN also markets medical equipment." CMN had a nice day today, closing at $18.40, up $1.35 or 7.92% in an otherwise dismal market.
Early this morning, Cantel reported second quarter 2004 earnings results
and like so many of the stocks that end up on this site, the results were enough to propel the stock higher. During the quarter ended January 31, 2004, sales jumped to $41.1 million from $34.4 million the prior year. Net income was $2.6 million or $.26/diluted share, vs $2.4 million or $.24/diluted share the prior year.
Looking at "5-Yr Restated" financials
from Morningstar.com, we can see first that revenue has grown steadily and rapidly from $38 million in 1999 to $138 million in the trailing twelve months. Earnings/share have also steadily grown from $.20/share to $.85/share in the trailing twelve months. Free cash flow has improved from $1 million in 2001 to $10 million in the trailing twelve months.
Balance Sheet-wise, Morningstar reports that CMN has $10.5 million in cash and $53.1 million in other current assets, enough to cover both the current liabilities of $21.6 million and the long-term liabilities of $33.7 million combined.
Looking at "Key Statistics" on Yahoo.com
, we can see that CMN is a small cap company with a market cap of $171.58 million. The trailing p/e is 21.50 and the forward p/e for fye 31-Jul-05 is 16.28. The PEG is very nice at 1.05, with an also reasonable price/sales of 1.15.
There are only 9.32 million shares outstanding, and of those, only 7.50 million of them float. There are only 77,000 shares out short as of 2/9/04, but with the low trading volume, this still represents 3.5 days of average trading volume, but only 1.03% of the float.
No cash dividend is paid, and no stock split is reported.
If we look at a point and figure chart on CMN
, we can see that the stock just recently appears to have broken though a resistance level at around $14.0, and has headed higher in a strong fashion (in my humble opinion.)
Overall, I like this stock quite a bit. Except for the low trading volume and the low market cap, the value is excellent with a p/e just over 20 and a PEG just over 1.0. The balance sheet is solid and the company is generating nice free cash flow! We will have to see how stocks trade as this might become another addition to my portfolio!
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
"Trading Transparency" IGT
Hello Friends! Looking hard for a profit, I found that IGT was getting in the range of a sale of a portion of my 200 shares and I went ahead and sold 50 of IGT a few minutes ago at $42.71/share for about a 23% gain. I purchased my 200 shares of IGT (International Game Technology), at $34.60 on 11/5/03. Now have 150 remaining...and can buy a new position (!)....at least when the market looks a bit healthier! Regards to all.
If you have any questions, comments, or words of encouragement, please email me at firstname.lastname@example.org
Monday, 1 March 2004
"Trading Transparency" CYTC
Hello Friends! I got my sale on a gain. With about a 26% gain on my CYTC, I sold 100 shares earlier today at $18.71. My 500 shares were originally purchased just weeks ago at $14.86/share on 1/29/04. This allows me to spend one of my nickels that is burning a hole in my pocket so I shall be on the lookout for a good prospect to add to the portfolio! Interestingly, AAII Pharma, which was sold earlier this year is now down under $10. Yikes. Sure does pay when you note some fundamental problems in a stock! Or at a loss!
"Trading Transparency" BRLI
Hello Friends! With that nickel burning that hole in my pocket...well...what is a fellow gonna do? Reminds me of that old Cracker Jacks commercial...remember? Anyway, that sure dates me.
Bio-Reference Lab, Inc., is an oldie but goodie around here. I first posted BRLI on 9/22/03 when it was selling for $11.63 (!). Anyhow, NOW I have gotten around to buying some shares...they made the list of greatest gainers today, and I picked up 300 shares at $21.21. This is the link
to the original post on Bob's Advice!
Thanks so much for stopping by. Remember to do your own investigation of all stocks mentioned on this site prior to making any investment decisions...and always remember to consult with your investment advisors to make sure any investment is appropriate and timely for you!
Regards again, and remember to email me at email@example.com if you have any questions, comments, or words of encouragement!
Sunday, 29 February 2004
"Seven Months Ago" A longer term view examining the week of August 4, 2003
Hello Friends! It is getting late Sunday evening and I guess I should be watching the Academy Awards with the rest of my family...but I am determined to get my 'housekeeping' chores for this website done before I call it a night. One of the things I have been doing each weekend is trying to see how the stocks I have picked have been doing. Sort of an appraisal of this entire process I guess. I mean I owe it to all of you who take the time to stop by to at least review what I have picked and tell you what has happened since! Eventually, I will try to start looking out one year instead of just seven months....this blog has been up almost a year now...and I once heard if you do something regularly for about six weeks you can make a habit of it. Past that point now!
As always, please always do your own due diligence and research all of the stocks posted here. Remember to cut your losses quickly and let your winnings run. In general!
I had a very busy week during that first week in August, 2003. I actually posted 11 stocks that week, so bear with me, and let's take a look at how they are doing now.
Atrion Corporation (ATRI) was posted on Bob's Advice
on 8/4/03 at a price of $34.70. ATRI closed 2/27/04 at $44.51 for a gain of $9.81 or 28.3%. They ARE planning to split 3:2 later this month.
On February 12, 2004, ATRI reported their fourth quarter 2003 results
. For the quarter, ATRI reported revenue of $14.8 million in 2002, vs $15.3 million in the same quarter in 2002. Earnings, however, were $.68 in 2003, vs $.57 in 2002. With the slight contraction in revenue, I would probably be cautious about committing new money to this stock..in my opinion.
Intier Automotive (IAIA) was posted
on 8/4/03 at a price of $16.50. IAIA closed on 2/27/04 at $15.86, for a loss of $(.64) or (3.9)%.
IAIA announced fourth quarter 2003 results
on 2/23/04. Sales were $1.4 billion for the quarter, up 35% compared to $1.06 billion in the same quarter in 2002. Diluted earnings per share were $.37 compared to a loss of $(0.09) in 2002. This company appears at least at first glance to be doing just fine.
Mylan Laboratories (MYL), a stock that I currently still own in my trading portfolio, was posted here
on 8/4/03 at a price of $34.50. On 10/9/03, MYL split 3:2 so our effective price on the website was $23.12. MYL closed 2/27/04 at $23.50 for a gain of $.38 or 1.6%.
On January 29, 2004, MYL third quarter fiscal 2004 earnings
. For the quarter ended 12/31/03, net revenues increased 9% to a third quarter record $349.8 million. Diluted earnings per share for the quarter were $.31/share vs $.24/share the prior year, an increase of 29%. It appears that this company is also doing just fine.
August 6, 2003, found me posting FTI Consulting
here at a price of $21.90. FCN closed 2/27/04 at $16.42, for a loss of $(5.48) or (25)%.
On 2/18/04, FCN announced their fourth quarter 2003 results
. For the quarter, revenues were $96.2 million, an increase of 6.2% compared with $90.6 million for the fourth quarter of 2002. However, earnings per share declined 26.8% to $.30/share, from $.41 the prior year. These results are not strong enough to continue to recommend this stock on this website. We will continue to follow this one, like I do with all of the others!
Hang in there....four down and seven to go!
Zimmer Holdings (ZMH) was posted here
on 8/6/03 at a price of $49.79. This orthopedic-related firm, which was spun off from Bristol Myers, has done well since out pick, and closed on 2/27/04 at $75.64, for a gain of $25.85 or 51.9%.
On February 9, 2004, ZMH announced fourth quarter 2003 results
. Due to acquisitions, ZMH had revenue growth of 90%, diluted earnings per share were up 38% over the prior year, and they increased 2004 eps guidance. They appear to be doing great, and the stock is following this underlying performance!
August 6, 2003 found me posting Pulte Homes (PHM)
on the blog at a price of $63.86. PHM split 2:1 on 1/5/04, so out effective recommended price was only $31.93. PHM closed on 2/27/04 at $52.76 for a very nice gain of $20.83 or 65.2%.
On 1/28/04, PHM reported fourth quarter 2003 results
. Revenues increased 24% to $2.9 billion, and diluted earnings per share increased 40% to $1.95 from the prior-year $1.39. The company also raised 2004 guidance. This was a GREAT report...and explains the amazing stock performance!
Next, on 8/6/03, I posted DRS Technologies
on the blog at a price of $27.98. DRS closed at $30.16 on 2/27/04 for a gain of $2.18 or 7.8%.
On 2/12/04, DRS third quarter earnings
. Revenue for the quarter jumped 68% to $280.6 million, attributed to the purchase of Integrated Defense Technologies Inc. Earnings for the quarter came in at $11.6 million or $.45/share compared with $7.4 million or $.41/share the prior year. This company and the stock still look attractive to me!
Hang in there, 7 down and four more to go!
Sunrise Senior Living (SRZ) was posted here
on 8/6/03 at a price of $23.95/share. SRZ closed 2/27/04 at $35.16 for a gain of $11.21 or 46.8%.
On 2/26/04, SRZ reported fourth quarter 2003 results
. Earnings per share actually DROPPED $.15 to $.67 from $.82 in the prior year. Revenues "under management" increased 160% to $1.7 billion. I don't really understand these numbers and would have to put a caution sign in front of this stock. I don't own any shares of this one, and would be a little careful in adding any positions even though it HAS been a great performer for us!
On August 7, 2003, I selected Jos A. Bank Clothiers
for the Blog at a price of $44.16. JOSB had a 3:2 split on 2/19/04, so our effective selection price was actually $29.59. JOSB closed 2/27/04 at $33.00 for a gain of $3.41 or 11.5%.
On 12/1/03, JOSB reported third quarter 2003 results
. Total net sales for the quarter ended 11/1/03 were up 24.4% to $72.0 million compared to $57.9 million in the same period of 2002. Comparable store sales were up 8.7%, while catalog and internet sales were up 25.6% during the quarter. Earnings per share increased 46% to $.38/share compared to $.26/share in 2002. These were GREAT results, and the stock still looks nice to me. As I have noted elsewhere, I do not own any shares of this stock.
O.K. just two more!!!
On 8/8/03, I posted eSpeed (ESPD)
on the blog at a price of $18.98. ESPD closed 2/27/04 at $20.19 for a gain of $1.21 or 6.4%.
On February 9, 2004, ESPD reported fourth quarter 2003 results
. Quarterly revenue was up at $27.7 million vs. $22.4 million the prior year. Net operating income, however, was down at $8.8 million vs $9.2 million the prior year. Diluted GAAP earnings/share were flat at $.15 both in 2003 and 2002 for the same quarter. Overall, this is a plus/minus report imho, and would put a 'caution light' on this stock avoiding any new committments, although not seeing news bad enough to outright sell this stock.
Finally, at long last, I picked Emulex (ELX) on the blog
at $22.46 on 8/8/03. ELX closed at $23.18 on 2/27/04, a gain of $.72 or 3.2%.
On 1/27/04, ELX reported 2nd quarter results
. Revenues were up 23% from the prior year. However, diluted eps actually came in at $.04/share, vs $.19/share the prior year. Like some of the others with similar results, sticking to our guidelines, I would have to put a caution on this particular issue.
Overall, for the 11 stocks, I had an average gain of 17.6% during this seven month period! Not too shabby indeed. Thanks so much for hanging in there for this rather tedious, but necessary review!
Remember, past performance is NO GUARANTEE of future performance for these or any stocks. I hope that you enjoyed this review and if you have any questions, comments, or words of encouragement, please feel free to email me at firstname.lastname@example.org
Posted by bobsadviceforstocks at 9:08 PM CST
Updated: Sunday, 29 February 2004 9:36 PM CST
"A reader inquires about PEG ratios, and Short-Interest"
Hello Friends! I really enjoy getting an email with a good question. First of all, I am an amateur investor myself, but I will try to answer any question the best I can.
Brian L. writes: "Here's my first question. On Feb 27th you give an overview of shuffle master (SHFL). You talked about outstanding shares and floating shares with a relationship to shares out short, What is this telling us about the stock and if this a short term indication how short? Also you talk about PEG being high or you will say, "It's only" what number is the middle of the road or neutral? Take care"
Indeed, on 2/27/04, (just two days ago), I posted SHFL
on this website. Most of my statistics come from the "Key Statistics" on Yahoo.com
First question, what about the "short interest." For me, this is a number which gives me two bits of information, 1) if this is high...more than a day or two of trading volume...then this may be an opportunity to benefit from a short 'squeeze'. That is, if the price rises on good news, the stock may head higher quickly as short-sellers look to cover their positions. In the case of SHFL, we can see that the short ratio is 26.925, with 5.71 million shares out short or 37.80% of the float. This actually, per Yahoo, expanded from December 2003, by about 500,000 shares. 2) However, a word of caution, short sellers are not completely ignorant either, and maybe there is information out there on a stock that is potentially damaging....so a short interest this high also must make one a bit cautious...sort of going against the trend.
I went on the web to see if I could get anything else. Best I could find was a definition on investorwords.com
, which stated that: "Short interest divided by average daily volume over some period, usually 30 days. Some investors believe that a high ratio is a bullish indicator, and a low ratio is a bearish indicator." As we look at stocks, it is just one more factor that we should consider...and maybe we can all get a better feel for what will happen with the stock price in the near future!
Next you asked about the PEG ratio. I usually pick this up also from Yahoo.com. The PEG is a measure of valuation that is more informative than the standard P/E ratio. The P/E is a static number indicating the current price over the trailing earnings. If a company is expected to grow quickly in the future, it may indeed be reasonable to pay a higher P/E if the growth is coming soon. This is how the P/E ratio is developed. This is somewhere along the lines of GARP...not the "World According to..." but "Growth At a Reasonable Price."
What PEG is reasonable? Tough call. Certainly PEG ratios near one or under are quite reasonably priced. This suggests that the p/e and the growth rate are fairly in synch. If you are paying over a 2.0 PEG then you are certainly paying a premium for the growth, in my opinion. That doesn't mean that a low PEG will guarantee that a stock will rise or that a high PEG means the opposite...but just another factor to get a feel for the valuation of an investment. I try to keep my analysis a little 'eclectic' if that is the right word (!), meaning I don't want to be truly JUST a growth investor, or a value investor, but more along the lines of growth at a reasonable price I guess!
Again, looking on the Web, I found a nice explanation
from the Motley Fool website.
I hope that this discussion is helpful for you! I really DO enjoy getting emails and questions from people who read what I write. It is my sincere wish to be informative. But remember, I am NOT an investment advisor and I am learning along with you about all of these investment ideas!
Posted by bobsadviceforstocks at 7:56 PM CST
Updated: Sunday, 29 February 2004 7:59 PM CST
How are we doing?" A look back on the week of December 22, 2003"
Hello Friends! Thanks for stopping by again. It is the weekend...and soon we will be starting another trading day. Weekly, I like to look back a short period of time, currently we are about nine weeks out, and see how my selections have performed. As always, please be sure to do your own due diligence on all of these stocks and consult liberally with your investment advisors!
During the week of December 22, 2003, I posted six stocks on this Blog: CompuDyne (CDCY), Computer Sciences Corp (CSC), Ventana Medical Systems (VMSI), Faro Technologies (FARO), Sanderson Farms (SAFM), and Sharper Image (SHRP). Of those stocks, I currently have shares of Sanderson Farms (SAFM).
I posted CDCY on this blog
on 12/22/03 at a price of $10.051. CompuDyne closed 2/27/04 at $8.85 This represents a loss of $(1.201) or (11.9)%.
Computer Sciences was posted on Bob's Advice
on 12/23/03 at $43.80. CSC closed on 2/27/04 at $41.79 for a loss of $(2.01) or (4.6)%.
Ventana Medical Systems was posted here
on 12/23/03 at a price of $39.80. VMSI closed 2/27/04 at $41.48 for a gain of $1.68 or 4.2%.
I posted Faro Technologies (FARO)
on Bob's Advice on 12/24/03 at a price of $23.90. FARO closed 2/27/04 at a price of $27.81 for a gain of $3.91 or 16.4%.
Sanderson Farms (SAFM) was posted here
on 12/24/03 at a price of $42.79. SAFM just had a 3:2 split, so our effective selection price was actually $28.53. SAFM closed 2/27/04 at $35.35 for a gain of $6.82 or 23.9%.
Finally, my favorite mall store, but a stock I have never owned, Sharper Image (SHRP), was posted on Bob's Advice
on 12/26/03 at $32.40. SHRP closed 2/27/04 at $35.63 for a gain of $3.23 or 10.0%.
The average performance for these stocks was a gain of 6.33%. Really not too bad for this group of stocks selected on the week of December 22, 2003.
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
Friday, 27 February 2004
February 27, 2004 Shuffle Master (SHFL)
Hello Friends! Thanks so much for stopping by...and thanks especially for those of you who have taken the time to email me and let me know that you are out there and following this website. I suppose I would blog for just myself, but if I can know that I am sharing ideas with others, well it just makes it that much more meaningful for me. As always, I must recommend that you all do your own due diligence and research prior to making any investment decisions based on what you read here. Also, please consult with your investment advisors to make sure that these investments are appropriate and timely for you!
I came across Shuffle Master this afternoon, while looking through the lists of top % movers. SHFL is currently trading at $41.45, up $2.56 or 6.58% on the day. According to the money.cnn.com "snapshot"
, SHFL "...develops, manufactures and markets automatic card shuffling equipment, table games and video-slot machine game software for the gaming industry."
Looking for latest earnings reports, I quickly found the first quarter 2004 earnings report
on Yahoo. In fact, this came out yesterday just after the close of the market, and is probably the reason why this stock is behaving so well today. For the quarter ended January 31, 2004, "...the Company reported revenue of $15.6 million, compared to $11.9 million for the same quarter a year ago, an increase of 31%. Net income for the quarter was $5.9 million or $.34 per diluted share, compared to $3.3 million or $.19 per diluted share for the first quarter of fiscal 2003."
Lookin at Morningstar.com "5-Yr Restated" financials
, we can see the BEAUTIFUL revenue progression from $27.1 million in 1998, $28.9 million in 1999, $38.9 million in 2000, $48.0 million in 2001, $56.1 million in 2002, and $63.5 million in the trailing twelve months.
In an equally pretty fashion, earnings per share have improved each year from $.15/share in 1998, $.20 in 1999, $.53 in 2000, $.63 in 2001, $.77 in 2002 and $.95 in the trailing twelve months.
Free cash flow has also been improving: $9 million in 2000, $18 million in 2001, $18 million in 2002 and $22 million in the trailing twelve months.
Balance-sheet-wise, this is equally nice. They have $17.3 million in CASH, enough to pay off both the current liabilities of $12.0 million and the long-term liabilities of $400,000 combined. In addition, they also are reporting on the Morningstar website $23.4 million in other current assets. A very pretty picture indeed!
If we look at "Key Statistics" from Yahoo
, we can see that SHFL has a market cap of $687.57 million, a trailing p/e of 42.00, but a forward p/e (fye 31-Oct-05) of only 26.74. With the rapid growth of this company, the 5-yr estimated PEG is only 1.35, making this a reasonable value. The Price/Sales ratio is quite high though at 9.57.
Per Yahoo, SHFL has 16.59 million shares outstanding with 15.10 million of them that float. There is an INORDINATE number of shares out short as of 1/8/04, representing 5.28 million (!), which is 34.95% of the float, or 17.189 average trading days. With the good earnings news, there may be a scramble for the exits here as the stock rises in spite of the shares that have been pre-sold and need to be covered.
No dividend is paid, and the last stock split was in June, 2001, when a 3:2 split was paid.
Taking a brief look at the technicals, we can see from a stockcharts.com point and figure chart
that this stock was trading sideways until March, 2003, when it broke through a resistance level at about $20.00/share and has headed up fairly strongly to its current levels in the low $40 range. The technicals look nice imho, and I would not be going short against this one. By the way, I do NOT own any shares of this, but certainly would be interested if I wasn't sitting on my hands, waiting for a sale of a stock before buying....I also do NOT have any short or other option positions on this stock.
Just wanted to clear the air on all of that!
Thanks so much again for stopping by! If you have any comments, questions, or words of encouragement please feel free to email me at firstname.lastname@example.org
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