March 10, 2006 Universal Security Instruments (UUU)
Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

The market is bouncing back today which is always a relief! Looking through the list of top % gainers on the AMEX today I came across Universal Security Instruments Inc. (UUU) which as I write, is trading at $21.65/share, up $1.43 or 7.07% on the day. I do not own any shares nor do I have any options on this stock.

According to the Yahoo "Profile" on UUU, the company

"...engages in the design and marketing of various safety products consisting primarily of smoke alarms, carbon monoxide alarms, and related products. It markets a line of residential smoke alarms that include battery, electrical, and electrical with battery backup alarms, as well as outdoor floodlights under the name ‘Lite Aide’, carbon monoxide alarms, door chimes, and ground fault circuit interrupters."

Let's take a look at the key things that I used to include this stock in the blog this afternoon:

1) Latest quarterly result.

On February 13, 2006, Universal Security announced 3rd quarter 2006 results. For the third quarter ended December 31, 2005, sales climbed 26% to $7.4 million from $5.8 million in the same quarter the prior year. Earnings jumped 78% to $.80/diluted share, up from $.45/diluted share the prior year.

2) Longer-term results.

Reviewing the "5-Yr Restated" financials from Morningstar.com, we see that revenue has been growing steadily from $7.7 million in 2001 to $23.5 million in 2005 and $27.5 million in the trailing twelve months (TTM).

Earnings have also improved almost perfectly (except for a dip from $1.54/share in 2003 to $1.49/share in 2004) from a loss of $(.62)/share in 2001 to $1.94/share in 2005 and $2.42/share in the TTM.

Free cash flow has been less than perfect with $-0- reported in 2003 and $-0- reported in the TTM.

The balance sheet appears solid with $1.1 million in cash and $10.5 million in other current assets balanced against $3.0 million in current liabilites. This results in a 'current ratio' of almost 4. There are no long-term liabilities reported on Morningstar.

3. Valuation.

Looking at Yahoo "Key Statistics" on UUU, we can see that this is a TINY company with a market capitalization of only $36.65 million. The trailing p/e is nice at 8.95, and the price/sales ratio comes in at 1.24.

Referring to the Fidelity.com eResearch website, we find that UUU is in the "Electronics Wholesale" industrial group. Within this group, Universal Security is actually the richest in valuation when measured by Price/Sales ratios. Coming in at 1.3, this tops the group which is followed by W.W. Grainger (GWW) at 1.2, Wesco International (WCC) at 0.7, Arrow Electronics (ARW) at 0.4, Avnet (AVT) at 0.3 and Bell Microproducts (BELM) at 0.1.

Going back to Yahoo, we can see there are ONLY 1.69 million shares outstanding with 1.00 million of them that float. Of these 793 shares were out short as of 2/10/06, representing 0.1% of the float or 0.2 trading days of volume. This doesn't look significant to me. No cash dividend is reported and the last stock split was a 4:3 split 4/6/04.

4. The chart.

Looking at a "Point & Figure" chart on UUU from StockCharts.com:

We can see what appears to me to be a phenomenal graph with the stock climbing from $.75/share in April, 2001, to the current $21 level. The chart is actually quite strong!

So in conclusion, what do I think about this stock? Well, the very small capitalization of a stock is always intriguing to me. What I do like about the stock is the very strong quarterly report, with solid growth in both revenue and earnings, the nice Morningstar report which shows historic revenue and earnings growth, and a solid balance sheet. Valuation is nice with a p/e under 10, but the Price/Sales is actually fairly high in its group. In addition, the chart is fabulous.

On a downside, the company is not generating any free cash as far as I can tell. But the rest of the financials are superb. Unfortunately, with a micro-cap stock like this, volatility is likely to be pretty significant. And I am not in the market to be buying anything anyhow :(, as I haven't sold any stocks to give me the 'permission' to purchase a new position.

Thanks so much for stopping by and visiting! If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com. Have a great weekend!

Bob

Claire's Stores (CLE) Revisiting a Stock Pick
HERE FOR THE PODCAST ON CLAIRE'S

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

I was looking through the list of top % gainers on the NYSE and came across Claire's Stores (CLE) which closed at $33.03, up $2.83 on the day or 9.34%. I do not own any shares nor do I own any options on this stock.

I first wrote up Claire's on Stock Picks Bob's Advice on February 5, 2004, when the stock was trading at $20.30. With today's close at $33.03, this represents a gain of $12.73 or 62.7% since posting.

And what exactly does Claire's do?

According to the Yahoo "Profile" on Claire's, the company

"...operates as retailer offering costume jewelry and accessories to tweens, teens, and young adults. It has two store concepts, Claire’s Accessories, which caters to girls and teens in the 7 to 17 age range, with operations internationally, and Icing by Claire’s that caters to teens and young women in the 17 to 27 age range, with operations in North America."

And how about the latest earnings report?

Actually, it was the earnings report that was released today that drove the stock higher in the face of a weak market. Today, before the start of trading today, Claire's reported 4th quarter 2006 results. For the quarter ended January 28, 2006, sales grew 5% to $414.7 million from $395.9 million in the same quarter last year. Earnings climbed 24% to $69.1 million or $.69/share, up from $55.5 million or $.56/share the prior year.

The company did state that the first quarter 2007 results would be slightly below expectations, but raised the 2007 fiscal year guidance to $1.96 - $2.01 on revenue of $1.45 - $1.47 billion. Analysts had been expecting $1.89/share on revenue of $1.47 billion.

In addition, on March 2, 2006, Claire's reported February, 2006, same store sales results. For the month of February, total sales rose 3% while same store sales at stores open a year actually climbed 4%.

How about longer-term?

Reviewing the Morningstar.com "5-Yr Restated" financials, we can see the almost perfect progression in revenue from $.9 billion in 2001, to $1.4 billion in the trailing twelve months (TTM)

Earnings, which dipped from $.65/share in 2001 to $.20/share in 2002, has subsequently grown steadily to $1.44/share in 2005 and $1.60 in the trailing twelve months.

Interestingly, the company pays a small dividend and has been fairly active raising this payment from $.06/hsare in 2001 to $.30 in 2005 and $.39/share int he TTM.

Another interesting fact we can glean from the Morningstar report is the number of shares. In 2001, CLE reported 100 million shares. This has been decreasing each year from this level to 99 million shares in 2005 and 94 million in the TTM.

Free cash flow has been increasing overall from $121 million in 2003 to $136 million in 2003 and $172 million in the TTM.

The balance sheet as reported on Morningtar looks solid with $359.8 million in cash alone, more than enough to pay off both the $178.6 million in current liabilities and the $43.1 million in long-term liabilities combined. With the $203.6 million in other current assets, this gives us a "current ratio" of just over 3.0.

What about some valuation numbers on this stock?

Looking at Yahoo "Key Statistics" on CLE, we can see that this is just barely a large cap stock with a market capitalization of 3.23 Billion. The trailing p/e is 20.68 with a forward p/e of only 17.48. The PEG ratio (5 yr expected) isn't bad at 1.23.

Insofar as the Price/Sales figure is concerned, the company is in the "Apparel Stores" industrial group according to the Fidelity.com eResearch website. Within this group CLE is moderately priced per this ratio. Topping the list is Chico's FAS (CHS) with a Price/Sales ratio of 5.1. This is followed by Claire's (CLE) at 2.2, followed by Abercrombie & Fitch (ANF) at 2.1 and American Eagle (AEOS) at 2.1. These are followed by PacSunwear (PSUN) at 1.2 and Limited Brands (LTD) at 1.2.

Other statistics show that there are 99.37 million shares outstanding and currently over 88.82 million of them float. Of these, 1.96 million shares are out short as of 2/10/06. This is 2% of the float or 3.2 trading days of volume.

Yahoo reports CLE paying a dividend of $.40 yielding 1.3%. The last stock split was a 2:1 split on 12/22/03.

What about a chart? Looking at a "Point & Figure" chart on CLE from StockCharts.com, shows the steady growth in price from $6.00 in Sepotember, 2001, to its current level at $33.

So what do I think? Well the latest earnings report was solid even if the very first quarter may come in a little light by a penny or so. The forecast for 2007 is quite bullish! Valuation is nice with a PEG just over 1.0, and the Price/Sales ratio is also quate moderate. To top it off the Morningstar.com report is extremely strong, the company pays an increasing dividend, and the float is being reduced. Along with a solid chart, this is a formula for a higher stock price!

Thanks so much for stopping by! I am fading quickly this evening, so I shall not get around to a podcast this evening. My pillow calls me :). Let me know if you have any comments or questions! You can leave them right on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

Alliance Data Systems (ADS) Revisiting a Stock Pick
Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to always consult with your professional investment advisors prior to making any investment decisions based on information on this website.

The market was behaving a little better today with the DJIA actually closing up 25.05 and the NASDAQ, which traded as low as 2249 intraday, closed at 2,268.25, down (.13) or (.01)%, essentially unchanged on the day. I heard some analysts dissecting the day's performance and they actually were attributing some of the more positive action on the strength in the bond market, as well as the reversion of the inverted yield curve. In layman's talk (the only language I am able to speak), investor pessimism often develops when the long end of maturities (10yr or 30yr) bonds yield less than the short end (2 or 5 yr bonds). Historically, this inversion has preceded recessions, a development not at all good for stocks!

In any case, I hit the list of top % gainers and found an old favorite, Alliance Data Systems (ADS), on the list of top % gainers on the NYSE. ADS closed at $45.22, up $1.46 or 3.34% on the day. I do not currently own any shares of this stock, although I did own some shares in my trading portfolio as recently as 10/25/05, when the shares were sold after an 8% loss. This answers the perennial question I get on this blog about whether I will consider buying a stock after I sold it at a loss. The answer is "Yes!", but only if the stock hits the criteria to reach the blog.

So let's take another look at ADS and I will show you why I think it is worth another look by this blog. (I should point out that I first reviewed Alliance Data Systems (ADS) on Stock Picks Bob's Advice on August 1, 2003, when it was trading at $28.45. With the stock closing today at $45.22, this represents a gain of $16.77 or 58.9% since posting.)

First, what does ADS do?

According to the Yahoo "Profile" on Alliance Data Systems, the company

"...and its subsidiaries provide transaction services, credit services, and marketing services in North America. The company facilitates and manages transactions between its clients and their customers through multiple distribution channels, including instore, catalog, and the Internet."

And how about the latest quarterly report?

As documented on the company's website, they reported 4th quarter 2005 results on February 1, 2006. Revenue for the quarter ended December 31, 2005, grew 21% to $421.2 million, up from 4346.8 million in the fourth quarter of 2004. Net income climbed 96% to 431.3 million for the quarter, or $.38/diluted share, compared to $16.0 million or $.19/diluted share for the same quarter the prior year. This was a very strong quarter imho.

How about longer-term?

Reviewing the Morningstar.com "5-Yr Restated" financials, we can first see the steady growth in revenue from $.7 billion in 2000 to $1.3 billion in 2004 and $1.5 billion in the trailing twelve months (TTM).

Earnings have increased steadily from $.31/share in 2002 to $1.22/share in 2004 and $1.45 in the TTM. Free cash flow, while down a tad in the past twelve months, has grown strongly from $80 million in 2002 to $305 million in 2004 and $205 million in the TTM.

The balance sheet is just fair imho, with $157.8 million in cash and $592.7 million in other current assets, enough to cover the $692.3 million in current liabilities giving us a "current ratio" for this stock of just over 1.0. In addition, the company has $813.8 million in long-term liabilities not touched in any significant fashion with the current assets. I would suspect that with the strong free cash flow the past 12 to 18 months, that this balance sheet should be improving.

What about valuation numbers?

Reviewing the Yahoo "Key Statistics" on ADS, we can see that this is a large cap stock with a market capitalization of $3.71 billion. The trailing p/e is reasonable (imho) at 27.59, with a forward p/e based on estimates (fye 31-Dec-07) even nicer at 16.21. The PEG ratio (5 yr expected) is reasonable as well at 1.06.

According to the Fidelity.com eResearch website, ADS is also reasonable priced in relation to the Price/Sales ratio relative to other stocks in the "Information/Delivery Services" industrial group. Topping this group is FactSet Research (FDS) with a Price/Sales ratio of 6, followed by Jupitermedia (JUPM) at 4.8, Wright Express (WXS) at 4.3, then Alliance Data Systems (ADS) at 2.4, and DST Systems (DST) at the bottom of this group with a Price/Sales ratio of 1.8.

Going back to Yahoo for some more numbers, we find that there are 82.04 million shares outstanding with 67.77 million that float. Of these shares, 5.19 million shares are out short as of 2/10/06, representing 6.50% of the float or 5.6 trading days of volume. Since this is over 3 days worth of trading volume, I consider this significant and may result in some buying pressure if the stock price should rise (as it did today), creating a possible "squeeze" environment for the shorts.

No cash dividend and no stock splits are reported by Yahoo.

What about a chart? If we take a look at a "Point & Figure" chart on ADS from StockCharts.com:

We can see that the stock which was trading rather poorly between January, 2002, and April, 2002, when it dropped from $26.00 down to $14, broke through resistance in April, 2003, at $17.00 and has moved strongly higher to a peak of $48 in December, 2004. The stock has been trading lethargically throught much of 2005, and only in January, 2006, has it broken through the new resistance levels around $41 and is trading higher currently. The chart looks reasonably strong to me.

So what do I think? Well, in review, the stock moved nicely higher today, had a very strong earnings report last month, has shown steady and strong revenue and earnings growth with impressive free cash flow. The balance sheet is a bit anemic with a significant debt load that appears manageable in light of the free cash flow. Valuation is reasonable with a p/e in the low 20's, a PEG just over 1.0 and a Price/Sales ratio near the lowest in its group. In addition, the chart looks reasonably strong recently, although the stock appears to have spent most of 2005 consolidating. Could be an interesting pick!

Thanks again for stopping by and visiting. If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

"Looking Back One Year" A review of stock picks from the week of December 13, 2004.







Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always please remember that I am an amateur investor, so please remember to consul with your professional investment advisors prior to making any investment decisions based on information on this website.

As my regular readers realize, there are several different things going on simultaneously on this website! First of all, I like to discuss stocks that fit my criteria for investment. A year or so later, I like to go back and examine these "picks" to see how they turned out. This analysis assumes a buy and hold strategy which is not what I actually employ in my investments. Instead, I like to sell my losing stocks completely and quickly at an 8% loss, and also sell my appreciating stocks (see the previous entry on Coach) slowly and partially. But for the sake of analysis, I like to assume a 'buy and hold' strategy for my stock picks. I believe it stil l gives us a feel for how the stock selections were doing, even though the actual performance in my hands might be substantially better (or worse).

Also on this blog, I like to discuss my actual holdings in my "trading portfolio". Those stocks are the ones that I actually purchase and have real stock trading losses and gains. Whenever I make a trade in my actual trading account, I try to post a note as soon as possible under the title "Trading Portfolio Transparency".

Anyhow, a little over a year ago, on December 19, 2004, I 'wrote up' C R Bard (BCR) on Stock Picks Bob's Advice when it was trading at $63.90. BCR closed on March 3, 2006, at $69.67 for a gain of $5.77 or 9% since posting.

On January 25, 2006, C R Bard (BCR) reported 4th quarter 2005 results. Net sales grew 7% to $452 million from $424.1 million the prior year same period. Net in come came in at $80.1 million, with diluted earnings per share reported at $.75/share, both up 15% from the same period the prior year, when Bard reported $69.8 million or $.67/diluted share. While a strong result, analysts were expecting 4th quarter results of $462.1 million in revenue with earnings of $.76/share. Thus, while growing, the company missed on analysts' expectations, keeping the subsequent stock price performance 'subdued'.

So how did we do that week? Well, the only stock was C R Bard (which I wrote up on a Sunday!), and that stock appreciated 9% since posting.

Thanks so much for stopping by! If you have any questions or comments, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

Coach (COH) Weekend Trading Portfolio Analysis
Click ***HERE*** for my PODCAST on COACH













Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

As regular readers of my blog realize, one of the tasks I address on this website is to share with you an actual trading portfolio that I own. These stocks are derived from stocks discussed on this website, and are managed with the same strategy that I advocate elsewhere: selling my losing holdings quickly at an 8% loss limit, and selling my gaining investments slowly and partially as they appreciate. Coach (COH) has been one of the top performing stocks in my portfolio.

I acquired my shares of Coach on 2/25/03 with a cost basis of $8.33/share. I currently own 102 shares which closed 3/3/06 at $36.12/share, giving me a gain of $27.79 or 334% since purchase. I have sold portions of COH seven times since my purchase, at 30, 60, 90, 120, 180, 240, and 300% appreciation levels. My next planned sale would be 1/6th of my remaining shares at a 360% appreciation level or 4.6 x $8.33 = $38.32 or if the stock retraces to 50% of the highet sale point (1/2 of 300% = 150% or 2.50 x $8.33 = $20.83) then I shall be selling all remaining shares to preserve my gains.

Let's take an updated look at this stock which has been a fabulous choice for my portfolio.

First of all, let's review what the company does. According to the Yahoo "Profile" on Coach, the company

"...engages in the design, production, and marketing of fine accessories worldwide. Its products include handbags; women?s accessories, such as wallets, wristlets, cosmetic cases, key fobs, and belts; and men?s accessories, such as belts, wallets, and other small leather goods; and business cases, such as computer bags and messenger-style bags, as well as men?s and women?s totes; outerwear, gloves, hats, and scarves; and weekend and travel accessories, such as cabin bags, duffels, suitcases, garment bags, and a collection of travel accessories. The company also offers watches, footwear, eyewear and sun glasses, and office furniture under Coach brand name. Its products are sold through direct-to-consumer channels, including company-operated retail and factory stores, online store, and catalogs, as well as through indirect channels, including department store locations in the United States, international department stores, freestanding retail locations, and specialty retailers. As of October 1, 2005, the company operated 199 retail stores and 85 factory stores in North America; and 107 department store shop-in-shops, retail stores, and factory stores in Japan."

And how about the latest quarterly report?

On January 24, 2005, Coach announced 2nd quarter 2006 results. For the quarter ended December 31, 2005, net sales grew 22% to $650 million up from $532 million the prior year. Including 'option expense', net income grew 37% to $174 million or $.45/diluted share, up from $127 million or $.32/diluted share the prior year. These results exceeded the company's guidance of $.43/share as well as analysts' expectations of $.44/share. In addition, the company raised guidance on the rest of fiscal 2006 with earnings of at least $1.33, ahead of the analysts' consensus of $1.20. Coach was 'hitting on all cylinders', you could say, beating consensus with strong earnings and revenue growth as well as raising guidance for the rest of the year. These are the kind of things in an earnings report that drive a stock higher from my perspective.

And how about the Morningstar results?

Reviewing the Morningstar.com "5-Yr Resatated" financials on Coach, we can see the steady growth in revenue from $600 million in 2001 to $1.7 billion in 2005 and $1.9 billion in the trailing twelve months (TTM).

Earnings have also been steadily increasing from $.24/share in 2002 to $1.00 in 2005 and $1.21/share in the TTM. The share float has grown slightly from 358 million in 2002 to 377 million in 2005 and 383 million in the TTM.

Free cash flow is solidly positive and growing with $165 million in 2003, increasing to $450 million in 2005 and $506 million in the TTM.

The balance sheet is solid with $746 million in cash, enough to more than enough pay off both the $347.7 million in current liabilities and the $51.5 million in long-term liabilities. With the other current assets of $435 million, we can calculate (comparing total current assets to current liabilities) a current ratio of over 3.

What about some valuation numbers on this stock?

Looking at Yahoo "Key Statistics" on Coach, we find that this is a large cap stock with a market capitalization of $13.85 billion. The trailing p/e is a bit rich at 30.07, but the forward p/e (fye 02-Jul-07) is a bit nicer at 24.41. Thus, with the solid earnings growth expected, the PEG works out to 1.32. (PEG's 1.5 or less are reasonable imho, and 'cheap' if they come in under 1.0).

We can see how expensive this stock really is if we examine the Price/Sales ratio relative to stocks in the same industrial group: "Textile-Apparel Footwear/Accessories", according to the Fidelity.com eResearch website.

Coach (COH) tops this list with a Price/Sales ratio of 7.3. This is followed way back with Nike (NKE) with a ratio of 1.6, then Timberland (TBL) at 1.5, Wolverine World Wide (WWW)at 1.2 and Rocky Shoes and Boots (RCKY) with a Price/Sales ratio of 0.6. So certainly from this particular criterion, this stock is not any kind of bargain!

Going back to Yahoo for a few more valuation numbers, we find that there are 383.36 million shares outstanding with 376.84 million of them that float. Of these, 7.18 million are out short representing 1.90% of the float or a current ratio of 2.6. Since I use 3.0 as a cut off on this particular statistic, I do not find the level of short interest very significant.

No cash dividends are paid and the last stock split was a 2:1 split 4/5/05.

What about the chart? If we look at a "Point & Figure" chart on Coach from StockCharts.com:

We can see that the chart is an absolutely gorgeous graph, which, except for a dip down to $2.50 in September, 2001, the company has bee charging higher with unbelievable strength for the past 4 1/2 years! The stock, if anything, is over-extended, with the price far ahead of its "blue line" of support.

So in summary, this stock has been very kind to me. It has appreciated steadily and I am actually waiting for a 360% appreciation move to sell another 1/6th of my holding. Beyond this, the latest quarterly report was strong with the company beating expectations, as well as raising guidance. The past five years on Morningstar are without a blemish, with revenue, earnings, free cash flow, and the balance sheet looking fabulous. The p/e and PEG aren't too rich but the Price/Sales ratio is definitely higher than any other stock in its group. Finally, the chart looks quite strong, if a bit over-extended.

Thanks so much for stopping by and visiting! I hope that next week finds you in good health and that all of our investments are moving in the right direction. If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

"Trading Transparency" Angiodynamics (ANGO)
Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

A few moments ago I sold my 240 shares of Angiodynamics (ANGO) at $23.51. I had purchased these shares 1/6/06 at a cost basis of $26.26. Thus, I had a loss of $(2.75) or (11.7)%. This exceeded my sale point of an 8% loss, and thus I sold my position today.

On any sale at a loss, I refrain from re-investing proceeds and shall be "sitting on my hands" until such time as I sell a portion of a position at one of my targeted gains.

Thanks so much for visiting. If you have any comments or questions, please feel free to email me at bobsadviceforstocks@lycos.com or leave them on the blog.

Bob

March 1, 2006 Autodesk (ADSK)
Click ***HERE***for my PODCAST on AUTODESK

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

I was looking through the list of top % gainers on the NASDAQ this afternoon and came across Autodesk (ADSK) which closed at $41.68, up $4.03 or 10.70% on the day. I do not own any shares of this stock nor do I own any options. This evening, I did happen to listen to the first part of Jim Cramer's Mad Money, and did hear a listener call in about Audodesk and hear Cramer give it a big plug. This doesn't really determine or affect my choice on the blog, but it is a plus as well.

And what exactly does this company do? According to the Yahoo "Profile" on Autodesk, the company

"...operates as a software and digital content company worldwide. The company provides business solutions through technology products and services, including integrated and interoperable design software, Internet services, wireless development platforms, and point-of-location applications."

And how about the latest quarterly result?

Yesterday, after the close of trading, Autodesk reported 4th quarter 2006 results. For the quarter ended January 31, 2006, revenues climbed 17% to $417 million, from $356 million in the same quarter the prior year. Net income for the quarter was $83 million or $.33/diluted share compared to $66 million or $.26/diluted share the prior year. In addition, the company raised guidance (the third part of what I like to figuratively refer to as a 'trifecta') for 2007. As reported last night

" Chief executive and chairwoman Carol Bartz said demand was strong for its products to design in two dimensions while an increasing number of customers were migrating to new three-dimensional products.

"I think we (will) have a big run on both sides for a long time," Bartz said. "Considering the fact that ultimately the majority of our base should move to 3D, and we are only 10 percent there, that is a huge opportunity."

Bartz said Autodesk raised its fiscal 2007 forecast from its November target due to a dollar that has stabilized, an economy that seems stronger and momentum from a strong fourth quarter."

And how about a longer-term look at the company from Morningstar?

Reviewing the "5-Yr Restated" financials on ADSK from Morningstar.com, we can see that between 2001 and 2003, the company actually had flat to declining revenue from $.9 billion in 2001 to $.8 billion in 2003. However, since 2003, revenues have grown strongly to $1.2 billion in 2005 and $1.5 billion in the trailing twelve months (TTM).

Earnings have followed a fairly similar course, declining from $.40/share in 2001 to a low of $.14/share in 2003, then climbing sharply to $.90/share in 2005 and $1.26/share in the TTM. The company also pays a small dividend of $.06/share, although Morningstar reports only $.03/share in the TTM.

Free cash flow has been positive and growing strongly from $50 million in 2003 to $332 million in 2005 and $418 million in the TTM.

The balance sheet as reported on Morningstar looks solid with $547.9 million in cash alone, enough to cover both the $463.4 million in current liabilities and the $50.1 million in long-term liabilities combined. As far as the 'current ratio' is concerned, Morningstar reports an additional $311.8 million in other current assets, which when combined with the cash of $547.9 million and compared to the current liabilities of gives us a current ratio of just under 2.0 another sign of financial strength.

Taking a look at the Yahoo "Key Statistics" on ADSK, we can see that this company is certainly a large cap stock with a market capitalization of $9.62 billion. (The cut-off for mid-cap stocks for me is $3 billion). The trailing p/e is 33.26, with a forward p/e (fye 31-Jan-07) of 24.37. The PEG Ratio (5 yr expected) is a reasonable 1.22. (I use anything under 1.5 as fairly valued and frankly any PEG under 1.0 as 'cheap').

According to the Fidelity.com eResearch website, ADSK is in the "Technical/System Software" industrial group. Within this group of stocks, ADSK is relatively expensive with a Price/Sales ratio of 6.4. This ratio is only exceeded by Infosys (INFY) at 9.8, and is ahead of Mercury Interactive (MERQ) at 3.8, Manhattan Associates (MANH) at 2.6, and Take-Two Interactive (TTWO) which is the cheapest in the group with a Price/Sales ratio of 0.9.

Going back to Yahoo for a few more numbers, we find that there are 230.8 million shares outstanding with 229.55 million that float. Of these, 6.72 million shares were out short as of 1/10/06. This represents 2.90% of the float, slightly higher than the previous month's 6.71 million shares, and yet the short ratio is only 2.8, under the 3.0 figure I use as a cut-off for significance.

As noted above, the company pays a small dividend of $.06/share yielding 0.20%. The last stock split was a 2:1 split 12/21/04.

And what about a chart? Looking at a "Point & Figure" chart from StockCharts.com on ADSK:

We can see that the stock chart follows the Morningstar.com long-term results report almost perfectly. While revenue and earnings have been flat between 2001 and 2003, so is the chart. Only in September, 2003, the stock broke through resistance at $9.50 and has been climbing strongly since. Recently, the stock has pulled back slightly from the $48 level to the current $42 level. Overall, the chart looks fine to me.

So what do I think? Well, the stock has many of the characteristics I like to see in a stock pick. The latest quarter was solid with strong earnings and revenue growth and raised guidance, the past five-years, while not perfect, have shown steady results the past three years. The company even pays a small dividend. Free cash flow is positive and rapidly growing. The balance sheet is solid with enough cash to pay off both the current and long-term liabilities combined. Value-wise, the P/E is moderate in the low 30's, forward P/E in the 20's with a PEG under 1.5. The Price/Sales ratio is a bit rich, but this stock may well deserve the valuation. Finally, the chart looks nice to me.

Anyhow, thanks so much for once again taking the time to visit my blog. If you have any questions or comments, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

February 28, 2006 CAS Medical (CASM)
Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

I was looking through the list of top % gainers on the NASDAQ today and came across CAS Medical (CASM) which, as I write, is trading at $12.60, up $1.02 or 8.81% on the day, in an otherwise weak market. I do not own any shares of CASM nor do I have any options.

So what does CAS Medical do anyway?

According to the Yahoo "Profile" on CASM, the company

"...engages in the development, manufacture, and distribution of diagnostic equipment and medical products for use in the healthcare and medical industry. The company principally offers blood pressure measurement technology MAXNIBP, vital signs measurement equipment, cardio-respiratory monitoring equipment, and supplies for neonatal intensive care. It also develops, assembles, and sells blood pressure cuffs, liquid infusion devices, and blood transfusion filters."

And how about the latest quarterly result?

This was a little harder to find, but as often is the case is readily available on the CAS Medical website in the 2005 Archives.

On October 27, 2005, CASM reported their 3rd quarter 2005 results. Revenues for the quarter ended September 30, 2005, came in at $7.48 million, a 48% increase over the $5.04 million reported in the same quarter the previous year. (The company noted that these results included the recent acquisition of Stacorp, Inc.) Net income for the quarter increased to $433,000 or $.04/diluted share, up from $384,000 or $.03/diluted share in the same quarter last year. In the same announcement, the company guided 2005 earnings higher to $.12-$.14/share.

And how about longer-term results?

Reviewing the Morningstar.com "5-Yr Restated" financials, we can see that revenue has grown steadily from $12.1 million in 2000 to $19.9 million in 2004 and $23.8 million in the trailing twelve months (TTM).


Earnings, however, have been quite erratic (which is a common observation in these tiny companies) dropping from $.06/share in 2000 to a loss of $(.03)/share in 2002, and increasing subsequently to $.05 in 2003, $.11 in 2004 and $.13/share in the TTM.


Free cash flow has been either nil or positive with $0 in 2002 increasing to $2 million in 2004, and back to $0 in the TTM.


The balance sheet, as presented on Morningstar.com, looks solid with $1.1 million in cash and $10.4 million in other current assets balanced against $4.3 million in current liabilities, resulting in a "current ratio" of almost 3. The combined current assets are more than enough to pay off both the $4.3 million in current liabilities and the $5.3 million in long-term liabilities combined.


And what about valuation numbers?


Looking at Yahoo "Key Statistics" on CAS Medical, we can see that this is a very small company with a market capitalization of only $126.29 million. The trailing p/e is quite rich at 96.92. There is no forward p/e reported on Yahoo (probably due to the lack of analysts making estimates on future earnings.)


CAS Mecical is in the "Medical Instruments/Supplies" industrial group of stocks according to the Fidelity.com eResearch website. Within this group, CASM is moderately priced with a Price/Sales ratio of 5.7. Leading off this group is Alcon (ACL) with a Price/Sales ratio of 8.3, followed by Guidant (GDT) at 7.2, then CAS Medical (CASM) at 5.7, Stryker (SYK) at 4.1, Boston Scientific (BSX) at 3.2 and Baxter (BAX) at 2.4.

Going back to Yahoo for some more numbers, we find that CASM has only 10.02 million shares outstanding with 6.33 million of them that float. As of 1/10/06 there were only 33,500 shares out short representing 0.4 trading days of volume (the short ratio). This short interest is only 0.50% of the float so all-in-all the short shares are not much of a factor with this stock as far as I can tell.


Yahoo did not report any dividends nor any stock splits.


What about a chart? Looking at a "Point & Figure" chart from StockCharts.com on CASM:

We can see that this chart is extremely strong with a stock climbing sharply from $.38/share in September, 2004, to the current $12.51 level today. This has been a meteoric rise for this stock which if anything, might be a tad over-extended after climbing so far so fast!

So what do I think? Well, I like this stock. The latest quarter was strong, the Morningstar.com evaluation looks good, and I like the raised guidance. Valuation-wise, the p/e is certainly rich, but the company is just starting to have positive earnings and that is a bit hard to tell. The Price/Sales is also a bit rich but not bad relative to other stocks in its group. Finally the chart is very strong. However, whenever I find myself dealing with very small companies, I often find the volatility a bit threatening, so be prepared to buckle your seat belts and hang on :).

Thanks again for stopping by and visiting! Remember to always check with professionals prior to following any of my "advice". That would make me happy :). If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

"Looking Back One Year" A review of stock picks from the week of December 6, 2004







Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

As my regular readers know, I like to pick stocks for possible investment on this blog, using my own perspective and analysis that I document on each of my posts. However, to determine if what I am writing about is actually a successful approach for picking stocks requires a retrospective analysis. Each weekend, I try to look at all of the stock selections from a week about a year earlier. Since I have missed a few of these discussions :(, I am now about 60 weeks out on my reviews. These reviews assume a buy and hold approach to investments. In practice, I do not follow this strategy and do not recommend it; in fact I sell my losing stocks quickly and completely, and my gaining stocks slowly and partially. However, for the sake of simplicity, this approach is useful to at least see what has happened to the stocks discussed on this blog!

On December 8, 2004, I posted Cogent Systems (COGT) on Stock Picks Bob's Advice when it was trading at $35.03. COGT closed at $22.88 on February 24, 2006, for a loss of $(12.15) or (34.7)%.

On October 26, 2005, Cogent reported 3rd quarter 2005 results. Revenue grew 64% to $38.4 million, from $23.4 million in the same quarter a year ago. GAAP Net income was $20.1 million or $.21/diluted share down from $20.4 million or $.29/diluted share the prior year. The company explained that the higher figures a year ago were related to a net tax benefit of $11.6 million; however, for this blog, I stick with GAAP (generally accepted accounting principles) numbers.

On December 6, 2004, I discussed DaVita (DVA) on Stock Picks Bob's Advice (and also purchased some shares which were later sold in my Trading Account) at $36.42. Davita closed at $59.12 on February 24, 2006, giving this pick a gain of $22.70 or 62.3%.

On February 15, 2006, Davita (DVA) announced 4th quarter 2005 results. Revenue was up almost 100% to $1.13 billion from $583.9 million a year earlier in the same quarter. Earnings increased 13% to $64 million or $.61/share, up from $56.6 million or $.56/share last year. In addition, hitting my so-called "trifecta", the company raised guidance for 2006 calling for income of $630 million to $700 million, up from $600 to $670 million previously estimated.

So how did I do with these two stocks from a week a bit more than a year ago? I had one loser, Cogent, with a loss of (34.7)% and one gainer, DaVita, with a gain of 62.3%. Averaging these two stocks gives me an average gain of 13.8%.

Thanks again for stopping by! If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

Cal Dive (CDIS) Weekend Trading Portfolio Review











Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor so please consult with your professional investment advisors prior to making any investment decisions based on information on this website.

As I like to point out on many of my entries on this blog, I am trying to do several things simultaneously on this website. First of all, I like to discuss stocks that I am interested in; stocks that meet my criteria for investment. In addition, I write about my actual trades and my actual trading portfolio. I do this for transparency, to let you know what I actually own and what I am doing with my holdings. I share with you my accomplishments and my failures.

Finally, on weekends, when I get around to it :), I like to review my trading portfolio, going alphabetically through my positions so that I may actually review these currently 22 holdings approximately twice a year. Also, on weekends, I try to review my stock picks from the prior year on a trailing 52 week (now up to about 60) basis. This particular post is about one of my actual holdings, Cal Dive (CDIS) which is currently in my trading portfolio.

On November 3, 2004, I came across Cal Dive (CDIS) on the list of top % gainers. Having just sold some shares at a gain, I had a permission slip to buy a new position and went ahead and purchased 200 shares at $38.16 and immediately posted my trade on Stock Picks Bob's Advice. Later that day I did a more complete review of Cal Dive on Stock Picks Bob's Advice.

I currently own 142 shares of CDIS with a cost basis of $19.10. The stock had a 2:1 split on 12/9/05. CDIS closed at $36.75 on 2/24/06, giving me a gain of $17.65 or 92.4% on my remaining shares since my purchase a little over a year ago. I have now portions of CDIS four times, selling 50 shares on 2/25/05 at a price of $49.87, for a gain of $11.67 (pre-split) or 30.5%. My second sale was for 37 shares on 8/1/05 at a price of $60.84 for a gain of $22.64 or 59.3%. My third sale was for 28 shares on 11/22/05 at a price of $73.01, for a gain of $34.81 or 91.1%. Finally, I sold 28 shares after the stock split at a price of $41.82 for a gain of $22.72 or 119% on a post-split basis.

Since I have sold portions of my holdings four times, my next stock split would be at a 180% gain on the upside or 2.80 x $19.10 = $53.48 or on the downside, I would sell all remaining shares if the stock traces back to 50% of its highest sale point (120% x .5 = 60%), or 1.60 x $19.10 = $30.56.

Let's take a closer look at Cal Dive (CDIS). First of all, according to the Yahoo "Profile" on Cal Dive, the company

"...operates as an energy services company in the Gulf of Mexico, and in the North Sea and the Asia/Pacific regions. It offers a range of marine contracting services, such as marine construction, robotic services, manned diving, and decommissioning services. CDI, with its fleet of 22 vessels and 26 remotely operated vehicles and trencher systems, performs various services that support drilling, well completion, intervention, construction, and decommissioning projects. It also acquires and operates mature and noncore offshore oil and gas properties, as well as related production facilities."

What about the latest quarterly report? Actually, the company is scheduled to report earnings this Wednesday, March 1, 2006. But let's take a look at the previous quarter for some idea about how the company is doing.

On November 1, 2005, Cal Dive reported 3rd quarter 2005 results. Revenue was up dramatically to $209 million, from $132 million in the same quarter the previous year. Earnings climbed 78% to $45.7 million from $22.8 million last year or $1.05/diluted share up from $.59/diluted share. This was a very strong quarter for the company. Recently, the stock pulled back in price after the company the acquisition of Remington Oil and Gas for $1.4 billion. (listed on "investor news" on the company website.

And how about longer-term results? Reviewing the "5-Yr Restated" financials on CDIS from Morningstar.com, we can first of all see the beautiful progression in revenue growth from $181 million in 2000 to $543.4 million in 2004 and $698.4 million in the trailing twelve months (TTM).

Earnings have grown nicely, if not as consistently, from 4.36/share in 2000, to $1.03 in 2004 and $1.50 in the TTM. The company has expanded its shares slightly from 63 million in 2000 to 76 million in 2004 and 78 million in the TTM.

Free cash flow has been erratic with $(95) million in 2002 improving to $177 million by 2004. With the apparent $343 million acquisition of Remington, this resulted in a drop to $(63) million in free cash flow in the TTM.

The balance sheet is adequate with $150.5 million in cash and $218.2 million in other current assets, enough to cover the $198.0 million in current liabilities more than 1.5x over. (Giving us a 'current ratio' of over 1.5). The company does have a significant long-term liabilities load of $798.4 million. This does not appear to be a problem for this rapidly growing company.

And how about some valuation numbers on this stock?

Reviewing Yahoo "Key Statistics" on Cal Dive, we can see first that this is still a 'mid-cap' stock with a market capitalization of $2.86 billion (using a $3 billion cut-off for large cap status). The trailing p/e is a reasonable 24.40 and the forward p/e (fye 31-Dec-06) is downright cheap at 12.42. Thus, the (5 yr expected) PEG is only 0.59. Generally stocks with PEG's of 1.5 or less are reasonably priced.

According to the Fidelity.com "eResearch" website, CDIS is in the "Oil & Gas Equipment/Services" industrial group.

On a relative Price/Sales ratio comparison, Cal Dive is relatively richly valued with a Price/Sales ratio of 4.3. This is topped only by Schlumberger (SLB) at 5.1, and followed by Baker Hughes (BHI) at 3.5, BJ Services (BJS) at 3.2, Pride International (PDE) at 2.9 and Halliburton (HAL) at 1.8.

Going back to Yahoo for a few more numbers, we can see that there are 77.85 million shares outstanding and 72.30 million of them that float. Of those shares that float, 5.41 million of them are out short representing 7.20% of the float or 4.4 trading days of volume (the short ratio). Using my 3 day arbitrary cut-off, this is a bit of a large short interest and may be a bullish influence in the face of good news, especially if the earnings coming out on Wednesday are reasonably upbeat.

There is no cash dividend, and as I noted above, the company last split its stock in the form of a 2:1 split on 12/9/05.

What about a chart? Looking at a "Point & Figure" chart on CDIS from StockCharts.com, we can see that the stock was trading sideways from May, 2001, when it was at $15, until October, 2004, when it broke through resistance at around $11.50, and has climbed steadily and strongly since. Recently the stock has pulled back from heights around $45 to the current $36.75 level. The stock rise appears intact, with the support level below the current stock price.

So what do I think? Well this stock has been a great performer for me with four partial sales already at the 30, 60, 90 and 120% gain levels. The stock has pulled back to a 90% appreciation point, but I do not think the stock rise is over yet. However, much of the price movement on this stock will be in association with the oil price, making it subject to all sorts of geopolitical events.

Underlying numbers on this stock are solid with steadily appreciating revenue and earnings, free cash flow, which except for the recent acquisition, has been positive and growing. The p/e is reasonable and the PEG is under 1.0. Price/Sales-wise the stock is richly valued, but not the highest or even second-highest within its group. The chart looks nice. Overall, if the company can come in with a reasonable earnings report this Wednesday, I wouldn't be surprised to see this stock moving higher once again. On the other hand, a disappointment, could easily drop this stock to my next sale point on the downside, about $36 and if so, I shall be unloading all of my shares. We will know more later this week!

Thanks so much for stopping by and visiting! If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob