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Thursday, 31 May 2007
CommScope (CTV)

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 advisers prior to making any investment decisions based on information on this website.

I was looking through the list of top % gainers on the NYSE today, and came across CommScope (CTV), which as I write, near the close of trading today, is trading at $54.77, up $2.08 or 3.94% on the day.  I do not own any shares of CTV nor do I have any options.  However, I would like to share with you why I believe this stock deserves a place on this blog and why

COMMSCOPE (CTV) IS RATED A BUY

What exactly does this company do?

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

"...together with its subsidiaries, provides infrastructure solutions for communications networks worldwide. It engages in the design, manufacture, and marketing of electronic, coaxial, and fiber optic cable products for data networking, Internet access, wireless communication, telephony, and other broadband applications."

How did they do in the latest quarter?

On April 26, 2007, CommScope announced 1st quarter 2007 results.  For the quarter ended March 31, 2007, the company reported sales of $435.5 million, up 24% from last year's sales of $352.3 million in the same quarter in 2006.  Net income was $45.9 million in 2007, up sharply from $12.7 million in 2006 same quarter.  Earnings per share came in at $.63, up more than 200% from the $.19/diluted share reported in the first quarter of 2006.

The company raised guidance for fiscal 2007 from sales of $1.72 to $1.76 billion to a new estimate of $1.84 to $1.89 billion. 

This report beat expectations of sales of $420.1 million and earnings of $.52/share.  Thus the company not only came in with strong results, but they beat expectations and raised guidance.  There isn't much more a company can report that is more bullish for a stock than this!

What about longer-term results?

Examining the Morningstar.com "5-Yr Restated" financials on CommScope, we can see that revenue, which took a dip from $598 million in 2002 to $573 million in 2003, has subsequently grown strongly to $1.62 billion in 2006 and $1.71 billion in the trailing twelve months (TTM).

Earnings which dipped from a loss of $(1.10) in 2002 to $(1.19) in 2003, turned profitable at $1.15 in 2004, dipped to $.78/share in 2005, but then once again resumed a climb to $1.84/share in 2006 and $2.28/share in the TTM.

The company has maintained a stable number of shares outstanding with 61 million reported in 2002, and 61 million reported in the TTM.  Free cash flow has been solid with $95 million in 2004, dropping to $66 million in 2005 before increasing to $87 million in 2006 and $119 million in the TTM.

The balance sheet is excellent with $459.8 million in cash, more than enough to cover the $197.4 million in current liabilities more than twice over.  In fact, the total current assets, including the $438.7 million in 'other current assets' is $898.5 million, yielding a current ratio of 4.55.

What about valuation numbers?

Looking at Yahoo "Key Statistics" on CTV, we can see that the company is a mid cap stock with a market capitalization of $3.35 billion.  The trailing p/e is a moderate 24.10 with a forward p/e (fye 31-Dec-08) estimated at 19.20.  The PEG (5 yr expected) is estimated at a reasonable 1.31.

Reviewing the Fidelity.com eresearch website, we can see that the Price/Sales (TTM) is a reasonable 1.85, compared to the industry average of 4.30.   Profitability is quite good at 22.59 Return on Equity (TTM) compared to the industry average of 21.66.

Finishing up with Yahoo, there are 61.23 million shares outstanding with 60.53 million that float.  As of 4/10/07, there were 3.87 million shares out short, representing 6.4% of the float or a somewhat significant 3.7 trading days of volume (I use 3 days as my somewhat arbitrary cut-off for short interest significance).  No dividend and no stock splits are reported on Yahoo.

What does the chart look like?

Reviewing the "Point & Figure" chart on CTV from StockCharts.com, we can see that except for a slight price dip in January, 2005, the stock has moved steadily higher from the $6.50 range in August, 2002, to the current level of $55.30.  Simply put, this appears to be a very strong, if not slightly overextended, chart.

Summary:  What do I think?

For a variety of reasons I like this stock.  Let's go over a few things I just discussed.  First of all, the stock is moving strongly higher today suggesting good price momentum.  The latest quarter was solid.  The company beat expectations for both revenue and earnings and went ahead and raised guidance.  They have been doing well for the last several years with steady revenue and earnings growth without expansion of the outstanding shares.

Free cash flow is positive and growing and the balance sheet is solid.  Lots of cash.  

Valuation-wise the p/e isn't too high in the 20's and the forward p/e is better in the teens.  Looking at the PEG, the company is appropriately valued with a PEG under 1.5.  The Price/Sales ratio is good for its industry and the Return on Equity is better than average as well.  Finally, the chart looks very strong.  What else could an investor want?

Anyhow, if I were buying a stock, this is the stock I would be buying today.  Meanwhile, I shall be filing it away into my 'vocabulary' of stocks, waiting for the appropriate time to buy....if that should arise!

Thanks again for visiting!  If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.  If you get a chance, be sure and visit my Stock Picks Podcast Website where, if I get a chance, I shall be adding a new episode soon.

Bob 


Posted by bobsadviceforstocks at 3:16 PM CDT | Post Comment | Permalink
Updated: Thursday, 31 May 2007 5:53 PM CDT
A Reader Writes "...have you found using margin to be a good investment?"

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 advisers prior to making any investment decision based on information on this website!

I had a nice comment from one of my most loyal of readers, Eric, who wrote:

"Hi Bob,

Thanks for the posts!

I was wondering if you could share your thoughts on using margin. The 10% interest rate seems steep but the increased buying power is a big draw. I realize you are trying to buy down your margin, but overall have you found using margin to be a good investment? Would you suggest using it with an interest rate as high as 10%?

Thanks for your time and advice! 

Eric"

I think this deserves an honest response.  I spend a lot of time preaching against using margin and then I go and use it!  It is certainly one of those "Do as I say, not what I do!" moments.  But I certainly do not believe that margin, or buying on leverage, is a good idea for most investors.  It simply increases the volatility of one's account.

In an up-market, it certainly does help.  But it also magnifies losses on the way down, so that is the part that all of you 'newbies' are not quite as familiar with.  That is why I stopped at 20 positions as my margin balance really became unrealistic.  If anything, I wouldn't recomment getting below 80% equity levels on margin or borrowed money.  If you are to have margin at all.

Currently, my own Trading Account, even after the big rally and my latest sale, sits at $53,853.72.  I have $66,205.55 in margin debt.  My total holdings stand at $120,059.27.  Thus, I am sitting at a 44.85% margin level.  Way too much debt to make me comfortable.

It is well known that margin contributed to the calamity of the Great Crash in 1929.  At that time people were putting, as I recall off the top of my head, like 10% down.  Currently minimum margin requirements are as low as 30%.  I am really not that far above the minimum level to avoid what is called as a "margin call".  Different equities have different margin requirements.

So while I believe in an aggressive and disciplined trading and investment approach.  My own goal is to eliminate margin and to use my own trades and sales to do so.  By the way, year-to-date, I have a net of $12,309.61 in realized gains so far, including a net of $3,062.06 of short-term gains and $9,247.55 in long-term gains.  These are real profits based on net sales of stocks including losses and gains combined.  So the market has been kind to me.  

In addition, I have $32,335.12 in unrealized gains which represent my net of profits and losses that are still paper profits, that are what would happen if I sold all of my 20 stocks today.  So the market is kind to me.

I do not plan on moving beyond 20 positions until I have reduced my margin balance significantly.  I may move back to 25 if I get to 80% equity levels.  Or I may wait to pay off the whole thing.  I will keep you posted :).

Thanks so much for commenting and visiting.  If you have any other questions, or any of you other readers, (is that good English?), then go ahead and leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

 

 


Posted by bobsadviceforstocks at 5:42 AM CDT | Post Comment | View Comments (4) | Permalink
Updated: Thursday, 31 May 2007 8:27 AM CDT
Wednesday, 30 May 2007
Ventana Medical Systems (VMSI) "Trading Transparency"

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 advisers prior to making any investment decisions based on information on this website.

A few moments ago, with the market shrugging off the China sell-off news in the States, my Ventana Medical Systems (VMSI) hit a sale point on an appreciation target.   I sold 26 shares of VMSI at a price of $51.64.  This represented 1/7th of my position of 188 shares which were purchased on 4/16/04 with a cost basis of $23.47.  Thus, my shares had hit an appreciation of $28.17 or 120% from purchase.  I have sold shares of Ventana three times previously--at a level of 30, 60, and 90% appreciation targets--and had been waiting for the 120% appreciation level to trigger a partial sale--I am now selling 1/7th of my remaining position--and did so!

Since I am at my 'new' maximum of 20 positions (which I adjusted downward from 25 in light of my hefty margin level of about 50%), I shall be 'sitting on my hands' with the proceeds of this sale, applying it to my margin balance, and waiting until I once again dip below 20 positions before using a sale at a gain ("good news") to give me that "permission slip" to add a new position to my portfolio.

When shall I sell Ventana next?  On the upside, my next four sale points shall be at 60% intervals--that is, at 180, 240, 300 and 360% appreciation levels--if they are reached.  At those levels, I shall be selling 1/7th of my remaining shares.  A 180% gain would mean the stock price would have to reach 2.80 x $23.47 = $65.72 before selling once again some additional shares.   Since I now have 162 shares, 1/7th of that total would mean a sale of 23 shares at that higher level.

On the downside, I certainly reserve the right to sell all of my remaining shares on any fundamentally bad news announcement.  On a price basis, should the shares decline to 50% of the highest targeted appreciation level, that is since I just sold at the 120% appreciation level, if shares should dip back to 60% appreciation levels or 1.60 x $23.47 = $37.55, then likewise, I shall be selling all remaining shares of that 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.  If you get a chance, be sure and visit my Stock Picks Podcast Website where I discuss many of the same stocks I write about on the blog.

Bob 

 


Posted by bobsadviceforstocks at 2:18 PM CDT | Post Comment | View Comments (1) | Permalink
Monday, 28 May 2007
"Looking Back One Year" A review of stock picks from the week of January 2, 2006

 

 

 

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 advisers prior to making any investment decisions based on information on this website.

I hope that all of you in the States are having a nice Memorial Day.  I certainly would like to express my words of appreciation for all those young men and women who are serving their nation today and to remember all of those who have died in current and past conflicts.  We need to be proud of them and yet at the same time double our own efforts at improving understanding among all people and trying to make war and conflict a thing of history. 

As part of my blog I have been trying to use the weekend as a time to review past stock picks.  These review assume a buy and hold strategy.  I do this due to the ease of review.  I am rather 'low-tech' on this blog, and it is easy to look at past stock picks and simply see how they have changed in price.  However, in practice, I utilize a very disciplined portfolio investment strategy that requires me to sell stocks both on small losses as well as partial sales on appreciation targets.  The difference in these strategies would certainly affect performance outcome and should be taken into consideration when reviewing the results I shall be discussing.

Last week I reviewed the week of December 26, 2005; going a week ahead, let's take a look at the stock picks discussed on this blog during the week of January 2, 2006.  If you are interested in looking closer at these selections (or others) I would encourage you to use the links on Stock Picks Bob's Advice along the left side of the entries that will get you to all of the past entries on this website by date.

On January 3, 2006, I reviewed Thoratec (THOR) on Stock Picks Bob's Advice when the stock was trading at $22.52.  I do not own any shares of this stock.  THOR closed at $19.24 on May 25, 2007, for a loss of $(3.28) or (14.6)% since posting.

 The following is a "Point & Figure" chart on Thoratec (THOR) from StockChart.som:

 

On May 3, 2007, Thoratec (THOR) reported 1st quarter 2007 results.  Revenue for the quarter came in at $57.3 million, up 18% from last year's $48.8 million in the same period.  However, the company came in with a loss of $(930,000) or $(.02)/share.  "Excluding items", the company came in at a profit of $4.3 million or $.08/share, up from $3.2 million or $.06/share last year.   This was good enough to beat expectations of $.07/share on revenue of $54.4 million.

Even though the company improved profits on a non-GAAP basis, I really require financial performance to be evaluated on 'generally accepted accounting principles' and thus, since the company did grow revenue, 

THORATEC (THOR) IS RATED A HOLD

On January 3, 2006, I 'picked' Neoware Systems (NWRE) for Stock Picks Bob's Advice when the stock was trading at $25.63.   Neoware (NWRE) closed at $11.68/share on May 25, 2007, for a loss of $(13.95) or (54.4)% since posting.  I do not own any shares of Neoware.

The following is a "Point & Figure" chart on Neoware from StockCharts.com:

On May 1, 2007, Neoware (NWRE) announced 3rd quarter 2007 results.  For the quarter ended March 31, 2007, revenue came in at $22.1 million, down from $27.8 million in the prior year.  The company came in with a loss of $(.05)/diluted share, down from net income of $.12/share last year.  Due to the decline in revenue and the decline of earnings with a loss,

NEOWARE (NWRE) IS RATED A SELL

On January 4, 2006, I posted HealthExtras (HLEX) on Stock Picks Bob's Advice when the stock was trading at $30.51.  HLEX closed at $30.17 on May 25, 2007, for a loss of $(.34)/share or (1.1)% since posting.  I do not own any shares of HLEX.

The following is a "Point & Figure" chart on HealthExtras from StockCharts.com

On May 7, 2007, HealthExtras announced 1st quarter 2007 results.  For the quarter ended March 31, 2007, revenue totaled $406.4 million, up 70% from first quarter 2006 revenues of $238.7 million.  Net income came in at $9.7 million or $.23/share, up 69% from $5.8 million or $.14/share the prior year same period.

Apparently, analysts were expecting $.23/share in earnings which HLEX met, but revenue had been expected to come in at $415.4 million with HLEX reporting revenue results slightly under this amount. 

But with the strong revenue and earnings growth,

HEALTHEXTRAS (HLEX) IS RATED A BUY

On January 5, 2006, I posted True Religion Apparel (TRLG) on Stock Picks Bob's Advice when the stock was trading at $19.40/share.  TRLG closedat $15.63 on May 25, 2007, for a loss of $(3.77) or (19.4)% since posting.  I do not own any shares of this stock.

The following is a "Point & Figure" chart on TRLG from StockCharts.com


On May 8, 2007, True Religion (TRLG) announced 1st quarter 2007 results.  For the quarter ended March 31, 2007, net sales grew to $36.1 million, up from $35.6 million in the same quarter last year.  Net income, however, dropped to $4.2 million or $.18/share, from $6.5 million or $.28/diluted share last year.  In light of the sales increase but the decrease in earnings,

TRUE RELIGION (TRLG) IS RATED A HOLD

Finally, on January 6, 2006, I posted AngioDynamics (ANGO) on Stock Picks Bob's Advice when the stock was trading at $26.22.  ANGO closed at $16.15 on May 25, 2007, for a loss of $(10.07)/share or (38.4)%.  I do not currently own any shares of AngioDynamics.

The following is a "Point & Figure" chart on AngioDynamics from StockCharts.com:

On March 27, 2007, AngioDynamics reported 3rd quarter 2007 results.  Net sales increased 35.1% to $26.7 million compared with sales of $19.8 million in the third quarter of 2006.  However, the company reported an operating loss of $10.5 million which included R&D expense of $12.1 million "associated with the RITA Medical acquisition." This worked out to a loww of $(.55)/share compared with a profit of $.14/share the year-earlier.

In light of the strong revenue growth but the switch from profit to loss,

ANGIODYNAMICS (ANGO) IS RATED A HOLD

So how did I do during this week over the New Year's holiday in 2006?  In a word, AWFUL!  I had five "picks" and EVERY SINGLE ONE DECLINED!  How is THAT for TERRIBLE?  The average loss worked out to a loss of (25.6)%!

This review I hope points out a few salient points.  First of all, I am trying very hard to be scrupulously honest on this blog, and in addition am quite capable of picking stocks that decline.  I have been asked multiple times why I hold to my 8% loss limit.  Why not buy more shares if you like the stock I am asked.  It is because of stock picks like this that require me to be disciplined.

"You have to kiss a lot of frogs to find a Prince!" (from Kiss Me Frog)


So no, there is nothing magical about what I do.  Sometimes I pick GREAT stocks, companies like Bolt (BTJ) or Precision Castparts (PCP) or Coach (COH).  But there are many times that my process results in stocks that don't work out.  Companies that find their fortunes changing; an event that the individual investor cannot hope to anticipate.  However, we can respond to the market's actions.  We can limit our losses in our own accounts, and we can continue to strive to find the right "frog"!

Have a great weekend everyone...what's left :).  And if you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.  If you get a chance, be sure and visit my Stock Picks Podcast Website.

Bob 


Posted by bobsadviceforstocks at 12:10 PM CDT | Post Comment | Permalink
Updated: Monday, 28 May 2007 3:55 PM CDT
Saturday, 26 May 2007
Flotek Industries (FTK)

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 advisers prior to making any investment decisions based on information on this website.

I would like to apologize once again for not making as many stock "picks" recently as I have in the past.  My life and time demands keeps getting busier and busier and I suspect that I shall be making fewer posts than previously for the Summer and hopefully in the next few months shall be able to pick up the pace once again.  But I intend to continue to post interesting stocks from time to time and continue with the trading "transparency" that shall keep you posted on my actual trading portfolio and the activity therein.  I also intend to continue with the "weekend reviews" and the "trading portfolio reviews" so my anticipated 'backing-off' of blogging is likely not to materialize anyhow :).

This morning, I took a look at the stocks moving higher yesterday and came across a new name for me, Flotek (FTK), that I believe deserves a place on the blog.  Flotek made the list of top % gainers on the AMEX, closing at $47.08, up $3.23 or 7.37% on the day.

I have reviewed so many different stocks that I thought I might have looked at this one previously, so I searched through my blog using Google, :), something that I suggest to all of you as well as my "pico search" function, but didn't find any reference to Flotek among my many past stock picks.  I do not own any shares of this stock, nor do I have any options.  However, 

FLOTEK (FTK) IS RATED A BUY

Let's take a closer look at this company and I shall try to walk you through my thinking and why I like this stock.  I recently had a note suggesting my recent Mesa Lab (MLAB) purchase might be like my Bolt (BTJ) success.  I suspect this particular stock, also in the oil industry, and also on the AMEX might well act more like Bolt that MLAB, but then again I would be just speculating on the future.  You know I don't like to do THAT! :).  But as Ed Sullivan like to say, let's get on with the shooooo.

What exactly does this company do?

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

"...provides oilfield services and equipment to the energy and mining industries in the United States and internationally. It has three segments: Chemicals and Logistics, Drilling Products, and Artificial Lift."

How did they do in the latest quarter?

On May 9, 2007, Flotek announced 1st quarter 2007 results.  For the quarter ended March 31, 2007,  revenues grew 118% to $35.1 million, up from $16.1 million in the year-ago same period.  Net income came in at $3.7 million or $.39/diluted share, up 111% from the $1.8 million, and up 105% from the $.19/diluted share in the same period in 2006.

What about longer-term results?

If we examine the Morningstar.com "5-Yr Restated" financials on Flotek, we can see a very pretty picture of steady revenue growth from $11.3 million in 2002 to $52.9 million in 2005 and $100.6 million in 2006.  Extrapolating the current quarter (which we cannot routinely do not knowing the seasonality of results) would get us to at least a $140 million rate for 2007.  Earnings, which were losses in 2002 and 2003 at $(1.10 and $1.23 respectively), turned profitable in 2004 at $.31/share, increased to $.94/share in 2005 and $1.22/share in 2006. 

No dividends have been paid, and the company has slightly increased its outstanding shares from 5 million in 2002 to 9 million in 2006.  This 80% increase in shares is somewhat concerning.  However, the company has increased its revenue over 800% during the same period.  I can live with this dilution :).

Free cash flow, while small, has been positive recently with $2 million in 2004, $-0- in 2005, and $3 million in 2006.  

The balance sheet looks fine with $500,000 in cash and $37.6 million in other current assets.  This total of $38.1 million in current assets can easily cover the $20.7 million in current liabilities yielding a current ratio of 1.82. 

What about some valuation numbers on this stock?

Looking at Yahoo "Key Statistics" on FTK, we can see that this is a small cap stock with a market capitalization of only $427.53 million. The trailing p/e is a bit rich at 33.04, but the forward p/e is far better at 14.49 (fye 31-Dec-08).  We don't have a PEG ratio, but with the rapid growth in the latest quarter (at over 100%) I suspect the PEG has to be at 1.0 or under from my own 'guesstimating' (is that an allowable word here?). 

Using the Fidelity.com eresearch website, we can see that the stock is also richly valued in terms of the Price/Sales ratio where FTK comes in at a ratio of 3.49 (TTM), compared to the industry average of 2.02.  However, Fidelity also points out that in terms of profitability, as measured by the Return on Equity (ROE), the company has a ROE (TTM) of 25.92%, well ahead of the industry average of 14.43%.

Finishing up with Yahoo, we can see that there are only 9.08 million shares outstanding with 6.73 million that float.  Currently, there are 302,580 shares out short (as of 4/10/07), representing 3.9% of the float.  However, due to the relatively low level of average trading volume (74,375 shares), this represents a significant (imho) level of short interest with 9 trading days of short sales (the short ratio).  This short interest may well pressure the stock higher (as it seems to be currently doing) as the short-sellers, betting against the stock rise, may be "squeezed" into buying shares.

There are no dividends reported on Yahoo, and no stock splits.

What about the chart?

If we look at a "Point & Figure" chart from StockCharts.com on Flotek, we can see what appears to be a very strong upward move for this stock from the $4.00 level in late 2004 to the current level around $47.  The stock has been consolidating at the current level the last few weeks forming a flag formation.  As I have pointed out previously, I am not a market technician, but the chart simply looks like the price has been moving strongly higher.  I see nothing in the current news about the company that suggests anything should change.


Summary: What do I think about this stock?

Needless to say, I like this stock a lot.  They reported a phenomenal quarterly report, the stock moved higher in the face of lots of naysayers and short-sellers who are likely now fueling the higher price move.  The fundamentals are almost impeccable and the chart looks nice.  The only thing it doesn't do is pay a dividend. 

Anyhow, I wanted to get a great stock posted, and let you know I was still blogging :).  If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.  If you get a chance be sure and visit my Stock Picks Podcast Website.

Have a great Memorial Day Weekend everyone!

Bob 

 


Posted by bobsadviceforstocks at 7:55 AM CDT | Post Comment | Permalink
Thursday, 24 May 2007
A Reader Writes "This raises a question...."

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 advisers prior to making any investment decisions based on information on this website.

Earlier today I had a great letter from Doug S. who wrote:

"Bob: looked at this when you wrote it up in January and didn't buy
because of float and more importantly volume(market makers typically have had a 1/2 to 1 point spread). This raises a question. When you run across a situation like this, great fundamentals with these
problem what are your thoughts. EBIX and even LECO(true float of only about 2 mil it's so closely held) are similar situations."

Doug,

Thanks so much for writing!  You have written some very good points about selecting an appropriate stock for investment.  In general, I have avoided making too many investments in the smallest of capitalization stocks.  However, the utilization of trading rules and the fact that each investment is only a small part of a larger portfolio, allows me the liberty of occasionally purchasing stock in a company like Mesa which according to the Yahoo "profile" on Mesa, has a market capitalization of only $75 million, making this a "microcap" stock.   Also, according to Yahoo, the company has a float of only 2.52 million shares and an averae trading volume of only 2,320 shares each day.  One can easily imagine why there would be such a wide spread on the bid/ask equation and why an owner in this stock might experience increased volatility.

A small float can work in a positive fashion as well, as witnessed by the trading in the stock yesterday on the back of a strong earnings announcement.

Since I am prepared to part company with any of my investment on an 8% losss, this strategy gives me the confidence to buy shares in companies that might otherwise be too small fo be safe for purchase. 

EBIX is also another tiny company with solid numbers.  I wouldn't hesitate to buy this stock assuming the rest of the analysis was o.k.  LECO, another great company, has a float of over 40 million so it doesn't really fit into the picture in the same fashion.

Bottom line is that assuming everything else is intact, I am prepared to buy stocks of small market capitalization firms.  I am less anxious to buy low-priced stocks much under $10.  I have found the lower priced stocks to have far too much price volatility to allow me to hang on to them very long.

I am not completely sure that I have answered your question.  In summary, I am prepared to buy any particular stock that fits my criteria, and am prepared to sell any of the stocks I own if they hit a sale point that I have predetermined at the time of purchase.  I try not to have too many tiny market cap stocks and often spend time looking at the NYSE for top % gainers in order to prevent this from happening in my account.

Let me know if I have addressed your own concerns.  I can only tell you what I do.  There isn't any correct answer for a question like this.  Only opinions.

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

Bob 


Posted by bobsadviceforstocks at 1:51 PM CDT | Post Comment | Permalink
Wednesday, 23 May 2007
Selling My 2nd Lot in Baldor for a New Position in Mesa Laboratories (MLAB) "Trading Transparency"

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 advisers prior to making any investment decisions based on information on this website.

If any of you think that I am NOT an amateur investor, then after THIS story, I am sure I shall have you convinced!  The other thing about this story is that it is so EMBARASSING.  I mean, when you BLOG, you do it all publicly.  All of your OOPS and SHUCKS and 'didn't mean to do THAT...' if you know what I mean :).  I am entirely human.  And I can really err :).

Yesterday, I got all excited about the Cytyc acquisition and decided to sell my remaining shares of Cytyc which being acquired, were sort of unlikely to appreciate much from their elevated point anyhow.  So I went looking at the top % gainers list, as I am prone to do.  And boy was I excited.  I had written up Baldor (BEZ) a couple of times and really liked their numbers and it was on the top % gainers list!  Cleverly thinking about my 1/7th sale figures (being rather quick with the '7's tables' in multiplication in school), I decided to buy 140 shares of Baldor.   And I wrote it up on the blog and shared it with all of you with a big :).  Sort of like that kid that stuck his thumb in the pie and pulled out a plum and said what a good boy am I....or however that nursery rhyme goes :).

O.K. so this morning I check my Fidelity account and see not 140 shares but 280 shares of Baldor.  Boy did THEY mess up I figure and emailed them right away.  HOW could they mess up like THAT???  To follow up on this, I got a representative on the line and shared with him my apparent observation of a Fidelity screw-up.  What did they do? I wanted to know, Enter that purchase twice?  Fortunately the cooler-headed representative walked me through my own account and low and behold, I ALREADY HAD PURCHASED BALDOR SHARES TWO WEEKS AGO when sold my portion of UEIC.  YIKES. 

O.K., to make a short story long, I sold 140 shares of Baldor, and checking the lists of top % gainers, came across another favorite, Mesa Laboratories (MLAB) which I had previously written up on Stock Picks Bob's Advice on January 12, 2007, making a nice move higher today.  Mesa reported 4th quarter 2007 results this morning that were very strong.  The stock moved very strongly higher and I picked up 210 shares of Mesa at $24.00/share.  As I write this up, Mesa is trading at $24.00, up $5.50 or 29.73% on the day.  I hope the stock can hold this sharp gain and not shake me out on the profit-taking :).  Wish me luck.

MESA LABORATORIES (MLAB) IS RATED A BUY

While I am at it, let me update you on another sale.  My Meridian Bioscience (VIVO) hit a 180% appreciation level and a little earlier today I sold 45 shares of my 315 share position (1/7th) at $20.84. Meridian (VIVO) was purchased 4/21/05, and has a cost basis of $7.42/share.  Thus, this partial sale represented a gain of $13.03 or 175.6% after expenses (this was at a bit over 180% appreciation before commissions, etc. 

Normally with a partial sale at a gain, I would be 'eligible' to add a new position.  However, with LOTS of margin, I have capped my portfolio at 20 positions and this small sale will be used to help reduce the significant margin level.  When I get a chance, I shall need to update you on my current Trading Account holdings and all of the margin, etc., held in the account.

Thanks so much 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.  If you get a chance, please be sure and visit my Stock Picks Podcast Website, where I discuss many of the same stocks I write about here on this website.

Bob


Posted by bobsadviceforstocks at 12:31 PM CDT | Post Comment | Permalink
Tuesday, 22 May 2007
Cytyc (CYTC), Baldor (BEZ) "Trading Transparency"

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 advisers prior to making any investment decisions based on information on this website.

As I discussed yesterday, Hologic (HOLX), one of my holdings, announced it was purchasing Cytyc (CYTC) another of my holdings in my Trading Account.  With the sharp rise in Cytyc stock after the announcement, I was able to sell 1/7th of my holding after it hit a 180% appreciation target.  I purchased Gildan (GIL) yesterday to fill out my trading account portfolio at 20 positions.

This morning, after reviewing the list of top % gainers on the NYSE, I saw that Baldor (BEZ), a stock that I have reviewed recently was on the list, and I went ahead and sold my 162 remaining shares of Cytyc at $43.49 (these shares were purchased 1/29/04 with a cost basis of $14.86/share) and purchased 140 shares of Baldor (BEZ) at $47.1095.  Wish me luck!

I made this swap as it was my own assessment that Cytyc, unless another offer came in, would likely sit at the current price until the acquisition was completed.  I was not interested in additional shares of Hologic which would be received and with the market fairly richly valued, it made sense to lock-in the gain on Cytyc that I had experienced. At least that has been my thinking.  This sale on an acquisition is an event that I haven't really planned on in this portfolio.  However, with an impending acquisition, I shall be reserving the right to unload my shares and replace the entire position at my own timing.  We shall see how this works out.

It is useful to have what I call a large 'vocabulary' of investable stocks.  When I saw Baldor moving higher today it was pretty simple to recheck some of the basic data including the latest quarter and Morningstar page to confirm that things were still intact.  Having reviewed the stock previously, I was comfortable replacing my Cytyc with something completely different!

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.  If you get a chance, be sure and visit my Stock Picks Podcast Website where you can download podcasts and listen to me discussing many of the same stocks I write about here on the blog!

Regards to all of my friends!

Bob 


Posted by bobsadviceforstocks at 2:47 PM CDT | Post Comment | Permalink
Monday, 21 May 2007
Gildan Activewear (GIL) "Trading Transparency"

Hello Friends!  Thanks so much for stopping by and visiting my blog Stock Picks Bob's Advice today.  If you had read my previous note you would see that I had that "nickel" in my pocket once again with my partial sale of Cytyc (CYTC) on news it was being acquired by Hologic (HOLX), which happens to be another holding of mine. 

Looking through the list of top % gainers today, being at under my 20 position maximum I thus had 'permission' to add a new holding to my Trading Account, I saw that an old favorite of mine, Gildan Activewear (GIL) was acting well, trading at $72.12, up $2.01 or 2.87% on the day as I write.  I first wrote up Gildan on December 2, 2004, when the stock was trading at $32.65.  Unfortunately, I didn't buy any shares at that time. 

A few moments ago I purchased 105 shares of Gildan (GIL) at $72.16.  I will try to update Gildan on the blog when I get a chance.  They recently announced a stock split, and a great earnings report that exceeded expectations by a penny.  Anyhow, it is a stock that has a great track record, and who knew that an apparel company like Gildan could be such a strong growth stock?

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


Posted by bobsadviceforstocks at 9:48 AM CDT | Post Comment | Permalink
Cytyc (CYTC) "Trading Transparency"

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 advisers prior to making any investment decisions based on information on this website.

I don't usually have the strange combination of one of my holdings (Hologic (HOLX)) announcing an acquisition of another of my holdings (Cytyc (CYTC)).  As is usually the case, this meant a sharp rise in my CYTC stock and a not quite as steep decline in HOLX.  At this point, I shall go ahead and sell my 1/7th position in CYTC as it hit a sale point at a more than 180% gain from my purchase.  I shall wait and see if the company is indeed going to be acquired, and if there aren't any better offers out there.  If the acquisition becomes set, I shall be selling my CYTC stock and simply replacing it with another position.  This would be one time where a sale was on 'good news' and yet I plan on eventually unloading the entire position.

A few moments ago I sold 26 shares of my CYTC position (1/7th of my 188 shares I owned) at $43.16.  These shares were purchased 1/29/04 at a cost basis of $14.86, with a gain of $28.30 or 190.4% since purchase.  This represents my fifth partial sale with prior sales at 30, 60, 90, and 120% levels.

Since I am under 20 positions (19), I again have a nickel in my pocket and shall be looking for a new position on the top % gainers list.  I shall keep you posted.  Meanwhile, I shall need to monitor my HOLX which unfortunately, could end up being sold on the 8% loss level if things deteriorate further.  

Bob 


Posted by bobsadviceforstocks at 9:04 AM CDT | Post Comment | Permalink

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