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Saturday, 15 March 2008
My Prosper.com Account: Update #2

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.

Last month, on February 10, 2008, I discussed my Prosper.com account.  (If you do choose to sign up via these links, please know that there is a $25 incentive when you make your first loan and also a $25 fee that I receive for making that referral!)

It is difficult to read the financial news without reading about the ongoing credit crunch.  I have great concerns about person-to-person lending arrangements in the midst of this credit problem and economic slow-down.   

And yet Prosper.com CEO Chris Larsen sees opportunity in this 'credit crunch'.  As he recently related in an interview with the San Francisco Business Times:

"Prosper CEO Chris Larsen said Monday that the San Francisco company is benefiting from the credit crunch that's sending more lenders and borrowers to the person-to-person lending marketplace.

More people with good credit are coming to Prosper as home equity loans and credit cards become harder to obtain, Larsen told 350 people attending the company's Prosper Days in San Francisco.

"Banks are retrenching so aggressively," he said. Prosper lenders have also pulled back on loans made to subprime borrowers.

Larsen also anticipates more people might be willing to lend on Prosper as rates fall on other investments following the Fed's dramatic rate cuts."

However, I still am cautious about the safety of lending unsecured amounts to individuals in this set-up and would encourage all of you to exercise reasonable caution and care.  Certainly emphasizing higher quality borrowers and spreading out your loans to multiple borrowers is a reasonable approach to reduce some of the risk.   Meanwhile, I am committed to continuing to share with you my own experience on Prosper.com. 

A recent article on these type lending arrangements recently was published in the Wall Street Journal.  Pay special attention to the comments sections, especially to  ira01 who details some of his perceptions of the risks involved in lending on Prosper.  Especially useful is his link to LendingStats.com which summarizes the Prosper.com lending experience.

In fact, you can view my statistics on Prosper.com here

Reviewing my own Prosper.com information, I currently have 53 active loans vallued at $2,816.62.  I continue with my automatic $50 deposit into Prosper.com twice/month.  I have $15.37 in payments pending, $122.59 in current bids that are 'winning', yet still not concluded for an average interest rate of 18.62%.  I have had total loans of $2,960.69, with $248.63 in payments received.  My average interest rate on my loans is at 15.69% with a daily interest accrual of $1.20.

Right now 50 of my 53 loans are current.  I have one loan which is less than 15 days late on a payment (it is marked as having a pyament being processed); however, I have two loans which are more problematic.   One is between 15 days and 30 days late with a principal balance of $(47.87), and one which is greater than 30 days overdue and has been entered into collection.  That one has a balance of $(46.76).

My first loan was written September 20, 2007, and my latest loan was approved March 10, 2008. 

If you are interested in learning more about Prosper.com, you can click here to enroll.  Like I have noted, I do receive a $25 referral fee if you do decide to make a loan.  I have tried to emphasize the tremendous risks involved, risks that have grown as the credit crunch develops and the pressure on homeowners and others who may seek unsecured loans may increase.

Thanks so much for stopping by and visiting my blog!  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 Covestor Page where my actual Trading Portfolio is monitored and evaluated as well as my SocialPicks Page where my stock picks are followed and monitored.  If you are interested, consider dropping by my Podcast Page where you can download mp3's of me discussing some of the many stocks and issues I address in the blog!

Hoping next week brings all of us good health and financial success.  

Yours in investing!

 

Bob 

 


Posted by bobsadviceforstocks at 1:36 PM CDT | Post Comment | Permalink
Updated: Saturday, 15 March 2008 1:37 PM CDT
Wednesday, 12 March 2008
Esco Technologies (ESE)

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 adivisers prior to making any investment decisions based on information on this website.  I was rather excited about my new Seeking Alpha affiliation....o.k. it is just another website, but I really am an amateur, and this is big stuff :).  (This is really new, so they haven't even posted an article yet....I shall have to wait and see how this works out!)

And it is late (9:30 pm Wisconsin time) and I have to be up at 5:00 to get out and do my walk at the University.  I am a confirmed couch potato, but have been working at increasing my activity of late....besides the markets aren't open that hour anyhow.  I generally get into rather heated political discussions with my fellow walkers....but that is another story as well.

What I am trying to get at is I want to make this a brief entry and instead I am writing word after word trying to explain to you why I want this to be short.  Now does that make sense?

There wasn't any follow-through from yesterday's big rally as the market closed today (3/12/08) at 12,1110.24, down (46.57) and the Nasdaq closed down (11.89) at 2,243.87.  Oil charged ahead over the $100 level closing at $109.92, and gold continued to push the $1,000/ounce level closing at $4.70.  It really wasn't the kind of trading day to make an investor smile.

But back to my review.  (If those Seeking Alpha folks had read this before they certified me I might never had gotten that medal!)

Esco Technologies (ESE) made the list of top % gainers today, closing at $41.06, up $3.99 or 10.76% on the day.  I do not own any shares or options of this stock.

In a nutshell, this company that produces devices for the electric utility business,  reported an order for 88,000 electronic devices from PG&E and has a


 

potential for up to 4.1 million 'gas units' over the life of this contract.  With the price of natural gas going through the roof, the 'street' liked this report and I guess figured Esco was in the right business at the right time :).

O.K. keeping it simple, the last quarter reported on February 7, 2008, was solid. The Morningstar.com "5-Yr Restated" financials look great, and the point and figure chart from StockCharts.com, appears to show that the company is breaking through recent resistance on the upside and is far from over-extended!


With all of this in mind,

ESCO TECHNOLOGIES (ESE) IS RATED A BUY 

O.K. that was briefer than usual.  But did it make my point? 

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

Yours in investing!

 

Bob 


Posted by bobsadviceforstocks at 9:56 PM CDT | Post Comment | Permalink
Participating in Seeking Alpha

It is with a great deal of pleasure to let all of you know that I shall be participating in Seeking Alpha.  You can visit my bio page here.  (You may notice that I have updated my picture as well.)

Seeking Alpha is the brainchild of David Jackson.  In his biography, it is noted:

"David Jackson worked for five years as a technology research analyst for Morgan Stanley in New York. He left in early 2003 to manage money (long/short) and explore new approaches to financial publishing, ultimately leading to the creation of Seeking Alpha. Prior to Morgan Stanley he worked in technology venture funding and macro-economics (HM Treasury in London and The Bank of Israel). He has a B.A from Oxford University and an MSc from The London School of Economics."

Kiplinger in 2007 listed Seeking Alpha as the best website for financial information. 

There is no monetary compensation for me involved in this association.  In fact Bill Rempel, a.k.a. NO DooDahs! wrote an interesting piece complaining about this failure to provide a share in the revenue with submissions.  As for me, at this point in my life, I am enjoying the greater exposure to readers who are interested in what I am writing about, and the opportunity of entering into larger disussions on the subjects I blog about.

It is estimated, unless I have it wrong, that Seeking Alpha had 535,658 unique visits in the month of February 2008.  I generally get about 200 visits a day here.  So you know I am smiling.

I am looking forward to this association.  In fact I am proud to share my Seeking Alpha 'medal of approval' on the blog!  O.K., I am just an amateur, and I get excited about these things :).

Thanks so much for dropping by and visiting!  I shall continue to strive to produce good content for all of you readers and now Seeking Alpha visitors.  If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Yours in investing,

 

Bob 


Posted by bobsadviceforstocks at 9:04 PM CDT | Post Comment | View Comments (1) | Permalink
Updated: Wednesday, 12 March 2008 9:08 PM CDT
Tuesday, 11 March 2008
Inter Parfums Inc. (IPAR) "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 so please remember to consult with your professional investment advisers prior to making any investment decisions based on information on this website.

What a difference a day makes!  

The market took off to the upside after the Federal Reserve announced a "$200 billion Term Securities Lending Facility" which will assist banks and financial firms to "liquify" their mortgage-backed securities.  These securities have been one of the problems facing the financial world.  As reported yesterday:

"In recent days some large private funds that had bought mortgage-backed securities with borrowed money said their lenders were demanding that the funds put up more capital to cover the declining value of the securities. Such "margin calls" can force funds to dump securities they hold, in turn driving markets lower.

Carlyle Capital, a $21-billion-asset mortgage securities fund that was hit with margin calls last week, said Monday that it was continuing to talk to its lenders about forbearance.

After regular trading ended Monday, MFA Mortgage Investments, a New York-based fund, said it had sold $1 billion in mortgage-backed securities since Friday to pare back its use of borrowed money."

After the Fed move, markets responded and moved higher with the Dow closing at 12,156.81, up 416.66 and the Nasdaq up 86.42 to 2,255.76, and the S&P 500 closing at 1,320.65 (3/11/08).

With this broad-based rally, it wasn't hard to find a stock 'to like' today that fits my own investment philosophy.  In fact, I noticed that an 'old name' Inter Parfums (IPAR) had made the list of top % gainers on the Nasdaq today, closing at $19.65, up $3.37 or 20.70% on the day.  I do not own any shares or options on this equity.  However, I do write 'old name' because I first posted Inter Parfums (IPAR) on Stock Picks Bob's Advice back on October 6, 2003, about 4 1/2 years ago!  At that time, IPAR was trading at $10.98.  Based on today's closing price of $19.65, this represents an appreciation of $8.67 or 79.0% since posting.

Let's take a closer look at IPAR and I shall explain why

INTER PARFUMS (IPAR) IS RATED A BUY

First of all what exactly does this company do?

According to the Yahoo "Profile" on Inter Parfums, the company

"...along with its subsidiaries, manufactures, markets, and distributes fragrances and fragrance-related products in Europe and the United States. It produces and distributes prestige fragrance products under various brands, which include Burberry, Lanvin, Paul Smith, S.T. Dupont, Christian Lacroix, Quiksilver/Roxy, Van Cleef & Arpels, and Nickel. The company markets fragrance products, cosmetics, and skin care products primarily under license agreements with brand owners. It also produces and distributes fragrance, personal care, and home fragrance products under Banana Republic and Gap brand names; alternative designer fragrances and personal care products; mass market fragrances under proprietary brand names, as well as a license for the Jordache brand; Aziza line of eye shadow kits, mascara, and pencils for the young teen market; and health and beauty aids under Intimate brand name, including shampoos, hand lotions, conditioners, and baby oils for specialty retailers, mass market retailers, and discount chains in the United States and Canada."

How did they do in the latest quarter?

As is often the case with a sharp move in a stock, it was the earnings announcement after the close of trading yesterday that pushed IPAR stock sharply higher today.   Inter Parfums announced 4th quarter 2007 results.  Net sales increased 32% to $119.4 million, up from $90.2 million.  net income increased 57% to $8.6 million from $5.5 million.  Diluted earnings per share came in at $.41/share, up 52% from $.27/share during the period ended December 31, 2007.

The company beat expectations with these results as analysts, according to Reuters Estimates, expected earnings of $.34/share on revenue of $107.6 million.  In that same news report, it was reported that the company also raised guidance for 2008 to $1.25/share on revenue of $442 million in 2008.  Just two months ago, in January, the company had guided to earnings of $1.16/share on net sales of $437 million.  The company had been expected to come in at $1.14/share on revenue of $438.4 million according to Reuters Estimates.

As I have described in other blog entries (for example here and here), a "trifecta plus" in an earnings report that for me involves a strong report with increasing revenues and earnings, with the particular company exceeding expectations and raising guidance. 

IPAR has done all of this!  And the market loved the announcement!

What about longer-term results?

Reviewing the Morningstar.com "5-Yr Restated" financials, we can observe the strong and steady growth in revenue from $130.4 million in 2002 to $321.1 million in 2006 and the $360.4 million in the trailing twelve months (TTM). During this time, earnings have steadily grown from $.47/share in 2002 to $1.00 in the TTM (except for a slight dip from $.77/share in 2004 to $.75/share in 2005).  The company pays a dividend and has increased it fairly regularly from $.06/share in 2002 to $.16/share in 2006 and $.19/share in the TTM.  Outstanding shares are quite stable with 20 million in 2002 and an increase to only 21 million in 2006 and the TTM.  In the same time period, revenues climbed almost 200% and earnings were up in excess of 100%.

Free cash flow, while not showing significant growth, is positive at $9 million in the trailing twelve months.  The balance sheet is solid with $54 million in cash and $240.0 million in other current assets.  Thus, this total of $294 million in current assets, when compared to the $122.4 million in current liabilities yields a current ratio of 2.4. 

What about some valuation numbers?

Examining the Yahoo "Key Statistics" on IPAR, we find that this is a small cap stock with a market capitalization of only $401.59 million.  the trailing p/e is reasonable imho at 19.63 with a forward p/e (fye 31-Dec-08) estimated at 15.00.  With the steady growth in earnings expected, the PEG ratio is very reasonable at 0.95.

Using the Fidelity.com eresearch website, we can see that the Price/Sales (TTM) ratio is reasonable at 0.92 compared to the industry average of 1.73.  In terms of profitability, the Return on Equity (TTM) isn't quite as impressive at 12.51% compared to the industry average of 42.83%.

Returning to Yahoo, we find that there are 20.44 million shares outstanding with 9.44 million that float.  Of those that float, 988,960 shares were out short as of 2/12/08, representing 10.3% of the float or 13 trading days of volume!  Using my own idionsyncratic '3 day rule' for significance, this represents a whole lof of shares out short as of last month, setting up for what may well have been a short squeeze today on the good news of strong earnings results.

As reviewed above, the company does pay a small dividend of $.20/year yielding 1.20%.  The company last split its stock on September 17, 2001, with a 3:2 stock split.

What does the chart look like?

Reviewing the 'point & figure' chart on Inter Parfums (IPAR) from StockCharts.com, we can see that the stock has moved very nicely from $2.75/share in 2001 to a high of $32 in March, 2004.  the stock has struggled to reach that level since then making back to only $28 in May, 2007, only to dip back to a low of $14 in January, 2008.  The stock is trading below resistance levels and it would be nice to see this stock break through $23/share to feel more comfortable regarding the technical appearance of the chart imho.


Summary:  What do I think about this stock?

Well, I cannot say that I understand this stock from a Peter Lynch perspective :), but seriously I really do like this stock.  The latest quarterly report was quite strong, beating estimates on both revenue and earnings with the company raising guidance above the street's expectations.  The company has a pretty solid record of growth the past five years, they have a stable number of shares outstanding, and they even pay a dividend that they have been steadily increasing!

Free cash flow is positive and the balance sheet appears solid.

Valuation-wise the p/e is in the teens with a PEG under 1.0.  The price/sales ratio is cheap but the Return on Equity figure is a bit anemic relative to similar companies.  In addition, there are lots of short-sellers out there who have already sold shares and with the current price rise, may well be hustling to cover their shorts.   Technically, the chart certainly doesn't look like it is getting ahead of itself, but I would like to see the stock move a bit higher prior to feeling like it has broken its previous drift lower.  I am not ready to buy shares, but if I were in the market, this is the kind of stock I would be adding to my portfolio!

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 have time, be sure and stop by and visit my Covestor Page where my current trading portfolio is reviewed an assessed, my SocialPicks page where my picks from the last year have been reviewed, and my Podcast page where you can download a radio show that I have put together discussing some of the many stocks mentioned on this blog.

Good luck trading and investing tomorrow!   Remember, "Don't fight the Fed!"

Yours in investing,

 

Bob 


Posted by bobsadviceforstocks at 5:31 PM CDT | Post Comment | Permalink
Sunday, 9 March 2008
Westcorp (WES) "Long-Term Review #16"

 

 

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.

One of the things I have tried to do on my blog is to look back on past stock picks and find out how they turned out.  With the blog heading towards five years of age, and with the posts approaching 1,700, this does become a bit awkward at times.  Thus, I have done the one year reviews and the "long-term reviews" which look at the earliest posts on this website.  

Last weekend I discussed Dearborn (DEAR) which was originally posted on May 27, 2003.   The next stock was also originally posted on May 27, 2003: Wescorp (WES).

This is what I wrote:

"May 27, 2003

  Westcorp (WES)

Continuing to scan the lists tonight before checking out for the day, I was hoping to find something sexier than another financial. However, using out criteria, that was all that I could find. Please feel free to suggest other issues anytime!

According to CNN.money, WestCorp is "a financial services holding company providing automobile lending through WFS Financial, and community and mortgage banking through Western Financial Bank."

Last month, on April 23rd, WestCorp reported their earnings for the first quarter of 2003. In summary, per the NYTimes on the Web, net income rose 40% to a record $23.5 million for the quarter, EPS increased 30% to $60 for the quarter, and total revenues grew 22% to $194 million for the quarter. An outstanding last quarter....one of the main criteria of our selection methodology.

For the last 5 years, looking at Morningstar, we see STEADY growth (another criterion), from $0.4 billion in 1998, to $0.5 billion in 1999, $0.8 billion in 2000, $1.0 billion in 2001, and $1.2 billion in 2002.

Unfortunately, the entries on cashflow and assets and liabilities are NOT included in complete form on Morningstar but the rest of the numbers look excellent.

WES closed the day ar $24.41 or up $1.70 (7.49%).

Have a great evening and please stop by again soon!

Bob"
 
Fortunately for this reviewer, this will be a short review :).  On September 12, 2005, Wachovia announced the acquisition of Westcorp (WES) for 1.2749 shares of Wachovia.  With Wachovia (WB) closing at $27.22, assuming that WES shareholders were still holding onto their WB stock, this would represent 1.2749 x $27.22 = $34.70.  With WES trading at $24.41 for the post, this would be a gain (despite the recent sharply lower price of WB and all of the financials!) of $10.29 or 42.2% since posting!
 
Thanks so much for stopping by and visiting!  If you have any comments or questions, please leave them on the website or email me at bobsadviceforstocks@lycos.com.  
 
If you get a chance, be sure and visit my Covestor Page where my actual Trading Portfolio is monitored, my SocialPicks page where my stock picks from the past year or so have been monitored and evaluated, and my Podcast Page where you can download some mp3's of me discussing some of the many stocks reviewed on this blog!
 
Have a great week!
 
Yours in investing,
 
 
Bob 


Posted by bobsadviceforstocks at 9:06 PM CST | Post Comment | Permalink
"Looking Back One Year" A review of stock picks from the week of August 21, 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 haven't been very busy posting this past week.  There really hasn't been much to write about except the continuing challenge to the markets by the ongoing correction.  My own Trading Portfolio is down to just 6 positions, from my maximum of 20 and just above my minimum of 5.  These positions are: Copart (CPRT), Covance (CVD), IHS (IHS), Morningstar (MORN), ResMed (RMD) and Meridian (VIVO). 

Especially with just 6 positions, it is easy to have one stock exert an inordinate amount of effect on the portfolio.  This is exactly what happened Friday when Copart disappointed investors with their quarterly report.  The stock plunged $(3.93) or (10)% to $35.50, erasing much of the 'paper profits' on this holding.  However, with the stock trading above my cost of $33.72, and with the report not really being bad enough from my perspective to unload the shares, I hang on and take my 'licks' from this correction

As part of my weekend activity on this blog, I have been trying to look back at stocks I posted a year ago.  Having missed several weeks along the way, it is really a retrospective analysis of stocks selected for this blog more like 1 1/2 years earlier!  In any case, I work week by week through past stock selections to find out what worked, what didn't, and can we possibly learn from these selections.

This review assumes a buy and hold approach to investing.  In reality, I use a disciplined portfolio management strategy designed to limit losses by quick sales of declining stocks and retaining gains by partial sales at appreciation targets.  The difference between these two strategies would certainly affect eventual investment performance.  But for the ease of analysis, I shall continue to do my reviews assuming a passive buy and hold strategy for these stock picks.

Last weekend I reviewed the pick(s) from the week of August 14, 2006.  Let's move a week ahead and take a look at the activity on this blog for the week of August 21, 2006.  Fortunately for this reviewer, I only 'picked' one stock on the blog during the week of August 21, 2006.  Unfortunately for this reviewer it was a bust!

On August 26, 2006, I posted ICT Group (ICTG) on Stock Picks Bob's Advice when the stock was trading at $28.94.  ICTG closed at $8.59 on March 7, 2008, for a loss of $(20.35) or (70.3)% since posting.  (We can see from this price performance, that maintaining a loss limit of (8)% or whatever you choose, would be better than picking a stock and blindly hanging on!)

Let's take a closer look at this stock and I will explain why

ICT GROUP (ICTG) IS RATED A HOLD

First of all what does this company do?

According to the Yahoo "Profile" on ICT Group (ICTG), the company

"...and its subsidiaries provide outsourced customer management and business process outsourcing solutions. It offers customer care/retention, technical support and customer acquisition, and cross-selling/upselling services, as well as market research, database marketing, data capture/collection, email management, collections, and other back-office business processing services."

How did they do in the latest quarter?

On February 27, 2008, ICTG reported 4th quarter 2007 results.  Revenue for the quarter ended December 31, 2007, came in at $112.5 million, down from $117.2 million the year earlier.  The company reported a net loss of $(3.0) million or $(.19)/diluted share.  Excluding one-time expenses, the company came in with net income of $922,000 or $.06/diluted share.  In any case, compared to last year, this was way down from the $5.1 million in net income or $.32/diluted share reported.  Even with the excluded items, the company failed to meet expectations on revenue for the quarter of $114.6 million but did beat on earnings which had been expected to come in at $.03/share

The company was not very optimistic about 1st quarter 2008 results:

"For the first quarter of 2008, the Company expects revenue to be slightly below fourth quarter 2007 levels. As indicated during the Companys third quarter earnings call, first quarter expenses will be higher than normal due to seasonal factors, as well as for training and other start-up costs associated with a large contract won in the third quarter and the completion of the accelerated ramp-up of ICT GROUPs offshore facilities. Consequently, first quarter 2008 diluted earnings per share are expected to result in a loss of $0.03 to $0.07 per diluted share."

This reduced guidance was well below street expectations. 

What about longer-term results?

Reviewing the Morningstar.com "5-Yr Restated" financials on ICTG, we can see that the revenue picture is intact with steady increases from $299 million in 2002 and $448 million in 2006 and $458 million in the trailing twelve months (TTM).  Earnings, however, have dipped from the $1.11/share reported in 2006 to a loss of $(.24)/share in the TTM.

Free cash flow has also turned negative at $(4) million from 2006 when $9 million of free cash flow was generated. The balance sheet is still solid with $24 million in cash and $101 million of current assets, compared to current liabilities of $47.3 million and a nominal amount of long-term debt recorded at $6.5 million.  This $125 million in current assets yields a current ratio of over 2.0 when compared to the current liabilities of $47.3 million.

What about valuation numbers?

Reviewing Yahoo "Key Statistics" on ICTG, we can see that this is a small cap stock with a market capitalization of only $135.64 million.  There is no trailing p/e recorded, but the PEG is cheap at $.73 and the forward p/e is also cheap at 10.23 (fye 31-Dec-09).  

Reviewing the Fidelity.com eresearch website, we find that the Price/Sales (TTM) is cheap at 0.30 compared to the industry average of 2.05.  With the recent losses, the Return on Equity (ROE) (TTM) is reported at (7.23)% compared to the average of 27.89 in the industry per Fidelity.

Finishing up with Yahoo, we can see that there are only 15.79 million shares outstanding with 8.91 million that float.  Of these 618,890 shares were out short as of 2/12/08, representing 7.1 trading days of volume or 6.4% of the float.  This is significant and represents some bullish possibilities with the ratio well above my own '3 day rule' for short interest.

No dividends and no stock splits are reported on Yahoo.

What does the chart look like?

Reviewing the "point & figure" chart on ICT Group (ICTG) from StockCharts.com, we can see how the stock climbed from October, 2005, when it was trading at $11.50 to a peak of $36 in November, 2006.  The stock has declined steadily since that time to the current low of $8.59 just pennies above the recent low of $8.


Summary:  What do I think?

When I first started writing up this particular stock to review, I initially ranked this as a "sell".  But it just seems too late to be advocating a "sell" on a stock that is as decimated as this one is.  The forward p/e (if it can indeed once again turn profitable) is only 10 or so.  The PEG is well under 1.0, the Price/Sales ratio is cheap.  What this has turned into is a value play.  Not my kind of stock at all.  But it appears too late to be advocating a 'sell'.  Thus, the 'hold'.  

If the stock can indeed turn around in a couple of quarters, we may well see this stock moving higher once again beyone its very depressed levels.

THAT was the only stock I picked during that week back in August, 2006. And it was a humdinger.  This stock emphasizes, and I cannot overemphasize this point, the imperative of limiting losses and not riding a stock down all the way from a peak.  Thus, my performance for that week back in August, 2006, was a loss of (70.3)% on my pick--the only stock selected for the blog.  Probably the worst week I have reviewed for awhile.

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 Covestor Page where my trading portfolio is analyzed, my SocialPicks page where you can view my picks from the last year or so, and my Podcast Page where my podcasts are stored for you listening pleasure!

Hoping we all have a little more profitable week in the days ahead!

Yours in investing,

 

Bob 


Posted by bobsadviceforstocks at 5:17 PM CST | Post Comment | Permalink
Updated: Sunday, 9 March 2008 5:18 PM CST
Tuesday, 4 March 2008
Silicom (SILC) "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 I sold my 350 shares of Silicom (SILC) at $13.62.  These shares had been purchased 1/28/08 at a cost basis of $13.67. Thus, they just went 'into the red' for me, starting to generate an unrealized loss.  Since I had added these shares into my portfolio as a result of a trade (the last position from any trades), and I had already sold these shares once at a profit, my 'trading strategy' directed me to unload these shares once they passed break-even.  And I did.

Thus, I am now down to six positions.  I shall be sitting on my hands with the proceeds of this trade as it was a sale on 'bad news'.  And since I am still above my minimum of 5 positions (but getting close), it is not necessary to replace this holding.

With my own sale of Silicom, I am reducing my rating on the stock:

SILICOM (SILC) IS RATED A HOLD

You might ask why I don't reduce my rating to "sell" since I sold my own shares.  Basically, since I sold on a personal technical reason, and not because of any fundamental knowledge that I am aware of, it didn't make sense to change this rating to a sell.  However, I always suggest that we all place limits to our positions to reduce the possibility of incurring a large loss.  Anyhow, that's my take on this perspective.

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.

Yours in investing,

 

Bob 


Posted by bobsadviceforstocks at 9:17 AM CST | Post Comment | View Comments (2) | Permalink
Sunday, 2 March 2008
"Investment Strategy" and "After Apple-Picking" by Robert Frost--I post another Podcast!

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.

Tonight I became ambitious and posted a second podcast about my investment strategy and I also read a poem by Robert Frost, "After Apple-Picking." 

CLICK HERE TO LISTEN TO THIS PODCAST

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

Yours in investing,

 

Bob

 


Posted by bobsadviceforstocks at 7:38 PM CST | Post Comment | Permalink
FTI Consulting (FCN) "A New Podcast!"

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 have been working hard to catch up with a few things this weekend.  Including a podcast!

CLICK HERE FOR MY PODCAST ON FTI CONSULTING (FCN)!

Have a wonderful week and I hope you enjoy my podcast!

Yours in investing,

 

Bob 


Posted by bobsadviceforstocks at 5:57 PM CST | Post Comment | Permalink
Updated: Sunday, 2 March 2008 6:18 PM CST
Saturday, 1 March 2008
Dearborn Bancorp (DEAR) "Long-Term Review #15"

 

 

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. 

It is hard for me to believe that I am approaching my fifth anniversary here on this blog.  My first entry was posted back on May 12, 2003.  And since then I now have a total of 1,766 entries (not including this one).  Needless to say, it is hard to find entries when there are so many to go through!  And it is even harder to assess how all of these stocks discussed and revisited are doing.  With that in mind, I started a new entry called "Long-Term Review" and have been trying to dig back into the early days of the blog and share with you how those stocks all turned out.

They haven't all been profitable.

My last long-term review was done on October 21, 2007, when I reviewed NVR as my 'long-term review #14' from May 23, 2003.  My next stock picked on the blog was Dearborn Bancorp (DEAR) which I wrote up on May 27, 2003.

I wrote:

"May 27, 2003
Dearborn Bancorp (DEAR)
 

It is after the close. I like to post mid-day if possible but yikes I have to make a living too! Got back to my office and saw the market was up some 179 points today at the close. And our stocks did great. Looking at last week's pick of SYNO, boy was that ever timely. I know I broke my rules buying it but sometime you just have to!

Looking at our lists of greatest % gainers on the NYSE/NASDAQ/AMEX, I have come across a bank. Dearborn Bancorp in particular. I do not, nor does anyone in my family own any shares...nore do I plan to buy at this time.

Dearborn had a GREAT day closing at $22.50 on the day, up $3.00 or 15.38%. That's a lot better than my CD at Wells Fargo which auto-renewed this past month at 0.8%....after-hours the stock is up further to $23.00 or up $.50 or another 2.22%. So what is the news?

Today, Dearborn announced a 5% stock dividend. Doesn't really mean any cash in your pocket....in reality stock dividends are dilutional....but psychologically, in the strong market, I guess someone thought it was a pretty good idea.

In addition, on April 16th, Dearborn Bancorp, 'the holding company for Community Bank of Dearborn', reported earnings of $580,000 for the quarter ending 3/31/03. This 'represented a 21.6 percent increase over the Corporations cearnings of $477,000 in the same quarter of 2002.' per the NYTimes on the Web. Fully diluted, eps was $.20 vs $.18 a little over a 10% increase.

Total assets increased 35.2% during the same period and total deposits were up 36.2%, and total loans grew by 38.1% in the same period. This bank is making money! Technically the stock has been quite strong the past few months.

Looking at Morningstar for a 5 year review, we see that revenues have grown from $5.7 million in 1997, to 8.8 million in 1998, 10.2 million in 1999, 13.3 million in 2000, 16.0 million in 2001 and 18.7 million in trailing twelve months.

EPS have grown the last four quarters (prior to current reported quarter) by 44.64%, 61.54%, 199.58% and 58.66%. We do not have a cash flow assessment on this on Morningstar.

There may be other people who are better at assessing bank stocks which have their own group of analysts. However, on our little system, Dearborn showed up today on the list and it deserves a mention! Bob"

Dearborn (DEAR) has had a series of 5% stock dividends.  Thus adjusting for multiple splits we get an adjusted pick price of $22.50 x 100/105 (2003) x 100/105 (2003) x 100/105 (2004) x 100/105 (2004) x 100/105 (2005) x 100/105 (2006) x 100/105 (2006) = $15.95.

Anyhow, DEAR closed at $6.99 for a loss of $(8.96) or (56.2)% since posting.

How did they do in the latest quarter?

On January 15, 2008, Dearborn Bancorp (DEAR) reported 4th quarter 2007 results.  For the quarter ended December 31, 2007, net income was $398,000 or $.05/diluted share, compared to net income in 2006 during the same period of $2,252,000 or $.29/diluted share.

What about longer-term?

Checking the Morningstar.com "5-Yr Restated" on DEAR, we find that revenue has continued to increase from $12 million in 2002 to $29 million in 2006 and $34 million in the trailing twelve months (TTM).

Earnings, however, peaked at $1.20/share in 2005 from $.66/share in 2002.  Earnings dipped to $1.17/share in 2006 and down to $.59/share in the TTM.

Outstanding shares have increased from 4 million in 2002 to 7 million in the TTM.  This is o.k. in light of the revenue increase, but earnings during this period, with the latest dip included, means that they are actually lower dipping from $.66/share in 2002 to $.59/share in the TTM.

Free cash flow is negative at $(34) million in 2004, $(2) million in 2005, $(53) million in 2006 and $(47) million in the TTM.

I know that we cannot really judge banking stocks in the same fashion as we do companies that make some sort of 'widget', but still, the numbers are discouraging.

What about the chart?

Reviewing the 'point & figure' chart on Dearborn (DEAR) is a bit discouraging.  The stock made a terrific move higher from $3.50 in November, 2002, to a peak of $25 in June, 2004.  The stock was unable to break this level and in fact broke down entirely in July, 2007, when the stock dipped below $13.  More recently, the stock appears to have found some new level of support in the $6.00 range and may well be poised to move higher.  However, I would need to see the stock trading nort of $12.50 to find some encouragement of that idea. 

 

Summary: 

I wrote this stock up back in 2003 well before the financials melt-down.  With the negative trend in earnings, the negative free cash flow, and the dismal price chart,

DEARBORN BANCORP (DEAR) IS RATED A SELL

I am probably late at this rating, but I have to call it as I see it.  Anyhow,

Thanks so much again for visiting my blog!  If you have any comments or questions, please feel free to leave them on the website or email me at bobsadviceforstocks@lycos.com.  If you get a chance, be sure and visit my Covestor Page where my Trading Portfolio is reviewed and analyzed, my SocialPicks Page where all of my stock picks from the past couple of years are reviewed, and my Podcast Page where, if you are still up for it, you can download a radio show or two of mine discussing some of the many stocks I write about here on the website.

Wishing you all a wonderful Sunday and a good week to come!

Yours in investing,

 

Bob 


Posted by bobsadviceforstocks at 10:29 PM CST | Post Comment | Permalink

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