"Weekend Review" A review of stock picks from the week of September 20, 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 decisisions based on information on this website.

As regular readers of this blog know, the weekend is a time for me to review past ideas and past picks. To see how they would have done, if I had purchased these stocks. This analysis assumes a buy and hold approach when in fact, what I practice here is disciplined selling. That is, I sell my losing stocks quickly if they drop 8% after an initial purchase, and sell my gaining stocks slowly (selling 1/6 of existing holdings---revised down from 1/4) at pre-determined intervals. This strategy would certainly affect, and likely improve, performance. But for the sake of this review, let's see how the stocks from that week a little over a year ago turned out.

On September 23, 2004, I posted Carter's on Stock Picks Bob's Advice when it was trading at $26.30. Carter's has had a nice price move, closing at $59.98 on November 25, 2005, a gain of $33.68 or 128% since posting.

On October 25, 2005, Carter's (CRI) announced 3rd quarter 2005 results. For the quarter ended October 1, 2005, and including the acquisition of Oshkosh B'Gosh on July 14, 2005, net sales jumped 48.1% to $372.2 million. Excluding the Oshkosh acquisition, retail stores climbed 1.7% while comparable store sales actually dropped .9%. Thus the acquisition clouds the underlying anemic results from the Carter's retail assets.

Net income dropped 42.5% to $10.6 million or $.35/diluted share. However excluding acquisition charges, net income actually increased 68.6% to $31.1 million or $1.02/diluted share. On this blog however, I don't like excluding anything if possible and just look at the bottom line, as best I can see the results.

Thus, with the drop in same-store sales, and the decrease in income, CRI gets a thumbs-down, despite the fact that the stock itself has been a spectacular performer here!

On September 24, 2004, I posted Digital Theater Systems (DTSI) on Stock Picks Bob's Advice when it was trading at $18.68. DTSI closed at $14.50 on November 25, 2005, for a loss of $(4.18) or (28.8%) since listing.

On November 7, 2005, DTSI reported 3rd quarter 2005 results. For the quarter ended September 30, 2005, revenue came in at $17.6 million, up from $16.0 million in the same period last year. Net income, however, was $1.2 million or $.07/diluted share, down sharply from last year's $3.2 million or $.18/diluted share.

So how did we do during that week a year ago? Actually quite well thanks to Carter's. The two stocks had performances of a gain of 128% for CRI, and a loss of (28.8)% for Digital Theater Systems. The average performance was a gain of 49.6%.

Thanks so much for stopping by! I hope the the upcoming week will find you in good health and be good for your financial health as well! If you have any comments or questions, please feel free to email me at bobsadviceforstocks@lycos.com, or simply leave your comments/questions right in the blog where I shall try to respond.

Bob

©2005 Robert Freedland

Listen HERE for my new podcast on this entry.

Posted by bobsadviceforstocks at 9:54 AM CST | Post Comment | Permalink
Updated: Sunday, 27 November 2005 6:56 PM CST