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It is hard for me to believe that it is the weekend once again. Sometimes when you are busy, the days really fly by. Anyhow, without a market to be checking, the weekend offers me a chance to review past selections to find out how they are turning out and to help me refine my own stock-picking technique.
This review assumes a "buy and hold" strategy. In practice I employ a portfolio management strategy that actively manages my holding, selling losing stocks quickly after an initial purchase and gaining stocks slowly at set appreciation targets. However, for the sake of simplicity, I have been assuming that equal dollar amounts of each stock pick was purchased for the week that I am reviewing. When looking at the 'average performance' I have been average all of the individual performances for an arithmetic mean. Occasionally I own or have owned stocks discussed. I generally don't indicate this on reviews, but in this case, I currently still own some shares of COH, otherwise, I do not own the stocks discussed in this entry.
On May 31, 2005, I posted American Vanguard (AVD) on Stock Picks Bob's Advice when it was trading at $18.00/share. On April 18, 2006, AVD had a 4:3 stock split so my effective pick price works out to $13.50. AVD closed at $14.00 on September 29, 2006, for a gain of $.50/share since the stock was selected or 3.7% since posting.
American Vanguard announced on September 28, 2006, that even though net sales should be rising in 2006, lower net income should result due to "increased opereating expenses and higher interest and tax rates." Just as 'raising guidance' is a big plus in my book, stocks that do the opposite, lowering guidance, is quite a damper on future price performance in my experience. Normally, I would have given this stock a 'thumbs-up' because on August 7, 2006, AVD reported 2nd quarter 2006 results. Sales for the quarter ended June 30, 2006, climbed 14% to $42.7 million, and net income jumped 21% to $3.3 million while earnings per share were up at $.12/share from $.11 in the second quarter of 2005. But with the lowered guidance, the stock does not deserve a 'thumbs-up'!
On June 1, 2005, I 'revisited' Coach (COH) and picked it again for the blog when it was trading at $30.67/share. COH closed at $34.40 on September 29, 2006, for a gain of $3.73 or 12.2% since posting.
On August 1, 2006, Coach reported 4th quarter 2006 results. The company reported that net sales grew 23% to $514 million. Net income increased 31% to $118 million or $.31/diluted share, up from $90 million or $.23/diluted share in the same period a year earlier. The company beat expectations of $.29/share for the quarter. The company also went ahead and raised guidance for fiscal 2007 with sales now expected at $2.5 billion, up about 19% from the 2006 year. Earnings are now forecast to rise to at least $1.55, up 22% over the year earlier and ahead of the current analysts expectations of $1.53/share. Thus, this is my 'trifecta-plus' in a quarterly report, which means that the company did everything right: reported increased revenue, increased earnings, beat expectations and raised guidance. My kind of earnings report!
Finally, on June 2, 2005, I 'revisited' Abercrombie & Fitch (ANF) on Stock Picks Bob's Advice when it was trading at $65.12/share. ANF closed at $69.48/share on September 29, 2006, for a gain of $4.36 or 6.7% since posting.
On August 15, 2006, Abercrombie & Fitch reported 2nd quarter results. For the quarter ended July 29, 2006, sales climbed 15% to $658.6 million from $571.6 million. Profits came in at $65.7 million or $.72/share, up from $57.4 million or $.63/share in the same quarter last year. This came in pretty much in line with expectations which were for earnings of $.71/share on sales of $659 million. The stock moved higher on the announcement as the company guided second half expectations higher with earnings of $3.15 to $3.20/share in the second half of fiscal 2006 with full year earnings of $4.49 to $4.54/share. Analysts had been expecting full year earnings of $4.39/share.
So how did I do during that week picking stocks? Well, I guess you could say reasonably well with all three stocks moving higher and an average gain of 7.53% since being "picked" on the blog.
Thanks so much for visiting! Please note the new "Pico Search" feature on the blog which will allow you to search the many (over 1,000 entries!) on this website where I discuss many stocks of current interest. If you have any comments or questions, please feel free to drop me a line at bobsadviceforstocks@lycos.com and be sure to visit my Stock Picks Podcast Site.
Bob