Stock Picks Bob's Advice
Saturday, 23 August 2003
"How are we doing?" A look back on Week of July 7th, 2003
I haven't done this update for awhile so as we slip back....this gives us a little longer view...almost two months out now. The week of July 7th was not a busy week on the weblog for me. We actually only made two picks! Findwhat.com (FWHT)on 7/7/03, and Websense (WBSN) on 7/8/03.
We picked Findwhat.com on 7/7/03 at $22.16/share. FWHT closed yesterday 8/22/03, at $20.89 which is a loss of $1.27 or 5.7%. Websense was selected on 7/8/03 at $20.26. As of yesterday, WBSN closed at $23.63 a gain of $2.74 or a gain of 13%.
So, for the week, with just two picks we had one down 5.7% and the other up 13%. This gives us a net gain of 7.3% or an average gain of 3.65%. Nothing spectacular but at least moving in the right direction.
Thanks for stopping by! Please come back and visit soon. Be sure to stop by the main webpage: http://bobsadviceforstocks.tripod.com where there are links to my current trading portfolio as well as a summary of all of our picks on this site.
Have a great weekend!
Friday, 22 August 2003
August 22, 2003 Electronics Boutique Holdings Corp. (ELBO)
It is 1 pm Central time with the market set to close in two hours. The Dow continues to fade, now down 26.38 points to 9397.30 with the NASDAQ clinging to a 2.50 point gain at 1780.05. Today does not look too promising a trading session if you are long the market like I always am.
One other stock caught my eye today as I was skimming through those greatest percentage gainers today: Electronics Boutique (ELBO). I have seen many of these small shops in malls and have sometimes spent time looking for a good video game for my Mac or my PC. Yep, I am prone to spend an occasional evening staring at the computer screen...playing Command and Conquer or some other silly game!
Anyhow, ELBO is beating the tide handily, trading as I write at $32.30 up $3.49 or 12.11%. I do not own any shares of this company.
ELBO reported earnings yesterday....and I believe this is the source of the pop in the stock price. For the second quarter ending August 2, 2003, revenues rose 15% to $302.1 million from $262.6 million last year. Net income was $1.7 million, a 181% increase from net income of $0.6 million last year or on a per share basis, $.07 vs $.02 in 2002.
Morningstar.com shows a pattern of steady growth in revenue starting with $0.5 billion in 1998, $0.6 billion in 1999, $0.7 billion in 2000, $0.8 billion in 2001, $1.06 billion in 2002, and $1.3 billion in 2003.
Free cash flow, while erratic, has recently turned to the positive, with $(44) million in 2001, $8 million in 2002, $(9) million in 2003, and $35 million positive cash flow reported in the trailing twelve months.
Assets and liabilities look satisfactory per Morningstar which reports $118.3 million in cash and $226.5 million in other current assets as opposed to $193.8 million in current liabilities and only $12.1 million in long-term liabilities on the balance sheet.
Yahoo shows that the market cap is a moderate $716.2 million with 24.9 million shares outstanding and only 13.2 million of those that float. No dividend is paid. The p/e is a reasonable 18.71 and the price/sales ratio is inexpensive at 0.52. There are 2.42 million shares out short which represents a bit of an opportunity to those of us that invest long. The short ratio, representing the trading days to cover is 5.75 as of 7/8/03, which suggests a bit of buying pressure supplied by the shorts...which may be in effect today.
I do like this stock a lot, and would consider buying some shares in here if I had some free cash (lol)...anybody want to email me some? Just kidding. Listen, have a great weekend, stop by and visit again and frequently, and if you have a website of your own I would greatly appreciate if you could post a link here for those that might be interested!
Regards to all of my friends.
Trading transparency QSII
I actually wanted to pull some cash off my portfolio for some work around the house, so I sold 50 shares of QSII this morning for about $42. We still have 150 shares and I will try to hold off additional sales unless the stock appreciates/depreciates significantly. Bob
August 22, 2003 DJ Orthopedics, Inc. (DJO)
The market started off enthusiastically with a quick gain with the news that Intel was optimistic about the coming quarter. The Schering-Plough piece did not help and the market paused in its recent bullish move with a bit of a correction. Currently the Dow is trading at 9413.79 down 9.89 on the day but the NASDAQ at 1783.83 is up 6.28.
Looking through the biggest percentage gainers I came across DJ Orthopedics, Inc. (DJO). This company, according to CNN.Money, "...is an orthopedic sports medicine company that designs, manufactures and markets products & services that repair, regenerate and rehabilitate soft tissue and bone, help protect against injury and treat osteoarthritis of the knee."
Currently, DJO is trading at $10.89 up $.52 or 5.01% on the day. The latest earnings report, for the second quarter of 2003, was released on 8/5/03. According to NYTimes on the Web, net revenues for the quarter ending June 28, 2003, were $47.4 million, an increase of 4% over last year's net revenue of $45.7 million. Net income in the quarter was $2.7 million or $.15/share compared with a net loss of $4.9 million or $(.27)/share in 2002.
Morningstar.com shows a nice steady increase in revenue starting at $85.3 million in 1996, $94.9 million in 1997, $104 million in 1998, $116 million in 1999, $144 million in 2000, $169 million in 2001, and $183 million in 2002. Free cash flow has improved recently from a $(5) million in 20002, $(10) million in 2001, to a positive $11 million in 2002 and $14 million in the trailing twleve months.
Assets and liabilities are fairly well balanced with $13.2 million of cash and $64.0 million of other current assets vs. $24.7 million of current liabilities and $89.3 million in long-term liabilities.
DJO is a fairly small company with a market cap of $186.1 million with 17.9 million shares outstanding and only 9.3 million of them that float. No dividend is paid. Due to prior losses, no p/e is reportable and the price/sales is a reasonable 1.00 per Yahoo. There are only 119,000 shares out short...representing 1.23 days of average trading volume.
Overall, this is a nice small orthopedics firm. I own some EXAC in my trading portfolio but do not own any share of this company. Good luck investing!
Thanks for stopping by! Please come back and visit again soon.
Thursday, 21 August 2003
August 21, 2003 Lifeway Foods, Inc. (LWAY)
O.K. I hate doing this but I found this one this morning and jumped in with both feet first BEFORE I posted this note. So I AM an owner of 200 shares in my trading account and will update that account shortly.
Lifeway (LWAY)"...produces kefir, a drinkable product similar to yogurt sold under the name Lifeway's Kefir, a plain farmer's cheese sold under the name Lifeway's Farmer's Cheese, and a fruit sugar-flavored product similar to cream cheese sold under the name Sweet Kiss." (according to CNN.Money) (This is what I would call a 'wholesome' stock pick!)
Lifeway, as I write, is trading at $14.51 up $2.10 on the day or 16.91%. On August 14, 2003, as reported on NYTimes on the Web, Lifeway reported their second quarter 2003 earnings result. Revenues for the quarter ending June 30, 2003, were $3.78 million, up 25% from $3 million last year. Net income was $691,082 or $.16/share an increase of 96% compared to $351,656 or $.08/share last year.
Looking at Morningstar.com we find sequential growth in revenue of $6.0 million in 1997, $6.8 million in 1998, $7.9 million in 1999, $9.2 million in 2000, $10.7 million in 2001 and $12 million in 2002. Extrapolating the current quarter would get us something like $14 million in 2003.
Free cash flow, while small, is positive with $0 million in 2000, $1 million in 2001 and $3 million in 2002. Per Morningstar, $2 million in the trailing twelve months.
Looking at Assets/Liabilities we find Lifeway with $8.4 million in cash and $3.0 million in other current assets, easily covering the $1.1 million in current liabilities and $1.1 million in long term debt.
Looking at Yahoo, we find that LWAY is a TINY company with a market cap of $52.4 million. This is one of the smallest companies we have reviewed here with 4.22 million shares outstanding and only 1.10 million shares that float. No dividend is paid. Company is currently selling at a trailing p/e of 21.89 with a bit of a steep price/sales ratio of 3.95. As of 7/8/03, there are only 3,000 shares out short representing 0.3% of the float so forget about a short 'squeeze'.
I like this stock...except for its tiny size and the fact that Fidelity required 100% equity...that is, it is non-marginable. Good luck if you buy! Thanks for stopping by.
August 21, 2003 Trading Transparency
Haven't seen too much to post but did like LWAY today. Picked up 200 shares at around $13.80 or so....and in the last week, sold my RATE....stock price has been drifting down and we still had about a $260 profit so out went THAT interest-rate sensitive issue. QSII has been strong since our purchase so after a fast 26% gain, I dropped 100 of the 300 shares. That's about the size of things. Will try to post the full report on LWAY later today.
Tuesday, 19 August 2003
August 19, 2003 Dynacq International, Inc. (DYII)
Welcome Back! Thanks again for stopping by. Please leave comments here or email me at firstname.lastname@example.org
Anyhow, market is see-sawing (?sp?) back and forth but seems to want to move ahead. We had good numbers from Home Depot...2 cents ahead of expectations...and the housing starts hit a multi-year record (although housing construction permits were not quite as strong.)
Dynacq International (DYII) showed up this morning in the greatest percentage gainers. According to CNN.Money, one of my favorite starting points, Dynacq "...owns and operates an integrated healthcare delivery system that includes outpatient surgical center, hospital, physician management services and home infusion therapy."
DYII is having a nice day today trading currently at $24.50 up $1.25 or 5.38% on the day. On July 14, 2003, DYII reported their third quarter (ending May 31, 2003) earnings results: Net patient service revenues increased to $25.6 million from $19.5 million in 2002, a 31% gain from the prior year. Net income rose 52% to $6.27 million from $4.127 million the prior year or $.40 from $.27 a 48% gain for the diluted per share earnings 2003 from 2002. This was reported from BUSINESS WIRE on the NYTimes on the Web.
Morningstar.com is overall favorable with a steady revenue growth from $11 million in 1998, $16.2 million in 1999, $26.0 million in 2000, $43.8 million in 2001 and $64.9 million in 2002. With current revenue at $25 million plus, it looks like current 2003 year should be in range of $90 to $100 million in revenue. Not too shabby at all!
Free cash flow is a bit bouncy with $4 million reported in 2000, $2 million in 2001, $5 million in 2002, but ($1) million in the trailing twelve months. Apparently there has been a large increase in capital spending the past twelve months causing the drop back into negative territory.
The company is solvent with $4.9 million in cash and $29.5 million in other current assets. According to Morningstar, current liabilities stand at $7.6 million and long-term liabilities are at $4.7 million.
According to Yahoo.com, this is a fairly small company with a market cap of $343.8 million. There are 14.8 million shares outstanding with a float of 6.10 million. No dividend is paid. The p/e is a reasonable 18.96, and as of 7/8/03, there were quite a few shares out short...1.17 million ot be exact....representing 9.31 days of average trading volume (short ratio). This is bullish for the stock as these shares need to be eventually covered.
I do not own any shares of this stock....and actually prefer to personally avoid HMO, hospital type companies, which might be strange as I am in that medical field of business. But maybe I am too close to the trees to see the forest? Anyhow, the company DOES look nice and may very well represent an excellent investment.
Regards to all of my friends and please come back and visit often. If you have a website, I would love for you to provide a link for this site on yours....would help me get recognized by Gooogle!
Monday, 18 August 2003
August 18, 2003 Measurement Specialties, Inc. (MSS)
I haven't posted much the last few days...in fact I need to do my weekend update...and now it is almost TUESDAY (yikes)....so here is another one for you to ponder!
Again, I came across this stock in the greatest percentage gainers today. This stock, Measurement Specialties (MSS), is on the AMEX...and is a smaller issue than some of the stocks we have examined before. Smaller issues tend to be quite volatile both on the upside and downside....especially with a small float.
By the way, I do not own any shares of MSS, nor do any members of my family.
Measurement Specialties closed today at $12.31 up $.98 or 8.65% on the day. According to the NYTimes on the web, Measurement Specialties is "...a designer and manufacturer of sensors and sensor-based consumer products." According to Yahoo, these products "...include pressure sensors, custom microstructures, accelerometers, tilt/angle sensors and displacement sensors for electronic, automotive, medical, military and industrial applications."
On August 7, 2003, MSS reported results for its first fiscal period ending 6/30/03. Net sales for the 3 months increased 9.8% to $26 million compared to $23.7 million for the same period in 2002. For the same period, net income was $3.7 million or $.29/diluted share compared to a net loss of $2.2 million or ($.18)/diluted share in 2002.
Morningstar.com shows a fairly history of revenue growth from $29.3 million in 1998, $37.6 million in 1999, $60.0 millio in 2000, $102 million in 2001, $132 million in 2002.
Free cash flow has just turned positive with ($10) million in 2001, ($8) million in 2002, $2 million in 2003 reported.
The assets and liabilities are fairly well balanced with $2.7 million in cash reported with $26.7 million in other current assets balanced against $23.6 million in current liabilities and $3.6 million in long-term liabilities.
Yahoo.com shows a tiny market cap of $140.0 million wiht 12.4 million shares outstanding and 10.7 million of them that float.
No cash dividend is paid. Due to prior losses, no significant p/e is reported. There is a HUGE short interest of 1.33 million shares representing 12.5% of the float or 55.54 days of average trading volume (!). This was as of 7/8/03 as reported on Yahoo.
Technically, the stock graph shows a steady, ascending curve...and looks quite strong (imho) although certainly not maintainable.
This is an interesting investment selection. I would rather see a longer period of positive earnings to allow a low p/e....also the small market cap may or may not be attractive to you. It certainly deserves your consideration!
Regards again...and thanks for stopping by!
August 18, 2003 PolyMedica Corporation (PLMD)
Hello friends! Was away from my computer for a few days and am back on a great day in the market!
Looking over the greatest percentage gainers, I have found a new one for me: PolyMedica Corporation (PLMD). I do not own any shares of this issue nor does any member of my family.
PLMD had a nice day today closing at $46.05 up $5.01 on the day or 12.21%. Looking through the news, we find that Polymedica did have some accounting questions regarding how they account for advertising expenses...this was reported on 8/13/03....and would affect some of their earnings for 2002 and 2003. Regardcless, they reported a nice earnings report on 8/13/03: revenues for the first fiscal 2004 quarter ending 6/30/03 were $98.9 million an increase of $17.3 million or 21% from the prior year's result of $81.6 million. With the more conservative accounting of advertising expenses, as reported on NYTimes on the Web, net income for the quarter would be $8.9 million or $.70/diluted share compared to $7.3 million or $.58/diluted share in the first quarter of fiscal 2003.
By the way, according to CNN.Money, PolyMedica "...is a nationwide provider of direct-to-consumer specialty medical products and services, primarily focused on the diabetes supply and consumer healthcare markets."
Examining Morningstar.com, we find that revenue growth has been excellent. In 1998, $73.8 million in revenue reported, $104.8 million in 1999, $156.9 million in 2000, $220.0 million in 2001, $279.7 million in 2002, and $334.6 million in the 'trailing twelve months.'
Free cash flow has been positive with $6 million in 2001, $8 million in 2002 and $7 million in 2003.
The balance sheet shows $28.6 million in cash and $97.4 million in other current assets, more than enough to cover the $31.9 million in current liabilities and $22.4 million in long-term liabilities.
It is revealing to look at Yahoo.com 'profile' section on PLMD. We find that the market cap is a moderate $506.9 million with 12.4 million shares outstanding with 10.1 million of them that float. The company DOES pay a dividend (!) with a $1.00 dividend reported on an annual basis with a projected yield of 2.44%. The price/earnings is very reasonable at 12.21. Price/sales is not inflated either at 1.38.
It is interesting to see that as of 7/8/03, there were 3.78 million shares out short representing 37.4% of the float or 10.15 days of average volume. Perhaps some of the current upward price movement involves some of the nervous short-sellers covering their short position (?). If not, they may be nervous soon, releasing additional buying pressure for this company.
I like this stock due to earnings momentum, reasonable price (on a p/e basis), income support, and technical price movement. I have a little concern over accounting questions regarding capitalization of advertising costs...but this does not take away the underlying revenue growth and earnings of this company. I am certainly thinking about buying some shares in here....if I can find some available cash!
Regards again and thanks for stopping by. Please email me if you have any questions or comments at email@example.com
Thursday, 14 August 2003
August 14, 2003 Tyler Technologies, Inc. (TYL)
I guess if you are reading my entry tonight you probably do not live in New York City. What a night! We will have to see if New York gets the power back...and what this means for the market. Perhaps a fuel cell company is a good bet?
Anyhow, I first heard of Tyler in a Yahoo chatroom. Yes I sometimes drop by there to chat and share some ideas. And browsing the big percentage movers, Tyler Technologies shows up. they had a great day today: TYL closed at $5.75 up $.44 or 8.29% on the day.
Tyler "...provides technology, software, data warehousing, electronic data management outsourcing services, title plant and property records database information and other services for local governments and other enterprises." according to CNN.Money.
On July 31, 2003, TYL reported second quarter earnings results: total revenue increased 8% to $36.1 million from $33.6 million in the quarter ending June 30, 2002. Operating income for the quarter was $3.1 million, an increase of 35%, compared with operating income of $2.3 million in 2002. Net income for the quarter was $2.0 million compared with $1.3 million last year. Apparently there must be more shares outstanding because on a per share basis the increase was only from $.03 to $.04 per diluted share.
Morningstar shows a steady increase in revenue from $23.4 million in 1998, $71.4 million in 1999, $93.9 million in 2000, $118.9 million in 2001, $133.9 million in 2002. Extrapolating the current quarter gets us somewhere in the neighborhood of $140 million in revenue for 2003.
Free cash flow has improved nicely from ($10) million in 2000 to $10 million in 2001 and $17 million in 2002.
The Balance Sheet as reported on Morningstar.com shows $45.0 million in cash and $38.5 million in other current assets. This is significantly greater than the $43.9 million in current liabilities and $4.4 million in long-term liabilities.
Reviewing Yahoo.com, we find that Tyler is a small company with a market cap of $214.5 million and 40.4 million shares outstanding with 27.9 million of them that float. No dividend is paid. The p/e is a very reasonable 10.71, there are only 78,000 shares out short...representing a half-day of average trading volume.
I like this stock a lot overall....the price is reasonable, the growth is steady, and the finances are intact. Downside: price is under $10 making it more volatile (on percentage basis), and stock only trades an average of 148,000 shares/day. Otherwise, really everything looks nice and this is a stock that should be evaluated for purchase.
Needless to say, I do not own any shares nor do any members of my family. If you have any questions or comments, please contact me at firstname.lastname@example.org or leave a comment right here on the website! Thanks for stopping by and please come and visit again soon.
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