"Looking Back One Year" A review of stock picks from the week of August 18, 2003





Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. Usually, I try to post a review each weekend of what I have written about one year earlier in order to see how the stock picks have performed. Last weekend I was asleep on the job and didn't get to it! O.K. I am only human and I apologize. Did anyone notice? As always, please remember that I am an amateur investor so please do your own investigations before using any information on this website and consult with your professional investment advisors to make sure that any investments discussed are appropriate, timely, and likely to be profitable for you! If you have any comments or questions about this blog, please feel free to email me at bobsadviceforstocks@lycos.com .

On August 18, 2003, I posted PolyMedica (PLMD) on Stock Picks at a price of $46.05. PLMD split 2:1 on 9/30/03 making our "pick price" actually $23.03. PLMD closed on 9/10/04 at $30.00 for a gain of $6.97 or 30.3%.

On July 27, 2004, PLMD announced 1st quarter 2005 results. Revenues for the first quarter ended June 30, 2004, came in at $111.1 million, a 12.3% increase compared to the $98.9 million the prior year. Net income was $13.8 million, a 24.1% increase over the $11.1 million the prior year, and diluted earnings/share were $.50 a 13.6% increase compared to the prior year $.44/share. The company also announced they expected net revenues of $114-$118 million and diluted earnings per share of $.50-$.54 for the fiscal 2005 2nd quarter. It looks like PLMD is doing just fine!

Measurement Specialties (MSS) was posted on Stock Picks on August 18, 2003, at a price of $12.31. MSS closed on 9/10/04 at $22.99 for a gain of $10.68 or 86.8%.

On August 4, 2004, MSS announced 1st quarter 2005 results. For the first quarter ended June 30, 2004, net sales increased 7.6% to $28.0 million compared to $26.0 million the prior year. However, income from continuing operations came in at $3.3 million or $.23/diluted share compared with $3.7 million, or $.29/diluted share the prior year. My preference is always to note increasing earnings along with revenue growth, so this is not quite as attractive to me as other news. However, the stock price has done well, and apparently the street is still quite bullish on future prospects.

On August 19, 2003, I picked Dynacq (DYII.PK) at a price of $24.50. This has been a very disappointing selection and the company has been dropped to the "pink sheets" and thus the change in symbol due to apparent accounting questions. DYII.PK closed at $6.35 on 9/10/04, for a loss of $(18.15) or (74.1)%. With all of the accounting problems, it is hard to even sort out the latest quarter results and thus, I will refrain from commenting on that portion of the stock. Clearly, this type of development supports the need for clearly placed loss-limits, which for my trading portfolio, is represented by an 8% loss.

On August 21, 2003, I posted Lifeway Foods (LWAY) at $14.51. LWAY split 2:1 on 3/9/04 so our effective pick price was $7.26. LWAY closed on 9/10/04 at $10.30 for a gain of $3.04 or 41.9%.

On August 16, 2004, LWAY reported 2nd quarter 2004 results. Revenue rose 6% to $4.002 million compared to $3.78 million last year. Net income was $432,109, or $.05/share, compared with $691,082 or $.08/share, a decrease of 38% from the prior year. The decrease was attributed to the temporary spike in milk prices during the quarter, but the street didn't like this result anyhow, and the stock price has pulled back subsequent to this news.

On August 22, 2003, I posted DJ Orthopedics (DJO) on the blog at $10.89. DJO closed on 9/10/04 at $20.97 for a gain of $10.08 or 92.6%.

On July 27, 2004, DJO announced 2nd quarter 2004 results. Net revenues for the quarter ended June 26, 2004, totaled $63.2 million, a 33.2% increase compared with $47.4 million reported the prior year. Net income for the quarter, excluding redemption of some Notes as reported, was $4.7 million, or $.21/share a 75.6% increase from $2.7 million or $.15/share reported the prior year. DJO continued to stand behind optimistic guidance of $260 million for the full 2004 year. This was a nice report!

Finally, on August 22, 2003, I posted Electronics Boutique (ELBO) on Stock Picks at $32.30/share. ELBO closed at $33.27 on 9/10/04 for a gain of $1.07 or 3.3%.

On August 19, 2004, ELBO announced 2nd quarter 2004 results. For the quarter ended July 31, 2004, revenue increased 19.8% to $362.0 million, from $302.1 million the prior year. During the quarter, same-store-sales actually DECLINED 2.2%. Net income increased 132.4% to $3.9 million or $.16/diluted share exceeding previously announced expectations, compared with $1.7 million or $.07/diluted share the prior year.

So what does all of that mean? Well, sales were up apparently by adding outlets since same store sales actually dipped. However, the earnings picture improved dramatically, so the report appears to be a wash. I would resist recommending any retail stock to anyone which had declining same store sales like this stock!

So how have we done this past year? Of these six stocks, five had gains, ranging from 3.3% for ELBO to 92.6% for DJ Orthopedics. Unfortunately, we had a weak performer in Dynacq (DYII.PK) which lost (74.1)% of its value. Even with Dynacq, the average GAIN was 30.1%, an outstanding performance for that particular week a little more than a year later!

Thanks again for stopping by! Please excuse the lack of organization in all of these posts, but by browsing through the dates on the left, you can review all of my past posts. Again, remember I am an amateur investor so get professional advice before making decisions based on what I write, and please feel free to email me at bobsadviceforstocks@lycos.com as I love to hear from readers with their comments and questions! Have a great week everyone!

Bob

September 11, 2004 Leadis (LDIS)
Hello Friends! It is hard to write anything at all about stocks without first thinking of the thousands that perished at the hands of terror three years ago. I salute all of those who lost their lives in NYC and at the Pentagon and in a field in Pennsylvania. I remember getting to work and having an associate show me the live shot of the World Trade Center first tower burning after being hit. My first thought was that it must have been just another one of those freak small plane accidents. Then the second tower was hit. Then the first came down followed not long after by the second. Those images don't just leave your mind. On a positive note, I open with the Daniel Liebeskind project drawing so that we may all look forward to the future as we memorialize the past.

I was scanning through the list of top NASDAQ % gainers yesterday and came across Leadis Technology Inc (LDIS). I do NOT have any shares or options in this company. And please remember, I am an amateur investor, so please consult with your professional investment advisors prior to making any investment decisions based on information on this website. LDIS had a very nice day today, closing at $12.68, up $2.73 or 27.44% on the day.

According to the Yahoo "Profile", LDIS "...designs, develops and markets mixed-signal semiconductors that enable and enhance the features and capabilities of small-panel displays. The Company's core products are color display drivers with integrated controllers, which are critical components of displays used in mobile consumer electronics devices."

Doing a little detective work, the only thing I could see that drove the stock higher yesterday was their participation in an SG Cowan & Co. Fall Technology Conference yesterday with an associated webcast. This is about an hour long presentation, so you can listen on the net to what the company had to say if you register there. The introductory point is that Leadis sells to hand-set phone manufacturers, the company is only four years old, and has customers including Nokia, Samsung, and LG, which are the 3/5 top manufactures in this market, representing 55% of the hand-set phone market.

On July 28, 2004, LDIS announced 2nd quarter 2004 results.Revenue came in at $41.3 million, an increase of 19% over the prior quarter revenue of $34.8 million, and an over 200% increase over the prior year same quarter revenue of $13.8 million. Net income per diluted share came in at $.24/share an over 25% increase from the $.19/share reported the prior quarter and an over 300% increase from the prior year $.05 result. In addition, LDIS raised guidance for the 3rd quarter 2004 results to revenue between $40-$43 million from the $21 million the prior year. GAAP diluted eps is expexted to be between $.13 to $.16/share.

This company is only four years old so we don't have 5 year results, however looking at the "5-Yr Restated" financials from Morningstar.com, we can see how revenue has grown from $1.2 million in 2001, $7.9 million in 2002, and $84 million in 2003. With the current and upcoming quarter at around $40 million, the $160 million revenue target appears reasonable for 2004.

Earnings turned positive in 2003 at $13 million, and from the recently announced earnings report, we can see that net income was $7 million in the second quarter alone, with a target of $28 million for the year if we extrapolated the current result (?).

Free cash flow was $(1) million in 2001, $(4) million in 2002, but turned positive at $13 million in 2003.

According to Morningstar.com, the balance sheet looks just fine with $23 million in cash and $37 million in other current assets, enough to cover both the current liabilities of $33.5 million and the $14.6 million in long-term liabilities combined.

How about valuation? For this I like to look at Yahoo "Key Statistics". Here we can see that this is a small cap stock with a market cap of only $348.38 million. The trailing p/e is very nice at 13.80 with a forward p/e (fye 31-Dec-05) of 15.85. The PEG is beautiful at 0.76, and the Price/Sales isn't too bad at 1.97.

Yahoo reports 27.48 million shares outstanding with only 6.00 million that float. There are 269,000 shares out short as of 8/9/04, representing 4.48% of the float or 2.745 average trading days, so in my view, this doesn't look too bad either. There are no cash dividends, and no stock splits reported on Yahoo.

How about "technicals"? Looking at Stockcharts.com for a Point & Figure chart on LDIS:

we can see a limited graph, with the stock coming public in June, 2004, dropping from $14.5 to $9.5 and then moving up from this new support level. This is a small company with limited technicals to follow.

So what do I think? Well this is a fascinating company with explosive growth. I do not know what the barriers to entry are but the company does have great recent earnings results, strong fundamentals, reasonable valuation, and might just be one of those that you can "hit out of the park." Unfortunately, I am not in the market to buy anything, but if I were, I might be looking at this. I am always worried about buying low-priced stocks though; if it pulls back just a point, you will hit your 8% stop on a $12 stock. But then again, we sure have seen some stocks really power ahead when they have news and fundamentals like this!

Thanks again for stopping by! If you have any questions, comments, or words of encouragement, please feel free to email me at bobsadviceforstocks@lycos.com

Bob

September 8, 2004 Sierra Wireless (SWIR)

Hello Friends! As always, I am delighted that you could take the time to visit my blog. I am quite the amateur. The place is a mess :) so make yourself at home, you can sit on the sofa, or the Lazy Boy...and browse through the collection of posts that I have here on my blog, Stock Picks Bob's Advice. Just make sure you are aware that I am an amateur investor so please consult with your professional investment advisors prior to making any investment decisions based on information on this website. Also, if you have any questions or comments, please feel free to email me at bobsadviceforstocks@lycos.com.

As a review, and for those of you who are not familiar with my methods (or is it madness?), the first place I like to "prospect" for stock market ideas is in the lists of greatest percentage gainers for the day. You might ask "Why that list?" and I don't have a better answer than "If I am going to pick a stock TODAY to tell you about, why not pick a stock that is moving UP strongly today?" I am sure there are many other methods of looking at stocks, but that is just something I have been doing!

Anyhow, today on the list of top % gainers on the NASDAQ, I came across Sierra Wireless, Inc. (SWIR), a stock that I do NOT own any shares nor do I own any options. SWIR closed today at $19.15, up $3.18 or 19.91% on the day!

What drove the stock higher today was an announcement was a collaboration with Intel (INTC) that would "...deliver integrated wireless connectivity solutions to mobile professionals worldwide." In more 'techno-speak', they were collaborating to develop and promote "...integration in wireless local area networking (WLAN) and wireless wide area networking (WWAN) to provide a better user experience." Not being one who knows a WAN from a LAN, I will defer to more sophisticated observers, but the market thought this was indeed good news and rewarded the stock price accordingly.

Well the second thing I like to check when looking at a new stock pick is the latest quarterly report. In this way, I try to find out whether the latest earnings news demonstrates that the company is doing well...what do I look for?...I like to look at revenue, earnings, and any comments regarding future guidance. Hopefully all of these will be positive.

On July 21, 2004, SWIR announced 2nd quarter 2004 results. For the quarter ended June 30, 2004, revenue came in at $51.6 million, a 24% increase over the first quarter of 2004 (sequential growth), and a 149% increase over the $20.7 million in revenue in the same period of 2003. This in itself is a terrific report! Net earnings for the quarter came in at $6.0 million or $.23/diluted share, compared to $3.3 million or $.13/diluted share the PRIOR quarter (sequential growth), and compared to $.05/diluted share in the second quarter of 2003. In addition, they provided strong guidance of $57 million for the upcoming quarter or $.24/diluted share, again predicting continued sequential growth in both earnings and revenue for the upcoming quarter. I like this report a lot.

How about longer-term? If we take a look at "5-Yr Restated" financials from Morningstar.com, we can see that revenue has grown sequentially from $24.6 million in 1999 to $101.7 million in the trailing twelve months (TTM). Earnings which were positive at $.23/share in 1999, dropped sequentially to a low of $(2.57)/share in 2002, only to increase to a profit of $.12/share in 2003. With current earnings and projected earnings of around $.25/share each quarter, the company is working on around $1.00/share for 2004.

According to Morningstar.com, free cash flow has also been steadily improving recently with $(32) million in 2001, improving to $(7) million in 2002, and turning positive at $12 million in 2003. The balance sheet is also quite nice with $85.1 million in CASH, more than enough to cover BOTH the $30.1 million in current liabilities and the very small $2.3 million in long-term debt. In addition, Morningstar reports SWIR with an additional $25.3 million in other current assets. Looks pretty good to me!

The next think I like to review are some valuation parameters. For this, I like to check the Yahoo "Key Statistics" on SWIR. Here we can see that the market cap is a small cap $481.78 million. The trailing p/e is rich at 51.48, but the forward p/e is dramatically lower (fye 31-Dec-05) at 18.24. Thus, the PEG isn't bad, but not really 'cheap' at 1.53. Yahoo reports 25.16 million shares outstanding with 15.10 million of them that float. There are 1.85 million shares out short, representing 12.24% of the float as of 8/9/04, but even this level is only 1.183 trading days of short shares...so imho, using 3 days as a 'cut-off' this doesn't look like "squeeze" material to me. No cash dividends are reported and no stock splits are mentioned on Yahoo.

What about technicals? I am NOT much of a technician at all (!!!) so always take this portion of my examination with a grain or two of salt....but here goes.....looking at a point and figure chart for SWIR, from Stockcharts.com, a GREAT place to look at graphs:

we can see that this stock was trading steadily higher from September, 2002, when it was as low as $1.75/share, until late August, 2004, when it broke down below a support line at about $19.50. (It had peaked around $45/share in April, 2004.) Currently, it is moving back ABOVE the support line, and this looks bullish to me. I would like to see the stock hold the current level and move higher to the $23 level to confirm its momentum. (Again, I am NOT a technician, but have provided you with a chart to review as well!)

So what do I think? Well, the world is certainly going wireless, and this stock is VERY interesting. Especially the recent collaboration with Intel, which with its "Centrino" chip and built-in wireless devices, is looking to grow into this segment. The latest earnings looks GREAT. The past five years has seen explosive growth. The free cash flow is turning nicely positive and the balance sheet is superb. Valuation might be a bit nicer, but then you can't always have EVERYTHING :). (It is ok to try though). And the graph looks ok to me. The stock has pulled back from its recent highs and looks to be moving higher once again.

Now if I just had some MONEY to invest lol. As you know, I just sold my shares of RAD and am waiting patiently (can you believe I am still SITTING on my hands) until I can sell a few shares of one of my current positions at a targeted gain level. So I can't buy anything anyway....but this kind of stock would be on my purchase list if I WERE in the market!

Thanks again for stopping by! If you have any questions, comments, or words of encouragement, I would love to hear from you at bobsadviceforstocks@lycos.com

Bob

September 7, 2004 Aviall (AVL)

Hello Friends! Thanks so much for stopping by! I hope that you find lots of things that get you thinking but please always remember I am an amateur investor, so please consult with your investment advisors prior to making any investment decisions based on information on this website to make sure they are timely and appropriate for you! If you have any questions, comments, or words of encouragement, please feel free to email me at bobsadviceforstocks@lycos.com .

I was looking through the list of top NYSE % gainers today and came across Aviall (AVL). I do not own any shares nor do I have any options in this stock. AVL closed today at $21.30, up $.88 or 4.31% on the day. According to the Yahoo "Profile", AVL "...is engaged in the distribution and supply of new aviation parts, supply-chain management and other related value-added services, primarily to the aerospace aftermarket and the provision of online inventory information services ot aerospace, defense and marine industries."

On July 14, 2004, AVL reported 2nd quarter 2004 results and raised earnings guidance for fiscal 2004. Net sales for the quarter ended June 30, 2004, came in at $314.0 million, a 25% increase over the $250.8 million for the same quarter last year. Operating income was $20.5 million, up $3.9 million or 24% from last year. AVL earned $.40/diluted share compared with a loss of $(1.35)/diluted share in the 2nd quarter of 2003. Excluding some non-recurring expenses in that quarter the pro forma diluted results in 2003 were $.24/share.

For a longer-term perspective, I like to check the Morningstar.com "5-Yr Restated" financials on AVL. In this view we can see that revenue has grown steadily since 1999, with accelerated growth since 2001. $372 million in sales in 1999 with $1.05 billion in sales in the trailing twelve months (TTM).

Earnings have been erratic with $.53/share in 1999, dropping to a loss in 2003 and the TTM. The latest quarter and the improved guidance suggests the company is turning around and is now profitable once again.

Free cash flow has improved from a negative $(93) million in 2001, to $42 million in the TTM.

The balance sheet, as reported by Morningstar.com, shows $11.4 million in cash and $493.9 million in other current assets, balanced against $158.6 million in current liabilities and $208.4 million in long-term liabilities.

What about "valuation"? If we take a look at "Key Statistics" from Yahoo, we can see that this is a small cap stock with a market cap of $691.7 million. The trailing p/e is reasonable at 17.30 with a forward p/e (fye 31-Dec-05) of 16.17. The PEG is thus nice at 1.19. (anything close to 1.0 with the PEG is reasonable to me.)

Yahoo reports 32.40 million shares outstanding with 30.60 million shares that float. Of these there were 525,000 shares out short as of 8/9/04, representing 2.692 trading days or 1.72% of the float. This does not seem to be a lot of shares out short.

No cash dividend and no stock dividends are reported on Yahoo.
What about "Technicals"? Looking at a Point & Figure chart from Stockcharts.com:

we can see that the stock was trading LOWER from June, 1999, when it was trading at around $19.50/share and then corrected all the way down to $4.50 in October, 2000. It has traded higher since and recently is trading well above its suport level as the stock price trades higher.

Overall I like this stock. The recent earnings report was solid, although the prior 12 months have not been very profitable for this company. The free cash flow is improving, the balance sheet is solid, and the valuation isn't bad. Technically the stock is breaking out to higher ground. As always, I am sitting on my hands until such time as one of my holdings in my "Trading account" is sold, and then I can add a new postion!

Thanks again for stopping by! If you have any questions, please feel free to email me at bobsadviceforstocks@lycos.com

Bob

"Trading Transparency" RAD


Hello Friends! I wanted to pass on a trade today that I just did in my "Trading Portfolio". I just sold my last 225 shares of RAD at $3.71. One thousand shares were acquired at $2.62 12/19/02, so I have held them almost two years. In fact, they really DON'T fit into my investment strategy on this blog but I have held them and managed them the same way. Thus, I made $1.09/share or 41.6%.

If I was ahead so much why did I sell? RAD is currently trading at $3.72, down $.83 or 18.24% today. They dropped because of a management announcement that sales for the year ending Feb. 26, 2005, would be between $16.9 billion and $17 billion with same store sales up 2.75% to 3.25%. Previous guidance was for sales between $17.1 and $17.3 billion with same store sales up 3.75% to 4.75%. With the cutting of estimates, the stock tumbled.

This was not my first sale. I sold 400 shares at $3.77 5/6/03 for a gain of $1.15/share or 43.9%. I then sold 150 shares 6/16/03 at $4.33 for a gain of $1.71/share or 65.3%, 150 shares on 9/3/03 for $4.93 for a gain of $2.31/share or 88.2%, and 75 shares at $5.93 for a gain of $3.31 or 126%. Today, with the decline dropping me below my 50% retracement of the last gain, I pulled the plug and let RAD go.

Currently I am down to 17 positions in my Trading Account. I plan on a maximum of 25 positions, but will wait until I have sold a portion of one of my holdings at a gain before adding another position.

Thanks so much for stopping by. Please remember that I am an amateur investor so please consult with your professional investment advisor before acting on any information on this website. If you have any questions, comments, or words of encouragement, please feel free to email me at bobsadviceforstocks@lycos.com .

Bob

September 2, 2004 Polaris Industries (PII)

Hello Friends! It is late Thursday evening, and I cut away from the President's acceptance speech at the Republican Convention because I remembered there was a stock I wanted to discuss on my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please discuss all of these investment ideas on this website with your own professional investment advisors and do your own investigation to make sure they are appropriate and timely for you! And if you have any questions or comments, please feel free to email me at bobsadviceforstocks@lycos.com .

This afternoon, as I was examining the lists of top % gainers on the NYSE and came across Polaris Industries (PII) which closed at $51.00, up $2.53 or 5.22% on the day. I do not own any shares of this stock nor do I own any options. According to the Yahoo "Profile", Polaris "...designs, engineers, manufactures and markets all-terrain vehicles (ATVs), snowmobiles, motorcycles and personal watercraft as well as related replacement parts, garments and accessories."

What drove the stock higher today was the announcement from Polaris that they would be dropping their marine and watercraft division which lost money for the company in 2003. The "street" applauded the wisdom of this move by rewarding the stock price with a multi-percent gain in price!

On July 15, 2004, PII reported 2nd quarter 2004 results. Revenue for the quarter ended June 30, 2004, came in at $422.3 million, up 12% from the prior year's second quarter sales of $377.1 million. Net income came in at $.54/diluted share, a 15% increase over the prior year's $.47/diluted share. In addition, PII increased full year 2004 earnings guidance to $2.72-$2.84/share. This was a nice quarterly report!

How about longer-term? If we look at a "5-Yr Restated" financials from Morningstar.com, we can see that during the past five years revenue has grown steadily from $1.3 billion to the $1.7 billion reported in the Trailing Twelve Months (TTM). Earnings per share have also grown steadily from $1.54 in 1999 to $2.50 in the TTM. In addition, the dividend has grown steadily from $.40/share in 1999 to $.70/share in the TTM. You don't often get a steadily increasing dividend ALONG WITH steadily increasing revenue and earnings!

According to Morningstar.com, the free cash flow has also been fairly solid at $135 million in 2001, dropping to $94 million in 2003, but increasing back to
$135 million in the TTM.

The balance sheet also looks nice with $26.3 million in cash and $321.2 million in other current assets according to Morningstar, as compared to $287.3 million in current liabilities and only $29.5 million in long-term liabilities. Clearly current assets are plenty to cover BOTH current and long-term liabilities.

How about valuation? According to Yahoo "Key Statistics", this is a mid-cap stock with a market cap of $2.18 billion. The trailing p/e isn't bad at 19.87 with a forward p/e of 16.29 (fye 31-Dec-05). The PEG however, isn't quite as inexpensive at 1.42, but the Price/Sales is only 1.23.

Yahoo reports 42.65 million shares outstanding with 42.10 million of them that float. Of these shares, as of 7/8/04, there were 4.56 million shares out short, a HUGE ratio of 23.03 trading days representing 10.83% of the float. This stock moved up nicely today, and if it continues its rise, a SHORT SQUEEZE isn't completely out of the question imho.

According to Yahoo, the company is currently paying a $.92/share dividend yielding 1.90%. The stock split 2:1 earlier this year in March, 2004.

How about "technicals"? If we take a look at a "point&figure" chart from Stockcharts.com:

we can see a beautiful upward movement of the stock price from $12.00/share in early 2000 to the current $50/share level today. Except for a drop below the support line in early 2003 when it dropped down to $22, the stock has been trading at or above its "support lines".

So what do I think? I like this stock....lol that's probably why I posted it! What I mean is that the stock had a nice move upward today on news of the discontinuation of its marine division which was losing money for PII. The latest earnings report a few weeks ago was solid with growth in earnings, revenue along with an upward revision of earnings and revenue expectations for 2004. The Morningstar.com report is gorgeous, with steady revenue, earnings and yes, even DIVIDEND growth the past 5 years. The company is spinning off a solid amount of free cash and the balance sheet is clean (imho.) The p/e isn't bad although for perfection's sake, I would rather have the PEG at or under 1.0. I even like the large # of short sellers even though I don't like betting against them....if they are wrong, they will have to cover their shorts! Technically, the stock graph is also quite strong.

The only PROBLEM, lol, is that I don't have any money to buy any stocks! I can only buy stocks in my system of trading when I have sold a portion at a gain...and nothing there yet!

Thanks again for stopping by! If you have any comments, questions, or words of encouragement, please feel free to email me at bobsadviceforstocks@lycos.com .

Bob

September 1, 2004 The Cooper Companies (COO)

Hello Friends! It is getting late in the evening, but I do have a stock to post! Actually, I have SO MANY stocks discussed here on Stock Picks Bob's Advice, that I thought that I had actually discussed this one, Cooper (COO), already! Actually, the confusion is that I DO OWN shares of COO in my "Trading Portfolio", that were initially purchased in February, 2003. You see there's the rub....I purchased it BEFORE I started my Blog! Anyway, thanks again for stopping by and visiting and be sure to consult with your professional investment advisors prior to making any investment decisions based on information on this website, as I am an amateur investor. If you have any questions or comments about this website, please feel free to email me at bobsadviceforstocks@lycos.com and I will try to get right back to you!

The Cooper Companies (COO) had a nice day today, closing at $63.33, up $5.38 or 9.28% on the day. As I noted above, I DO own some shares of COO in my trading account, which I also follow on this website. According to the Yahoo "Profile", The Cooper Companies "...develops, manufactures and markets healthcare products through its two principal business units: CooperVision (CVI) and CooperSurgical (CSI). CVI develops, manufactures and markets a range of contact lenses for the worldwide vision care market. CSI develops, manufactures and markets medical devices, diagnostic products and surgical instruments and accessories used primarily by gynecologists and obstetricians."

What drove the stock higher today, and I feel like I am beginning to sound like a broken record, was an earnings report and the Management ALSO raising guidance on upcoming earnings. Yesterday, after the close of trading, COO announced Third Quarter 2004 results. Revenue came in at $129.1 million, a 16% increase when results are adjusted for currency fluctuations. Earnings came in at $.58/share, up 21% from the prior year. In addition, COO raised fiscal 2004 revenue guidance to $488-$493 million and EPS of $2.59-$2.61, up from prior revenue guidance of $483-$493 million and earnings of $2.55-$2.58/share. Although not a large increase in guidance, the fact that guidance was being raised was enough to spark a run on the stock.

How about longer-term? If we look at a "5-Yr Restated" financials on Morningstar.com, we can see that revenue growth has been steady, increasing from $168.2 million in 1999 to $451.7 million in the Trailing Twelve Months (TTM).

Earnings per share have also increased EACH AND EVERY YEAR from $.88/share in 1999 to $2.40 in the TTM. In addition, COO has been paying a dividend at least since 1999 when it was $.02/share and has been intermittently been raising it to the $.06/share in the TTM.

How about Free Cash Flow? This also looks nice with $9 million in free cash flow reported in 2001, increasing to $47 million in the TTM.

And how about the Balance sheet? According to Morningstar numbers, this looks very nice with $23.1 million in cash and $231.1 million in other current assets, enough to cover the $113.5 million in current liabilities AS WELL AS pay off most of the Long-term liabilities from the Current Assets alone.

And valuation? Looking at Yahoo "Key Statistics" , we can get most of this information. This is a mid cap stock (there are many definitions, but if we use under $10 billion down to about $2 billion, this fits in at $2.07 Billion in capitalization.) The trailing p/e isn't bad at 26.39 and the forward p/e (fye 31-Oct-05) is even nicer at 20.83. The PEG isn't bad at 1.13, and the price/sales is a bit richer at 4.19.

Yahoo reports 32.67 million shares outstanding with 31.40 million of them that float. Of these shares, 2.31 million shares are out short, a bit of a heavy short interest representing 3.794 trading days or 7.35% of the float. (I use 3.0 trading days arbitrarily as a cut-off to ascertain whether I think the # of shares out short is "significant".)

The stock dividend which I have already discussed is $.06/share or 0.10%. The last stock split was a 2:1 in November, 2002.

And what do the 'Technicals' look like? If we look at a Point and Figure chart from Stockcharts.com:

we can see what in my opinion is a BEAUTIFUL stock graph from at least as far back as 2000 when it was trading at $12.50 to its current level of $63 range. If anything, the stock price looks a wee bit ahead of itself.

So what do I think. Hey I really like this stock a lot. In fact I OWN shares in this stock. The recent earnings report was strong, they just RAISED guidance for the rest of the year, the steady growth in revenue, earnings and dividends is very impressive. The free cash flow is positive and growing and the balance sheet looks clean. The valuation isn't really bad, there are a bit of a heavy # of shares already out SHORT....and yes, the graph looks strong.

Thanks again for stopping by! Again if you have any questions, please feel free to email me at bobsadviceforstocks@lycos.com.

Bob

"Looking Back One Year" A review of stock picks from the week of August 11, 2003





Hello Friends! Thanks so much for stopping by! I have had a quiet week on the blog, with a combination of not seeing much new that I liked, and just being away from my computer as well. I think I will be starting to "revisit" stocks that I have not discussed in a year or so that make nice moves in the market. Just a thought. As always, please remember that I am an amateur investor, so please consult with your professional investment advisors and do your own investigations prior to making any investment decisions based on material on this website!

I selected Possis Medical (POSS) for Stock Picks Bob's Advice on August 11, 2003, at $17.33. POSS closed on 8/27/04 at $18.04 for a gain of $.71 or 4.1%.

On May 18, 2004, POSS announced 3rd quarter 2004 results.Sales came in at $19.3 million for the fiscal quarter ended April 30, 2004, up 32% from the prior year. Net income was $.16, a 60% increase, from the $.10 in the prior year. These were nice results.

However, on August 24, shares of POSS dropped as much as 41% after the company cut revenue outlook for fiscal 2005 to $85-$90 million from previous forecast of $92 million to $98 million on disappointing study results for its AngioJet blood clot treatment after heart attacks. This is not the kind of news that is helpful in moving a stock higher!






I posted Techne (TECH) on this blog on August 12, 2003, at a price of $32.08. TECH closed on 8/27/04 at $40.75 for a gain of $8.67 or 27%.

On August 10, 2004, TECH released unaudited 4th quarter 2004 results. Consolidated net sales for the quarter ended June 30, 2004, were $42.5 million, an 8% increase over the prior year. Consolidated net earnings were $13.4 million or $.32/diluted share compared with $12.7 million or $.31/diluted share the prior year. These results are o.k. if not stellar.

On August 14, 2003, I posted Tyler Technologies (TYL) on this blog at $5.75/share. TYL closed at $9.04 on 8/27/04 for a gain of $3.29 or 57.2%.

On July 28, 2004, TYL announced 2nd quarter 2004 results. Revenue for the quarter ended June 30, 2004, increased 22% to $44.3 million from $35.1 million last year. Net income for the three months was $3.0 million or $.07/diluted share up from $2.0 million, or $.04/diluted share the prior year. These were very nice results and you can see that the stock price has responded appropriately!

Well, how did we do with these three stocks now that it is a year later? Well all three had gains with 4.1% appreciation for POSS, 27% for TECH, and 57.2% for TYL. The average gain for the three was 29.4% for the one year period.

Thanks so much for stopping by! Remember, past results DO NOT guarantee future results, and that I am an amateur and you really need to do your own investigation on all of these stocks and consult with your professional investment advisors! As always, if you have any questions, comments, or words of encouragement, please feel free to email me at bobsadviceforstocks@lycos.com

Bob

August 25, 2004 Williams-Sonoma Inc. (WSM)

Hello Friends! I am delighted that you are taking the time to visit my blog, Stock Picks Bob's Advice! Always remember, even if I present a polished product for you to read, that I am an AMATEUR investor, and please consult with your professional investment advisors all investment ideas on this website to make sure they are appropriate and timely for you! Also, if you have any comments or questions, I would be delighted to hear from you and will try to answer your questions right on this blog. You can contact me at bobsadviceforstocks@lycos.com .

Well I finally made it to the NYSE Price % Gainers list. Williams-Sonoma (WSM) had a GREAT day today, closing at $34.64, up $3.14 or 9.97% on the day. I do not own any shares of this company nor do I own any options.

And you guessed it, what drove this stock higher? EARNINGS. Earnings are such an important ingredient in the successful investment strategy! This morning, before the open of trading, WSM announced 2nd quarter 2004 results. Revenues for the second quarter ended August 1, 2004, increased 18.8% over the second quarter of 2003. Diluted earnings per share for the second quarter increased 53.3% over prior year results to $.23/share, $.03 above the high end of guidance provided by the company in May, 2004.

On a comparable store basis, sales increased 5.0%. The Pottery Barn stores were strongest with 10.2% same store sales increases, while the flagship Williams-Sonoma stores were actually the weakest with a (1.6%) decrease in same store sales. Interestingly, this parallels the Ann Taylor story, a stock I do own and have discussed elsewhere, where the Rack stores are growing much stronger than THEIR flagship stores. Go figure.

How about longer-term? Looking at the "5-Yr Restated" financials on Morningstar.com, we can see the pretty picture of revenue growth with $1.5 billion in 2000, increasing each year to the $2.9 billion in the trailing twelve months (TTM). Earnings per share, while dropping slightly to $.50 from $.58 in 2001, have otherwise grown steadily to $1.39 in the TTM. Free cash flow, which dropped to $(3) million in 2004 has otherwise increased from $49 million in 2002 to $66 million in the TTM.

How about the balance sheet? Looking at Morningstar.com, we can see $74.6 million in cash and $556.5 million in other current assets as compared to $367.0 million in current liabilities and only $227.4 million in long-term debt. Williams-Sonoma seems to have ample cash and current assets to easily cover the current liabilities and could pay off most of its long-term liabilities as well without much of a stretch.

How about "valuation"? I like to use "Key Statistics" on Yahoo to help me look at this question. If we use a range of $500 million to $3.0 billion in market cap for a mid cap stock, we find WSM a Large Cap stock with a market cap of 44.03 billion. The trailing p/e isn't too bad (imho) at 25.19, the forward p/e is even nicer at 18.72 (fye 1-Feb-06). Based on "5 yr expected" earnings, Yahoo shows the PEG at 0.97. I love it whenever it is below 1.0! Price/sales also moderate at 1.28.

Yahoo reports 116.25 million shares outstanding with 73.20 million of them that float. They also report that as of 7/8/04, there are 5.68 million shares out short (up from 4.10 million the prior month). Using a 3 day supply as a cut-off for significance (just one of those things I like to do), we find that WSM has 6.286 trading days of shorts. With that many short sellers, you can see why the stock really "popped" today on good news as some of the short sellers must have been scrambline to buy shares to cover their "shorts".

Yahoo reports no cash dividend, and the last stock split was a 2:1 split in May, 2002.

How about "technicals"? If we look at a Point and Figure chart from Stockcharts.com:

we can see that while WSM was trading lower in late 2001, bottoming at about $11/share, the stock turned higher in November, 2001, and has moved higher steadily since then with a small pause in October 2002. The graph looks strong to me!

So what do I think? Well, the earnings look very nice with strong and steady revenue growth. Quite frankly the only thing that disturbs me was the slowdown in sales at the flagship stores, however, with the Pottery Barn and Outlets included, same stores were up a solid 5%.

Valuation looks nice, the balance sheet is just fine, and the technicals look nice. Looks like a nice stock to have in the portfolio! As for me, well I am stil sitting on my hands, waiting to sell a portion of one of my positions at a gain!

Thanks so much for stopping by! Again, email me at bobsadviceforstocks@lycos.com if you have any questions or comments.

Bob

"Looking Back One Year" A review of stock picks from the week of August 4, 2003






Hello Friends! It is Saturday, and one thing I like to do on the weekend is to answer my mail, and check and see how the selections I have posted here on Stock Picks Bob's Advice are doing. Please remember that I am an amateur investor so please consult with your own professional investment advisors before making any decisions based on information on this blog. If you have any comments or questions on this website, please feel free to email me at bobsadviceforstocks@lycos.com .

On August 4, 2003, I posted Mylan (MYL) on this blog at a price of $34.50. MYL split 3:2 on 10/9/03 nmaking my effective stock pick price actually $23. MYL closed on 8/20/04 at $16.89 for a loss of $(6.11) or (26.6)%. (Please note that for the purpose of review, I always consider that I would be using a "buy and hold" strategy for these picks, if I HAD bought them, but actually, I place an 8% stop loss, usually using a "mental" stop, and sell when it hits that level. Implementing THAT strategy would certainly affect my performance!)

There has been a LOT of news on MYL recently, mostly involving an acquisition of King Pharma and interest in MYL by Carl Icahn. For the sake of this review, I will restrict my review to the latest quarterely result, which for MYL, was released on July 26, 2004. For the quarter ended June 30, 2004, net revenues were fairly flat at $339 million, a $7.6 million increase over net revenues the prior year. Earnings/diluted share came in at $.30 for the first quarter 2005, exactly the same as the first quarter 2004 results. This was not exactly a spectacular result and the street responded accordingly.

I posted Intier Automotive (IAIA) on Stock Picks on August 4, 2003, at a price of $16.50. IAIA closed at $18.441 on 8/19/04 for a gain of $1.941 or 11.8%.

On August 3, 2004, IAIA announced 2nd quarter 2004 results. For the quarter ended June 30, 2003, sales increased 26% to $1.4 billion compared to $1.1 billion for the same period in 2003. Operating income increased strongly to $67.9 million compared to $39.9 million last year. Diluted earnings per share for the quarter came in at $.61 compared to diluted earnings per share from continuing operations of $.36/share for the same period in 2003. These were very strong results imho.

On August 4, 2003, I posted Atrion (ATRI) on Stock Picks at $34.70. ATRI closed at $45.40 on 8/20/04 for a gain during the year of $10.70/share or 30.8%.

On July 29, 2004, ATRI announced 2nd quarter 2004 results. Revenues for the quarter were only up 1% to $16.4 million from $16.2 million for the same quarter last year. Diluted earnings per share, however, jumped 21% to $.87 compared to $.72 last year. Personally, I would like to see revenue growth along with earnings growth on all of these stock picks...so I am less than impressed with this report although the stock price is doing just fine!

Sunrise Senior Living (SRZ) was posted on Stock Picks on August 6, 2003, at a price of $23.95/share. SRZ closed on 8/20/04 at a price of $35.06 for a gain of $11.11/share or 46.4%.

On August 3, 2004, SRZ reported 2nd quarter 2004 results. Excluding property sales in 2003 and 2004, earnings increased $.14 or 70% to $.34/share this quarter. Otherwise, with sales included, earnings dropped by $.01 to $.66/diluted share. For the quarter, revenue "under management" increased 10% to $437 million. The numbers are a bit confusing to me with all of the exceptions and clarifications, but apparently the "street" was happy with the result, and the stock has remained strong.

I posted DRS Technologies (DRS) on Stock Picks on August 6, 2003, at a price of $27.98/share. DRS closed at $37.52 on 8/20/04 for a gain of $9.54 or 34.1%.

On August 5, 2004, DRS reported 1st quarter 2005 results. Revenues jumped 80% to $300.7 million. Net earnings came in at $11.8 million or $.43/share compared with $7.3 million or $.32/share the prior year. DRS went ahead and RAISED its outlook for fiscal 2005 due to an acquisition and new orders. This was a very strong earnings report imho.

Pulte Homes (PHM) was posted on Stock Picks on August 6, 2003, at a price of $63.86. PHM split 2:1 on 1/5/04, and as a result, the effective pick price was actually $31.93. PHM closed at $58.76 on 8/20/04 for a gain of $26.83 or 84%.

On July 26, 2004, PHM reported 2nd quarter 2004 resultsRevenues from domestic homebuilding settlements increased 30% to $2.4 billion. There was a 9% increase in the average selling price to $282,000, combined with a 19% increase in home closings to 8,480 homes. Net income came in at $187.7 million, a 54% increase over the $122.0 million the prior year. Earnings per diluted share were $1.45 for the quarter, a 48% increase over the prior year earnings of $.98/share. In addition, the company RAISED EARNINGS GUIDANCE (I always like to put THAT in caps!) for continuing operations in 2004 to the range of $7.80 to $8.00/diluted share. This appears to really be a terrific report from PHM. Again, even as I commented on my first post, I am concerned about climbing interest rates....but I would not let my phobias interfere with owning this or any other stock....just have to stick with the rules!

On August 6, 2003, I posted Zimmer Holdings (ZMH) on Stock Picks at $49.79/share. ZMH closed on 8/20/04 at $73.23/share for a gain of $23.44 or 47.1%.

On July 28, 2004, ZMH announced 2nd quarter 2004 results. Earnings came in at $116.3 million, or $.47/diluted share, compared with $89 million or $.45/diluted share the prior year. Excluding acquisition related items, they actually came in at $.58/share (analysts were looking for $.55). Nicely, the company RAISED GUIDANCE for the full year, projecting net earnings of $1.86 to $1.90/share and $2.26 to $2.30 on an "adjusted basis". Analysts WERE looking for $2.25/share on an adjusted basis. The stock has been a solid performer in the past, and it appears that the "street" still embraces its current outlook.

I posted FTI Consulting (FCN) on Stock Picks at $21.90 on August 6, 2003. FCN closed at $17.30 on 8/20/04 for a loss of $(4.60) or (21)%.

On July 28, 2004, FCN announced 2nd quarter 2004 results. For the quarter ended June 30, 2004, revenues were $107.4 million, compared with $94.5 million from continuing operations for the prior year same quarter, an increase of 13.7%. Income from continuing operations was $12.8 million compared with $18.5 million the prior year, a DECREASE of 30.8%. Earnings per diluted share came in at $.30 compared with $.44 from continuing operations the prior year, a decrease of 31.8%. These are less than exciting results, and as you can see, the stock price has performed accordingly!

On August 7, 2003, I posted Jos. A. Banks (JOSB) on Stock Picks at $44.16. JOSB split 3:2 on 2/19/04 for a resultand stock pick price of $29.44 and then split 5:4 on 8/19/04 for a subsequent effective price of $23.55. JOSB closed at $27.27 on 8/20/04 for a gain of $3.72 or 15.8%.

On May 25, 2004, JOSB announced 1st quarter 2004 results. For the quarter ending January 29, 2004, total sales increased 28.3% to $79.9 million from $62.3 million the prior year. Comparable store sales were up 13.6% (a very strong number), with combined catalog and internet sales up 18.7% for the quarter. Earnings per share were $.47 vs $.20/share the prior year, an increase of 135%. In addition, the company RAISED GUIDANCE, with earnings expected to come in at $23.3 million compared with $16.6 million in 2003. This is really a GREAT report, and it will be interesting to see what happens for the 2nd quarter report which should be out in the next few days!

On August 8, 2003, Emulex (ELX) was posted on Stock Picks at $22.46. ELX closed at $10.30 on 8/20/04 for a loss of $(12.16)or (54.1)%.

On August 5, 2004, ELX reported 4th quarter 2004 results. Revenue rose 6% to $86.4 million from $81.8 million the prior year, however, this was 13% lower than the previous quarter! Net income came in at $10.6 million or $.13/share down 42% (!) from $18.4 million or $.22/share the prior year. These were definitely NOT very good results, and you can see the effects of this on the stock price!

I posted eSpeed (ESPD) on August 8, 2003, at $18.98/share. ESPD closed at $10.75/share on 8/20/04 for a loss of $(8.23) or (43.4)%.

On August 5, 2004, ESPD announced 2nd quarter 2004 results. Total revenue for the second quarter came in at $42.8 million, compared with $39.1 million the prior year. Net income was $9.0 million or $.16/diluted share compared with $9.1 million or $.16/share last year. This just doesn't show the growth in revenue and earnings that I like to see in this blog! And you can see how poorly the stock price has performed!

Well, that was the week. PHEW. Finally got THAT out of the way! Well how did we do? Of the eleven stocks picked that week, I had seven gainers and four losers for an average gain of 11.35%. Not really too bad a performance overall! Thanks again for stopping by! If you have any questions or comments, please feel free to email me at bobsadviceforstocks@lycos.com .

Bob