June 18, 2003 Macrovision (MVSN)
Hello friends! Thank you for stopping by.

Was scanning through the lists this morning and not finding much. It does look like the market is trying to correct but those BULLS are lurking in the background and seem to be BUYING on any weakness!

This morning's pick is Macrovision. Right away I want to tell you that I do own some shares in one of my managed accounts that I have for some retirement assets. So, #1 I am a little biased about this issue in a favorable sense, and #2 I am a little more familiar with them.

MVSN is the company that in a nutshell has been providing copy protection for all of your (or many) VHS tapes for years and now is offering copy protection for CD's and DVD's. They have some other lines of work but that in a word is the main thrust of this organization.

Macrovision is having a GREAT day today on news of their reorganization into two operating units: one for their video and music technology and the other "SafeCast business and the enterprise unit merge into the software technology groups." per CBS MarketWatch news.

The stock currently is trading at $21.15 up $4.26 or 20.39% (!) on the day.

On April 28, 2003, MVSN reported their first quarter 2003 results with revenues of $28.1 million vs $23.7 million a year yearlier, an increase of 19% (per NYTimes on the web.) Pro forma diluted earnings per share were $.17 or 6% lower than the $.18 last year. (this is NOT part of our usual criteria....as earnings should be UP in the latest quarter....but I have written so much already...and the rest of the picture IS very nice.)

Morningstar.com shows revenues of $31.1 million in 1997, $36.4 million in 1998, $52.1 million in 1999, $80.1 million in 2000, $99 million in 2001, and $102 million in 2002. Based on recent quarter, extrapolating would get us over $110 million in 2003.

They are cash flow positive, while dropping from $35 million in 2000, to $31 million in 2001, but back up to $51 million in 2002.

The company, per Morningstar is LOADED with cash, with $171.7 million of cash reported more than the $27.4 million in current liabilities and there is NO long-term debt.

The stock looks nice to me with the one caveat that the last quarter showed a 6% drop in earnings....overall a nice stock to consider in your portfolio and I am glad I have some in mine!

Bob

Please let me know if you have any questions or comments on this or anything else on this site....email me at bobsadviceforstocks@lycos.com

June 17, 2003 FactSet Research Systems (FDS)
O.k. it is almost 11 pm here in Wisconsin and I really should be getting some sleep but I know I haven't looked hard at that list of stocks so here goes.

In fact, this selection, FactSet Research looks BETTER to me than Dicks Sporting Goods that I went ahead and bought earlier today. I guess it is just buyer's remorse. And besides, can you REALLY get excited about a stock whose symbol is FDS? Anyhow...don't let me explain THAT one.

ANYHOW, FactSet had a GREAT day in the market. The stock was up $2.56 to $40.39 a gain of 6.77% on the day.

What sparked interest in this company, was their earnings report which came out earlier today. The company, by the way, "is a provider of online integrated database services to the global financial community. The company provides financial information and analytics for investment managers/bankers, and other financial professionals." I wonder if that includes amateur WebLog authors....hmmm. (per CNN.Money)

Back to the earnings report...Revenues were up 12.8% to $59.1 million while operating income rose 21% to 19.5 million. Net income increased 37.8% to $14.3 million and diluted earnings per share increased 41.4% to $.41 for the quarter ending May 31, 2003. This is per the NYTimes on the Web.

Looking at Morningstar we see one of those BEAUTIFUL bar graph progressions that is the HALLMARK of the website here. Revenue was $78.9 million in 1998, $103.8 million in 1999, $134.2 million in 2000, $176.7 million in 2001, $205.9 million in 2002, and $211.7 million for the trailing twelve months.

Extrapolating from the current quarter at $59.1 million we get just under $240 million for the year 2003. Not too shabby indeed.

There are only 34 million shares outstanding for a market cap of $1.365 billion. The stock has a trailing p/e of 32.31 and DOES pay a dividend...small but not bad in today's interest climate of 0.52%.

Free Cash Flow has been improving recently with an improvement from $19 million in 2000 and 2001 up to $57 million in 2002.

This company is LOADED with CASH. They have $138.7 million in cash with $41.7 million in other current assets. Current liabilities are $35.3 million and there is NO long-term debt. (I am really sorry I rushed and bout Dicks now.....lol...but this one looks great!).

I do not own any shares but if there is any way I can figure out to pick up some I sure would! This is a pretty stock and deserves a place in your portfolio!

Regards to my friends. Again, please respond or comment right HERE on this WebLog or drop me a line at Bobsadviceforstocks@lycos.com and I will try to get back to you! Have a great evening....all 54 minutes left!

Bob

June 17, 2003 Outback Steakhouse (OSI) and update
The market won't quit. Just when I thought the market was going to rest, the bulls come storming back. Our E-Loan (EELN) stock that I picked up June 4th at $5.15 closed at $6.81 up another 7+%. Synovis that I picked up on May 21, 2003, at $14.54 (!), closed today at $24.68 up another $.84. I went ahead and sold 150 of my EELN for a quick 30% gain and another 50 of SYNO for about a 70% gain (!) in a month. Unbelievable! With the money, I made an initial purchase of 150 shares of DKS....Dick's Sporting Goods. We have reviewed DKS in this Blog earlier.

Looking through the lists on CNN.Money, Outback Steakhouse showed up. This has been an old favorite of the growth stock crowd...and is the home of the famous 'bloomin' onion'. If you haven't had one of those, it is worth the trip to the Outback!

I sound like an advertisement and no, I don't own any shares of this stock. I mean, I really can't own them all, can I?

Outback had a great day closing at $39.76 up $2.43 or 6.51%. I don't see any news to explain the jump. They did report on May 29th that same store sales were up about 1.4% for domestic Outback restaurants....is that anything to write home about?

On April 22nd, Outback reported their first quarter results, and per the NYTimes on the Web, reported net income was $45,067,000 or $.58/share compared to $36,963,000 or $.46/share for the same period ending march 31, 2002. Revenues for the quarter were up 12.6% to $651,678,000. Now that's a lot of Chicken on the Barby.

Morningstar shows a steady growth in annual revenue from $1.4 billion in 1998, $1.6 billion in 1999, $1.9 billion in 2000, $2.1 billion in 2001, and $2.4 billion in 2002. Free cash flow has been a bit erratic with $100 million in 2002 dropping to $28 million in 2001 and back up to $156 million in 2002.

Assets and liabilities appear pretty evenly balanced.

The company looks nice fundamentally and is behaving quite well technically. Definitely a possible purchase for your portfolio.

Hope everyone has a Happy Tuesday! Bob

Please email me at bobsadviceforstocks@lycos.com if you have any questions, comments, or wish to give me any words of encouragement! Thanks for stopping by.

June 16, 2003 Whitman Education Group (WIX)
It is late and the market is closed. A last glance at the largest advancers includes checking the AMEX. I found one here in the educational market, an are that has been fairly strong recently.

Whitman Education Group (WIX)"operates degree and non-degree granting proprietary schools devoted to career training primarily in the medical, technical, and business fields."

WIX had a nice day today closing at $14.89 up $.83 or 5.90% on the day. I do not own any shares of this company nor do any members of my family.

On May 30, 2003, WIX reported their fourth quarter results: (for the fourth fiscal quarter ending March 31, 2003) revenue increased 17% to $30.1 million compared to $25.7 million in last year's fourth quarter. Net income for the quarter increased to $2.8 million or $.17/share compared with $1.1 million or $0.08 per diluted share for the same period last year.

Morningstar shows that this growth has been consistent even back to 1998 when revenue was $60.3 million, $74.0 million in 1999, $77.6 million in 2000, $79.6 million in 2001, $91.9 million in 2002, and $105.4 million in the trailing twelve months.

Free cash flow has been improving, although dropping from a positive $5 million in 2000 to $1 million in 2001, it was back up to $12 million in 2002.

Assets and liabilities are weighted heavily in favor of assets with $48.7 million in cash and other current assets compared to a total of $41.4 million in current AND long-term liabilities combined.

This is a small company with only a $230 million market cap. They have a trailing p/e of 30.39 and do not pay a dividend.

If you are looking for a stock investment in this area, this is a very nice looking company both on technical and fundamental grounds.

Happy investing everyone. Again, please drop me a line at bobsadviceforstocks@lycos.com if you have any questions, comments, or just want to share some words of encouragement! Thanks for stopping by.

Bob

June 16, 2003 American Home Mortgage (AHMH)
I hate doing this but while I was looking for stocks to post, I found AHMH....American Home Mortgage and the stock looked SOOO GOOOD to me, I went ahead and bought some...about 300 shares. So let me tell you about this company, and you can see if you would like to buy some as well.

We have seen a lot of these mortgage companies popping up on our lists....stocks like New Century Financial (NCEN), and UFM....stocks we have already discussed here and have been doing quite well.

AHMH "is an independent retail mortgage banking company that sells loans and related servicing rights to institutional buyers. AHMH also operates a mortgage website at MortgageSelect.com." (per CNN.Money)

On April 23, 2003, AHMH reported earnings for the first quarter of 2003. Per NYTimes on the Web, 2003 earnings rose 143% (!) to $16.3 million from $6.7 million. Revenue rose 179% (!) to $94.6 million for the first quarter from $33.9 million for the same perior in 2002. They also announced an increase in their dividend.

The company DID warn that if interest rates rose, their revenue/earnings would most likely drop accordingly. However, if you follow the interest rate scene....rates are hardly rising.

The company is small but growing quickly. Revenue growth, according to Morningstar.com, was $11.3 million in 1997 going to $20.2 million in 1998, $24.9 million in 1999, $58.3 million in 2000, $128.1 million in 2001, and $189.8 million in the trailing twelve months.

Free cash flow DOES appear to be negative and the assets-liabilities statement is incomplete on Morningstar.com.

Currently, the stock is trading at $19.49, up 11.18% on the day. They have a reasonable (!) p/e of 7.35, and yield 1.25% in dividends.

Anyhow, I bought before I posted so I apologize....but I liked the explosive growth in revenue/earnings on this little one which coupled with a low p/e sounds like a recipe for a continued price appreciation.

Have a great day...and please drop me a note at bobsadviceforstocks@lycos.com and let me know if you find this site useful!

Bob

June 16, 2003 Dominion Homes (DHOM)
Another homebuilder has shown up on the lists that meet our criteria.

Dominion Homes "offers three sizes of single-family homes that are different by size, price, standard features and available options in Central OH and Louisville, KY."

DHOM is having a great day today. Currently trading at $24.50, it is up $2.47 or 11.21% on the day.

Last quarter results were announced on April 30, 2003, per the NYTimes on the web: Net income increased 19% to $4.8 million from $4.1 million last year for the quarter ending March 31, 2002.

Revenues increased to $104.0 million, based on the delivery of 569 homes, from $98.4 million based on the delivery of 518 homes during the first quarter of 2002.

Reviewing the Morningstar.com financials, we find that revenue has grown from $207.9 million in 1997, $264.9 million in 1998, $277.6 million in 1999, $326.4 million in 2000, $395.7 million in 2001 and $487.5 million in the trailing twelve months.

Unfortunately, cash flow is a negative six million which is one of the only flaws for this company.

The company, however, is fairly flush with cash with $4.1 million in cash and $272.8 million in other current assets compared to current liabilities of $39.3 million and Long-term liabilities off $115.5 million.

I do not own any shares of this and am not anticipating a purchase at this time. The stock is interesting and may be an excellent way to participate in the housing boom with a relatively small company. (compared to HOV and LEN discussed elsewhere on this site.)

Bob

June 16, 2003 Quest Diagnostics (DGX)
The bull is running.

Today's pick for the morning is Quest Diagnostics (DGX) on the NYSE. Quest is having a geat day trading at $64.28 up $2.78 on the day. The p/e is reasonable at 19.90 and they don't have a dividend.

Last quarter results were posted on April 22, 2003, per the NYTimes on the web. Earnings per share increased 28% to $.86 from $.67 in the quarter ending March 31, 2003, and revenue of $1.1 billion for the quarter grew 15.4% over the prior year. This includes acquisitions of Unilab and American Medical Laboratories. Pro Forma revenue growth (assuming that these were both part of Quest for both periods) acually grew just 3.2%.

By the way, DGX "is a clinical laboratory testing company which offers testing services used by the medical profession in the detection, diagnosis, monitoring and treatment of diseases." per Cnn.money.

Looking at Morningstar.com, we find revenue growth very consistent, starting at $1.5 billion in 1998, increasing to $2.2 billion in 1999, $3.4 billion in 2000, $3.6 billion in 2001 and $4.1 billion in 2002.
Extrapolating the current quarter we would get about $4.4 billion in 2003.

The company spins off lots of free cash flow starting at $253 million in 2000, increasing to $317 million in 2001 and up to $441 million in 2002.

DGX has about $820 million in current assets vs $636 million in current liabilities and $919.4 million in long term debt. They also report $2,499 million in other long term assets. A little heavy on debt perhaps but with all the free cash flow this shouldn't be a problem imho.

A very interesting stock and should be at the top of all of your potential picks. I do not own any shares of this but certainly would be interested in acquiring shares if the opportunity availed itself.

Happy Monday!

Bob

June 13, 2003 Looking Back...How are we doing??
Not a lot of stocks showed up on the list...the Dow was down 79.40 at 9,117.10 and the Nasdaq closed down 27.13 at 1,626.49.

It has been suggested to me that we should review some of our past suggestions. Well Happy Birthday to us. This site is only one month old now and we have already 58 entries! I hope you can read all of them.

Our first pick on 5/12/03 was Saint Jude Medical, the medical equipment maker. Trading at that time at $55.30, it has closed today at $61.89. Unfortunately, even I didn't buy any shares. That is a $6.59 gain in the month or an 11.9% appreciation.

JCOM was out second pick, and being a NEWBY at posting I don't have the price on the post. It is now trading at $33.50, and looking at a graph of the price of JCOM, I believe it was around $30...but we won't count this one officially.

On May 14th, I posted HLEX at $5.70. Healthextras, Inc. ...HLEX closed today at $7.06. This is a HUGE gain of $1.36/share or a 23.8% gain since our post.

May 15th was the post date for AHS at $10.05. AHS closed today at $12.27. This is a pick up of $2.22, or 22%.

On May 16th, we posted Agree Realty, ADC, at $23.41. ADC closed today at $24.70 a gain of $1.29. This is a 5.5% gain on the month.

May 19th we posted DNA, Genentech, at $53.04. DNA closed today at $72.90 or a gain of $19.86 or 37.4% on the month.

Next week will try to review some of the later posts. I think it is wise to give each of these picks at least a month before we review them...like this but WOW, I know it was a good month in the market....but look at this performance!

Have a great weekend!

Bob

June 13, 2003 Lannett Company, Inc. (LCI)
Lannett is a company that I am familiar with and have purchased shares in the past. Unfortunately I was stopped out by my 8% rule....and no longer own any shares. However, it is the best stock on the lists today and deserves a once-over.

It really did feel like Friday the 13th if you are a long-term investor and not selling short. The market had a rather small correction today, perhaps again suggesting the underlying bullish sentiment that appears to continue to drive the indices higher.

LCI had a great day today. It closed at $21.53 up $.92 or 4.46% on the day.

Lannett is another generic drug manufacturer...a little like ELAB and AAII that we already own...they "manufacture and distribute, throughout the United States, pharmaceutical products sold under generic names and its own trade or brand names, and also manufacture and develop products for other companies."

On April 24, 2003, Lannett reported results for their fiscal 2003 3rd quarter: compared to 2002, net sales jumped 28%, and net income was up 7%. Results that are nice but not overall earth-shattering.

Morningstar shows a steady growth in revenue going back to 1998 when it was $9.5 million, increasing to $10.6 million in 1999, $11.6 million in 2000, $12.1 million in 2001, up to $25.1 million in 2002 and $35.0 million in the trailing twelve months.

The company turned cash flow positive in 2002 with $5 million free cash flow positive but only $4 million free cash flow positive in the trailing twelve months.

There is only $0.5 million in cash on hand per Morningstar.com, but $13.0 million in total current assets compared to $5.0 million in current and long-term liabilities combined.

The numbers are nice if not fabulous, stock is not what I would call cheap with a trailing p/e of 41.06 per Morningstar.com. However, it is a stock to know about and watch and is what appears to be the best stock on the lists of advancers.

Bob

June 12, 2003 Charles River Associates Incorporated (CRAI)
I saw this one and I thought it was the Towel maker. I guess that is James River or something....or was it James Taylor....lol.

O.K. so I am better at picking stocks than telling jokes and I should stick to it. Anyhow, I don't own any of these shares, have no plans right now to buy any and nobody in my family or stock club owns any that I know. In fact, I don't think I ever even heard of this company until 5 minutes ago!

CRAI "is an economic and business consulting firm that applies analytical techniques and industry knowledge to complex engagements for a range of clinents, including law firms, corporations and governments." Yikes, almost sounds like Arthur Andersen.

Charles River Associates had a GREAT day today and made the most-up list as well. It closed at $27.95 up $4.03 or 16.85%. In fact, after hours it is trading up another nickel. (But a nickel won't even buy you a candy bar these days.)

What drove the stock up was an EARNINGS report. If the three most important things in real estate are "location, location, and location" then in MY book, the three most important things for a stock investment is "earnings, earnings, and EARNINGS!"

Today, CRAI reported financial results for the fiscal 2003 second quarter ended May 16, 2003.

Revenues for the quarter increased 43.7% to $40.2 million compared to $28.0 million last year. Net income increased 40.9 percent to $2.8 million or $.30/share from $2.0 million or $.22/diluted share last year (2002). This is all from the NYTimes on the Web article. By the way the NYTimes site is a free site but you do have to register.

Checking Morningstar.com, we find steady revenue growth from $53.0 million in 1998, $74.0 million in 1999, $109.8 million in 2001, $130.7 million in 2002, and extrapolating (I love that word!) from the present quarter, assuming no seasonality, we can estimate about $160 million for 2003. Aren't these BEAUTIFUL numbers? Don't you just LOVE this company?

Free cash flow has been improving steadily, although the numbers are SMALL, the TREND is wonderful: $-1 million in 2000, $+2 million in 2001, $9 million in 2002 and $12 million in the trailing twelve months.

The company is very solvent per Morningstar with $23.7 million in Cash, $48.2 million in other current assets as opposed to $30.5 million in Current Liabilities. Long-term assets total $44.0 million compared to a miniscule $4.5 million in long term debt.

This stock trades at a trailing p/e of 28.52 and does not pay a dividend. If I had some free cash....I know the same old story....but HONESTLY...this is a beautiful picture and looks like a GREAT investment.

Goodnight again and keep those cards and messages coming at bobsadviceforstocks@lycos.com.

Bob