Stock Picks Bob's Advice
Thursday, 24 July 2003
July 24, 2003 Sierra Health Services, Inc. (SIE)
As a physician, I always am a bit annoyed by HMO's which are both our salvation and our burden. Kind of like the same way patients must view HMO's I guess! However, Sierra Health Services (SIE) went to the top of the list today in a group of managed care corporations that outperformed the market on a down day. We also have MME mentioned elsewhere on this site.
Sierra, according to CNN.Money "...is a healthcare services company that operates HMOs, indemnity and workers compensation insurers, military health programs, PPOs and multi-specialty medical groups."
SIE had a great day today closing at $27.09 up $5.79 or 27.18% on the day. They did this on the back of an outstanding earnings report. Quoting from the headline on the NYTimes on the Web from the Business Wire report: "2nd quarter 2003 earnings of $.68 per diluted share, income from continuing operations increases 95%; guidance raised for 2003." (Income was $.34 per diluted share in 2002.)
Morningstar shows a steady growth in revenue from $0.8 billion in 1998, $0.9 billion in 1999, 1.0 billin in 2000, $1.1 billion in 2001, and $1.3 billion in 2002.
Free cash flow has recently improved from a negative $17 million in 2000 to a positive $91 million in 2001, and $124 million in 2002.
The balance sheet is not as pretty as some of our selections but is fairly evenly balanced with $246.3 million in cash and $692 million in other current assets vs. $788.2 million in current liabilities and $166.1 million in long-term liabilities.
Yahoo.com 'profile' shows a market cap of $584.8 million with 27.5 million shares outstanding and 22.8 million float. The p/e is a very reasonable 13.15, no dividend is paid,a nd quite a few shares are out short at 2.25 million representing 7.3 days of trading of average volume.
In general, knowing the pressures and vagaries of health care as a busines, I am not a great fan of HMO stocks. However, trying to avoid personal biases I have to recommend this issue as being appropriate for selection in light of the continued outstanding business performance of this company.
Neither I nor any members of my family own any shares of this company.
Regards to All!
Posted by bobsadviceforstocks at 9:58 PM CDT
Updated: Thursday, 24 July 2003 10:00 PM CDT
July 24, 2003 Fair Isaac Corporation (FIC)
Stocks were looking so nice this morning and then about 2:15 just pooped out. So much for a nice morning rally!
If you read the previous post, you will see that I jumped out of NCEN...with a nice gain still remaining....and bought FIC...Fair Isaac Corporation. Fair Isaac, according to CNN.Money "...is a developer of data management systems and services for the financial services, retail, healthcare, telecommunications, personal lines insurance and other industries."
In spite of the pullback late in the session, FIC held on to a nice gain closing at $55.42 up $5.13 on the day or 10.20%. They performed well as the company reported a superlative earnings report for the second quarter yesterday: revenues were $163.0 million vs $91.0 million last year. Net income was $30.0 million or $.60/share compared to $14.4 million or $.41/share.
Morningstar.com shows a nice historical pattern of growth in this company: $246 million of revenue in 1998, $276.9 million in 1999, $298.6 million in 2000, $329.1 million in 2001, $392.4 million in 2002. Extrapolating the present quarter gets us over $640 million in revenue for 2003.
Free cash flow has grown very nicely from $14 million in 2000, to $47 million in 2001 and $80 million in 2002. Morningstar.com reports $109 million in free cash flow for the trailing twelve months.
Cash on hand is ample at $165.8 million with $152.7 million of other current assets. This is more than enough to cover the current liabilities of $90.9 million and $146.9 million in long-term liabilities as well.
Looking at Yahoo.com, we find that the market cap is $2.37 billion, 47.2 million shares outstanding and 46.4 million of those float. The company DOES pay a small dividend of $.08/share yielding 0.16%.
There are quite a few shares out short as of 7/8/03. At that time there were 4.59 million shares reported out short representing 11.64 days of average trading volume. This is bullish as it represents borrowed shares that have been sold requiring the short sellers to purchase these shares sometime in the future.
The p/e IS a bit steep at 53.84 and the company HAS had a great year already...but I like this stock a lot and as such have already purchased some shares (150) in my trading account.
Regards to all of my friends. Thank you for visiting and come back often! eMail me with any questions, comments, or words of encouragement at firstname.lastname@example.org.
Posted by bobsadviceforstocks at 9:40 PM CDT
Updated: Thursday, 24 July 2003 9:47 PM CDT
July 24, 2003 Trading transparency FIC for NCEN
Market doing pretty good today. My NCEN...listed elsewhere has the dwindles. Stock is creeping down...we still have a sizable gain. Company does mortgage business on less than top quality applications...with interest rates heading up at least on the interim...I decided to bail out with a nice gain. Replaced the shares with Fair Isaac...they had spectacular earnings report...so I picked up 150 Shares of FIC.
I will try to post the report on FIC later today...it is a nice company that is worth your attention and I DO own some shares now!
Regards to all of my friends! And readers!
Wednesday, 23 July 2003
July 23, 2003 QLT Inc. (QLTI)
Out late tonight and spent the day away from my computer....with the market up moderately today, I figured we'd find at least one stock that fits the bill and it looks like QLT Inc. (QLTI) works well!
I am familiar with this company which produces Visudyne, for photodynamic therapy which is used to treat the 'wet' form of age-related macular degeneration. I do not own any shares of this issue...nor does anyone in my family.
QLTI had a nice day today--closing at $15.39 up $1.59 or 11.52% on the day.
They reported their second quarter results today which was instrumental in driving the stock higher today. Sales were up 25% over 2002 for the quarter at $89.2 million. Earnings per share for the second quarter of 2003 was $.16 a 60% increase from the $.10 reported last year.
Morningstar shows no revenue reported in 1997 and 1998, then $17.9 million in 1999, $33.2 million in 2000, and $84 million in 2001. Extrapolating the current quarter we get about $360 million in sales in 2003.
Free cash flow which was -$38 million in 1999, and -$50 million in 2000 turned positive in 2001 at $19 million.
Assets and liabilities show QLTI flush with cash per Morningstar.com with $163.8 million in cash compared to $25.3 million in current liabilities and NO long-term liabilities. In addition QLTI has $86.2 million reported in other current assets.
Yahoo.com shows a market cap of $947.7 million with 68.7 million shares outstanding and 53.6 million shares that float. The p/e is a bit steep at 47.59 but not too unreasonable with the fast growth rate.
As of June 9, 2003, there were 2.39 million shares out short...representing 5.19 trading days. This is a positive effect on the stock price.
Overall, the numbers are nice and the balance sheet is clean but this still represents pretty much a one-product company with a product that merely ameliorates a dismal condition and usually does not provide a cure. I am not real enthusiastic about this issue, but if you keep to the 8% stops as we do on all of our issues, it may be worth some attention.
Thanks for stopping by the website! Be sure to drop me a line if you have any questions, comments, or as always appreciated words of encouragement.
Tuesday, 22 July 2003
July 22, 2003 Cognizant Technology Solutions (CTSH)
This one I have glanced at before but I don't have any shares. Let's take a closer look.
Cognizant, according to CNN.Money, "...is a provider of custom information technology (IT) design, development, integration and management services."
CTSH is having a GREAT day today on the back of a positive earnings announcement. Currently it is trading at $30.22 up $3.19 or 11.80% on the day.
Revenues for the quarter ending June 30, 2003, were $87.4 million up 17% from $74.5 million in 2002. Net income for the second quarter increased to $13.5 million or $.20/diluted share compared to $8.6 million or $.14/diluted share in 2002. (NYTimes on the Web)
Morningstar.com shows sequential annual growth in revenue from $24.7 million in 1997, $58.6 million in 1998, $88.9 million in 1999, $137.0 million in 2000, $177.8 million in 2001, and $229 million in 2002. Extrapolating the current quarter would give us over a $280 million annual revenue in 2003.
Free Cash Flow while inconsistent remains positive ranging from $20 million in 2000, $17 million in 2001, $21 million in 2002 and $16 million in the trailing twelve months.
The Balance sheet, as reported on Morningstar.com, is very nice: $126.6 million in cash...more than enought to cover current liabilities of $37.5 million and long-term liabilities of $24.5 million combined. In addition, Morningstar reports $55.9 million of other current assets.
This is a bit larger company than our last entry with $1.66 Billion market cap and 61.6 million shares outstanding with 61.4 million that float. The p/e while steep at 46.60 is better than the prior entry as well. More shares are out short: 5.45 million as of 6/9/03....representing 3.40 trading days to cover the repurchasing activity required.
I like this company a lot as well....only the p/e again is a bit steep. I do not own shares but would be happy to add to my holdings with some of these if the opportunity should avail itself.
Regards to all of my friends!
July 22, 2003 Vital Images (VTAL)
Today the market is behaving nicely...that is going up! Tomorrow may be another story. But our focus is not on timing the market or predicting the weather next weekend. We are focussed on picking the very best companies with the most consistent results. Boring but effective.
Vital Images is a stock that I own shares in a managed account elsewhere (not my trading account). I may actually have sold the shares as I do not make the calls on that account but I do believe there are some shares there still...so I am familiar with this company.
VTAL is having a very nice day today trading at $21.66 up $2.18 or 11.19% on the day. Behind the stock's move, the earnings were reported today for the second quarter ending June 30, 2003: revenues were at $7.5 million up 54% from $4.9 million last year, Net income was $666,000 up from $201,000 last year, or on a per share basis...$.06/diluted share vs. $.02/diluted share last year.
Oh I forgot to tell you what they do! VTAL, according to CNN.Money, "...develops & markets visualization software and workstations for clinical diagnosis, surgical planning and medical research."
Morningstar.com shows a very pretty picture with revenue growth growing from $4.5 million in 1998 to $6.6 million in 1999, $10.6 million in 2000, $15.2 million in 2001, $21.1 million in 2002...and if we extrapolate the second quarter, we would have a rate of $30 million in 2003.
Free cash flow has turned positive from a negative $3 million in 2000 to nothing in 2001 to a positive $1 million in 2002.
The company is small but has lots of cash: $10.5 million in cash enough to cover the current liabilities of $6.9 million and the long-term liabilities of $0.2 million combined. In addition, VTAL has, according to Morningstar.com, $5.5 million in other current assets.
VTAL is a SMALL company with a market cap of $178.8 million with only 9.18 million shares outstanding and only 6.60 million that float. The p/e is a very steep 118.78....but with the fast growth may very well be worth the price. There are a bit over 360,000 shares out short...which represents just over a day's worth of trading....per Yahoo.
I like VTAL which has everything going for it except for the p/e which is steep. This is already in my portfolio and might deserve a place in yours!
Thanks for stopping by! Please feel free to leave a message right here or contact me at email@example.com if you have any questions, comments, or my favorite message....words of encouragement!
Have a Happy Tuesday!
Monday, 21 July 2003
July 21, 2003 Simpson Manufacturing Co. (SSD)
Well the market is now closed with the Dow down about 90 points and the NASDAQ down 27. Earnings are coming in this week for the second quarter and some of these reports are good enough to give stocks a lift. Simpson Manufacturing reported and the stock is up nicely on a down day. I don't own any shares of Simpson and quite frankly, never heard of it before today when I came acrosse SSD on the lists of most up!
SSD closed today at $40.75 up $1.80 or 4.62% on the day. According to CNN.Money, SSD "...through its subsidiaries Simpson Strong-Tie Co. and Simpson Dura-Vent Co., designs, engineers and manufactures wood-to-wood, wood-to-concrete and wood-to-masonry connectors & venting systems for gas & wood burning appliances." (This does not sound like some of our other picks which are dot.com's!)
In the news today was the earnings report: net sales increased 18% to $146.4 million compared to $124.1 million for the second quarter of 2002. Diluted net income per share was $.71 vs $.60 last year.
Morningstar.com demonstrates that this 'low-tech' firm has pretty high quality growth. Sales were $279.1 million in 1998, $328 million in 1999, $369 million in 2000, $416 million in 2001, and $465 million in 2002. Sales should high over $500 million at the present rate if extrapolated for the next two quarters.
Free cash flow while not consistent has been positive: $16 million in 2000, $48 million in 2001 and $23 million in 2002.
The balance sheet looks pristine on Morningstar.com. They have $90.0 million of cash on hand against $49.6 million in current liabilities and $5.3 million in long-term liabilities. In addition, they report $205.9 million of OTHER current assets!
Per Yahoo.com, this company has a market cap of $957.6 million. There are 24.6 million shares outstanding while only 17.0 million float. No dividend is paid. The p/e is a very reasonable 17.29. Only 250,000 shares are out short....representing 4.90 days of daily trading volume.
There are a lot of things to like about this company and the fact that it is low-tech adds to the attractiveness in a balancing-out kind of way. I would love to own some shares of this issue...and may if the opportunity should arise.
Thanks for visiting and be sure to skim through the many other posts on this site....it is helpful to navigate via the calendar along the left hand side of the page.
July 21, 2003 DSP Group, Inc. (DSPG)
I owned a few of these shares a few years ago before the tech bubble broke. I don't own any DSPG shares at this time but the situation fulfills our criteria and is worth a second look.
DSPG is having a nice day today in an overall crummy market. The stock is trading at $25.23, up $2.29 or 9.98% per the NYTimes on the Web.
According to CNN.Money, DSPG "...develops and markets products and technologies that perform digital signal processing, the electronic manipulation of digitized speech and other digital signals, for use in a variety of telecom applications."
Earnings on this Santa Clara, California company were reported today and were the source of the nice percentage gain on a down day: for the quarter ending June 30, 2003, revenues gained 21% from $31,899,000 to $38,550,000. Excluding one-time charges and gains, 'pro-forma- diluted earnings per share increased 37% to $.26 from $.19 in the same period last year.
Even with the telecom bubble, DSPG maintained a steady record of revenue growth increasing from $51 million in 1998, $58 million in 1999, $87 million in 2000, $89 million in 2001, $125 million in 2002, and extrapolating the current quarter somewhere over $150 million in revenue in 2003.
Free cash flow has improved from $6 million in 2000, $23 million in 2001, and $32 million in 2002.
The balance sheet looks clean with $85.3 million in cash per Morningstar.com, more than enough to cover the $28.3 million in current liabilities and $4.1 million in long-term liabilities.
Yahoo reports that the market cap is $629.5 million with 27.4 million shares outstanding while 26.2 million float. No dividend is paid. The p/e is a little steep at 43.04. There are 670,000 shares out short which represents 2.6% of float or 1.76 trading days.
Overall, this is a nice stock if a little rich due to its p/e premium. Have a great afternoon!
Posted by bobsadviceforstocks at 1:52 PM CDT
Updated: Monday, 21 July 2003 1:53 PM CDT
July 21, 2003 IDEXX Laboratories (IDXX)
O.K. another lousy day in the market. We have had a very big run-up the last few months....and have profits to show for it and I suppose it is best to have a bit of a pull-back...but not too much, ok?
IDEXX Laboratories is having a nice day today. Currently per the NYTimes on the Web it is trading at $38.29 up $3.88 or 11.28% on the day.
IDXX according to CNN.Money, "...develops, manufactures and distributes products and provides services for veterinary, food and environmental markets."
The company reported their second quarter earnings today, and provided the impetus for the stock price appreciation: revenue increased 15% to $121.8 million from $105.7 million in 2002, earnings per diluted share for the quarter were $.47 vs $.37 for the quarter ending 6/30/02...an increase of 27%.
Morningstar shows a steady improvement in revenues reported from $263.0 million in 1997, $321.7 million in 1998, $358.4 million in 1999, $367.4 million in 2000, $386.1 million in 2001, and $413 million in 2002. The the current revenue rate, IDXX should be over $420 million in 2003.
IDXX is generating a lot of free cash and this has been improving since 2000 when $13 million free cash reported, $29 million in 2001, $88 million in 2002, and $94 million in trailing twelve months.
The company is also flush with cash with $175.4 million in cash dwarfing the $77.8 million in current liabilities and $5.8 million in long-term liabilities. In addition, they have $142.3 million of other current assets according to Morningstar.com.
According to Yahoo.com, there are 34.2 million shares outstanding and 32.4 million that float for a market cap of $1.18 Billion. The p/e is a moderate 24.06 and there are a few shares out short....3.06 million as of 6/9/03. This would amount to 10.74 trading days activity for the shorts to cover their borrowed shares.
I don't own any shares of this company, but I like this stock a lot...there isn't much NOT to like on this issue...and would be happy to add some to my portfolio...
Have a Happy Monday everyone...perhaps the Dow will trade UP this week? Remember, if you have any questions, comments, or words of encouragement drop me a line at firstname.lastname@example.org or leave a comment right here on the website!
Friday, 18 July 2003
"How are we doing?"..a look back on the picks of June 9, 2003
Hello friends. It is a weekend again, thank goodness and time to look back on our progress or lack of progress. I do not claim that this is a 'get rich scheme' but rather a reasonable method of picking 'quality stocks' that will appreciate over time. Let's see how our June 9th picks are doing.
First pick was Accredited Home Lenders (LEND) on June 9, 2003 when it was trading at $19.58. Currently as of close of trading on July 18, 2003, LEND is at $20.10, a gain of $.52 or 2.65%.
On June 10, 2003, we selected Caremark Rx (CMX) at $24.66. Currently CMX is trading at $25.13, a gain of $.47 or a gain of 1.9%.
June 10, 2003, also found us looking at Packeteer (PKTR) at $15.10. PKTR had a TERRIBLE day today....yikes...down $2.59 to $13.67. This is overall a loss of $1.43 from our purchase price or a loss of (9.47%).
Pediatrix (PDX) was selected on June 10, 2003, at $38.80. Currently PDX is trading at $39.70, a gain of $.90 or a gain of 2.31%.
June 11, 2003, we selected WebEx Communications (WEBX) at $14.41. WEBX closed today (7/18/03) at $15.19. This is a gain of $.78 or 5.4%.
Our next pick was Lennar (LEN) at $75.45. The homebuilders have been under a lot of pressure the past few weeks as mortgage rates have been reflating. (is that a word?) Anyhow, LEN closed at $68.35, a loss of $7.10 or a loss of (9.4%).
Charles River Associates (CRAI) was picked on 6/12/03 at $27.95. CRAI closed on 7/18/03 at $31.05 a gain of $3.10 or (11.09%).
Oshkosh Truck (OSK) was picked on 6/12/03 at $62.50. OSK closed today at $58.60 or a loss of $3.90 or (6.2%).
The final pick that week was Lannett Company (LCI) which was selected at $21.53. LCI closed today (7/18/03) at $20.50 a loss of $1.03 or a loss of (4.78%).
This was overall a mediocre performance for this group of stocks. Hopefully long-term we shall see improved performance....but the jury is out and we'll continue to monitor our performance to see if we need to change our rules of investing!
Regards to all of my friends....
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