Stock Picks Bob's Advice
Friday, 22 August 2003
August 22, 2003 DJ Orthopedics, Inc. (DJO)
The market started off enthusiastically with a quick gain with the news that Intel was optimistic about the coming quarter. The Schering-Plough piece did not help and the market paused in its recent bullish move with a bit of a correction. Currently the Dow is trading at 9413.79 down 9.89 on the day but the NASDAQ at 1783.83 is up 6.28.
Looking through the biggest percentage gainers I came across DJ Orthopedics, Inc. (DJO). This company, according to CNN.Money, "...is an orthopedic sports medicine company that designs, manufactures and markets products & services that repair, regenerate and rehabilitate soft tissue and bone, help protect against injury and treat osteoarthritis of the knee."
Currently, DJO is trading at $10.89 up $.52 or 5.01% on the day. The latest earnings report, for the second quarter of 2003, was released on 8/5/03. According to NYTimes on the Web, net revenues for the quarter ending June 28, 2003, were $47.4 million, an increase of 4% over last year's net revenue of $45.7 million. Net income in the quarter was $2.7 million or $.15/share compared with a net loss of $4.9 million or $(.27)/share in 2002.
Morningstar.com shows a nice steady increase in revenue starting at $85.3 million in 1996, $94.9 million in 1997, $104 million in 1998, $116 million in 1999, $144 million in 2000, $169 million in 2001, and $183 million in 2002. Free cash flow has improved recently from a $(5) million in 20002, $(10) million in 2001, to a positive $11 million in 2002 and $14 million in the trailing twleve months.
Assets and liabilities are fairly well balanced with $13.2 million of cash and $64.0 million of other current assets vs. $24.7 million of current liabilities and $89.3 million in long-term liabilities.
DJO is a fairly small company with a market cap of $186.1 million with 17.9 million shares outstanding and only 9.3 million of them that float. No dividend is paid. Due to prior losses, no p/e is reportable and the price/sales is a reasonable 1.00 per Yahoo. There are only 119,000 shares out short...representing 1.23 days of average trading volume.
Overall, this is a nice small orthopedics firm. I own some EXAC in my trading portfolio but do not own any share of this company. Good luck investing!
Thanks for stopping by! Please come back and visit again soon.
Thursday, 21 August 2003
August 21, 2003 Lifeway Foods, Inc. (LWAY)
O.K. I hate doing this but I found this one this morning and jumped in with both feet first BEFORE I posted this note. So I AM an owner of 200 shares in my trading account and will update that account shortly.
Lifeway (LWAY)"...produces kefir, a drinkable product similar to yogurt sold under the name Lifeway's Kefir, a plain farmer's cheese sold under the name Lifeway's Farmer's Cheese, and a fruit sugar-flavored product similar to cream cheese sold under the name Sweet Kiss." (according to CNN.Money) (This is what I would call a 'wholesome' stock pick!)
Lifeway, as I write, is trading at $14.51 up $2.10 on the day or 16.91%. On August 14, 2003, as reported on NYTimes on the Web, Lifeway reported their second quarter 2003 earnings result. Revenues for the quarter ending June 30, 2003, were $3.78 million, up 25% from $3 million last year. Net income was $691,082 or $.16/share an increase of 96% compared to $351,656 or $.08/share last year.
Looking at Morningstar.com we find sequential growth in revenue of $6.0 million in 1997, $6.8 million in 1998, $7.9 million in 1999, $9.2 million in 2000, $10.7 million in 2001 and $12 million in 2002. Extrapolating the current quarter would get us something like $14 million in 2003.
Free cash flow, while small, is positive with $0 million in 2000, $1 million in 2001 and $3 million in 2002. Per Morningstar, $2 million in the trailing twelve months.
Looking at Assets/Liabilities we find Lifeway with $8.4 million in cash and $3.0 million in other current assets, easily covering the $1.1 million in current liabilities and $1.1 million in long term debt.
Looking at Yahoo, we find that LWAY is a TINY company with a market cap of $52.4 million. This is one of the smallest companies we have reviewed here with 4.22 million shares outstanding and only 1.10 million shares that float. No dividend is paid. Company is currently selling at a trailing p/e of 21.89 with a bit of a steep price/sales ratio of 3.95. As of 7/8/03, there are only 3,000 shares out short representing 0.3% of the float so forget about a short 'squeeze'.
I like this stock...except for its tiny size and the fact that Fidelity required 100% equity...that is, it is non-marginable. Good luck if you buy! Thanks for stopping by.
August 21, 2003 Trading Transparency
Haven't seen too much to post but did like LWAY today. Picked up 200 shares at around $13.80 or so....and in the last week, sold my RATE....stock price has been drifting down and we still had about a $260 profit so out went THAT interest-rate sensitive issue. QSII has been strong since our purchase so after a fast 26% gain, I dropped 100 of the 300 shares. That's about the size of things. Will try to post the full report on LWAY later today.
Tuesday, 19 August 2003
August 19, 2003 Dynacq International, Inc. (DYII)
Welcome Back! Thanks again for stopping by. Please leave comments here or email me at firstname.lastname@example.org
Anyhow, market is see-sawing (?sp?) back and forth but seems to want to move ahead. We had good numbers from Home Depot...2 cents ahead of expectations...and the housing starts hit a multi-year record (although housing construction permits were not quite as strong.)
Dynacq International (DYII) showed up this morning in the greatest percentage gainers. According to CNN.Money, one of my favorite starting points, Dynacq "...owns and operates an integrated healthcare delivery system that includes outpatient surgical center, hospital, physician management services and home infusion therapy."
DYII is having a nice day today trading currently at $24.50 up $1.25 or 5.38% on the day. On July 14, 2003, DYII reported their third quarter (ending May 31, 2003) earnings results: Net patient service revenues increased to $25.6 million from $19.5 million in 2002, a 31% gain from the prior year. Net income rose 52% to $6.27 million from $4.127 million the prior year or $.40 from $.27 a 48% gain for the diluted per share earnings 2003 from 2002. This was reported from BUSINESS WIRE on the NYTimes on the Web.
Morningstar.com is overall favorable with a steady revenue growth from $11 million in 1998, $16.2 million in 1999, $26.0 million in 2000, $43.8 million in 2001 and $64.9 million in 2002. With current revenue at $25 million plus, it looks like current 2003 year should be in range of $90 to $100 million in revenue. Not too shabby at all!
Free cash flow is a bit bouncy with $4 million reported in 2000, $2 million in 2001, $5 million in 2002, but ($1) million in the trailing twelve months. Apparently there has been a large increase in capital spending the past twelve months causing the drop back into negative territory.
The company is solvent with $4.9 million in cash and $29.5 million in other current assets. According to Morningstar, current liabilities stand at $7.6 million and long-term liabilities are at $4.7 million.
According to Yahoo.com, this is a fairly small company with a market cap of $343.8 million. There are 14.8 million shares outstanding with a float of 6.10 million. No dividend is paid. The p/e is a reasonable 18.96, and as of 7/8/03, there were quite a few shares out short...1.17 million ot be exact....representing 9.31 days of average trading volume (short ratio). This is bullish for the stock as these shares need to be eventually covered.
I do not own any shares of this stock....and actually prefer to personally avoid HMO, hospital type companies, which might be strange as I am in that medical field of business. But maybe I am too close to the trees to see the forest? Anyhow, the company DOES look nice and may very well represent an excellent investment.
Regards to all of my friends and please come back and visit often. If you have a website, I would love for you to provide a link for this site on yours....would help me get recognized by Gooogle!
Monday, 18 August 2003
August 18, 2003 Measurement Specialties, Inc. (MSS)
I haven't posted much the last few days...in fact I need to do my weekend update...and now it is almost TUESDAY (yikes)....so here is another one for you to ponder!
Again, I came across this stock in the greatest percentage gainers today. This stock, Measurement Specialties (MSS), is on the AMEX...and is a smaller issue than some of the stocks we have examined before. Smaller issues tend to be quite volatile both on the upside and downside....especially with a small float.
By the way, I do not own any shares of MSS, nor do any members of my family.
Measurement Specialties closed today at $12.31 up $.98 or 8.65% on the day. According to the NYTimes on the web, Measurement Specialties is "...a designer and manufacturer of sensors and sensor-based consumer products." According to Yahoo, these products "...include pressure sensors, custom microstructures, accelerometers, tilt/angle sensors and displacement sensors for electronic, automotive, medical, military and industrial applications."
On August 7, 2003, MSS reported results for its first fiscal period ending 6/30/03. Net sales for the 3 months increased 9.8% to $26 million compared to $23.7 million for the same period in 2002. For the same period, net income was $3.7 million or $.29/diluted share compared to a net loss of $2.2 million or ($.18)/diluted share in 2002.
Morningstar.com shows a fairly history of revenue growth from $29.3 million in 1998, $37.6 million in 1999, $60.0 millio in 2000, $102 million in 2001, $132 million in 2002.
Free cash flow has just turned positive with ($10) million in 2001, ($8) million in 2002, $2 million in 2003 reported.
The assets and liabilities are fairly well balanced with $2.7 million in cash reported with $26.7 million in other current assets balanced against $23.6 million in current liabilities and $3.6 million in long-term liabilities.
Yahoo.com shows a tiny market cap of $140.0 million wiht 12.4 million shares outstanding and 10.7 million of them that float.
No cash dividend is paid. Due to prior losses, no significant p/e is reported. There is a HUGE short interest of 1.33 million shares representing 12.5% of the float or 55.54 days of average trading volume (!). This was as of 7/8/03 as reported on Yahoo.
Technically, the stock graph shows a steady, ascending curve...and looks quite strong (imho) although certainly not maintainable.
This is an interesting investment selection. I would rather see a longer period of positive earnings to allow a low p/e....also the small market cap may or may not be attractive to you. It certainly deserves your consideration!
Regards again...and thanks for stopping by!
August 18, 2003 PolyMedica Corporation (PLMD)
Hello friends! Was away from my computer for a few days and am back on a great day in the market!
Looking over the greatest percentage gainers, I have found a new one for me: PolyMedica Corporation (PLMD). I do not own any shares of this issue nor does any member of my family.
PLMD had a nice day today closing at $46.05 up $5.01 on the day or 12.21%. Looking through the news, we find that Polymedica did have some accounting questions regarding how they account for advertising expenses...this was reported on 8/13/03....and would affect some of their earnings for 2002 and 2003. Regardcless, they reported a nice earnings report on 8/13/03: revenues for the first fiscal 2004 quarter ending 6/30/03 were $98.9 million an increase of $17.3 million or 21% from the prior year's result of $81.6 million. With the more conservative accounting of advertising expenses, as reported on NYTimes on the Web, net income for the quarter would be $8.9 million or $.70/diluted share compared to $7.3 million or $.58/diluted share in the first quarter of fiscal 2003.
By the way, according to CNN.Money, PolyMedica "...is a nationwide provider of direct-to-consumer specialty medical products and services, primarily focused on the diabetes supply and consumer healthcare markets."
Examining Morningstar.com, we find that revenue growth has been excellent. In 1998, $73.8 million in revenue reported, $104.8 million in 1999, $156.9 million in 2000, $220.0 million in 2001, $279.7 million in 2002, and $334.6 million in the 'trailing twelve months.'
Free cash flow has been positive with $6 million in 2001, $8 million in 2002 and $7 million in 2003.
The balance sheet shows $28.6 million in cash and $97.4 million in other current assets, more than enough to cover the $31.9 million in current liabilities and $22.4 million in long-term liabilities.
It is revealing to look at Yahoo.com 'profile' section on PLMD. We find that the market cap is a moderate $506.9 million with 12.4 million shares outstanding with 10.1 million of them that float. The company DOES pay a dividend (!) with a $1.00 dividend reported on an annual basis with a projected yield of 2.44%. The price/earnings is very reasonable at 12.21. Price/sales is not inflated either at 1.38.
It is interesting to see that as of 7/8/03, there were 3.78 million shares out short representing 37.4% of the float or 10.15 days of average volume. Perhaps some of the current upward price movement involves some of the nervous short-sellers covering their short position (?). If not, they may be nervous soon, releasing additional buying pressure for this company.
I like this stock due to earnings momentum, reasonable price (on a p/e basis), income support, and technical price movement. I have a little concern over accounting questions regarding capitalization of advertising costs...but this does not take away the underlying revenue growth and earnings of this company. I am certainly thinking about buying some shares in here....if I can find some available cash!
Regards again and thanks for stopping by. Please email me if you have any questions or comments at email@example.com
Thursday, 14 August 2003
August 14, 2003 Tyler Technologies, Inc. (TYL)
I guess if you are reading my entry tonight you probably do not live in New York City. What a night! We will have to see if New York gets the power back...and what this means for the market. Perhaps a fuel cell company is a good bet?
Anyhow, I first heard of Tyler in a Yahoo chatroom. Yes I sometimes drop by there to chat and share some ideas. And browsing the big percentage movers, Tyler Technologies shows up. they had a great day today: TYL closed at $5.75 up $.44 or 8.29% on the day.
Tyler "...provides technology, software, data warehousing, electronic data management outsourcing services, title plant and property records database information and other services for local governments and other enterprises." according to CNN.Money.
On July 31, 2003, TYL reported second quarter earnings results: total revenue increased 8% to $36.1 million from $33.6 million in the quarter ending June 30, 2002. Operating income for the quarter was $3.1 million, an increase of 35%, compared with operating income of $2.3 million in 2002. Net income for the quarter was $2.0 million compared with $1.3 million last year. Apparently there must be more shares outstanding because on a per share basis the increase was only from $.03 to $.04 per diluted share.
Morningstar shows a steady increase in revenue from $23.4 million in 1998, $71.4 million in 1999, $93.9 million in 2000, $118.9 million in 2001, $133.9 million in 2002. Extrapolating the current quarter gets us somewhere in the neighborhood of $140 million in revenue for 2003.
Free cash flow has improved nicely from ($10) million in 2000 to $10 million in 2001 and $17 million in 2002.
The Balance Sheet as reported on Morningstar.com shows $45.0 million in cash and $38.5 million in other current assets. This is significantly greater than the $43.9 million in current liabilities and $4.4 million in long-term liabilities.
Reviewing Yahoo.com, we find that Tyler is a small company with a market cap of $214.5 million and 40.4 million shares outstanding with 27.9 million of them that float. No dividend is paid. The p/e is a very reasonable 10.71, there are only 78,000 shares out short...representing a half-day of average trading volume.
I like this stock a lot overall....the price is reasonable, the growth is steady, and the finances are intact. Downside: price is under $10 making it more volatile (on percentage basis), and stock only trades an average of 148,000 shares/day. Otherwise, really everything looks nice and this is a stock that should be evaluated for purchase.
Needless to say, I do not own any shares nor do any members of my family. If you have any questions or comments, please contact me at firstname.lastname@example.org or leave a comment right here on the website! Thanks for stopping by and please come and visit again soon.
Tuesday, 12 August 2003
August 12, 2003 Techne Corp. (TECH)
I first heard of Techne Corporation (TECH) at my stock club last year when one of the members presented the stock....and we owned it as a club for a short period. I do not currently own any shares nor do any members of my family.
TECH had a great day today closing at $32.08 up $3.65 or 12.84%. The stock moved on news of its earnings report which was released today. TECH "...is engaged in the development and manufacture of biotechnology products and hematology calibrators and controls which are distributed throughout Europe."
The earnings report, mentioned above, was for Techne Corporation's fourth quarter ending June 30, 2003. Net earnings were $12.6 million or $.31/share (diluted) compared with a loss of $303,659 last year or ($.01)/share (diluted in 2002.
Results for 2002 were adversely affected by an $11.4 million charge or $.27/share last year due to a settlement with Amgen, Inc.
Consolidated net sales for the quarter were $39,425,932 and increase of 11% from the year earlier sales results.
Morningstar.com shows that revenues have increased consistently since 1998 when $67.3 million in revenue, $90.9 million in 1999, $103.8 million in 2000, $115 million in 2001, $131 million in 2002, and $145 million in 2003.
Free cash flow has been positive if somewhat inconsistent with $8 million reported in 2000, $40 million in 2001, and $5 million in 2002.
The company is loaded with cash with $107.7 million reported, way more than the $11.9 million in current liabilities and $16.2 million in long-term liabilities combined. In addition, the company has an additional $28.6 million in other current assets.
Yahoo.com shows a market cap of $1.16 Billion, with 40.8 million shares outstanding and 38.3 million of them that float. No dividend is paid. The price/earnings is moderate at 36.97, there are 2.48 million shares out short as of 7/8/03. This is significant as it represents over 8 trading days of average trading volume of 296,000 shares.
With no debt and great earnings reported, I like this stock a lot. Not exactly cheap with the p/e of 36.9 but the stock looks nice on a growth basis. I don't have any cash to buy any now.....but...one never knows....On ne sait jamais!
(did I get my French right?)
Thanks for stopping by and please do visit again and share this URL with your friends. Drop me a line at email@example.com if you have any questions or comments.
Monday, 11 August 2003
How are we doing? A look at the week of June 30, 2003
The week of June 30, 2003, was a relatively slow week for this site. We posted five selections that week starting with TransMontaigne, Inc. (TMG) which was listed on 6/30/03 at $6.48. TMG closed today at $5.50 down $.98 or down (15.1%).
July 1, 2003, we selected Choicepoint Inc. (CPS) at $36.14. CPS closed today at $37.34. This is a gain of $1.20 or a gain of 3.3%.
Three stocks were selected on July 2, 2003, to close out the week of June 30th for selections: Digital River (DRIV) at $21.69, Metrologic Instruments (MTLG) at $35.60, and Mid Atlantic Medical (MME) at $55.56.
DRIV closed today at $20.84, down $.85 or down (3.9%), MTLG closed today at $29.89, down (16.0%), and Mid Atlantic Medical (MME) closed today at $50.53, down $5.03, or down (9.1%).
The market was NOT kind to our picks of 6/30/03; we had (9.1%), (16.0%), (3.9%), and (15.1%). We had only one stock with a gain of 3.3%.
We will have to see how these stocks do long term, but if they were in our trading portfolio, we would have sold all which reached an 8% loss.
August 11, 2003 Possis Medical, Inc. (POSS)
Market is still trading sloppy today. Currently NASDAQ is up while DOW is down. Was the opposite way most of last week. Anyhow, here is a stock that I do own some shares (or did the last time I checked) in a managed account...
Possis Medical "...is a developer, manufacturer and marketer of medical devices." The stock is currently trading at $17.33, up $1.65 or 10.52%.
On May 13, 2003, POSS reported last quarter earnings of $.10 vs $.09 last year on a fully diluted basis.
Sales were at $14.6 million, up 36% from last year.
Most likely, stock is moving up (?) because we are approaching the 3 month period from last year...and thus new earnings.
Morningstar.com shows steady growth since 1998 of this small company with revenue of $6.1 million in 1998, $13.2 million in 1999, $20.6 million in 2000, $30 million in 2001, $42 million in 2002 and extrapolating the current quarter would get us just shy of $60 million for 2003.
Free cash flow has steadily improved the last few years from ($11) million in 2000 to ($4) million in 2001, $6 million in 2002 and $10 million in the trailing twelve months.
The Statement on Assets & Liabilities as reported in summary on Morningstar.com looks excellent. POSS has $30.1 million of cash on hand, more than enough to cover the current liabilities of $5.8 million and there are NO long-term liabilities reported.
This small company has a market cap of $279.1 million with 17.8 million shares outstanding and 17.5 million of those that float. No dividend is paid. There are 604,000 shares out short as of 7/8/03, representing 2.46 days of trading volume.
I like this stock a lot...there is one cautionary note...on 2/12/03 they were warning about possible earnings shortfall in the third quarter. (This was the quarter reported in May, 2003.) We are now in the fourth quarter of their fiscal year and I see no reason to believe that they will have anything but a good quarter....but we should know soon.
Thanks for stopping by! Bob
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