March 10, 2005 Hibbett Sporting Goods (HIBB)

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always please remember that I am an amateur investor, so please consult with your professional investment advisors before making any decisions based on information on this website!

I was looking through the list of top % gainers on the NASDAQ and came across Hibbett (HIBB). Since HIBB is one of the first stocks I owned in my "Trading Portfolio", I was certain that I had discussed this somewhere in depth. Actually, I discussed HIBB not too long ago, when it was flirting with a sale on the downside. HIBB was acquired by me on 3/6/03 and I have a cost basis of $9.74/share. To give you the appropriate perspective, HIBB is trading at $29.49, as I write, up $2.75 or 10.28% on the day!

According to the Yahoo "Profile" on HIBB, Hibbett "...is an operator of athletic sporting goods stores in small to mid-sized markets predominantly in the southeast, mid-Atlantic and Midwest United States."

What has been driving the stock higher was the 4th quarter 2004 earnings results which were announced yesterday and a conference call today.

For the fourth quarter, revenue increased to $107.1 million from $91.2 million last year. Earnings came in at $8.2 million, or $.35/share, up from $6.5 million or $.27/share during the final quarter in 2003. For 2006, the company raised guidance to $1.26-$1.32/share, while the "street" was looking for $1.24. The news was enough to push the stock higher today!

How about longer-term? Taking a look at the Monrningstar.com "5-Yr Restated" financials, we can see what I think is one of the prettiest financial pictures in my portfolio or on this blog!

First, revenue has grown steadily from $174 million in 2000 to $362 million in the Trailing twelve months. Second earnings have grown also incredibly steadily from $.39/share in 2000 to $.99/share in the trailing twelve months (TTM). Free cash flow has been solid and growing: from $4 million in 2002 to $24 million in the TTM.

The balance sheet is also pristine, with $44.5 million in cash and $112.5 million in other current assets reported on Morningstar.com. Against this, HIBB has $46.3 million in current liabilities and only a $.5 million of long-term liabilities is reported!

What about valuation questions? Taking a look at "Key Statistics" on HIBB from Yahoo, we can see that this is really a small company, barely a mid cap stock with a market capitalization of $693.16 million. The trailing p/e is a bit rich at 29.62, but the forward p/e (fye 31-Jan-06) is a bit better at 23.81. Thus, the 5-Yr PEG isn't bad at 1.18. Price/sales also not too rich at 1.74.

Yahoo reports 23.47 million shares outstanding with 18.40 million that float. Of these, 686,000 shares are out short as of 2/8/05, representing 3.73% of the float or 4.426 trading days of volume.















So what does the chart look like? Taking a look at a Point & Figure chart from Stockcharts.com:

We can see that the stock has traded higher since January, 2000, when it was about $3.75/share to the current levels around $29.50. The graph really appears quite strong to me!

So what do I think? Well, I own the stock, so you know I like it! Especially after picking up shares in March, 2003, when HIBB was only $9.74/share! But seriously, the earnings are solid, the most recent same-store sales growth is just above 5%, the trend in revenue and earnings is quite impressive, valuation is reasonable, the balance sheet is super, well what IS there that I don't like? I can't really think of anything offhand :).

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

Bob

"Trading Transparency" SYNA

Hello Friends! Is this market talking to me or what? A few moments ago, my Synaptics stock (SYNA) hit the 8% loss limit and I placed a trade to sell my 300 shares at $21.90. These shares were also recently acquired on 2/25/05, for a cost basis of $24.05/share. Thus, I had a loss of $(2.15)/share or (8.9)% and out they went. You can see how my portfolio is moving back towards cash automatically. (Yikes). Anyhow, I shall be sitting on my hands, NOT replacing these positions, until one of my other holdings hits a sale point on a gain.

I hope you follow :). Thanks again for stopping by. Please feel free to email me at bobsadviceforstocks@lycos.com if you have any questions!

Bob

"Trading Transparency" PRFT

Hello Friends! Do you think I will ever learn? A few moments ago I unloaded my 400 shares of Perficient (PRFT) at $8.37/share. I have a cost basis of $9.37/share and had purchased them just four days ago on 3/4/05. YIKES. That is a loss of $(1.00)/share or (10.7)%. Ouch. Maybe next time I will learn to stick with stocks over $10. But those numbers were very attractive.

Just wanted to keep you posted! Have a great day trading! And whatever you do the rest of the time!

Bob

March 7, 2005 Egl Inc. (EAGL)

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to check with your professional investment advisors prior to making any investment decisions based on information on this website.

I have written some fairly in depth explanations about how I have been picking stocks so let me see if I can just get right to the important facts on this stock today!

First of all, reviewing the list of top % gainers on the NASDAQ today, I came across Egl Inc. (EAGL) which closed at $26.97, up $2.30 on the day or 9.32%. I do not own any shares nor do I own any options on this stock.

According to the Yahoo "Profile" on EAGL, EGL "...is a global transportation, supply chain management and information services company that provides logistics solutions, such as air and ocean freight forwarding, customs brokerage, local pick up and delivery service, materials management, warehousing, trade facilitation and procurement and integrated logistics and supply chain management services." As noted on the EGL website, EGL "...was the first US transport and logistics company to establish a proven freight delivery system in Iraq." I am not sure how much this Iraq work has contributed to their growth.

Looking for the latest quarterly report, I found that EGL reported 4th quarter 2004 results on March 3, 2005. Revenues for the quarter grew 16% to $230 million. Operating income for the quarter increased 66% to $27.6 million compared to the prior year same quarter. This worked out to $.26/diluted share, up from $.19/diluted share the prior year.

How about longer-term? Looking at "5-Yr Restated" financials on EAGL from Morningstar, we can see that revenue has grown fairly steadily from $1.4 billion in 1999 to $2.6 billion in the trailing twelve months (TTM).

Earnings have been rather erratic, dropping from $1.11/share in 1999 to a loss of $(.84)/share in 2001. Since that time, earnings have steadily increased to the $.94/share in the TTM.

Free cash flow has also not been perfect with $(41) million in negative free cash flow in 2001, improving to $23 million in 2002, but dropping to $(1) million in the TTM. This is a negative for this stock, but overall the rest of the numbers were fairly solid, so I decided to go ahead with the post.

The balance sheet is also fairly good with $97.3 million in cash and $633.4 million in other current assets, balanced against $488.8 million in current liabilities and $140.6 million in long-term liabilities.

What about "valuation"? Looking at "Key Statistics" on Yahoo for EAGL, we can see that this is a mid cap stock with a market capitalization of $1.23 billion. The trailing p/e isn't too bad at 26.57 and the forward p/e (fye 31-Dec-05) is better at 16.86. Thus, the five-yr PEG is under 1.0 at 0.94. In addition, the Price/sales is also below 1.0 at 0.41. Valuation looks nice to me.

Yahoo reports 45.59 million shares outstanding with 35.60 million shares that float. Of these, 1.54 million were out short as of 2/8/05, representing 4.33% of the float or 3.3318 trading days. This is just above the significant level of 3.0 (which is my own level that I use to judge short interest), but doesn't look like it is a big factor for this particular stock at this time.

No cash dividend is paid and the last stock split reported on Yahoo was a 1999 3:2 stock split.

How about "technicals"? Taking a look at a "Point & Figure" chart from Stockcharts.com:

We can see that this stock which was trading lower between late May, 2002, when it was at $18.00, dropped to a low in September, 2002, at around $9.50. Since that time, except for momentary weakness in February, 2004, this stock has been trading strongly higher. The graph looks strong but not over-extended imho.

So what do I think? Well the latest quarterly report looks quite strong, the five year record is nice, free cash flow is NOT as strong as I would like, the balance sheet is solid, and valuation is quite reasonable. The chart looks solid as well. I am not sure what this Iraq business is all about, but it is clear this company has been in business before all of this developed.

Now if I just had some money :) I might be buying some stock. But I just SOLD some stock on questionable news, and thus, I shall be sitting on my hands once again!

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

Bob

Trading Transparency "DVA"

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please consult with your professional investment advisors prior to taking any action based on information on this website.

A few moments ago, I unloaded my remaining 200 shares of Davita (DVA), the renal dialysis company, at $42.29/share. I purchased these shares at a cost basis of $36.29/share on 12/6/04, for a gain of $6.00/share or 16.5%. I sold because of news of a federal investigation into the accounting practices and chose not to ride this one out. Hopefully, I have not once again been "shaken out" of Davita unnecessarily.

I have owned Davita once before in 2003, and sold on news that turned out not to be fundamentally significant...so I may have done it once again...:).

In any case, with a sale of shares on "bad news" I am once again sitting on my hands, applying the proceeds of that sale to my margin...and waiting for a sale on "good news" before adding or replacing that position.

Thanks so much for visiting. If you have any questions or comments, please feel free to email me at bobsadviceforstocks@lycos.com.

Bob

A Reader Writes "When do you think I should start to purchase more stocks?"

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember 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.

I do however enjoy receiving mail from readers and if you would like to drop me a line, you can reach me at bobsadviceforstocks@lycos.com. Please remember that I cannot answer all letters that I receive and I cannot address individual investment issues....those are the things you need to use your own professional investment advisor to assist you with.

A week or so ago, Chris, who is a student over in Boston, Massachusetts, inquired about a class project. I answered him in the blog, and he has followed up with a progress report! (Thanks Chris for keeping me posted!). Chris wrote:

Hey Bob,

Sorry for the late response. Originally I had posted a comment but I
guess it didn't appear on the blog. What my partner and I decided to
do was use a variety of stratgies. We decided to each pick 3 stocks
and screen them with the suggestions you made. When my professor
returned out paper he said that your advice was sound in that it is
essential for us to follow the steps that you outlined, however, he
mentioned that we should use even more sources just to justify the
validity of your method.

My half of the portfolio mainly consisted of things that were a bit
safer including a blue chip and one of the stocks in your portfolio,
while my partner decided to invest in a mining company to balance our
beta, a reit, and another company which I don't recall at the
moment.. With the six stocks chosen I used 300,000 or so of our
million dollars. Now I will put your selling policies into place but
I was wondering when you think I should start to purchase more stocks.

Thanks for the time you put into helping us. It was a long entry
with a lot of great advice. If the return on our portfolio's was
real we'd surely pay you a fee :)

Chris

Well Chris, let me see if I may be of assistance. I think your professor's suggestion of using more sources is a good one. However, I suspect that the sources that I have been using are probably more than adequate. But more is better :).

You said your half of the portfolio consists of "...things that were a bit safer including a blue chip and one of the stocks in your portfolio". If I was your professor, I would inquire why you decided your picks were "safer"? And balancing with a mining stock and a REIT....well, this is getting interesting!

O.K., so you have used $300,000 of your $1 million to get started. When should you buy additional stocks? Well, from my perspective starting out at 30% invested is probably way too conservative. I think that 50% invested would be a great place to start. I would of course suggest that you look through my blog and page back through prior posts the last few months....as long as latest earnings are intact...you probably could find a few more stocks of interest. The stocks on my blog run the gamut in size and maybe you would be comfortable with a coupld of them.

My buying and selling strategy for a portfolio, that you could certainly adapt for your use, consists of an "internal barometer"....that is I like to use the performance of my own stocks to tell me when I should be buying and when I should be, as I like to say, "sitting on my hands."

What I would suggest is that you invest your $'s in your portfolio in fairly equal amounts among the different stocks. Predetermine how many stocks you want to have to feel adequately, yet not overly-diversified. For argument sakes, let's say 20. (I use 25 in my trading portfolio and am currently at 22.)

If you are at 50% invested, I would think you should thus be at 10 stocks. However, if you have only 6 stocks at 50%, well then 12 stocks would be your max.

I would suggest that your minimum # of holdings be half of your original # in your portfolio. I hope you are following. Thus, if you start at 6 stocks, you could drop down to three. If you get down to three stocks, I would then replace them if they are sold. If you get up to your maximum # of issues, for instance 12 stocks in this example, then if you have a signal to add a position, simply ignore this signal and instead add to your cash position.

O.K. what ARE the signals you are asking? Well, it is simple, as you know, I like to sell losers quickly, and winners slowly. These sales on gains or losses are the signals I use to add to the positions, or add to the cash.

There is an interesting book that you might like to discuss with your professor called "How to make $1,000,000 in the Stock Market Automatically!" by Robert Lichello that helped stimulate my own thoughts on this process. He does something rather different, but it is an interesting theory on portfolio management.

O.K. back to the signals! First, I have sale points on stocks rising in price. (I actually do this stuff!). What are they? For me, I sell 1/4 of a position remaining each time (1/4 of the shares), at sale points of gains of 30%, 60%, 90%, 120%, then by 60%: 180%, 240%, 300%, 360%, then by 90%....etc. I haven't got to those levels yet...but have sold some shares at 240% gains!

These sales on a gain, are signals that the market is in a healthy environment and I add a position (if I haven't reached my maximum # of positions in my portfolio).

Now on the downside: first sale is at a loss of 8%...out the stock goes. No matter how long I have held it. I usually give it at least a day :). However, if a stock has risen enough to have sold a portion at a gain, I will do the following: after the first sale (30% range), I sell if it hits "break-even". After that, I sell if it retraces 50% of its highest sale point...that is if I sold a portion at 90% gain, I will allow the stock to retrace back to 45%.

I also will sell a stock if there is something fundamentally wrong reported....like bad news. However, I really have been moving away from this, I don't want to have much "subjective" input on my holdings, and would prefer to let the market dictate my actions.

Well that is about what I do! I hope you can follow. See what your professor thinks and get back to me. I have enjoyed our correspondence and wish you well in your class!

Bob

"Looking Back One Year" A review of stock picks from the week of January 12, 2004.






Hello Friends! Thank you so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember 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!

A year ago, last January, I was off on vacation enjoying some scenery with friends and family. I didn't make any posts that week, thus, I shall review the following week's posts next week!

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

Bob

March 4, 2005 Perficient (PRFT)

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please consult with your professional investment advisors prior to making any decisions based on information based on this website!

As I posted a few moments ago, I just purchased 400 shares of Perficient (PRFT) in my "Trading Portfolio". Since I have not (as far as I can recall) ever reviewed this stock, I wanted to do so as soon as possible. Perficient (PRFT) as I write, is trading at $9.33, up $.91 or 10.81% on the day.

According to the Yahoo "Profile" on PRFT, Perficient "...is an e-business solutions services provider to large and major mid-size companies. It uses a solutions delivery approach called the Enabled Enterprise, which is designed to help clients reach new markets and increase revenues, acquire and strengthen customer relationships, reduce costs and increase productivity and empower employees."

On February 2, 2005, PRFT announced 4th quarter 2004 results. Total revenue came in at $21.6 million, up over 150% from $7.96 million the prior year. Diluted net income per share came in at $.06/share up 100% from the $.03/share the prior year. These results came in despite an increase in the share count from 16.5 million in 2003 to 23.0 million in 2004.

How about longer-term? Taking a look at a "5-Yr Restated" financials from Morningstar.com, we can see that revenue has grown fairly smartly from $2.6 million in revenue in 1999 to $45.2 million in the trailing twelve months (TTM).

The company was losing money between 2000 $(2.96)/share, through 2002-- $(.53)/share, turned profitable at $.07/share in 2003 and earned $.16/share in the trailing twelve months.

Free cash flow while small, has been positive and came in at $2 million in the TTM.

Balance sheet-wise, PRFT looks fine with $2.8 million in cash and $14.8 million in other current assets, as opposed to $9.8 million in current liabilities and $2.4 million in long-term liabilities.

How about "valuation"? Looking at "Key Statistics" on Yahoo for PRFT, we can see that this is a very small company with a market cap of $179.44 million. The trailing p/e is rich at 50.05 (with the company just turning profitable), the forward p/e (fye 31-Dec-06) is much better (based on estimates) at 27.38, with a 5-yr estimated PEG placed at 1.12. Price/sales is a bit rich at 2.76.

Yahoo reports 19.27 million shares outstanding with 13.40 million of them that float. Of these, only 476,000 or 3.55% of the float was out short as of 2/8/05, representing only 1.283 trading days of average volume.

No cash dividend and no stock dividends are reported on Yahoo.

How about "technicals"? In other words, what does their chart look like? Taking a look at Stockcharts.com, looking at a "point & figure" chart:

We can see that this stock was actually fairly steadily declining in price between November, 2000, when it was trading around $14, down to quadruple bottom in September 2002 at around $.50/share (!), since then it has been trading higher to its current level around $9. At least for the last two years, the stock has been on a bullish move.

So what do I think? Well the stock made a nice move today, but generally I hate stocks under $10 because that 8% loss limit almost always (!) makes me stop right out of a particularly good stock for no particular reason :(. However, earnings were very strong, revenue growth is solid (how much from acquisitions though ?), valuation is reasonable, last five years shows steady growth, cash flow is positive, the balance sheet is good, and the technicals look just fine. Anyhow, I liked it enought that I DID buy some shares!

Thanks again for stopping by! I hope all of this discussion is helpful to you and I really enjoy your comments and emails! You can write me at bobsadviceforstocks@lycos.com.

Bob

"Trading Transparency" Perficient (PRFT)

Hello Friends! Thanks once again for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember 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.

That nickel was sure burning a hole in my pocket! A few moments ago, after perusing the list of top % gainers on the NASDAQ today, I came across Perficient (PRFT), a stock that I have not reviewed here before. It IS under $10, so I am a bit cautious about this one, but the numbers looked great and I bought 400 shares at $9.35 a few moments ago. As I write, PRFT is trading at $9.26..so I am losing a few cents already :).

In any case, I will try to update PRFT with a full report later today or this weekend! Thanks again for stopping by! If you have any questions or comments, please feel free to email me at bobsadviceforstocks@lycos.com.

Bob

"Trading Transparency" QSII

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember 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!

I got a chance to check my "Trading Portfolio" a few moments ago, and was pleased to learn that another of my stocks had hit a sale point on the upside. This time, Quality Systems (QSII), which as I write is trading at $86.70, up $4.02 or 4.86% on the day, hit a sale point.

For those of you who might be new to my "strategy", I have a very disciplined (usually) buy and sell strategy. I sell my losers quickly at (8)% losses, and sell my winners slowly. I sell portions of winners (1/4 of my existing position) at set sale points of 30%, 60%, 90%, 120%, and then by 60% intervals at 180%, 240%, 300%, and 360%....I haven't had any with this strategy at the upper end of this range...but at that point would go by 90% intervals selling 1/4....etc.

Moments ago, as I wrote, I sold 22 shares (of my 90 share position) of QSII at $86.72/share. I had originally purchased Quality Systems (QSII) at a cost basis of $31.00/share on 7/28/03. I had sold portions of QSII four times already (!), being that this was my fifth sale, I had been waiting for a 180% gain level. Based on my $31 purchase price, I had a gain of $55.72/share or 179.7%, hitting my sale point!

Another thing. Since I am under my 25 position goal for my portfolio, I use a sale at a gain in one of my existing positions as a "green light" to add a new position. That nickel is ALREADY burning a hole in my pocket!

Again, thanks so much for stopping by! If I find anything and purchase a new position, I will keep all of you posted. If you have any comments, questions, or words of encouragement, please feel free to email me at bobsadviceforstocks@lycos.com!

Bob