Just a quick update to the previous post.  I just sold an additional 400 shares of SILC at $14.306.  Now down to 1200 shares and holding :).

Bob 

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website.

This market sure has a lot of 'mood swings' don't you think?

Just when I was feeling a bit blue over selling my WOOF stock for the second time since I have been an owner of shares, the market turns around and starts to rally.  Almost feeling the strength of the market move higher I thought I would take a look and see if there were any names that caught my attention.

Sure enough, Silicom (SILC) was moving strongly higher on earning news.   I had just reviewed Silicom on December 10, 2007, and you might want to refer to that review for information about the Morningstar.com report and valuation.

With all of that in mind, I took a big plunge and purchased 2,000 shares of Silicom (SILC) at a cost of $13.668.  With the stock trading higher this afternoon, I have already sold 400 shares of SILC at $14.1301, for a gain of $.4621/share or 3.38% since purchase.  (400 x $.4621 = $184.84 gain).  Nothing to sneeze at but I will take each small gain as I try to climb back into the black this year and move my performance ahead.

I would like to leave 400 shares in my Trading Account if possible, so I shall be looking to making three additional 400 share purchases----if I do this piecemeal as it appears I may do.  Anyhow, that's an update!

If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob 

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website!

I wanted to share with you a trade that I just implemented in my account.  I sold my complete position (210 shares) of VCA Antech (WOOF) at $37.74/share.  These shares were purchased on 7/27/07 at a cost basis of $41.04/share.  Thus I had a loss of $(3.30)/share or (8.04)% since purchase.

As you probably know, I use the (8)% loss as a point of sale of any position in my portfolio after an initial purchase, and not having sold any shares at higher appreciation targets.  Furthermore, I use this sale on "bad news" as a simple portfolio management signal.  (As if I hadn't been paying attention to what the market is doing!).  In other words, I do not plan to reinvest these funds.  Fortunately, my margin balance continues to dwindle along with my equity positions.  

I shall be waiting for some 'good news' signal to resume expanding the size of my portfolio with new positions.  I am now down to 8 positions in my trading account: ABAX, CERN, CPRT, CVD, IHS, MORN, RMD, and VIVO.  No position is immune from a sale.  So if the market continues to go lower, I shall update you on the progress in my portfolio.

As for WOOF, this is my second unsuccesful attempt to own the stock.  With my own sale of shares, I am thus reducing my rating:

VCA ANTECH (WOOF) IS RATED A HOLD     

Thanks again for visiting!  If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Have a good week everyone!

Bob 

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website.

CLICK HERE FOR MY PODCAST ON HOLOGIC (HOLX)

If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob 

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website.

As one of my weekend tasks, I try to get a review up examining past stock selections from this website.  Going one week at a time, last week I reviewed the picks from July 17, 2006.  This week, let's take a look at the stock picks from the week of July 24, 2006. 

These reviews assume a 'buy and hold' approach to investing.  In practice, I advocate and employ a disciplined portfolio management strategy that utilizes limiting losses to small percentages, preserving larger gains with sales and selling portions of stocks as they appreciate to targeted appreciation levels.  This difference would certainly affect investment performance and this should also be taken into consideration.

On July 25, 2006, I posted Hologic (HOLX) on my blog when it was trading at $48.34.  This was my second post on this stock which was posted April 27, 2005, at a split-adjusted price of $17.93.  Hologic closed at $62.07 on January 25, 2008, representing a gain of $13.73 or 28.4% since posting.

Let's take a closer look at this stock and update our analysis.

On November 6, 2007, HOLX announced 4th quarter 2007 results.  Revenues for the quarter ended September 29, 2007, came in at $202.6 million, up 31% over last year's revenues of $154 million.  Net income worked out to $32 million or $.58/diluted share, compared with a net loss of $(1.5) million or $(.03)/diluted share. 

The company beat expectations of analysts polled by Thomson Financial who had expected earnings of $.47/share on revenue of $198.1 million. However, the company did reduce guidance on fiscal 2008 results on earnings.  The company adjusted guidance to first quarter earnings of $2.15 to $2.20/share on revenue of $1.7 billion.  Previous guidance had been for profit of $2.35 to $2.40 per share on the same $1.7 billion.  Even the reduced guidance for 2008 still allows for a strong growth in earnings and revenue, but it is always helpful to have a company guide higher rather than lower in an announcement.

Longer-term, Hologics still has a very strong Morningstar.com "5-Yr Restated" financials page.   Revenue growth remains uninterrupted and phenomenal increasing from $204 million in 2003 to $738 million in 2007.  Earnings have increased from $.07/share in 2003 to $1.72/share in 2007 with a slight dip last year from $.63/share in 2005 to $.56/share in 2006 only to bounce back strongly in 2007.  Shares outstanding have increased from 40 million in 2003 to 55 million in 2007.  This 37.5% increase in shares was accompanied by an increase in greater than 200% in revenue and an increase of more than 1,500% in earnings.  

Free cash flow has been positive, and while dipping from $37 million in 2005 to $4 million in 2006, rebounded strongly to $130 million in 2007.

The balance sheet on Morningstar.com is strong with $399.0 milllion in total current assets compared to $178.6 million in current liabilities and only $82 million in long-term liabilities.

Finally, let's take a look at the "Point & Figure" chart from StockCharts.com on Hologic:

This is a PHENOMENAL graph. 

With the strong quarterly report, the beautiful longer-term fundamentals and the solid price chart,

HOLOGIC (HOLX) IS RATED A BUY

Let's take a look at the second stock I 'picked' that week,  BE Aerospace (BEAV) which was selected on this blog on July 26, 2006.  BEAV was posted on this blog when it was trading at $23.05.  BEAV closed at $37.91 on January 25, 2008, for a gain of $14.86 or 64.5% since posting.

Let's review some of the fundamentals behind this stock as well.

On October 30, 2007, BE Aerospace (BEAV) reported 3rd quarter 2007 results.  For the quarter ended September 30, 2007, revenues came in at $428.2 million, up 48.7% from the prior year's result of $287.9 million.  Net earnings were $44.5 million, up strongly over last year's $31.4 million.  GAAP earnings increased 20% to $.48/share from $.40/share last year.

The company in the same announcement raised guidance by $.12/share for the full year to approximately $1.69/share.  BEAV beat expectations for the quarter which according to analysts polled by Thomson Financial had been for $.41/share on sales of $400 million.

And longer-term?

Examining the Morningstar.com "5-Yr Restated" financials, we find a solid, if somewhat imperfect report.  Revenue has shown fabulous growth from $681 million in 2002 to $1.54 billion in the TTM.  Earnings, which showed losses from 2002 to 2004 when they improved from $(3.18)/share to $(.53)/share between 2002 and 2004, and then turned profitable at $1.39/share in 2005.  Earnings dipped to $1.10/share in 2006, and bounced back to $1.48/share in the TTM.

The company has increased the float from 33 million in 2002 to 81 milliion in the TTM.  This 48 million or 145% increase in the float was matched by an $855 million or 126% increase in revenue.   On a per share basis, earnings increased $4.66 or  146% increase in earnings.  Thus, growth has been proportionate to the outstanding shares issued.  I would rather see little share growth and in any case a disproportionate increase in revenue and earnings compared to the growth in outstanding shares.

Free cash flow has been erratic with $(14) million in 2004, $(4) million in 2005, $17 million in 2006, and then back to a negative $(29) million in the TTM.

The balance sheet is solid with a total of $943 million in current assets compared to current liabilities of only $296.1 million in current liabilities yielding a current ratio of greater than 3, and enough to easily cover the $191.9 million in long-term liabilities.

Looking at the "point & figure" chart from StockCharts.com on BE Aerospace, we can see an impressive display of price performance for this company.

But to summarize, this has been a phenomenal stock pick for this blog.  The last quarter was strong, but the Morningstar.com report gives me some pause.  Earnings have been a bit erratic, with a dip in 2006 from 2005, but a nice rebound in 2007.  The company has been aggressive in issuing shares with only a commensurate effect on revenue and earnings growth.  Free cash flow has been inconsistent and the latest results were negaive.  However, the balance sheet is solid.

As much as I would like to rate this a 'buy', the best I can do:

BE AEROSPACE (BEAV) IS RATED A HOLD

So how did I do with these two stock picks from that week in July, 2006?  In a word FABULOUS!  The two stocks both made strong gains after being selected for the blog and in fact had an average gain of 46.45%

Thanks so much for stopping by and visiting my blog!  If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

If you get a chance, be sure and visit my Covestor Page where my actual trading portfolio is reviewed and analyzed.  Visit my SocialPicks Page where my stock picks are reviewed and analyzed.  And if you still have some time, stop by and listen to my podcasts on my Podcast Page!

Wishing you all a peaceful weekend and a great week ahead!

Bob  

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website.

I am continuing to work on a strategy to trade stocks on very short-term basis and also manage my underlying trading account in response to market action.  I have allowed myself a single position for a "trade" with the strategy of buying a large position, which for me might be $25,000 or so, compared to my average holding of about $6,000, and then selling most of that position should the stock appreciate or selling the entire position should the stock actually drop in price.  I haven't set any firm sale points on either the upside of the downside--but that is my strategy.

Furthermore, after a single sale of a holding, including my 'trades', I move up my 'stop' to close to break-even, so that a position in which I have sold shares profitably doesn't turn into a losing venture.

This afternoon, after some rumors about Goldman Sachs, and perhpas just from 'trader fatigue', the market turned lower and brought all of my recent purchases along with it.

With my recent purchases of Dolby (DLB), Under Armor (UA), and Varian Medical (VAR), all moving into the 'red', I chose to sell all three of these positions even if the fundamentals remained intact.  It has been my strategy all along to sell these shares should they break down and start losing me money, and sell I did.

1.) Dolby (DLB): I purchased 800 shares of Dolby this morning at $44.62.  400 of these shares were sold shortly thereafter at $45.5275 and then the remaining 400 shares were sold for a small loss at  $44.4225.  As I write, Dolby is holding this level and is trading at $44.48, up $3.18 or 7.70% on the day.  With my own sale,

DOLBY (DLB) IS RATED A HOLD

2.) Under Armor was purchased 1/23/08 at a cost basis of $35.00/share. This was also part of a larger 'trade'.  Earlier today, with the market under pressure, UA dipped into the 'red' and I sold my 150 shares at $34.14.  UA is currently selling at $34.45, down $(1.21) or (3.39)% on the day.

UNDER ARMOR (UA) IS RATED A HOLD

3.)  Shares of Varian Medical (VAR) were also purchased 1/24/08 and were part of a more complex 'trade'.  They were purchased with a cost basis of $53 on 1/24/08.  Today Varian sold off with the rest of the market.  I sold my 100 shares at $52.1666.  VAR is currently trading lower at $51.78, down $(1.79) or (3.34)% on the day.  With my own sale of Varian Medical Systems,

VARIAN MEDICAL SYSTEMS (VAR) IS RATED A HOLD.

As you can see there is much I need to learn about making 'trades'. 

If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks @lycos.com.

Bob

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website.

With Microsoft reporting earnings that passed estimates, it appeared this morning that the market might well head into a third strong day of trading.  With that in mind, I was ready to dabble into a trade, hopefully ending up with a new position.  This is rapidly becoming another way that I am growing my portfolio--through management of my existing positions and through trading stocks on the upswing that generally meet my same criteria for 'quality'.

Looking through the list of top % gainers on the NYSE today, I noted that Dolby (DLB) which had been under pressure recently, was moving sharply higher in early trading.  As I write, Dolby is trading at $44.51, up $3.21 or 7.77% on the day.  I purchased 800 shares of Dolby at $44.62, and later sold 400 of them at $45.5275, for a gain of $.9075 or 2.03% on the trade.  This did represent a gain of $363.  The other shares are now slightly 'underwater' so I shall me monitoring them closely.  The market has pulled back slightly mid-morning, and I would anticipate these shares to move higher should the market move higher as well.

Dolby (DLB) is a recent "pick" for my blog, having written extensively about it on January 7, 2008. 

As I stated then,

DOLBY (DLB) IS RATED A BUY

I don't have a set 'stop' for this trade, but am not interested in letting it turn into any significant loss for me.  If the stock should move higher once again, I would plan on selling another 250 shares to leave 150 for my Trading Portfolio as a 'holding'.

Thanks again for dropping by and visiting!  If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website.

I am incorrigible.

Back to a trade again.  A few moments ago, with the market rally appearing to be strong out of the gate with what appears to be a continuation of yesterday's rally, I decided to see if I could add another trade to the portfolio.

Looking at the list of top % gainers on the NYSE, I came across Varian (VAR), an old favorite of mine, which closed at $53.57, up $4.47 or 9.10% on the day.  I say 'old favorite' because I have written about Varian (VAR) on this blog previously--first writing it up on October 20, 2003, and then revisiting Varian on May 11, 2005.  

With the market fluctuating and then moving higher after the 'stimulus package' was announced and the President offered comments, it seemed a good time to purchase some shares of Varian and I went ahead and purchased my usual 'over-sized' position of 600 shares at $52.9838 this morning.  Early this afternoon, with the market higher and Varian struggling to move ahead, I took my small profit, leaving 100 shares of my original position to stay as part of my Trading Portfolio, selling 500 shares at $53.4054.  This worked out to a gain of $.4215/share or .8% on the purchase.  With the 500 shares traded, this was a profit of $210.75 on this trade.

Let's take a closer look at Varian and I will explain why

VARIAN MEDICAL SYSTEMS (VAR) IS RATED A BUY

What exactly does Varian Medical do?

According to the Yahoo "Profile" on VAR, the company

"...and its subsidiaries primarily provide cancer therapy systems worldwide. Its Oncology Systems segment designs, manufactures, sells , and services hardware and software products to treat cancer with radiation, including linear accelerators, treatment simulation and verification products, information management and treatment planning software, brachytherapy products and software, and other accessory products and services. It also offers conventional radiotherapy, intensity modulated radiation therapy, image guided radiation therapy, and stereotactic radiotherapy, as well as brachytherapy techniques."

Was there any news to explain today's move?

Varian was the subject of an analyst upgrade today.  Leerink Swann upgraded the stock from 'Mkt Perform' to 'Outperform'. The company also jumped in response to the earnings report announced yesterday, after the close of trading.

How did they do in the latest quarterly report?

On January 23, 2008, Varian reported 1st quarter 2008 results.   Revenues for the quarter ended December 28, 2007, came in at $459 million, up 18% from the first quarter last year.  The backlog stood at $1.7 billion, up 22% from the end of the first quarter the prior year.  Net earnings were $.43/diluted share up from $.37/diluted share in the year earlier period.  Overall this was $55.5 million in net earnings up from $49.5 million last year.

This result exceeded analysts' expectations of $.40/share on revenue of $436 million according to Thomson Financial.  The company raised guidance on the 2nd quarter to $.51/share and revenue growth of 14-16%.  This is consistent with the mearn analyst estimate of $.51/share.  

For the full year the company also raised guidance for earnings of $2.05 to $2.07 from prior guidance of $2.04 to $2.06, with revenue growth of 14%.  Previously they had estimated revenue growth at 10 to 11%.  Currently analysts are estimating earnings for 2008 of $2.05/share.

How about longer-term results?

Reviewing the Morningstar.com "5-Yr Restated" financials, we can see a very pretty picture of steady revenue growth from $873 million in 2002 to $1.68 billion in the trailing twelve months (TTM), steady earnings from $.70/share in 2002 to $1.93/share in the TTM, and stable outstanding shares with actually a decrease in shares outstanding from 135 million in 2002 to 127 million as the company bought back shares from the public. 

Free cash flow has been positive, if not growing, with $210 million reported in 2004, and $206 million in the TTM.

The balance sheet is solid with $288.8 million in cash and $825.6 in other current assets.  This, when compared to the $644.9 million in current liabilities yields a current ratio of 1.73. (From my perspective, ratios above 1.25 are adequately 'healthy').  In addition, there is a relatively small amount of long-term liabilities reported at $81.6 million.

What about some valuation numbers?

Reviewing Yahoo "Key statistics" on VAR, we find that this is a large cap stock with a market capitalization of $6.7 billion.  The trailing p/e seems reasonable at 29.23, with a forward p/e (fye 28-Sep--09) estimated at 22.70.  The PEG is a tad rich at 1.60.

Checking the Fidelity.com eresearch website, we can see that the Price/Sales (TTM) ratio is reasonable at 3.51 compared to the industry average of 5.16. Also on Fidelity, we find that the Return on Equity (TTM) is more profitable than its peers at 29.55%, compared to the industry average of 25.63%.

Finishing up with Yahoo, we can see that there are 125.12 million shares outstanding with 124.52 million of them that float.  As of 12/26/07, there were 3.65 million shares out short, representing a short ratio of 4 days of average trading volume.  This is a bit heavier than my 3 day cut-off for significance, so there could well have been a bit of a short squeeze today as the stock climbed higher in the face of good news.

No dividend is paid and the last stock split reported on Yahoo was a 2:1 stock split on August 2, 2004.

What does the chart look like?

Reviewing the 'point & figure' chart on Varian Medical Systems from Stockcharts.com, we can see that the stock which moved strongly ahead from early 2005 when it traded as low as $31, moved to a peak at $61 in January, 2006.  Since then the stock has pulled back dropping as low as $38 in September, 2007.  Since that dip, the stock appears to be moving higher developing a new area of support.  This month, the stock has been under pressure, as have other stocks, but tentatively, the stock appears to be looking to break through resistance into new higher prices. 

 

 

Summary:  What do I think about Varian?

It is really a little hard to like any stock right now.  Just as you think you know something about it, the market finds a reason to tear down your position in a quick and devastating fashion.

However, by all of the usual metrics, this is a great stock.  Let's review some of the things I have noted above.  First of all they reported a great earnings report that beat expectations and they went ahead and raised guidance.  An analyst even gave it an upgrade today!

Longer-term, they have grown their revenue steadily, grown their earnings steadily, and have actually decreased their outstanding shares.  Free cash flow is solidly positive (if not growing) and the balance sheet appears strong.

Valuation-wise, the p/e is under 30, the PEG is a tad over 1.5, price/sales is below similar companies and the Return on Equity exceeds its peers.  There is a slightly significant number of short sellers and the chart appears a little encouraging.

With all of this in mind, I purchased a large position as a trade.  As is my new custom, with a successful trade, I left behind a small position which shall enter my Trading Portfolio.  Since I have already sold a portion of VAR once, I shall sell my remaining shares should it dip significantly below my cost.

Thanks again for stopping by and visiting!  If you get a chance be sure and visit my Covestor Page where my actual holdings are reviews, my SocialPicks Page where my stock picks are tracked and my Podcast Page where you can download an mp3 of me discussing one of the many stocks reviewed on this website.

Regards again and hopefully continued strength in the market in the days ahead.

Bob 

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 consult with your professsional investment advisers prior to making any investment decisions based on information on this website.

With the incredible volatility of the market (the Dow opened up down about 275 and closed up about 280 in the same day!), I decided not to sit with this sizeable position long-term.  I sold 650 of my 800 shares, leaving 150 for a possibly longer-term holding, at $35.54/share.  This was a gain of $.55/share or 1.6% since purchase minutes earlier.  With a more-or-less successful trade, I shall keep the Under All shares in my Trading Account and treat them as a new position that has had one sale at a gain already.  In other words, instead of waiting for a loss of 8% if the stock should decline, I shall be unloading my shares should the stock hit my purchase price or lower.  In addition, I shall allow myself the opportunity of making another "trade" should the opportunity arise.

As background, Under Armor (UA) announced 3rd quarter 2007 results on October 30, 2007.   Net revenues for the quarter incrfeased 46.3%, income climbed 53.8% and diluted earnings per share climbed 25% to $.40 from $.32/share last year.  The company in the same announcement raised guidance on net revenues for 2007 to the $590 to $600 million range from the prior range of $580 to $590 million, and raised guidance for annual income to $81.5 to $83 million from prior guidance of $79 to $81.5 million.

The third quarter report easily beat expectations of analysts of $.34/share on revenue of $171 million. 

More recently, the stock of Under Armor has been under pressure as it provided 1st half guidance well under expectations. The company announced expectations for first half of 2008 for $.03 to $.05/share.  Analysts had been expecting $.26/share in the first quarter and $.13/share in the second quarter according to analysts polled by Thomson Financial.  This guidance well below expectations had a deadly effect on the stock price and the stock price reflected this disappointment.  Also driving the stock down strongly last week was the downgrade by Wachovia Capital Markets analyst John Rouleau.

Ironically, while the company was lowering guidance for the first half they were also raising guidance for the full year 2007 to $605 million, ahead of the above noted guidance as well as ahead of the 'street.  They also reported expectations for $1.03 to $1.04/share in 2007 ahead of the $1.01 expected by Reuters. 

Longer-term, the Morningstar.com "5-Yr Restated" financials page is strong if imperfect, with steady revenue growth, limited earnings results, free cash flow which more recently is negative at $(4)million, and a solid balance sheet. 

Chartwise, the 'point & figure' chart on UA from Stockcharts.com looks quite week, with the stock breaking below support of $61 back in September, 2007, and heading lower since then. 

With the mixed Morningstar report, the recent guidance below expectations, and the chart that looks less than strong, the best I can do is

UNDER ARMOR (UA) IS RATED A HOLD 

Thanks so much for stopping by and visiting!  If you have any comments or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.   For further information on my trading account and my overall performance, be sure and visit my Covestor Page.  Also, visit my SocialPicks page if you would like to see how all of my 'picks' have been performing.  And if you find the time, I am sure you would enjoy my Podcast Page where you can listen to me discuss some of the same stocks I write about here on the blog.

Bob 

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 pleae remember to consult with your professional investment advisers prior to making any investment decisions based on information on this website.

A few moments ago I exercised my prerogative to make a trade with one position in my account.

I did this because the market appeared to be over-sold over the short-term, and was rallying into the close.  Under Armor Armor (UA) is trading at $35.76 as I write, up $4.48 or 14.31% on the day.  I purchased 800 shares at $34.99 just minutes ago.  Wish me luck.

Bob