Bought TRID
Bought 400 shares @ $28.11
posted by Andrew at
8:44 AM
Everyone has opinions. They give you their two-cents worth. I'll give you more. One penny more. That's a cool 50% more than others. And that's wicked value. The LIVEROCKET investment philosophy is that at any given time, there are amazing companies out there that are building better mousetraps and generating incredible sales. This is not a buy and hold philosophy. No company can maintain exceptional growth and momentum for long.
2 Comments:
Hi Andrew,
What is your criteria for picking up stocks? Whats your opinion about DNA, MYOG, UPL? I got into NTRI at 42.69 after reading your analysis and looking at its fundamentals and last year run, hope it will perform atleast half of what it did last year....
Jitendra
Jitendra,
Thank you for enjoying this blog. I hope that you make money.
I'd like to say upfront that I personally invest in the stocks that I add to the LiveRocket paper portfolio. Timing may be different (I may get in or out at a different time based on my more aggressive personal investment objectives), but I am putting my money where my mouth is.
I can not share my methodology at this time. There is a very rigorous process that I follow and only a few stocks at any time make it through.
Which is not to say that it is foolproof. I have had unfortunate timing (GRP, NTRI, ALC). I have also picked stocks that turned out to be a bad fit (BCSI).
Thanks for sharing your stock ideas. Now to answer your questions about these stocks
DNA - Genentech is a great story. There just aren't that many companies positioned for success in biotech. That said, it's stock continues to languish. Could it break out? It has an expected 50% earnings growth this year, but they have a 42 forward P/E. Their growth is already priced in, I think. They would have to beat earnings pretty significantly. I don't know what they have that will do that.
MYOG - If you have the stomach for risk, here it is. They have a drug in the works for a rare heart disorder. There is competition but MYOG is in Phase III trials - which means that they are close to sales. But it's still years away.
So this is a classic small company play: one product which can make or break them. They have an existing $10M sales stream but this company is losing lots of money. There is a lot of Institutional interest. The downside is that small companies like this have incredibly volatile stocks. The only reason to invest would be if you really knew the product and space. I don't.
UPL - Natural gas is hot, and UPL has it. The market for natural gas is only growing. Natural gas moves with oil prices with notable exceptions that push the value higher. Compare with oil companies: gas has much higher margins and in some respects is more in its infancy as far as adoption is concerned. That will help IF prices drop - demand will continue to expand. Margins have been growing this year, and UPL has much better margins than rival COG. I wonder why.
They have a very reasonable price compared to future growth potential. And they have the law of size in their favor - they are small enough that any growth drives up their value more.
But I notice the following statement in their latest earnings report:
"Our 2006 plans continue the growth theme with a record capital expenditure budget of $425 million. We plan to execute the most aggressive drilling program in our history with 160 gross wells in Wyoming, and bring into production three more fields in China. With over seventeen years of identified drilling opportunities in Wyoming coupled with our low cost structure, we remain positioned to continue delivering industry leading performance for many years to come."
If you plot GRP (maker of the dril lbits) against UPL, they move 1:1 in the last year.
I prefer equipment vendors like GRP because in theory they are more resilient to daily oil price volatility. This does not seem to be the case, however.
Worth noting is that the stock price hasn't budged in 5 months.
The range in earnings estimates is massive: $1.35~$2.20 - a 75% variation. Blame the volatility of fuel prices.
If you want to make an energy play, this one looks very good. I don't like the energy price volatility.
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