Stocks I follow/own that are worth knwoing
I follow many stocks for a variety of reasons. Here are some of them.
HEALTHCARE
AET – I bought in for two reasons: large cash position relative to stock price (~$24 per share after debt) and oversold after Q2 earnings release misses. They are now ~30% higher than that time.
WHY I DON’T OWN: Concern over rising unemployment. I expect competition for a shrinking enrollment base
TEVA – I think these guys are oversold. Generics are scaring Big Pharma. Some, like Merck, are trying to fight back by using other generic companies to undercut Teva, but it’s ultimately a losing battle. Teva’s sales are surging almost 70% YoY. But the market has their stock still crashing. They seem to have a bottom of $30 (currently at $32).
HOUSING
BMHC/BLG – The pre-eminent housing construction stock. With homebuilding dropping at least 30%, it’s a wonder this stock doesn’t follow suit.
WHY I DON’T OWN: Market manipulation keeps it above $25. Also, I don’t trust their bookkeeping. To begin with, they have a book value of $20, but look more closely. Over 50% of the assets are bullshit assets like goodwill and intangible assets. In fact, real assets like Current assets (sales, invoices, inventory) fell ~10% in 1 quarter while the bullshit assets rose 25%. Liabilities dropped at the same rate as current assets with one exception: debt. It rose 15% in just 1 quarter to $381M. This company has just enough cash flow momentum to keep up payments, but the book value is a farce. The book value is supposed to give a value if the company were liquidated – well, a glorified lumber company is worth the lumber, not the relationships.
ENTERTAINMENT
DLB – Boy did I miss this one. I voted thumbs down after Motley Fool went ga-ga over them. I still don’t get it. But they are up 50% since I walked away. Their HD play clearly is working, but I think that it is nonsense.
MVL – I love them, but as I’ve said in the past, their earnings are too far out in the future for me. Too much potential risk (although in their case, MVL’s risk is pretty low).
NFLX – I follow them out of habit, mainly. I love their product, but I have minimal respect for the management. They missed out on games and on global markets.
CONSUMER
WFMI – I still think that they are overvalued by ~15%.
WHR – I can’t believe this turkey is still flying. People are not buying their products and that isn’t changing next year. They are kept afloat by consumer durable spending (which may or may not be working in their favor). Strong short position must be part of the problem (short covering)
ETH – Furniture is as dead as the housing market, but this stock resists the downside. Strong short position must be part of the problem (short covering)
RSH – Another obvious dead duck that won’t give it up. Lack of focus or competitiveness are all that RSH has to offer. Watch them try and take this private via an LBO because nobody will acquire them (like Sears). Maybe a Chinese or Korean company can be suckered into this, because this is a dead company walking.
DIS – I own Disney. They are a stealth company, growing in small bits. I expect them to get a lot of mileage from this holiday season (Pirates DVD release, Cars toys, etc).
JBLU – I love this company but they have made some operational errors such as buying different types of airplanes (Embraer and Boeing). That just adds operational costs, reduces efficiencies and is stupid. But Jetblue delivers a leading product and they look unbeatable.
CTRN – Retail clothing. Too niche for my tastes, but a wonderful growing small company.
NTRI – I love the company, but I wonder if the growth momentum is still there.
INFRASTRUCTURE
PWR – I just got out of them. I still like them, just taking my profits. The flat revenue scared me.
JOYG – I’m currently out, because I think it’s just a matter of time for mining stocks to get hit. But this company is on solid ground for a while.
KSU – I own. I believe in their future. Plus I think they have been recently hit by the downturn in automakers’ fortunes (fewer parts being shipped if fewer cars are being built). However, coal shipping is super-strong and I see that helping them out.
ENI – South American electricity company. They are growing and running a great business, but I don’t like the debt/equity situation.
VARIOUS
CRDN – I wanted to buy into them but I saw a reduction in military spending. Otherwise, this is the company to own.
ET – They will be hurt by the Bank of America free trade offers as well as a US economy slowdown. The free trades hurt a little but it’s the loss of customer base that hurts more. ET makes money on margin business. The smart idea – which they have chosen – is to go global. But that is taking a while. They will probably get a bounce from the recent market strength, but then what?
OIL SERVICES/EQUIPMENT
DO – I own them. Along with ESV, DO is a major driller overflowing with cash and with a low P/E. However, their exposure to the Gulf Of Mexico was a concern. With Congress approving the new GOM drilling bill, DO should get some extra business.
GLBL – I own this. I love the global pipeline growth. A key issue here is backlog – visibility is not strong.
GRP – I love this company but hate the stock. They have mammoth backlog, rising margins, earnings off the hook in triple digits, and a mild 14 P/E. The stock never seems to advance beyond $45. It’s a good trading stock – sell at earnings and buy back later.
IO – Another oil company stock that I own. Their seismic equipment is used for both underwater and onshore sizing of deposits and they are very global.
TTI – I own them.I got in around $24 or so and they are up. Strong growth all the way.
HIGH TECH
STX – I love them and need to get back in them. Have you seen hard drive Video cameras? A potentially new multi-million unit seller.
T – I need to get back in them. Especially with the Bellsouth decision on the way. They are gaining momentum against the cable companies on the revenue side while reducing operational costs and bringing up margins.
IVAC – A niche player in the hard disc drive business. To osmall for me, but they are growing.
BRCM – Too big. I like MRVL better.
CBEY – Extremely volatile. I like them and see a good future, but sales seem to be flattening at the moment.
SNDK – Because I love flash. If we are now seeing HDD based video cameras, how far off are 100% flash based cameras? Think of it this way – the latest JVC and Toshiba HDD cameras require 30GB of memory. But battery consumption on Hard disc drives is just as bad as on mechanical DVD-Rs. But Flash memory would make battery life incredibly long. Moreover the camera would drop an incredible amount of weight and allow for radically different designs. The current cost for 30GB of flash would be ~$250. I dismayed that these aren’t here today. It still exhibits hallmarks of a downtrend. Partly an issue with earnings tied to acquisition challenges. It has a reasonable PE for now.
AKAM – Hey, these guys rock. But they are exclusively a US company. I do see potential clouds of competition on the horizon. And their P/E is ridiculously rich, giving them a PEG of almost 2. Sorry, but they are growing barely 50%. Yet each time I say that, they continue to grow. Ah well, I left HANS prematurely, only to see them crash eventually.
NVDA – It’s hard not to buy the hype that they are the last great graphics company that Intel can buy. Until the most recent quarter I would have said over valued based on sales, but their sales and earnings seem to be accelerating.
MRVL – I meant to buy them back at $19. It’s not too late, but chip sentiment is negative these days
APPL – Short them after MacWorld. My reasons
iPod sales slowing.
PC sales growth not accelerating as fast as expectations
Fear of Vista – this may take wind out of the sails
New products not shipping yet.
As the iPod business and Mac sales start to slow down, Apple must get out new products or the P/E will be reduced. They have 2 in the works: iPhone and iTV.
Even though it will be a me-too product, the iPhone will drive more business. But the problem is timing – it won’t ship for at least 3 more months, missing at least 1 quarter if not 2.
The iTV is trickier. This is a truly innovative device that could be disruptive. Right now, TV viewing is largely controlled by cable companies that push users through their set-top box. Apple could push folks back to a computer based streaming-video model.
Personally, I love the idea. Even if it’s a standalone device, which it won’t be. Rather, it will probably weave the iPod into this in a cool seamless way that justifies my 80GB device.
There are a lot of dependencies (price, ability to save, ease of use) and the biggest one is outside of Apple’s reach: content. They have to convince content providers to make the content available. And they have to provide a robust means of downloading and watching. I wonder what the bandwidth requirements are and if picture quality will compete with current cable, much less HD pictures.
HEALTHCARE
AET – I bought in for two reasons: large cash position relative to stock price (~$24 per share after debt) and oversold after Q2 earnings release misses. They are now ~30% higher than that time.
WHY I DON’T OWN: Concern over rising unemployment. I expect competition for a shrinking enrollment base
TEVA – I think these guys are oversold. Generics are scaring Big Pharma. Some, like Merck, are trying to fight back by using other generic companies to undercut Teva, but it’s ultimately a losing battle. Teva’s sales are surging almost 70% YoY. But the market has their stock still crashing. They seem to have a bottom of $30 (currently at $32).
HOUSING
BMHC/BLG – The pre-eminent housing construction stock. With homebuilding dropping at least 30%, it’s a wonder this stock doesn’t follow suit.
WHY I DON’T OWN: Market manipulation keeps it above $25. Also, I don’t trust their bookkeeping. To begin with, they have a book value of $20, but look more closely. Over 50% of the assets are bullshit assets like goodwill and intangible assets. In fact, real assets like Current assets (sales, invoices, inventory) fell ~10% in 1 quarter while the bullshit assets rose 25%. Liabilities dropped at the same rate as current assets with one exception: debt. It rose 15% in just 1 quarter to $381M. This company has just enough cash flow momentum to keep up payments, but the book value is a farce. The book value is supposed to give a value if the company were liquidated – well, a glorified lumber company is worth the lumber, not the relationships.
ENTERTAINMENT
DLB – Boy did I miss this one. I voted thumbs down after Motley Fool went ga-ga over them. I still don’t get it. But they are up 50% since I walked away. Their HD play clearly is working, but I think that it is nonsense.
MVL – I love them, but as I’ve said in the past, their earnings are too far out in the future for me. Too much potential risk (although in their case, MVL’s risk is pretty low).
NFLX – I follow them out of habit, mainly. I love their product, but I have minimal respect for the management. They missed out on games and on global markets.
CONSUMER
WFMI – I still think that they are overvalued by ~15%.
WHR – I can’t believe this turkey is still flying. People are not buying their products and that isn’t changing next year. They are kept afloat by consumer durable spending (which may or may not be working in their favor). Strong short position must be part of the problem (short covering)
ETH – Furniture is as dead as the housing market, but this stock resists the downside. Strong short position must be part of the problem (short covering)
RSH – Another obvious dead duck that won’t give it up. Lack of focus or competitiveness are all that RSH has to offer. Watch them try and take this private via an LBO because nobody will acquire them (like Sears). Maybe a Chinese or Korean company can be suckered into this, because this is a dead company walking.
DIS – I own Disney. They are a stealth company, growing in small bits. I expect them to get a lot of mileage from this holiday season (Pirates DVD release, Cars toys, etc).
JBLU – I love this company but they have made some operational errors such as buying different types of airplanes (Embraer and Boeing). That just adds operational costs, reduces efficiencies and is stupid. But Jetblue delivers a leading product and they look unbeatable.
CTRN – Retail clothing. Too niche for my tastes, but a wonderful growing small company.
NTRI – I love the company, but I wonder if the growth momentum is still there.
INFRASTRUCTURE
PWR – I just got out of them. I still like them, just taking my profits. The flat revenue scared me.
JOYG – I’m currently out, because I think it’s just a matter of time for mining stocks to get hit. But this company is on solid ground for a while.
KSU – I own. I believe in their future. Plus I think they have been recently hit by the downturn in automakers’ fortunes (fewer parts being shipped if fewer cars are being built). However, coal shipping is super-strong and I see that helping them out.
ENI – South American electricity company. They are growing and running a great business, but I don’t like the debt/equity situation.
VARIOUS
CRDN – I wanted to buy into them but I saw a reduction in military spending. Otherwise, this is the company to own.
ET – They will be hurt by the Bank of America free trade offers as well as a US economy slowdown. The free trades hurt a little but it’s the loss of customer base that hurts more. ET makes money on margin business. The smart idea – which they have chosen – is to go global. But that is taking a while. They will probably get a bounce from the recent market strength, but then what?
OIL SERVICES/EQUIPMENT
DO – I own them. Along with ESV, DO is a major driller overflowing with cash and with a low P/E. However, their exposure to the Gulf Of Mexico was a concern. With Congress approving the new GOM drilling bill, DO should get some extra business.
GLBL – I own this. I love the global pipeline growth. A key issue here is backlog – visibility is not strong.
GRP – I love this company but hate the stock. They have mammoth backlog, rising margins, earnings off the hook in triple digits, and a mild 14 P/E. The stock never seems to advance beyond $45. It’s a good trading stock – sell at earnings and buy back later.
IO – Another oil company stock that I own. Their seismic equipment is used for both underwater and onshore sizing of deposits and they are very global.
TTI – I own them.I got in around $24 or so and they are up. Strong growth all the way.
HIGH TECH
STX – I love them and need to get back in them. Have you seen hard drive Video cameras? A potentially new multi-million unit seller.
T – I need to get back in them. Especially with the Bellsouth decision on the way. They are gaining momentum against the cable companies on the revenue side while reducing operational costs and bringing up margins.
IVAC – A niche player in the hard disc drive business. To osmall for me, but they are growing.
BRCM – Too big. I like MRVL better.
CBEY – Extremely volatile. I like them and see a good future, but sales seem to be flattening at the moment.
SNDK – Because I love flash. If we are now seeing HDD based video cameras, how far off are 100% flash based cameras? Think of it this way – the latest JVC and Toshiba HDD cameras require 30GB of memory. But battery consumption on Hard disc drives is just as bad as on mechanical DVD-Rs. But Flash memory would make battery life incredibly long. Moreover the camera would drop an incredible amount of weight and allow for radically different designs. The current cost for 30GB of flash would be ~$250. I dismayed that these aren’t here today. It still exhibits hallmarks of a downtrend. Partly an issue with earnings tied to acquisition challenges. It has a reasonable PE for now.
AKAM – Hey, these guys rock. But they are exclusively a US company. I do see potential clouds of competition on the horizon. And their P/E is ridiculously rich, giving them a PEG of almost 2. Sorry, but they are growing barely 50%. Yet each time I say that, they continue to grow. Ah well, I left HANS prematurely, only to see them crash eventually.
NVDA – It’s hard not to buy the hype that they are the last great graphics company that Intel can buy. Until the most recent quarter I would have said over valued based on sales, but their sales and earnings seem to be accelerating.
MRVL – I meant to buy them back at $19. It’s not too late, but chip sentiment is negative these days
APPL – Short them after MacWorld. My reasons
iPod sales slowing.
PC sales growth not accelerating as fast as expectations
Fear of Vista – this may take wind out of the sails
New products not shipping yet.
As the iPod business and Mac sales start to slow down, Apple must get out new products or the P/E will be reduced. They have 2 in the works: iPhone and iTV.
Even though it will be a me-too product, the iPhone will drive more business. But the problem is timing – it won’t ship for at least 3 more months, missing at least 1 quarter if not 2.
The iTV is trickier. This is a truly innovative device that could be disruptive. Right now, TV viewing is largely controlled by cable companies that push users through their set-top box. Apple could push folks back to a computer based streaming-video model.
Personally, I love the idea. Even if it’s a standalone device, which it won’t be. Rather, it will probably weave the iPod into this in a cool seamless way that justifies my 80GB device.
There are a lot of dependencies (price, ability to save, ease of use) and the biggest one is outside of Apple’s reach: content. They have to convince content providers to make the content available. And they have to provide a robust means of downloading and watching. I wonder what the bandwidth requirements are and if picture quality will compete with current cable, much less HD pictures.
posted by Andrew at
10:18 PM
2 Comments:
Your analysis is second to nobody. You rock!
One thing I disagree is shorting AAPL purely based on its fundamentals. I lost some money in the summer betting against them. I would short AAPL ONLY if the overall market tanks. I would not short AAPL for only one and only one reason, that is, it is the MOST loved stock in wall-street probably next to GOOG. The lesson I learnt is not to bet against these wall street loved stocks
-MJ
Thanks for your kind comments.
Sentiment matters. Look at RID - Wall St hates them even though everything about them screams BUY.
Wall Street loves Apple an dthey can do no wrong.
However, sometimes these contrarian plays are where you make the money.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home