Liverocket Week 7 Performance - up 0.45%

First of all, I need to correct Week 6's results. I mis-entered the IMA ending price as $52.64 but it was $42.64. call it wishful thinking.

Correcting for that, we were up 0.74% in Week 6.

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This was a mixed week with many hits, but the misses bit deep.

THE GOOD

AMX - Up 3%

CTSH - Up 2%

DO - A $4 dividend AND the stock stayed pretty flat

HOLX - Up 4%. The key here is a major report spelling out the massive advantages of the digital mammography. The market is split between GE and HOLX and HOLX has a clear lead and a product/technical advantage.

IMA - Up 2.5%

NUAN - Up 7%. NUAN is now on the Blackberry and the Treo.

PCP - Up 3%

TIE - Up 6%

THE BAD

CLB - Down 2%

THE UGLY

DO -We went down 7% and got stopped out. I bought back in. I thought DO would be an LBO or acquisition target, but it is such a cash machine that I don't think Loews will sell them.

DIGE - Down 6%. Given only positive news, the question becomes why? I'm thinking it is locking in of profits.

UCTT - Stopped out. Ugly. Over the past few weeks we have dropped from $16 to $13.50. Shoulda locked in profits higher

My strategy going forward will be to wait for a market pullback and buy back in to some old favorites.

ERNINGS UPDATES:

NEXT WEEK: IMA Tuesday 2/20

2 WEEKS: MDR Wednesday, March 1st

Concern over DO/ESV

RIG released earnings and while they exceeded expectations, the analysts expressed concerns about rising costs.
This was something that I talked about regarding DO - demand is so strong that labor costs are rising. At this time revenue is rising faster, but the RIG analysts gave the company a hard time. Even after raising expectations for the year, the stock went down.

Having said that, DO and ESV are better companies than RIG.
ESV DO RIG
Rev Growth (yoy):78.10% 57.00% 34.50%
Gross Margin (ttm):67.39% 57.64% 41.10%
Oper Margins (ttm):54.69%45.85% 26.94%
P/E (ttm): 11.5 15.7 27.98

DO & ESV are growing 2x as fast and have a P/E half as large. Their margins are also much, much stronger.

CLB beats expectations

A good quarter for CLB
* Sales up 19% but missed expectations by 1%
* Earnings up 78% and beat expectations by 4%

The answer is margin growth. Margins are up 5% from 19% last year and almost 1% from the previous quarter.
The demand for their services is strong enough for them to raise next quarter guidance by 5%~10% and 4% for the year.

One thing that concerns me is that sales growth is slowing. It's projected to land at 15% for next year. I don't understand why and it makes me interested in possibly exiting.

Watch Out for Options Friday

This is a bad week for short traders. The Dow is up ~3% in the last 2 months alone. Economic forecasts are pretty strong. A lot of bellweather stocks are beating expectations.

I think another reason for the rise is that short traders have to cover their position. So I am going to wait before using the cash to buy more stocks. Next week may see some pullbacks.

Additionally, when we have moved past earnings season there will be some pullbacks and opportunities. But we don't want to wait too long - I smell hedge funds going long on the undervalued energy and commodity stocks.

Bought DO

I bought back in as promised. Just getting around to posting
100 shares @ 79.48

TIE Slams earnings - again

TIE did it AGAIN.

* Sales up 47%, beating expectations by 10%
* Earnings up 73% - even accounting for a one time gain from the sale of a company, they beat expectations by 30%

Prices continue to rise faster than costs: milled up 30%, and melted by 88%. Volumes increased 9% and 5% respectively.
Backlog rose to $1.1B.
Margins are increasing: they were 32% for the full year but 34% for the quarter

Most exciting is that new production facilities will come on line in the second quarter - that's big upside.

Interesting day: ILMN

A great day in the market.

ILMN shot up 6% after announcing a share buyback. That seems like a strange use of cash to me. I have been watching ILMN and would like to get in - but I want to see it establish a bottom. It may have or it may revisit $33

DO collapsed after the earnings and dividend excitement. We were stopped out. I am getting back in tomorrow.

INFY - Down on Indian stock market fall

NUAN - After slipping yesterday, NUAN raced back up. The focus is on Options Friday.

TIE shot up - see my TIE post

KSU - raced up. I regret not getting back into KSU and these guys are about to launch. I really, really like them.

UCTT Misses by $0.01 - We're Stopped out

The bad news is that UCTT's earnings grew only 775% and not the expected 800%.
* Sales grew 180% and slightly beat expectations
* Earnings grew 775%

They also gave guidance that is inline with expectations.

In terms of value, this company has a 17 P/E and a forward P/E of 11. Their growth is expected to 'slow' to 50%.
I'd prefer to see a raised guidance but it's hard to argue that this company is overvalued.

We were stopped out at $13.50

Revised Stops

Stop
AMX 43.0
ATW 46.0
CLB 74.0
CSH 40.0
CTSH 84.0
DIGE 46.0
DO 79.0
ESV 47.0
HOLX 49.0
IMA 38.0
INFY 55.0
MDR 45.0
NUAN 13.0
PCP 84.0
TIE 29.0
UCTT 13.5