As work is starting to settle down, I’m finding more time to analyze my portfolio and the stock market. Wow, Wha’ Happened?
I’ve added the following securities to my watch list. Merrill Lynch, FARO Technologies, Terex and Profunds Ultra Emerging Market make up the final four.
Faro Technologies (FARO) Inc., designs, develops, and manufactures software-based three-dimensional (3D) measurement devices for manufacturing, industrial, building construction, and forensic applications. FARO represents the West Virginia from the West division as the people’s champ. FARO is a serious growth story. FARO is currently trading at 20x 2007 earnings, consistent with the industry average. FARO released their Q4 ’07 earnings in mid February with a stellar quarter and year. Sales for the fourth quarter of 2007 were $59.2 million, an increase of $15.3 million, or 34.9%. Net income for the year was $18.1 million, an increase of $9.9 million, of over 100%. Net income for 2007 also included a litigation charge of $2.65 million. Excluding the charge, net income grew and astonishing 153% year over year. FARO has also been able to keep its margin steady by curbing all related expenses. FARO has seen a recent increase in its stock price of 40% since its 52 week low in mid-January. I’m a buyer when FARO drops below the $28 dollar range.
Merrill Lynch (MER) provides investment, financing, insurance, and related services to individuals and institutions worldwide. Merrill is the overmatched Michigan State Spartans. They both have fallen on hard times, had their fair share of moments of greatness in the past and both are managed by top shelf leaders. There is no need to rehash the recent performance of Merrill, but its current valuations are very attractive at 8x 2008 earnings for a solid company. Also, as the fed funds/discount rate is near a record low, the Banks are in a good position to massage the lending to deposits margins to their benefit.
Side note: I just watched Semi Pro this weekend, wondering if there is anyway I can get an hour and half of my life back…..
Terex (TEX) manufactures capital equipment for construction, infrastructure, quarrying, mining, shipping, transportation, refining, and utility industries worldwide. TEX represents the east division as North Carolina – clearly the golden child of the group with the best prospects. Terex is currently sporting a 8.5 P/E ratio, which is significantly below the industry average of 12. TEX recently reported Q4 ’07 results in February and continues to show management’s commitment to growth and quality (Similar to Hansbrough pre-game work-out of shooting the 10 footer till he makes 50 in a row, uncanny). Similar to FARO, TEX has had a recent run up of about 20% since its low in mid-January. If the stock bounces below $60, I’m all in.
Profunds Ultra Emerging Market (UUPIX) an ETF that seeks to correspond to twice the daily performance of the Bank of New York Emerging Markets 50 ADR index. UUPIX represents Wisconsin as the new kid in town. Fiery Bo Ryan has turned his Badgers into a serious contender. Similar, UUPIX launched last year strutted a 70% gain last year. YTD UUPIX has given back about half of the pervious year’s gain as the international markets cool. As the pullback continues the current valuation metrics are becoming more attractive. UUPIX is a dangerous play, far too speculative for the typical risk averse investor. If the pull back continues and if a few global markets begin to stabilize (Asia & Latin America), I’ll take a spin.
Disclosure: Two-4-the-Money currently has no position in any of the stocks mentioned above but positions can change at any time.
Monday, March 24, 2008
Monday, March 10, 2008
In Randy Moss I Trust
In the words of the infamous Randy Moss, "straight cash, Homey". As you can see everything has clearly hit the fan, as I'm using Randy Moss as the wordsmith of investing.......
The market's performance over the last few months has been unmentionable and hopefully forgettable.
As most investors, I'm getting defensive. I'm looking for income and export influenced equities. I recently purchased a small amount of Thornburg Mortgage (TMA) as the companies stock has dropped 80% is the last week, yielding an inflated 55%. I'm also looking into a few REIT's, thats right - "In today’s environment, that’s like saying you’re a sex offender — there isn’t a “good kind.”"
Times are tight, and the Fed isn't really helping the situation. I'm not a Monday Morning quarterback, so I'll stop there.
Two-4-the-Money
The market's performance over the last few months has been unmentionable and hopefully forgettable.
As most investors, I'm getting defensive. I'm looking for income and export influenced equities. I recently purchased a small amount of Thornburg Mortgage (TMA) as the companies stock has dropped 80% is the last week, yielding an inflated 55%. I'm also looking into a few REIT's, thats right - "In today’s environment, that’s like saying you’re a sex offender — there isn’t a “good kind.”"
Times are tight, and the Fed isn't really helping the situation. I'm not a Monday Morning quarterback, so I'll stop there.
Two-4-the-Money
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