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
Saturday, February 23, 2008
Friday, February 22, 2008
Wednesday, February 20, 2008
Patriots Troubles
I wanted to say a couple of things about the Patriots' Super Choke before it was really too late:
1. Belichick is a jackass for walking off the field early. This probably isn't a news flash. You're telling me a guy as detail oriented as Belichick didn't notice there was time left on the clock? You can't believe a word this guy says. When he tells you he didn't know if was against the rules to tape - lie. All you hear about is how smart this guy is, but he supposedly didn't understand a simple rule that the NFL notified every coach in the league about? And I don't understand why people are saying now that walkthroughs don't tell you much. I've never been in a football walkthrough, but I have been through walkthroughs in other sports. In my opinion, you can learn a lot from watching a walkthrough. Is it just me, or do you only walkthrough plays and situations you think you're going to use/see during the game? You can get a pretty good idea of a team's gameplan and strategy by looking at the walkthrough. Now Mike Golic on ESPN said you can't get much from a walkthrough, and for a player that knows the system inside and out and has had it beaten into them, that's probably true. You've run all of those plays all year and at full speed. But what better tool for the other team to have than a a tape of a team going slowly through the motions of the plays it is going to use during the game? I don't know why people are giving Belichick the benefit of the doubt on this one. Nothing he has said has convinced me he is even somewhat honest. Every excuse and explanation he has given is exactly what you would say if you were lying. We'll see if anything else comes from this, but just like Bonds and Clemens, I don't believe a word Belichick says.
2. I am really excited to see how the Patriots do this year. There are a lot of forces working against them. First, trying to rebound from and 18-1 season is harder than you think. They basically worked their asses off to achieve something great a failed. This is going to be a recovery season. Anything athlete knows that when you push yourself to the limit like they did, you need time to relax and recover after it is over. It's pretty hard to motivate yourself to start another win streak, especially after how hard it obviously was on them. Also, I am anxious to see how their players react if they do start losing. It is the easiest thing in the word to be all about the team and each other when you're winning. As soon as the winning stops, people starting thinking about themselves again. There are a lof of classy guys on that team and a lot of guys that know they would be nothing if they weren't on the Patriots, but there are also a lot of guys that leave at the first chance at money. These guys, as well as Moss, could start problems if the winning doesn't continue. Luckily for them, they only play 4 teams in 2008 that had winning records in 2007. So regardless, they should still be a good team, record wise. But I am still excited to see how they all perform after the huge let down last season, which is what it was.
3. Brady's season was great, but not as good as Manning's when he broke the record. Just look at the stats (it took Brady significantly more passes to break the record and Peyton and Brady's passer ratings were pretty similar). Everyone got so caught up with the Patriots scoring that they just assumed Brady had the best season of all time. Not true.
Prediction for Pat's season: 11-5, lose in the first round.
1. Belichick is a jackass for walking off the field early. This probably isn't a news flash. You're telling me a guy as detail oriented as Belichick didn't notice there was time left on the clock? You can't believe a word this guy says. When he tells you he didn't know if was against the rules to tape - lie. All you hear about is how smart this guy is, but he supposedly didn't understand a simple rule that the NFL notified every coach in the league about? And I don't understand why people are saying now that walkthroughs don't tell you much. I've never been in a football walkthrough, but I have been through walkthroughs in other sports. In my opinion, you can learn a lot from watching a walkthrough. Is it just me, or do you only walkthrough plays and situations you think you're going to use/see during the game? You can get a pretty good idea of a team's gameplan and strategy by looking at the walkthrough. Now Mike Golic on ESPN said you can't get much from a walkthrough, and for a player that knows the system inside and out and has had it beaten into them, that's probably true. You've run all of those plays all year and at full speed. But what better tool for the other team to have than a a tape of a team going slowly through the motions of the plays it is going to use during the game? I don't know why people are giving Belichick the benefit of the doubt on this one. Nothing he has said has convinced me he is even somewhat honest. Every excuse and explanation he has given is exactly what you would say if you were lying. We'll see if anything else comes from this, but just like Bonds and Clemens, I don't believe a word Belichick says.
2. I am really excited to see how the Patriots do this year. There are a lot of forces working against them. First, trying to rebound from and 18-1 season is harder than you think. They basically worked their asses off to achieve something great a failed. This is going to be a recovery season. Anything athlete knows that when you push yourself to the limit like they did, you need time to relax and recover after it is over. It's pretty hard to motivate yourself to start another win streak, especially after how hard it obviously was on them. Also, I am anxious to see how their players react if they do start losing. It is the easiest thing in the word to be all about the team and each other when you're winning. As soon as the winning stops, people starting thinking about themselves again. There are a lof of classy guys on that team and a lot of guys that know they would be nothing if they weren't on the Patriots, but there are also a lot of guys that leave at the first chance at money. These guys, as well as Moss, could start problems if the winning doesn't continue. Luckily for them, they only play 4 teams in 2008 that had winning records in 2007. So regardless, they should still be a good team, record wise. But I am still excited to see how they all perform after the huge let down last season, which is what it was.
3. Brady's season was great, but not as good as Manning's when he broke the record. Just look at the stats (it took Brady significantly more passes to break the record and Peyton and Brady's passer ratings were pretty similar). Everyone got so caught up with the Patriots scoring that they just assumed Brady had the best season of all time. Not true.
Prediction for Pat's season: 11-5, lose in the first round.
Wednesday, February 13, 2008
Global Market Potential
With the way the dollar has been I have been performing, I have been trying to find companies to invest in that will be less affected by a falling dollar. One of these companies could be NCR. NCR is the leading provider of ATM and self-service check out machines. NCR is well positioned internationally to take advantage of the growing middle-class in the former USSR and third world countries. As the citizens of these countries begin to accumulate wealth, they are going to demand the ATM’s that make our life so convenient. Also, developed countries in Europe and Asia still have a small amount of ATM’s per capita compared to the US, presenting a growth opportunity in these areas. NCR’s positioning abroad will be especially beneficial should the dollar continue to fall.
In addition to these opportunities abroad, NCR has done an excellent job of bringing the leading products to market before its competitors. NCR offers the largest capacity Teller Cash Recycler in the market place. This gives it an advantage over its competitors in a high margin business. NCR also offers several options for retailers that want to offer more self-service options for their customers. In addition to the usual self-check out lanes we all see at the grocer, NCR offers similar options at deli's and bakery's to improve these processes. This looks like a move in the right direction as a survey by Opinion Research Corp. showed that customers are increasingly choosing self-service lines for check-out, especially during peak shopping times. This bodes very well for NCR, now and in the future.
NCR is the leading provider of ATM and self-service check-out terminals. Its positioning in the global market, as well as its ability to offer the best products before its competitors, give it great future growth opportunities. Further, this stock has gotten little attention from investors, possibly offering a great buying opportunity for you and me. I have been watching this stock since early January, and its performance has done little to impress. However, considering the performance of the US stock market so far this year, and NCR’s strength globally, I think this will be a high performing stock in 2008 and beyond.
In addition to these opportunities abroad, NCR has done an excellent job of bringing the leading products to market before its competitors. NCR offers the largest capacity Teller Cash Recycler in the market place. This gives it an advantage over its competitors in a high margin business. NCR also offers several options for retailers that want to offer more self-service options for their customers. In addition to the usual self-check out lanes we all see at the grocer, NCR offers similar options at deli's and bakery's to improve these processes. This looks like a move in the right direction as a survey by Opinion Research Corp. showed that customers are increasingly choosing self-service lines for check-out, especially during peak shopping times. This bodes very well for NCR, now and in the future.
NCR is the leading provider of ATM and self-service check-out terminals. Its positioning in the global market, as well as its ability to offer the best products before its competitors, give it great future growth opportunities. Further, this stock has gotten little attention from investors, possibly offering a great buying opportunity for you and me. I have been watching this stock since early January, and its performance has done little to impress. However, considering the performance of the US stock market so far this year, and NCR’s strength globally, I think this will be a high performing stock in 2008 and beyond.
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