Friday, December 19, 2008
I know anyone who dares to express any opinion about stocks nowadays is nutts (like me)! But for all the other nutt-cases, here we go again: I know this seems weird, but I cannot ignore these stocks anymore Visa(V), Mastercard (MA), Goldman-Sachs (GS), Banco Itau (ITU), CME Group (CME), Intercontinental (ICE), Cemex (CX), Arcelor-Mittal (MT), General Dynamics (DG), Northrop-Grumman (NOC), Lockheed Martin (LMT). All of whom have almost monopoly power over their markets, they are large (and not because they blow up with phony derivatives but they earn their way to the top) and more importantly their business model is not easy to replicate. I do like Google (GOOG) and Apple (AAPL) but I think they still have room left in the downside. I also like some of the risky names which I think their upside potential now huge: BC, PSUN, LCAV, BX, NTRI, and maybe even some of the homebuilders (PHM, LEN, DHI, CTX).
Posted by Dr. N at 5:26 AM
Saturday, September 06, 2008
It's been a rough couple of months and I still think the bottom is yet to come. But I cannot help to notice that some of my favorite names are getting awfully attractive, price-wise, as of late. They include: Visa (V), Mastercard (MA), Potash (POT), Agrium (AGU), Mosiac (MOS), Intrepid Potash (IPI), Monsanto (MON), CF Industries (CF), Colfax (CFX). Some of the great names like CME group (CME) and Intercontinental Exchange (ICE) are selling for very attractive prices as well. To this list, I add construction/engineering firms which I think still have great global potential but have been beaten down severely by fears of slow down. I have to admit that for these guys, I still see potential for further deterioration in the months to come, such as the case with them in any "recession". These include KBR Inc. (KBR), Shaw Group (SGR), Flour (FLR), Foster Wheeler (FWLT), Jacobs Eng. (JEC). I am also very much attracted to certain energy stocks: Tesoro (TSO), Valero (VLO), Sunoco (SUN), Magellan Midstream (MGG). Energy stocks I am watching closely are: Petrobras (PBR), Petrochina (PTR), China Petroleum (SNP).
Posted by Dr. N at 6:35 AM
Friday, March 21, 2008
In this environment, one can easily take lousy stocks for "dirt cheap" opportunities. But if current trends continue, and that's big a "if", then the "second coming" of commodities should be a boon all commodity-levered stocks. Potash (POT) and Monsanto (MON) are among great agri-stocks that have lost some steam lately. First Solar (FSLR) and SunPower (SPWR) as well as Ormat (ORA) are great plays on alternative energy possibilities. Coal stocks can see another rise when steel price recover from recent decompression in the commodities prices. Peabody (BTU), Fording (FDG), Patriot (PCX) and even the mining equipment maker, Joy Global (JOYG), are among my favorites. I have to give a big word of caution: commodity plays are subject to the global expansion that has been going on for a while now. As the saying goes though, when US gets a cold, the world catches pneumonia, so a global recession, which is likely at this point, can put a damper on these price for some time. Global engineering and construction plays like Flour (FLR) or Foster Wheeler (FWLT) may have a better time since oil and commodity money flows to large projects as governments try to boost the infrastrcuture necessary for production of commodities.
Posted by Dr. N at 12:55 PM
The last recommendations, along with almost every other stock in the market, have been beaten down badly, OK, very badly. But that's not reason to stop looking for new opportunities. I still think that BX, MXB, and N will have fantastic long-term prospects. But more recently, Riskmetrics (RMG) and Visa (V) debuted in IPO market. Riskmetrics got hammered in the wake of "virtual collapse" of Bear Stern (BSC) --- another pick of mine in "dirt cheap stocks"! Obviously billioniare Lewis and I took a big hit but JPMorgam (JPM) would reap all the benefits that should have been ours!!! --- mostly because models riskmetrics produces are of great interest to risk-managers and risk-takers! But the firm has a unique position in that niche (it is wothwhile to remember that JPMorgan was the parent of Riskmetrics! So if JPM's astute money sneaffing is any indication, RMG's IPO should be a great way to take advantage of the upside.) Visa (V) and Mastercard (MA, another recommendation of mine) are the duoploy in the credit card market. With the craze in using the plastic here in US and just about everywhere else in the globe, the transaction volume and revenues should rise. The impending legal battles and IPO's lock-up period can hinder short-term price appreciation, but if MA is any indication, the three- to five-year upside is great.
Posted by Dr. N at 12:40 PM
Thursday, January 10, 2008
I, like many others, made the mistake of not believing in GOOG when it went public. In all honestly, I just got too greedy. I did reverse my mentality when I bought MA but alas I sold too early. I only gain 70% from first day closing. (Stock has gone from IPO price of $40 to $230). I like three new IPOs: MXB, BX and N. MXB or MSCI/Barra is a behemoth in creating indexes and every ETF for international indexes created must pay royalty to these guys. Barra makes a fantastic software for security analysis and investments. Very expensive and very expansive. The price has seen quite volatile but potential is huge. BX, Blackstone, is the largest private equity company in the world. Quite conservatively run so much so that Chinese government had to have a piece of the action. The price has been getting hammered due to turmoil in credit markets but I think the three-five year potential is monstrous. N, NetSuite, makes SAP-type software for mid-market. Since IPO price has seen highs of 48 and now trades at 30, very close to IPO price. This is a great niche to be in and Larry Ellison of ORCL has had a great stake in the company. Seems Larry is trying to get into the mid-market from backdoor! Leaving ORCL and its culture alone while going after smaller clients.
Posted by Dr. N at 11:46 PM
I haven't posted a blog for a while so I am back at it again! Lately, I have been getting interested in two sectors, investment banks and biotech. British billionaire, Joseph Lewis, has been accumulating shares of BSC to the tone of 10% of the company. Both BSC and MER has lost almost 50% of their value since their last peak price. This implies that these companies have to loose half of the topline forever for price to get so low. I think the potential for these two is quite robust in long-term and these kind of discounts cannot last forever. I see a downside of maybe 10% to 15% lower than current levels, but then serious multiple expansion should take place after 2009. SNY, NVS, and even BIIB (ETF) show signs of recent recovery and probably a come back in 2009. DNA and AMGN, despite recent disappointments, seem to have held themselves. PE multiples for DNA and AMGN and even SNY is in high teens and low 20s. For biotech giant, that seem quite low. I can see more softening for all of these in 2008, but potential for PE expansion in 2009 onward is quite good.
Posted by Dr. N at 11:27 PM