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