tag:blogger.com,1999:blog-364230672024-03-08T09:06:53.952-06:00DrN Stocks BlogsThis is a forum to exchange stock ideas based on solid reasoning, such as earnings forecasts, industry evolutions, macro changes, etc. The typical disclaimer applies, I and all bloggers take no responsibility for potential losses that could occur due to the fluctuating nature of the financial markets. We only express our opinions and none of the stocks recommended, and I repeat, none of the stocks recommended, shall be taken at face value. Follow our opinions only at your own risk.Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-36423067.post-48046778329948547122010-01-05T13:19:00.003-06:002010-01-05T13:29:17.753-06:00Dirt Cheap Stocks: Chapter 7I have to admit I am not an avid blogger. But I hope that my every so often ideas helps somebody! I know it seems odd to call any stock dirt cheap nowadays, given all the moves they have had in past several months. But I think select solar names look really good: First Solar (FSLR), SunPower (SPWRA), & Suntech (STP). Renewable (Norway:REC; PinkSheet: RNWEY) and Q-cell (Germany:QCE; PinkSheet: QCLSF). I also like CME and ICE. Both strong positions in energy & commodity dealership. Given the push for new ways of risk management, and Moody's and S&P falling out of favor (perhaps even subject to litigation), I like new names like RiskMetrics (RMG). Blackrock (BLK) is a great company too but it's just too rich for my blood. In long run, MasterCard (MA) and Visa (V) are great bets but they have had great runs. So maybe a loading up on a re-treat would be justified. Till later dudes and dudetts,Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com7tag:blogger.com,1999:blog-36423067.post-87771807506930183642008-12-19T05:26:00.004-06:002008-12-19T05:39:23.538-06:00Dirt Cheap Stock Picking: Chapter 6I 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).Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com4tag:blogger.com,1999:blog-36423067.post-25473268391228046762008-09-06T06:35:00.004-05:002008-09-06T07:07:40.356-05:00Dirt Cheap Stock Picking : Chapter 5It'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).Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com0tag:blogger.com,1999:blog-36423067.post-15968776651260955742008-03-21T12:55:00.002-05:002008-03-21T13:09:05.998-05:00Dirt Cheap Stock Picking: Chapter 4In 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 <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">coming</span>" of commodities should be a boon all commodity-levered stocks. Potash (POT) and Monsanto (MON) are among great <span class="blsp-spelling-error" id="SPELLING_ERROR_1">agri</span>-stocks that have lost some steam lately. First Solar (<span class="blsp-spelling-error" id="SPELLING_ERROR_2">FSLR</span>) and <span class="blsp-spelling-error" id="SPELLING_ERROR_3">SunPower</span> (<span class="blsp-spelling-error" id="SPELLING_ERROR_4">SPWR</span>) as well as <span class="blsp-spelling-error" id="SPELLING_ERROR_5">Ormat</span> (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 (<span class="blsp-spelling-error" id="SPELLING_ERROR_6">FDG</span>), Patriot (<span class="blsp-spelling-error" id="SPELLING_ERROR_7">PCX</span>) and even the mining equipment maker, Joy Global (<span class="blsp-spelling-error" id="SPELLING_ERROR_8">JOYG</span>), 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 (<span class="blsp-spelling-error" id="SPELLING_ERROR_9">FLR</span>) or Foster Wheeler (<span class="blsp-spelling-error" id="SPELLING_ERROR_10">FWLT</span>) 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.Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com0tag:blogger.com,1999:blog-36423067.post-49771277762257209782008-03-21T12:40:00.002-05:002008-03-21T12:53:48.731-05:00IPO Ideas & Actions: Chapter 2The 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.Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com0tag:blogger.com,1999:blog-36423067.post-84042779585474778782008-01-10T23:46:00.000-06:002008-01-10T23:59:51.931-06:00IPO Ideas & actions: chapter 1I, like many others, made the mistake of not believing in <span class="blsp-spelling-error" id="SPELLING_ERROR_0">GOOG</span> 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 <span class="blsp-spelling-error" id="SPELLING_ERROR_1">IPOs:</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_2">MXB</span>, BX and N. <span class="blsp-spelling-error" id="SPELLING_ERROR_3">MXB</span> or <span class="blsp-spelling-error" id="SPELLING_ERROR_4">MSCI</span>/<span class="blsp-spelling-error" id="SPELLING_ERROR_5">Barra</span> is a <span class="blsp-spelling-corrected" id="SPELLING_ERROR_6">behemoth</span> in creating indexes and every ETF for international indexes created must pay royalty to these guys. <span class="blsp-spelling-error" id="SPELLING_ERROR_7">Barra</span> 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 <span class="blsp-spelling-corrected" id="SPELLING_ERROR_8">government</span> 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 <span class="blsp-spelling-corrected" id="SPELLING_ERROR_9">monstrous</span>. N, <span class="blsp-spelling-error" id="SPELLING_ERROR_10">NetSuite</span>, makes SAP-type software for mid-market. Since <span class="blsp-spelling-error" id="SPELLING_ERROR_11">IPO</span> price has seen highs of 48 and now trades at 30, very close to <span class="blsp-spelling-error" id="SPELLING_ERROR_12">IPO</span> price. This is a great niche to be in and Larry Ellison of <span class="blsp-spelling-error" id="SPELLING_ERROR_13">ORCL</span> has had a great stake in the company. Seems Larry is trying to get into the mid-market from backdoor! Leaving <span class="blsp-spelling-error" id="SPELLING_ERROR_14">ORCL</span> and its culture alone while going after smaller clients.Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com0tag:blogger.com,1999:blog-36423067.post-65943352062074362132008-01-10T23:27:00.000-06:002008-01-10T23:46:16.201-06:00Dirt Cheap Stock Picking: Chapter 3I 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 <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">biotech</span>. British <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">billionaire</span>, Joseph Lewis, has been accumulating shares of <span class="blsp-spelling-error" id="SPELLING_ERROR_2">BSC</span> to the tone of 10% of the company. Both <span class="blsp-spelling-error" id="SPELLING_ERROR_3">BSC</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_4">MER</span> has lost almost 50% of their value since their last peak price. This implies that these companies have to loose half of the <span class="blsp-spelling-error" id="SPELLING_ERROR_5">topline</span> 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. <span class="blsp-spelling-error" id="SPELLING_ERROR_6">SNY</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_7">NVS</span>, and even <span class="blsp-spelling-error" id="SPELLING_ERROR_8">BIIB</span> (<span class="blsp-spelling-error" id="SPELLING_ERROR_9">ETF</span>) show signs of recent recovery and probably a come back in 2009. DNA and <span class="blsp-spelling-error" id="SPELLING_ERROR_10">AMGN</span>, despite recent disappointments, seem to have held themselves. PE multiples for DNA and <span class="blsp-spelling-error" id="SPELLING_ERROR_11">AMGN</span> and even <span class="blsp-spelling-error" id="SPELLING_ERROR_12">SNY</span> is in high teens and low 20s. For <span class="blsp-spelling-error" id="SPELLING_ERROR_13">biotech</span> 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.Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com0tag:blogger.com,1999:blog-36423067.post-32650819624658196802006-11-26T22:56:00.000-06:002006-11-26T23:09:31.419-06:00Dirt Cheap Stock Picking: Chapter 2I have been following specialty retailer over the past year and I have to admit that the entire sector had surprised me and pretty much everyone. Stocks like <span class="blsp-spelling-error" id="SPELLING_ERROR_0" onclick="BLOG_clickHandler(this)">COH</span>, MW, <span class="blsp-spelling-error" id="SPELLING_ERROR_1" onclick="BLOG_clickHandler(this)">URBN</span>, and <span class="blsp-spelling-error" id="SPELLING_ERROR_2" onclick="BLOG_clickHandler(this)">DBRN</span> have moved up nicely over the past couple months. In fact, <span class="blsp-spelling-error" id="SPELLING_ERROR_3" onclick="BLOG_clickHandler(this)">URBN</span> which I named in my chapter 1 list now is up nicely from $18 to $23 in a short month! I don't claim to know all that there's to be known about retailer and I am not by any stretch of imagination your <span class="blsp-spelling-corrected" id="SPELLING_ERROR_4">hip-hop</span>, fashion guru but some common sense makes me believe that there are still some good ones left out there. <span class="blsp-spelling-error" id="SPELLING_ERROR_5" onclick="BLOG_clickHandler(this)">CHS</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_6" onclick="BLOG_clickHandler(this)">CBK</span> have come to my attention recently. Both of which I only venture to put 18+ month price forecasts. <span class="blsp-spelling-error" id="SPELLING_ERROR_7" onclick="BLOG_clickHandler(this)">CHS</span> is about to post <span class="blsp-spelling-error" id="SPELLING_ERROR_8" onclick="BLOG_clickHandler(this)">earnings</span> and the price pattern suggests that no negative <span class="blsp-spelling-corrected" id="SPELLING_ERROR_9">surprise</span> is expected. I can see a 18+ month price of $55. In <span class="blsp-spelling-error" id="SPELLING_ERROR_10" onclick="BLOG_clickHandler(this)">CBK's</span> case, I can see some <span class="blsp-spelling-corrected" id="SPELLING_ERROR_11">serious</span> downturn in near future (somewhere in neighborhood of $15) but stock can see highs of $30 in longer term. Again, I am on the record, so we will see what's gonna happen!Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com2tag:blogger.com,1999:blog-36423067.post-65023742318277169742006-10-22T17:03:00.000-05:002006-10-22T17:49:28.703-05:00Overreaction: Chapter 1I have noticed often is the case that stocks get hammered for no good reason or jump to sky for no justifiable reason. I have grown to believe that when overreaction is on the positive side, you really can't bet against it, but on the downside, well, there are occasions that a patient investor can make bundles.<br />For instance recently, I come across <strong>CAT</strong> and <strong><span class="blsp-spelling-error" id="SPELLING_ERROR_0" onclick="BLOG_clickHandler(this)">SNDK</span></strong>. Both dropped by more than 14% and 20%, respectively in one day, following their <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">quarterly</span> <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">announcements</span> and guidance. Take for example <strong>CAT</strong>, the company <span class="blsp-spelling-error" id="SPELLING_ERROR_3" onclick="BLOG_clickHandler(this)">came</span> short on earnings, 1.14 instead of 1.35 and cut full year from 5.25-5.50 range to 5.05-5.30. I use <span class="blsp-spelling-error" id="SPELLING_ERROR_4" onclick="BLOG_clickHandler(this)">moneychimp</span> calculator for a back-of-envelope type computation (see <a href="http://www.moneychimp.com/articles/finworks/fmvaluation.htm">http://www.moneychimp.com/articles/finworks/fmvaluation.htm</a>). So with 5.50 esp, and analyst expected 5-year growth of 12%, 5 years of that growth, and 12% discount rate, the price is $73 (price two days before the skydive was $71!). Now let's see what should happen to get a $59 price. Assuming discount rate is 12%, and esp of 5.0, then growth has be 9%!!! So the worst-case earnings has to happen and the worst-case growth has to happen for price to be where it is now. I am not saying that <span class="blsp-spelling-error" id="SPELLING_ERROR_5" onclick="BLOG_clickHandler(this)">CAT's</span> price won't fall anymore, I actually suspect it will drop some more, possibly another 10% at some point in the next month or so. But after all the dust is settled, I think the price would come back up. Now if you add to this the fact most of the "<span class="blsp-spelling-error" id="SPELLING_ERROR_6" onclick="BLOG_clickHandler(this)">mis</span>" this quarter was legal cost and the firm might be managing end-of-the-year expectations, I dare to venture that three to six months from now the price is around, say, $80, give-or-take couple bucks. [I am going on record, so we'll see how foolish I will look in 3-6 months!]<br />As for <span class="blsp-spelling-error" id="SPELLING_ERROR_7" onclick="BLOG_clickHandler(this)">SNDK</span>, I am bit more cautious, because they came short of expectations due to increased expenses and growth was negative besaue of price-cuts. But considering that they acquired <span class="blsp-spelling-error" id="SPELLING_ERROR_8" onclick="BLOG_clickHandler(this)">FLSH</span> and consolidating market share and growing into flash music business, I venture a guess that stock might see price as high as $110 in 9-18 months, but be warn that in next 6-9 months its price may fall to a low of $38. I say this because given <span class="blsp-spelling-error" id="SPELLING_ERROR_9" onclick="BLOG_clickHandler(this)">pre</span>-<span class="blsp-spelling-corrected" id="SPELLING_ERROR_10">announcement</span> forecasts, <span class="blsp-spelling-error" id="SPELLING_ERROR_11" onclick="BLOG_clickHandler(this)">SNDK</span> was supposed to have 2.4 <span class="blsp-spelling-error" id="SPELLING_ERROR_12" onclick="BLOG_clickHandler(this)">eps</span>. To get the $62 <span class="blsp-spelling-error" id="SPELLING_ERROR_13" onclick="BLOG_clickHandler(this)">pre</span>-fall price, either growth had to be 30%, or years of growth 7+, or discount rate at 9%. Each one of these is quite <span class="blsp-spelling-corrected" id="SPELLING_ERROR_14">unreasonable</span>, so for now the fall is just a reversion to normality, then comes overreaction to irrationality and that my friend is signal to buy. Even if <span class="blsp-spelling-error" id="SPELLING_ERROR_15" onclick="BLOG_clickHandler(this)">SNDK</span>, as is said, loose 25% top-line pricing (they're marking down the price to compete!), then at 1.8 <span class="blsp-spelling-error" id="SPELLING_ERROR_16" onclick="BLOG_clickHandler(this)">eps</span> (this a big hit!) and growth of 20% (this seems in line with industry and analysts forecasts) then price should be $32 and P/E at around 17. Historically in past 10-years a P/E of 15-17 has been almost always the trough for stock cycles. So if we get there, it is a BUY!Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com0tag:blogger.com,1999:blog-36423067.post-1161500389311398492006-10-22T01:54:00.000-05:002006-10-22T02:04:57.451-05:00Dirt Cheap Stock Picking: Chapter 1I am a cheap b... and so I follow that philoshephy to heart. So over the years I have devised my own method to find "good" stocks (i.e., hisrorically robust earnings, growth, some recent indications of momemtum, etc.) that have gone thru some sort of correction. I admit that filters are intially all quantitative but they give me a head-start and I go from there. Here are my recent picks: CNS, CTSH, LM, BHI, SLB, VLO, RIG, and URBN.Dr. Nhttp://www.blogger.com/profile/16625618388146253899noreply@blogger.com2