This is the fourth update on the stock price status of the first seventeen Chasing Value companies. Closing prices are from September 14, 2007.
The first quarter produced amazing results but the second quarter was downright sad. No one will be surprised to see that anything touching constuction or finance took a bath. I own most of these stocks, so if you do too, I feel your pain. Anyone considering my commentary should "do their homework" too, as James Cramer says on his Mad Money TV show. These recommendations are from the first and second quarter 2007 and I have linked to the original stories.
February 16, 2007: Chasing value: Wells Fargo: Wells Fargo & Company (NYSE: WFC) closed at $35.66 down from $35.76: a loss of -0.02%, even money.
February 23, 2007: Chasing value: Anadarko Petroleum - got it! Anadarko Petroleum Company (NYSE: APC) closed at $50.58 up from $40.84: A gain of 23.85%.
March 3, 2007: Chasing value: Aluminum Corporation of China ADS: Aluminum Corp. of China (ADS) (NYSE: ACH) closed at $60.95 up from $22.98: A gain of 165%
March 20, 2007: Chasing Value: Anglo American - Inflation hedge & more: Anglo American plc (NASDAQ: AAUK) closed at $28.90 up from $24.65: A gain of 17.24%
March 23, 2007 Chasing Value: Cemex and LaFarge look solid: CEMEX S.A. B de C.V. (ADR) (NYSE: CX) closed at $29.17 down from $34.92: A loss of -16.47%. LaFarge (ADS) (NYSE: LR) closed at $37.80 from $39.02: A loss of -3%.
Cemex sank with the continuous reports of the deteriorating housing market in the United States. In the meantime it continues to move forward with the integration of Rinker, the largest supplier of construction materials in Australia. This makes Cemex the largest in the world and sets the stage for continued growth in Southeast Asia. It also is continuing to focus on reducing debt.
Of all the stocks I have written about in the Chasing Value section, I feel that this one suffered the most from guilt by association. I believe it was fairly valued before and it is on sale now. This company, with it's PEG ratio at .83 and lowered, P/E, P/S, P/B (SEE: AOL Money & Finance) has a ROE over 22 and pays about a 2% dividend yield.
April 6, 2007: Chasing Value: Johnson & Johnson (NYSE: JNJ) closed at $63.20 up from $61.25: A gain of 3.18%
April 11, 2007: Chasing Value: Duke Energy (NYSE: DUK) closed at $18.66 down from $19.00: A loss of -.018%, even money.
April 11, 2007: Chasing Value: Washington Mutual - WaMu (NYSE: WM) closed at $35.53 down from $39.00: A loss of -8.9%
April 17, 2007: Chasing Value: Bear Stearns - cheap and growing (NYSE: BSC) closed at $117.19 down from $148.00: A loss of -20.82%
April 18, 2007: Chasing Value: InfoUSA: Low share price for the kids (NASDAQ: IUSA) closed at $9.56 down from $10.53: A loss of -8.93%
May 1, 2007: Chasing Value: IndyMac Bancorp - once in a lifetime (NYSE: IMB) closed at $22.95 down from $30.09: A loss of -23.73%
May 29, 2007: Chasing Value: USG -- A bargain, plain and simple! (NYSE: USG) closed at $36.37 down from $52.00: A loss of -29.42%
June 7, 2007: Chasing Value: Quest Diagnostics Inc. (NYSE: DGX) closed at $55.53 up from $50.83: A gain of 9.25%
June 11, 2007: Chasing Value: Berkshire Hathaway -- the time is now (NYSE: BRK.B) closed at $3,995.95 up from $3,612: A gain of 10.36%
June 12, 2007: Chasing Value: Tata Motors LTD - patience, patience, GOT IT! (NYSE: TTM) closed at $17.02 up from $16.00: A gain of 6%
June 19, 2007: Chasing Value: Bank Popular (BPOP) should be very popular (NYSE: BPOP) closed at $12.03 down from $17.00: A loss of -29.24%
Well, if you bought into my first quarter picks, you would be putting me on a pedestal and if you bought into my second quarter picks, you would be knocking it down. However, If you were to have acquired equal dollar amounts of all seventeen stocks, you would be up 5.55% plus dividends. The S&P 500 was up about 3.5% through September 4, 2007 plus dividends. In my last update the "scoreboard" was quite amazing and I wrote that someday I might have to eat humble pie. Through June that is the case because I expected to have done much better.
The question now is whether the financials have absorbed too much fear and pessimism overshooting the mark to the low side, or if the fear is justified and there is a lot of bad news that has not yet surfaced.
My own feeling is that all the bad news, and then some is priced into these stocks. Interest rates will stay flat or go down over the next few months easing some of the pressure on many of my picks and the overall market. Many of these companies will improve as many of their competitors disappear. For the most part it's clear I was too optimistic about the strength of these institutions and got in way too early.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.
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