Last November I wrote Chasing Value: Apple's Great, but This Stock Is Better!
with the audacity to state "...the potential to beat Apple's prospects by 33 to 1 -- now that is amazing!"
Yes you read that correctly.
I still believe a dollar invested in EZCorp (EZPW
) will earn 33 times that of a dollar invested in America's sweetheart Apple Inc (AAPL
Of course anyone can make any proclamations that they want.
Few dare as I have to post the results when they are not favorable as I have over the past five years.
Today however, I will not be swallowing my pride as EZCorp, a leading pawn shop and cash advance company, has indeed out performed the tremendously successful Apple since the original story. It is worth mentioning to those that would point to Apple's ten-year run that EZPW was the better stock over the long haul as well.
Continue reading Chasing Value: EZcorp Still Besting Apple
It should surprise no one that oil stocks have taken the lead in the first quarter, while financial stocks -- after a good two-year run -- have been tamed. This is how things have shaped up through the first quarter for my 2011 stock picks. (For a look at my original picks, see here: part 1, part 2,
and part 3
Normally, if I said a business was underwater, investors would think the worst. Actually, in the summer Noble Corp (NE
) was underwater -- and investors were not impressed. However, this was a great buying opportunity, and although the company is still underwater, it is also a market leader among my stock picks and the overall market -- even among oil industry players. With its fleet of 69 offshore drilling rigs, Noble stands tall.
Continue reading Chasing Value: 2011 Stock Picks Q1 Review -- A Platform for Success
The other shoe hit the fan Wednesday when Newcastle Investments (NCT), one of my up-and-down picks for the year announced the pricing for a 15 million common share stock offering -- six bucks! -- considerably lower than the 52-week high of $8.85 the stock reached last month.
NCT closed Wednesday March 23 at $6.02.
In making this move, management seeks to raise $85.6million for future investments and operations. This is the management that guided the company back from the grave. I know, since I bought in at 60 cents. But with 62 million shares outstanding, the 25% dilution is a huge move. What are they thinking?
Continue reading Chasing Value: Newcastle Shares Drop to Offering Level
Sometimes I am so confounded by my fellow investors that I have a hard time finding somewhere to do a reality check, so I throw myself on the mercy of the blogosphere today. I do this because I have found no solace by making inquiries with brokers, analysts, traders, friends, family, and fellow investors large and small.
For almost three years I have been touting a EZCorp (EZPW
) stock that just keeps rising, and I believe is still under valued. Way undervalued. Before I continue let me make it clear I own the stock personally and in my investment company's portfolio -- still eating my own cooking.
The initial shares have a cost basis of $11.80. EZPW opened at $29.20 today and is trading higher.
Yesterday EZCorp announced the acquisition of a majority interest in it's Australian partner: EZCORP to Form Global Strategic Alliance With Cash Converters
. This expands the global reach of both businesses, increases the range of services, and should also improve efficiency in a broad number of areas.
Continue reading Chasing Value: EZCorp Still a Bargain
Back in the summer of 2010 when the market was down, the gulf was full of spewing oil and investors were running away from bad news stocks shocked most notably by BP (BP
) oil spill, I decided to post a contrarian story
reminding readers that the fear was overblown and created a buying opportunity.
"My pal Warren" has said for years that we should buy on fear and sell on greed. The toxic stock portfolio was a result of this sentiment.
This is the fourth update to my ranting eight months ago that acquiring six of the most hated, and most highly traded stocks with constant negative headlines would outperform the overall market. The theory has born fruit as the toxic stocks are ahead and the difference is increasing over time.
Continue reading Chasing Value: Toxic Stock Update #4 -- BAC, BP, C, GE, GS, RIG
There is a very small (micro-cap) insurance company in Florida called Homeowners Choice, Inc. (HCII
) that I included among my stock picks
for 2011. My suggestion was made with some reservations, not because of it's growth potential, but because I was concerned that the write-up itself might impact the stock.
Yesterday, March 8, HCII reported it's 13th straight quarter of profitability with Q4 earnings of 27 cents per share versus anticipated earnings of 14 cents.
At the time of the initial post HCII was $8.08. It was $8.50 at today's opening and has been hovering around that mark most of the trading day. That equates to a 5.19% gain in 9 weeks (30% annualized).
Continue reading Chasing Value: Homeowners Choice Earnings, Another Great Quarter
This morning before the market opened, Newcastle Investments (NCT), one of my 2011 stock picks (see Chasing Value: 2011 Picks Dust the S&P) reported earnings that stomped all over analysts estimates. The company reported that in the fourth quarter of 2010, income applicable to common stockholders ("GAAP income") was $197 million, or $3.18 per diluted share, compared to $17 million, or $0.31 per diluted share, in the fourth quarter of 2009.
For the full year 2010, GAAP income was $657 million, or $10.96 per diluted share, compared to a loss applicable to common stockholders ("GAAP loss") of $223 million, or $4.23 per diluted share, in 2009.
Continue reading Chasing Value: Newcastle Earnings Shatter Estimates
We are only one month into the new year and there have not been many dull moments. Games are going on in the Middle East and they are not the friendly kind. In Egypt a million plus protesters
are playing a game of chicken with the Mubarak government demanding he step down from his 32-year-old reign as perpetual president.
This is not radical Islam fundamentalists; it is even more fundamental. The people want to improve their daily lives in a meaningful way. Education, infrastructure, clean water and clean streets. Speaking of infrastructure and getting back to the less dramatic but still important great stock picks Telefonica (TEF
) and General Electric (GE
) were the big winners so far bouncing over 10% in January.
Continue reading Chasing Value: 2011 Picks Dust the S&P
The market is getting gently hammered today, but that only presents more opportunities from my perspective.
I am in Ixtapa, Mexico, nearing the conclusion of my first ever week long rest during a 35 year working career ... and counting. In some ways I am hoping to mold my future working environment from seashore to shining seashore -- all around the world -- taking advantage of modern technology. I am thinking of it as "have beach (+Internet), will travel."
Continue reading Chasing Value: Profiting from Ixtapa -- Buffett, Gold, Oil, Options and More
Last year, Archer Daniels Midland (ADM) was included in my stock picks for 2010 and it lost 4.9%. I gave some consideration to keeping it in the mix this year but thought more highly of other stocks in 2011, so I cast it off.
The turning of a calendar page is arbitrary and investments have only modest correlation to it in most instances. However, two weeks into the year ADM is already up, closing Wednesday at $32.56.
Corn prices have been rising and when last I checked futures were up another 1.47% in early morning trading.
Continue reading Chasing Value: Corn Soaring, ADM Boring, Investors Snoring
In Part 1 of this series
I discussed starting with a good story and then examining the metrics, or first starting with the metrics via a stock screen and then look at the story behind the numbers.
A third possibility is to start with an idea that springs off the pages of a business journal. Some years ago, in the 25th anniversary edition of Money Magazine they listed a group of stocks that had gone up during this tenure. The one I liked the best that withstood closer scrutiny was Southern Company (SO
), the electric utility.
The story and the metrics were great. It was located in one of the most desirable growth areas of the country. There was a favorable business climate, cheap housing, cheap land, good weather and an abundance of labor. The numbers were strong as well.
Continue reading Chasing Value: How to Find Value Stocks -- Part 2
On Friday I had the opportunity to present an investment strategy I developed over the past few years to a major asset manager interested in learning the intricacies. Among the questions he asked, one that comes up often, is how do I go about finding particular stocks that I think might be of value.
The answer of course is not so simple, because like any other type of discovery they come about in a variety of ways. Sometimes it begins with a story, as it did in December 2008 when I included EZCorp (EZPW) among my 2009 stock picks (and 2010 and 2011). In this case I was pondering what was going to be safe, and perhaps even in growing demand during a year of financial turmoil and high unemployment. The answer was pawn shops and cash-advance stores.
Continue reading Chasing Value: How to Find Value Stocks -- Part 1
I have already gone on record this year saying that financial companies and insurance stocks are going to continue to rebound. In my previous two posts Chasing Value: 2011 Stock Picks -- 5 of 11 and Chasing Value: 2011 Stock Picks -- 6, 7, 8, 9, I included several financial institutions. Today I add an insurance company.
The industry got whacked hard for many reasons. For one, it makes a significant amount of profit by investing its float, and like every other investor, the industry lost a pile of money in the financial crisis. It was embroiled more directly than some industries, as several insurers are affiliated with banks. Finally the housing crisis meant disruption to payment streams by homeowners who were delinquent on more than their mortgages.
Continue reading Chasing Value: 2011 Stock Picks -- 10 and 11
Could a stock that you made 1,100% on still have room to run? Yes, it is possible. In particular if it had a near death experience as a penny stock for a while.
That is the case with Newcastle Investments (NCT), the CMBS lender and real estate investment company that reached a recent high of $7.10 and has settled back down, most recently hovering between $6.70 to $7.00. It closed Thursday December 23 at $6.71.
Continue reading Chasing Value: 2011 Stock Picks -- Part 2
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