This is the final review of the seven stocks I picked twelve months ago, and the time has passed quickly. This covers the period from December 28 2006 through December 27 2007. It has been a stock pickers year for sure given that the S&P 500 index moved up only modestly. Having come to this conclusion, I must admit my seven picks were all over the place. Three beat the indices, two performed sorely and two were basically break even except for the healthy dividends.

If the stock you happened to pick was Google, Inc. (NASDAQ: GOOG), which I included as sort of a "stalking horse" because of its popularity, it beat all else as a portfolio of one. As a matter of fact GOOG beat my picks by a whopping 930% meaning it bested my returns with very little effort with a gain 9.3 times the average of my seven stock picks.

The average of my seven picks fell dramatically in the last two months and I have gone from wonderboy with about a 22% YTD return, to waterboy with about 5.5% return -- UGH! I rode the Chinese market up and down, among the macro events.

Luckily for me I did not stop picking stocks last December. My actual average of all recommendations in 2007 is notably higher, see: Chasing Value: My best and worst picks of 2007.

Highlighting the fact that this year was suited to the stock pickers, James Cramer's average based on his nine picks beat all the indices by a healthy margin. Cramer, as you might imagine, had the most volatile picks. The two best Apple Inc. (NASDAQ: AAPL) and Savient Pharmaceuticals Inc. (NASDAQ: SVNT) did spectacularly well. Apple was appreciating most of the year while Savient saved Cramers tush by doubling in the last month due to approval of one of their drug therapies.

Continue reading Chasing Value: 7 for 2007 review: Props to Cramer for his 2007 picks

Chasing Value: 7 for 2007 review: Props to Cramer for his 2007 picks originally appeared on BloggingStocks on Tue, 01 Jan 2008 13:13:00 EST. Please see our terms for use of feeds.

Year-end is almost upon us and I need to get this short list cut down to size with two weeks to go. Because this story is an ongoing process, the heart of the story, the possible stocks, are posted below again, with the latest in bold type as the story builds and I examine things more closely. This week I am adding another energy play in the form of a Canadian Trust. Then I follow with the current edited stock list and the stocks to be cut.

Gallery: Chasing Value: 8 for 2008

In seeking value stocks that have seen their share prices greatly diminished this past year based on reduced earnings, I came across Precision Drilling Trust ADR (NYSE: PDS), which has a P/E near 5 and a dividend yield over 10%. According to AOL Money & Finance information, the company is Canada's largest drilling contractor, with a fleet of 240 service rigs. Its contract drilling units provide drilling services, equipment supply and repair, and on-site catering and management. PDS has extended its reach into the United States this year and has invested in new technology, replaced older rigs and is preparing for continued expansion. Favorable metrics include a low P/B of 1.57 and high historic profit margins of 40%.

PDS closed yesterday at a price of $15.47 per share, near its 52-week low of $15.35, a low set today during the trading day, and 44% off its high of $27.78. The P/E is a trailing figure and is actually higher but the dividend looks secure. For a few more details see: Chasing Value: Precision Drilling for 10% yield.

Disclosure: I have already bought shares of PDS at $17 in several portfolios.

The following stocks have been put in three groups, considering I want to reduce the number to eight. The first group is highly likely to make the cut based on what I know today. The second group is still under consideration but depends on what the value is in two weeks because of current volatility. The last group is being cut, and I noted why.

Continue reading Chasing 8 for 2008: What's in, what's out

Chasing 8 for 2008: What's in, what's out originally appeared on BloggingStocks on Fri, 14 Dec 2007 15:55:00 EST. Please see our terms for use of feeds.

For the most part, this year has portrayed itself as a stock picker's market. If the stock you happened to pick was Google (NASDAQ: GOOG), which I included for fun because of its popularity, it beat all else as a portfolio of one.

The average of my seven picks fell as dramatically in November as it rose in October, reflecting the ebb and flow of the Chinese market. James Cramer's average based on his nine picks sank as well, but not as much. While Cramer managed to stay ahead of all the indices, and I beat the benchmark Standard & Poor's 500 and marginally beat the Dow Jones Industrial Average, I lost out to the NASDAQ and the average of the three.

Last month, after reporting spectacular gains, I remained realistic when posting "Of course, this could easily change given recent market volatility. A sharp downturn in the market could reverse our fortunes. A lot can happen in the remaining two months -- I take nothing for granted."

Yes, Google has done well, but Cramer's best, Apple (NASDAQ: AAPL) has done much better. It seems to be priced for perfection, as they say, but it also seems to be achieving it so far on the wings of the iPhone, iPod, and growing Mac sales. Warren Buffett voiced his opinion that the Chinese market has gotten bloated, and PetroChina ADR (NYSE: PTR), while still up significantly, dropped back off its all-time highs after becoming the second-largest capitalized company in the world.

Continue reading Chasing Value: After 11 months, AAPL +125%, GOOG +50%, PTR +35%

Chasing Value: After 11 months, AAPL +125%, GOOG +50%, PTR +35% originally appeared on BloggingStocks on Mon, 10 Dec 2007 16:55:00 EST. Please see our terms for use of feeds.

According to an ominous story on Bloomberg.com this morning, the recession is already here. It makes the argument that in many sectors of the economy, corporate profits were severely depressed in the third quarter.

In order to protect the bottom line, many companies have announced wholesale lay-offs in the tens of thousands. They are looking to every department to cut expenses and staff and often just eliminate entire departments. There is no doubt that this shake-out is happening because a day has not gone by in the past six months that we have not read about the falling dominoes of the economy.

The housing market, which was ripe with speculators and dreamers (of home ownership or huge profits) fueled by cheap financing which has disappeared, is now in full retreat. The depressed housing and credit markets were the first to show signs of weakness, followed by mortgage lenders who did not have to announce lay-offs, they just closed their doors. The home builders are not building, and the suppliers like Lowe's Co. (NYSE: LOW) and Home Depot (NYSE: HD) on the retail end and Caterpillar (NYSE: CAT) and USG Corp (NYSE: USG) on the wholesale end are feeling it.

Continue reading Recession fears build: Housing, banking, construction, retail, jobs

Recession fears build: Housing, banking, construction, retail, jobs originally appeared on BloggingStocks on Mon, 03 Dec 2007 14:46:00 EST. Please see our terms for use of feeds.

This is going to be a journey ending with eight stock picks for 2008, on December 28, 2007. It is my intention to use the closing prices on that day for those eight stocks as the point of departure to publicly track the results and see if I can beat the market again. This year, as measured through October I have done so. I have also been tracking James Cramer's picks and he too has beaten the market to date, but lags behind me (sorry, couldn't resist). While we made some great picks, we both had some dogs as well. Furthermore, I will be the first one to admit that there is some luck involved in the short run.

Last year I beat the market, earning 29%, and it was my fifth straight year doing so after going down in flames with the rest of you when the tech bubble burst. At that time I also had the pleasure of being an Enron investor as well, so I have made plenty of blunders. But I have learned a lot from my mistakes, and hopefully others can learn from them as well as I share my investing adventures and how I turned things around.

Continue reading Serious Money: Hot stocks for a cool year -- finding 8 for 2008

Serious Money: Hot stocks for a cool year -- finding 8 for 2008 originally appeared on BloggingStocks on Tue, 13 Nov 2007 16:46:00 EST. Please see our terms for use of feeds.

This Chasing Value post marks my 400th story for BloggingStocks over the last 18 months. I originally agreed to do about five per month, so I have exceeded what I thought was practical, given my other responsibilities. Through this time I have learned a lot about writing, blogging, editing, the internet, AOL, and have continued to improve my investing acumen, which is a never-ending process. Many of our readers have contributed with some thought-provoking commentary and made this time a more interesting journey. I created the Chasing Value section after discussions with Senior Editor Amey Stone, and it seems to have gathered a modest following. This is the latest installment tracking my 2007 picks.

Through September, the market has benefited from a 0.5% interest rate cut by the Federal Reserve Board, recovering much of August's losses. This has also stimulated oil and gold prices to new highs and caused the dollar to shrink in value overseas. To some degree I think this resulted in foreign stocks rising significantly, most notably Huaneng Power International ADS which derives 100% of its revenue outside the United States. Last December, I made a strong case for HNP; prior to its recent rise I did so again for our Volatile Market picks: Huaneng Power (HNP) is my pick for the next 50 years.

This year continues to be a stock picker's market, as the volatile James Cramer of TheStreet.com and I have both topped the indices. Cramer made the best and worst picks for the year among those I've been tracking monthly. Apple Inc. (NASDAQ: AAPL) is the best performer among all the stocks and indices in this review, and has stabilized what might have otherwise been a mediocre showing. It has been a good year for energy and tech stocks. The past few months have been dismal for the financial sector, and anything lingering near its giant shadow.

The Dow Jones Industrial Average is once again approaching its high of 14,000 and looks like there might be room to exceed it. The housing market and subprime loans continue to worry investors, but unlike last month when an interest rate cut was not a certainty, the market seems to be betting now that another cut is not far off.

Continue reading Chasing down 007 picks: AAPL +89%, HNP +46%, PTR & VLO +30%, GOOG +22%

Chasing down 007 picks: AAPL +89%, HNP +46%, PTR & VLO +30%, GOOG +22% originally appeared on BloggingStocks on Mon, 01 Oct 2007 13:01:00 EST. Please see our terms for use of feeds.

The Home Depot (NYSE: HD) has been a big disappointment to me this year and to long-term shareholders it has been worse.

The brutal housing market, slowing construction, tapped-out consumers, tightening credit markets, not to mention rampant company mismanagement, have all played their part. Then you have the competition from Lowe's (NYSE: LOW), so maybe I was just early and there is a lot of opportunity ahead. I tend to think so, but this story is about the sale of Home Depot's Supply Unit:

The original deal was for private equity firms Bain Capital Partners, Carlyle Group and Clayton, Dubilier & Rice to purchase price HD Supply for $10.3 billion, now reduced to $8.5 billion. This is $1.8 billion less, but that is not the end of the story. Home Depot will be receiving 17.476% less money but is selling 12.5% less of the company so the real difference is a 4.976% reduction in the price. This is not such a bad deal since it now shares in the upside of the new entity's future. Some might argue a path to an upside that will be paved by a better management group.

Although I am sure I am in the minority on this issue, I think The Home Depot negotiated a good deal given the circumstances. It is better for all concerned. The banks have less exposure, the private equity buyers have less risk and a lower purchase price and HD gets to close the deal with some future upside. This may actually work out better than the original deal.

Does anyone believe that the new owners will not outpace HD's return on equity or invested capital? I would bet that remaining 12.5% interest in HD Supply doubles in value faster than Home Depot's stock value. Interestingly, while the words I read here and there make this deal out as a disappointment the action on Wall Street has the stock trading up as a I write, about $1.2 billion in capitalization. Given that the option of not closing the deal might have caused the stock to trade lower, the difference between the downside risk and the upside stock move probably equals or exceeds the $1.8 billion dollars. So I like the deal very much.

To verify my track record, including bad calls, read Chasing Value and Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Serious Money: Home Depot (HD) deal is fine by me originally appeared on BloggingStocks on Mon, 27 Aug 2007 15:35:00 EST. Please see our terms for use of feeds.

July started off so promising and ended in the dumps. After the DJIA triumphantly closed above 14,000 it beat a hasty retreat scared off by a tumbling housing market, continued worries about sub-prime loans, record highs in oil prices, continued turmoil in Iraq and perhaps a dose of summer vacationitus. In addition, market darlings Apple and Google exited the month with a few unanswered questions. Nothing could be more telling than people speculating about a Dow 15,000...16,000...17,000 the moment it passed the 14,000 mark. And silly guy that I am...thoughts of repeating my 29% 2006 return entered my mind when I reached a 24% IRR earlier. That no longer looks like a possibility although I'm still doing fine - so far.

The month of July started off about stock picking and finished about stock picking as James Cramer of TheStreet.com would support. However, among the good picks were plenty of bad ones and anything remotely associated with housing, and sub-prime loans paid a heavy price by month end. Google maintained its leadership but did take a dive after reporting earnings. The Dow Jones Industrial Average (DJIA) set so many new highs that it is not news anymore, but then there was news, most of it bad enough to put doubt in investors minds, and the market traded down. Earnings reports still trickle in but nothing major unexpected affected the market. Mergers and acquisitions are showing some signs of slowing, but deals are getting done. This is my seventh follow-up report. For reference, check out my original Dec. 28, 2006 post on this topic.

Although the DJIA has been the market leader among the indices and may indicate that investors are giving large cap stocks their due, it has retreated lately. It also may indicate that the global economy is doing better as a whole than the national economy, creating opportunity for the multi-national corporations.

Continue reading Chasing Value 2007 picks : Google (GOOG) runs up, Cramer runs down, indices worse

Chasing Value 2007 picks : Google (GOOG) runs up, Cramer runs down, indices worse originally appeared on BloggingStocks on Wed, 08 Aug 2007 17:30:00 EST. Please see our terms for use of feeds.

Many years ago, one of my professors gave a design lecture which he titled I love hardware stores. In it, he presented various building elements that were off-the-shelf items that could be used to create (what he thought was) a particularly appealing aesthetic. He offered this theme as contemporary yet rustic, detailed yet simple, and very accessible to all.

After writing three stories on The Home Depot(NYSE: HD) recently, I feel that unlike many posts, a real dialog has been created between writer and reader, and people have brought up many issues that would be worthwhile for Home Depot to take note of -- not just offer up lip service, but really take to heart.

Continue reading I love hardware stores, but Home Depot ... hmm

I love hardware stores, but Home Depot ... hmm originally appeared on BloggingStocks on Tue, 03 Jul 2007 13:40:00 EST. Please see our terms for use of feeds.

Through the month of June it seems that it remains a stock pickers' market as Google Inc. (NASDAQ: GOOG), James Cramer of TheStreet.com and I all topped the indices. Google continued its strong move upward battling me for the lead, while Cramer lost much of his gains of last month competing to stay ahead of the indices. Cramer is sticking with his NYSE Euronext (NYSE: NYX) pick, and it continues to drag him down. Earnings reports still trickle in but nothing major has affected the market. Mergers and acquisitions are a bigger story and something seems to be happening every day. This is my sixth follow-up report. It is not a long time, but short of a major change in the global economic picture it looks like 2007 will be a good year. For reference, check out my original Dec. 28, 2006 post on this topic.

There seems to be growing support for large cap stocks which analysts have been talking about but now might be starting to show up for real. The Dow Jones Industrial Average has been the market leader among the indices and may indicate that investors are finaly giving large cap stocks their due. It also may indicate that the global economy is doing better as a whole than the national economy. There also may be some flight to safety. That said, June seemed more cautious then May except in foreign markets as indicated by the strong rise in my Chinese picks. Investors moved the S&P 500 index to new highs.

Continue reading Chasing down 007 picks: Google leads, Cramer sags, value up!

Chasing down 007 picks: Google leads, Cramer sags, value up! originally appeared on BloggingStocks on Mon, 02 Jul 2007 19:40:00 EST. Please see our terms for use of feeds.

For the past few weeks I have been targeting The Home Depot (NYSE: HD) with a broad critique that has been echoed by the voices of frustrated readers, investors, customers and former customers. When it comes to analyzing the company's problems, Home Depot customers and employees have plenty to say! They are screaming in anger, offering opinions of the company that are very very low. Lowe's, on the other hand, has received more favorable treatment but has not gone totally unscathed either

Bob Nardelli, the ultra-arrogant ex-CEO has been criticized for a lot of what ails the company. Employees have occasionally felt that some customers are impatient, irrational, and in a few cases dishonest. We heard that stores are dirty, poorly stocked, and not organized as well as Lowe's Cos Inc (NYSE: LOW), which has much newer stores. Complaints also emphasized Home Depot's failure to make delivery commitments on contracts in a timely fashion or not at all. Customers complained often of poor service from undertrained, inexperienced, uncaring employees.

Continue reading Home Depot needs schooling -- not summer vacation

Home Depot needs schooling -- not summer vacation originally appeared on BloggingStocks on Fri, 29 Jun 2007 16:45:00 EST. Please see our terms for use of feeds.

The large number of responses we received to my story Home Depot management should stock shelves & help some customers tells me I touched an important subject in the minds of our readers. Almost all the comments supported my contention that the first step toward improvement of The Home Depot (NYSE: HD) must come from management creating a deeper dialog with employees, customers and shareholders. This means management must roll up their sleeves and get personally involved with customers and staff.

Not surprisingly Home Depot executive management had nothing to say and no comments were received from Home Depot, not even a public relations person. It would have been spectacular if there was a dialog. I have been a supporter of giving management time and have viewed the stock as a value proposition this year. I might change my mind if Home Depot does not radically improve the level of dialog. If any Home Depot Executives read this I hope they will add their voice. I think I will send this post to Home Depot and see what happens.

Meanwhile Home Depot also announced the sale of its HD supply to private equity group for $10.3 billion as well as a $22.5 billion Increase in its share buyback plan. This jump started the stock for a day or two, and maybe the reduction in the number of shares will have the desired effect in raising shareholder value, but if you get the cash from borrowing or by selling assets the value may be dubious since each share is part of a smaller company. Prettier picture, less substance.

Continue reading Home Depot customers, and employees have plenty to say!

Home Depot customers, and employees have plenty to say! originally appeared on BloggingStocks on Fri, 22 Jun 2007 19:20:00 EST. Please see our terms for use of feeds.

It wasn't the bagels burning up, it was the owner.

Before work I often stop by New York Bagel & Deli (NYBD) in Santa Monica for coffee, a bagel and the word on the street. Well this morning I got an earful from my friend Brian Gruntz, the owner, about the pay and severance package Bob Nardelli received for running The Home Depot (NYSE: HD)...before bailing out after failing to increase shareholder value in terms of share price. Hundreds of millions of dollars...for what?

Even though it is almost six months later, Brian still finds it outrageous that Nardelli and other CEOs are rewarded for contributing nothing to their company's bottom line, or shareholders', and often negative results due at least in part to their failure of leadership. Brian went on to rant about a story he read somewhere linking CEO performance and the construction of personal mansions, which start to pop up, like oracles, six months before their demise.

Continue reading Burning up at the bagel shop - Home Depot & Nardelli won't go away

Burning up at the bagel shop - Home Depot & Nardelli won't go away originally appeared on BloggingStocks on Wed, 20 Jun 2007 16:45:00 EST. Please see our terms for use of feeds.

After all the posts about The Home Depot (NYSE: HD) and seeing so many comments about the condition of the stores, customer dissatisfaction and low employee morale, I started thinking about what management needs to do to turn things around. What would I do in this state of affairs? Only one thing came to mind. Leave the ivory towers and spend time in the stores. Not visiting, not inspecting, not for pep talks -- actually go to the stores and stock some shelves! Spend some time helping customers find what they need. Work at the customer returns counter. Work at the checkout counters. Help customers to their cars. Brown bag lunch with employees.

The Home Depot directors, officers, and senior managers need to actually return to the days of the owner getting his hands dirty. It's time to role up the sleeves and lead by example. No more reading reports to find out how things are going or visiting three stores in a day that have been prepped for your arrival. At this point, management needs to actually jump into the trenches with the troops and see the world from their perspective.

This is how Costco Wholesale (NASDAQ: COST) Starbucks (NASDAQ: SBUX) and Southwest Airlines (NYSE: LUV) grew strong, just to name a few. The leaders know from first hand experience what needs to be done because they have been there alongside employees and customers making sure they understood what it takes to build a successful enterprise and keep it that way. You cannot manage what you do not understand. When ex-CEO Nardelli left The Home Depot in January, he could have won a trophy for being the CEO most out of touch with customers, employees and shareholders on planet Earth. They could have used his likeness to craft the trophy itself.

I write this to remind management that there is no time like the present -- the time is NOW. Get to work -- real work! Then you will be able to turn the ship around. If not, you'll just leave a bigger mess for somebody else to clean up. Did I hear someone shout "spill on Aisle 3?!"

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well. Disclosure: I own shares in SBUX, as of this writing.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.Check out his other posts for BloggingStocks here.

Home Depot management should stock shelves & help some customers originally appeared on BloggingStocks on Wed, 13 Jun 2007 16:15:00 EST. Please see our terms for use of feeds.

Would it make any sense for Berkshire Hathaway (NYSE: BRK.A) to acquire The Home Depot (NYSE: HD)? The Home Depot has been stuck in a very tight range for the last six to eight months, hovering around $38 per share and closing Friday June 8, at $37.95; while most of the market has been reaching new highs. The Home Depot has been the subject of many stories from the January departure of its CEO to the questions about customer service, poor store atmosphere, competition from Lowe's Co (NYSE: LOW), deteriorating employee morale and the effects of a downturn in the housing market.

Given all the problems, The Home Depot has remained a hot topic related to its continued strong cash flow, low stock valuation and book value and low debt that all makes it seem ripe for a takeover or leveraged buyout. The under-valued real estate by itself gets my imagination going because I think it is the most under-valued of all HD's assets and offer the potential for substantial development. While a hedge fund or private equity buyout might make sense to some, I see greater value to Warren Buffett.

There has been a lot of speculation about what BRK might do next. Warren Buffett himself has said a large acquisition is in the cards, not surprising given Berkshire's huge cash reserves. Could it be that Buffett would make this large an acquisition?

If he bought The Home Depot, he would not need much leverage and he might need only buy controlling interest, not the whole company. His association by itself might add 20% to the stock value immediately because it would answer a lot of questions about what direction HD is going in. It would also rectify many of the company's image problems. For Berkshire, it would mean a direct outlet for many of its products like Shaw Carpet, USG Drywall, Acme Brick and Benjamin Moore paint. Berkshire could extend brands further by putting mini Dairy Queens in each Home Depot, maybe an H&R block, and push Geico insurance as well. The Home Depot could be a platform for many of BRK's enterprises.

While the Home depot would be a huge company to swallow for some, it would be a mere snack for Buffett. It could also be the next major catalyst for growth. BRK.A has a market capitalization of $119 billion (approx. 30% cash) and HD's is about $74 billion. Together this could be a $250 billion enterprise. While it might present a huge opportunity, I recognize it might also present to large a risk of upsetting Buffett's apple cart -- but it is an intriguing proposition.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well. Disclosure: I own shares in BRK.B, as of this writing.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Would Buffett buy The Home Depot? originally appeared on BloggingStocks on Mon, 11 Jun 2007 16:30:00 EST. Please see our terms for use of feeds.

Whittling Away at the Dow has been my longest multi-part blog to date. This is the seventh and concluding post of the series and for those that have been following along I hope there has been something of value for you in my comments. Among my surprises have been that there was so much value still left in the Dow given it's reaching new highs almost daily; I was surprised Disney was among the stocks that made the cut, and I was surprised at how few comments I received. You might notice that all six stocks that made the cut were from the top half of the Dow 30, perhaps I became tougher as I went along, but that's how it worked out. If you want to read the previous posts the following links will get you there: Part 1, Part 2, Part 3, Part 4, Part 5, or Part 6. So here we go, whittling the six down to three. Here are the stars:

• Alcoa Aluminum (NYSE: AA): Aluminum
• American International Group (NYSE: AIG): Insurance
• Caterpillar Inc. (NYSE: CAT): Heavy duty construction and mining equipment
• Disney (Walt) Company (NYSE: DIS): Entertainment production, media and theme parks
• Exxon Mobil (NYSE: XOM): Petroleum exploration, refining, and sales
• Home Depot (NYSE: HD): Retail and wholesale hardware and construction materials

Continue reading Serious Money: Whittling away at the Dow - best values : Part 7

Serious Money: Whittling away at the Dow - best values : Part 7 originally appeared on BloggingStocks on Fri, 08 Jun 2007 12:30:00 EST. Please see our terms for use of feeds.

The month of May was all about stock picking as James Cramer of TheStreet.com has come roaring back after a poor showing in April. Google also made a strong move upward. After languishing for three months it has come close to its all time high. The Dow Jones Industrial Average (DJIA) set so many new highs that it is not news anymore. Earnings reports still trickle in but nothing major has affected the market. Mergers and acquisitions are a bigger story and something seems to be happening every day. This is my fifth follow-up report. It is not a long time, but short of a major change in the global economic picture it looks like 2007 will be a good year. For reference, check out my original Dec. 28, 2006 post on this topic.

The DJIA has been the market leader among the indices and may indicate that investors are finaly giving large cap stocks their due. It also may indicate that the global economy is doing better as a whole than the national economy. There also may be some flight to safety. That said, May was not a time of caution. Investors moved everything upward with even the S&P 500 index reaching a new high. Cramer took back the lead and for the first time the indices lagged.

Continue reading Chasing down 007 picks: Google & Cramer roaring back and the Dow oh my!

Chasing down 007 picks: Google & Cramer roaring back and the Dow oh my! originally appeared on BloggingStocks on Mon, 04 Jun 2007 16:00:00 EST. Please see our terms for use of feeds.

Fifteen stocks have been reviewed, fifteen to go to complete the Dow Jones Industrials whittling. Of the first fifteen, five will be looked at again as possible value plays: Alcoa Aluminum (NYSE: AA), American International Group (NYSE: AIG), Caterpillar Inc. (NYSE: CAT), Disney (Walt) Company (NYSE: DIS) and Exxon Mobil (NYSE: XOM) . You can link to Part 1 of this series or Part 2 or Part 3 if you want to catch up. Comments are always welcome; on to the next five...

General Motors (NYSE: GM) has practically returned from the dead rising about 100% from it's lows 18 months ago, and it was the number one performing Dow stock last year. That's wonderful for shareholders and the UAW and the managers that steered the ship. Looking at it today as a stock investment I think it would take too much speculation to be an investor. I have no idea whether GM will produce some great car designs that will be appealing to future customers or whether they will effectively compete in the marketplace against worthy alternatives. I have no idea what will happen in UAW contract negotiations. When I look at the metrics it is a mess. All I can say is that for me GM stands for "Giant Mystery," and let others wiser than I support the shares.

Continue reading Serious Money: Whittling away at the Dow - GM, HPQ, HD, HON, & INTC: Part 4

Serious Money: Whittling away at the Dow - GM, HPQ, HD, HON, & INTC: Part 4 originally appeared on BloggingStocks on Fri, 01 Jun 2007 13:00:00 EST. Please see our terms for use of feeds.

This is an update through March 30, 2007 bringing the first quarter to a close. Earnings season is now upon us. It is my third follow-up report. Three months is a short time in the market for long term investors, and an eternity for a day trader. If you want to refer to the original article from December 28, 2006 see: You don't have to be 007 to find the best picks for 2007!.

Summary of Results:

• James Cramer's average return on his 9 picks was 2% after two months but now stands at: +2.82% an improvement. Adding the dividend portion (.66 x .25) of 0.165 brings Cramer's gain to 2.99%. Last month it was his speculative stocks that supported his gains. This month they pulled back and his gains came from his best pick so far, Apple Inc. (NASDAQ:AAPL)
• The Indexes remained slightly negative, the DJIA leading the way south: -1.2%. Adding it's portion of the dividend yield (1.8 x .25) of .45 brings it up to a gain of 0.85 for the quarter.
• My picks are down for the year, but improved from -1.9% last month, to a negative of -0.61% for the quarter. Adding the dividend portion of (3 x .25) of .75 brings my quarter to a slight gain of 0.14% which is negligible. My picks are the most volatile now with super gains over 25% from Valero Energy (NYSE:VLO) and super losses from PetroChina Co. (NYSE:PTR) which was at an all-time high when I mentioned it. Both companies are in the same industry, but PetroChina's profits are more closely regulated.
• Google (NASDAQ:GOOG) provided an +8.1% return in January, slipped to -2.9% in February and YTD has moved up for a smaller loss: -1.0% Although it has been an erratic three months Google has managed to float within a tighter range lately.

Not much change since last month. Since the quarter has concluded I added one quarter of the the dividends to the results. This is one of the criteria I used in my stock picks and will have an impact on the final results. Only 3 of Cramer's picks pay dividends averaging about .66%; the Indexes pay a higher average of 1.8%; my picks average still higher at about 3%; and Google does not pay a dividend. The flatter the market is this year the more the dividends will be a factor.

I still remain very comfortable with my stock picks and believe this year will prove to be a "Tortoise and Hare" story. It is my belief that 'Value' will beat 'Growth' and 'Indexing' over the long run. Google is a wild card! Two of my picks continue to be mentioned as buyout candidates; Dow Chemical Co. (NYSE: DOW) and Home Depot (NYSE:HD). Home Depot is receiving the most negative discussion in business circles these days but I see it as becoming a greater value at the lower price.

The following are the closing prices as of December 28, 2006 and three month returns for the seven stocks I recommended plus the addition of Spectra Energy that was spun out of Duke Energy (NYSE:DUK).

Continue reading Chasing down 007 picks: Q1 is done - Valero is tops

Chasing down 007 picks: Q1 is done - Valero is tops originally appeared on BloggingStocks on Mon, 02 Apr 2007 14:00:00 EST. Please see our terms for use of feeds.

This is an update through February 28, 2007 which has come and gone all too quickly. It is my second follow-up report. Two months is a short time in the market for a buy and hold guy like me, and ages for a day trader. If you want to refer to the original article from December 28, 2006 see: You don't have to be 007 to find the best picks for 2007!.

Summary of Results:.

• James Cramer's average return on his 9 picks was 5.86% last month but now after two months is: +2%. Interestingly it is his speculative stocks that are up the most. Best pick so far Level 3 communications.
• The Indexes all reversed from positive territory to slightly negative, the DJIA leading the way south: -1.2%.
• Liber return is negative at -1.9% held down by my inclusion of PetroChina which is down 22%. I cautioned about buying this stock at close to an all time high. However, for the purposes of this story I used that number as my starting point. Best pick so far Valero Energy.
• Google provided an +8.1% return in January and has since slipped for a YTD loss: -2.9% Among all considerations Google had the poorest showing in the last month going from first to last.

After each quarter I will be adding the dividends to the results. This is one of the criteria I used in my stock picks and will have an impact on the final results. Only 3 of Cramers picks pay dividends averaging about .66%; the Indexes pay a higher average of 1.8%; my picks average still higher at about 3%; and Google does not pay a dividend.

I still remain very comfortable with my stock picks and believe this year will prove to be a "Tortoise and Hare" story. It is my belief that 'Value' will beat 'Growth' and 'Indexing' over the long run. Google is a wild card! Two of my picks continue to be mentioned as buyout candidates; Dow Chemical Company and The Home Depot.

The following are the closing prices as of December 28, 2006 and two month returns for the seven stocks I recommended plus the addition of Spectra Energy that was spun out of Duke:

Continue reading Chasing down 007 picks: Jan/Feb results - Cramer on top

Chasing down 007 picks: Jan/Feb results - Cramer on top originally appeared on BloggingStocks on Sun, 04 Mar 2007 14:48:00 EST. Please see our terms for use of feeds.