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eBay: A 'high class, high cash flow' buy

Bill Martin – well-known for his role as founder of the Raging Bull website – now shares his trading and investment advice in his always-intriguing FindProfit newsletter.

And while noting that his latest buy "strays a bit from our usual small-to mid-cap focus," he is nevertheless willing to "step up and buy web giant eBay (NASDAQ: EBAY)."

After watching EBAY for years, he says, "we believe that the stock now represents an attractive purchase for long-term investors."

Ne notes that the stock began underperforming in 2005 as growth in its core marketplace business slowed and Google gained operating steam. Meanwhile, he says, the stock is now over 20% below its 52-week high and equal to the levels it traded at in early 2004.

In his view, EBAY is now an "attractive growth at a reasonable price stock." He forecasts that the company should generate nearly $2 billion in free cash flow in 2007 despite, he notes, high levels of capital expenditures.

The advisor notes, "To us, EBAY increasingly looks like the kind of high-class company that Warren Buffett loves: it has a strong brand and franchise, it generates substantial returns on equity, it is positioned to grow for as far as the eye can see, and it is in a position to reinvest its cash flows at high rates of return."

Continue reading eBay: A 'high class, high cash flow' buy

Top Picks 2007: Bill Martin "finds profits" at Gilead

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Gilead Sciences, Inc. (NASDAQ: GILD) is a favorite speculative idea for 2007 from Bill Martin, editor of FindProfit. The advisor explains, "Gilead is best known as a biopharmaceutical company with a leading HIV treatment franchise (Viread, Truvada, and Emtriva).

"Gilead is also a player in the fungal infection area, with treatments for chronic hepatitis B and influenza. Gilead's Tamiflu product is licensed to Roche, which produces and markets the product. The company has had a wonderful growth run in recent years, and now commands a $30 billion market cap.

"Trading just above 25 times 2007 earnings estimates, the stock is obviously not a bargain on the surface, but we believe that the stock remains a compelling investment opportunity, with several key drivers in hand.

"Foremost, Gilead's HIV franchise is truly best-in-class, and recent advances (including unique 'one-pill-a-day' regimes) and international expansion should power the company to double-digit growth in the coming years. Also two recent acquisitions (Myogen for $2.5 billion and Corus for $330 million) have materially improved GILD's pipeline, which was previously looking somewhat barren in the medium term.

Continue reading Top Picks 2007: Bill Martin "finds profits" at Gilead

Symbol Lookup
IndexesChangePrice
DJIA-89.2312,801.23
NASDAQ-23.352,903.88
S&P 500-9.311,342.64

Last updated: February 12, 2012: 12:27 PM

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