Continue reading Rapped up with Madoff

Rapped up with Madoff originally appeared on BloggingStocks on Wed, 21 Jan 2009 16:00:00 EST. Please see our terms for use of feeds.

This is a continuation of Serious Money: Choose these 5 stocks over CDs -- DEO, GE, HNP, JPM, MRK, which listed the first five stock ideas. Below are the other picks rounding out the ten.

Nucor Corporation (NYSE: NUE) - This is one of the world leaders in the idea of mini-mills. This smallish steel producer prides itself on running a tight ship, pays a dividend and has a P/E under 9. The steel industry has been volatile in recent years with many mergers and acquisitions. NUE could be a takeover target as the industry continues to consolidate. In the mean time, at Friday's closing price of $51.6, it was paying a 4.05% yield and is near its 52 week low, having dropped from a high of $83.56.

Precision Drilling TR (NYSE: PDS) - This Canadian supplier of gas drilling equipment and manpower is probably the least well known of the companies in this group. It has dropped off its highs with the recent sag in gas prices and may well be a bargain again although not the bargain it was when I posted Chasing Value: Precision Drilling for 10% yield. At Friday's closing price of $21.35 it was paying a 7.1% yield and that is still a wonderful bounty even it the stock only appreciates a little.

Continue reading Serious Money: 5 more stocks better than CDs -- NUE, PDS, SO, WFC, XEL

Serious Money: 5 more stocks better than CDs -- NUE, PDS, SO, WFC, XEL originally appeared on BloggingStocks on Mon, 25 Aug 2008 12:48:00 EST. Please see our terms for use of feeds.

The following two-part article puts forth ten stock ideas that I believe would be better off in your investment portfolio than one comprised primarily of Certificates of Deposits (CDs) or bonds, or even government treasuries. This is not to say that CD's do not have value or offer some level of security, but they are long term losers.

A basket of high yielding-high quality stocks can offer a higher return, better tax advantages, and the potential of significant appreciation for those with a long time horizon. Five year CD earning 4%, or a utility stock? I pick the utility every time.

My wife sent me the following quote from Ambrose Redman that I thought would be worth sharing with readers: "Courage is not the absence of fear but rather the judgment that something else is more important than one's fear."

It seems that might be extended to one's view on investing as well. What is really important, the short term or the long term, growth or value, the promise of riches or the hope for stability? In each case I would favor the latter over the former and this brings to mind one of my pal Warren's lessons: Do not buy a stock unless you would be happy to own it even if the market was closed for ten years.

Berkshire Hathaway (NYSE: BRK.A and BRK.B) is certainly a candidate. Take a look at last week's Chasing Value: Considering Berkshire Hathaway... again. However, it does not pay a dividend. The following five quality stocks do:

Continue reading Serious Money: Choose these 5 stocks over CDs -- DEO, GE, HNP, JPM, MRK

Serious Money: Choose these 5 stocks over CDs -- DEO, GE, HNP, JPM, MRK originally appeared on BloggingStocks on Mon, 25 Aug 2008 12:30:00 EST. Please see our terms for use of feeds.

During Thursday's trading, Anadarko Petroleum (NYSE: APC) hit an all-time high of $78.75 and closed at $77.62. Anadarko was one of my first recommendations after I started writing for BloggingStocks, and is nearing 100% appreciation from the $40 price tag it had when we acquired it.

The 10-year chart below indicates the strong long-term performance of Anadarko, rising about 500% and paying dividends to boot. I cannot say the stock is a bargain at recent highs, but I can emphatically state that this company belongs on your watch list.

Continue reading Chasing Value: Anadarko hits all-time HIGH!

Chasing Value: Anadarko hits all-time HIGH! originally appeared on BloggingStocks on Thu, 08 May 2008 21:45:00 EST. Please see our terms for use of feeds.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

There are many contrasts between The Home Depot (NYSE: HD) and Lowe's (NYSE: LOW), both of which sell a broad range of tools, fixtures, fittings, garden supplies, and construction materials to do-it-your selfers and professional contractors alike. Home Depot is the original big-box category killer of a hardware store that displaced many a mom-and-pop shop, as well as its predecessors, like Builders Emporium. Lowe's, the new kid on the block has been growing like mad with Home Depot's business in it's cross-hairs.

Both companies have been suffering mightily in the face of the housing slump and the crushing financial markets. Eventually, recession or not, both companies will see their revenues improve as the economy works through it's nightmarish problems.

Continue reading Battle of the Brands: Home Depot vs. Lowe's

Battle of the Brands: Home Depot vs. Lowe's originally appeared on BloggingStocks on Thu, 08 May 2008 19:00:00 EST. Please see our terms for use of feeds.

This weeks Barron's (subscription required) talks about The Next Warren Buffett. Of course nobody believes that's going to happen. The headline is cast to grab attention and sell papers, just like mine, but it's not happening: no way, no how!

Continue reading The next Buffett, Elvis, or Jordan

The next Buffett, Elvis, or Jordan originally appeared on BloggingStocks on Thu, 08 May 2008 15:39:00 EST. Please see our terms for use of feeds.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Something new and something old, eBay (NASDAQ: EBAY) the large Internet trading platform competes more each day with Craigslist, who's platform continues to unfold. They are very much the same, and oh so different, too. Craigslist has been resisting becoming eBay in too many ways, yet eBay has gone through the back door to acquiring partial ownership and tracking a competitive threat from the inside.

Being public, eBay must disclose its financial information, which is not true for the private Craigslist. Craigslist is not happy about eBay's ownership position, and for its part eBay has sued Craigslist. It says the board diluted its interest in the popular site by more than 10%, and the two have been trading accusations since.

For most of Craigslist's history there has been pressure to become public or sell itself outright or make the pursuit of profit a higher motive. That has been shunned in favor of slowly building a user friendly and practical Internet information trading platform.

Continue reading Battle of the Brands: eBay vs. Craigslist

Battle of the Brands: eBay vs. Craigslist originally appeared on BloggingStocks on Wed, 07 May 2008 14:05:00 EST. Please see our terms for use of feeds.

It did not take long for Marvel Entertainment (NYSE: MVL) to announce the intended 2010 release of Iron Man 2. This came one day after Marvel reported its latest earnings and the spectacularly successful weekend debut of its newest hit movie.

Having seen Iron Man with the cast and crew -- a prejudiced crowd if there ever was one -- I can tell you it is worth catching Iron Man on the big screen.

Meanwhile, if you are a Marvel comics fan, as I was growing up, and can't wait for the sequel, let's hope that the June 13 premiere of the The Incredible Hulk tides you over until 2010. And then, starting with Iron Man 2, you can look forward to the gates opening wide for the pantheon of Marvel Super Heroes.

Continue reading Marvel announces Iron Man 2

Marvel announces Iron Man 2 originally appeared on BloggingStocks on Tue, 06 May 2008 16:46:00 EST. Please see our terms for use of feeds.

Even if you have not seen the new Iron Man movie yet you can be sure that there will be a sequel after 'Iron Man' Proves His Mettle this weekend topping all estimates of its potential at the box office passing $100 milion dollar mark and easily taking the top spot.

Earlier today Marvel Entertainment (NYSE: MVL) reported an increase in earnings from last years first quarter. Net income came in at $45.23 million, compared to $46.84 million last year. However, net earnings were up from $0.54 to $0.58 per share this year.

Last week after seeing a preview of Iron Man I posted Marvel's Iron Man will be HUGE! and it was. This is only the beginning because in addition to more of Iron Man filling the big screen we can look forward to more of Spider-Man, The Hulk, Wolverine, The Punisher 2, Magneto, Namor and many more in script development. Then there is the product licensing too, so it looks like the world will be looking simply Marvel-ous as Billy Chrystal liked saying way back when on Saturday night live.

The comnpany raised it's 2008 earnings per share estimate to the rangeof $1.35 to $1.55 from the $1.30 to $1.50 range. Marvel increased net income guidnace for the year to $104 to $122 million from $100 to $118 million.

The Stock is up $2.25 to $32.50 per share in morning trading.

UPDATE: MVL closed up $2.85 to $33.10.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I hold no position in MVL as of this writing -- but I am considering buying it

Marvel reports earnings as Iron Man is golden originally appeared on BloggingStocks on Mon, 05 May 2008 16:35:00 EST. Please see our terms for use of feeds.

In this month' Money Magazine story, Calming words for troubled times the final words were by Deena Katz, Chairman, Evensky & Katz Wealth Management, who shared this "My mom always said, if you're going to do it, don't worry; if you're going to worry, don't do it."

Are you a worrier? Do you fret over everything? Can you undo those things you have already done that you are worried about? Sometimes it's tough. But maybe you should consider it. How does that apply to the stock market or investing in general. From that perspective it is very simple. Do not invest in anything that will keep you up at night.

While this may be good advice for most aspects of investing there is one time that it might cost you. When stocks are rising few people are worried. When stocks are falling everyone's worry factor rises. As their worry factor rises they tend to become sellers. This may relieve one of their worries but it also may relieve them of their money because it contradicts two other old bits of wisdom.

"Buy low and sell high" is a common refrain said tongue in cheek because a bell does not ring announcing the highs and lows. However, even 'my pal Warren' would advise that "investors should buy on fear and sell on greed". So then the modified version of mom's advice melding it with market realities is that you should be worried when others are not and remain calm when everyone else is panicking.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

Sunday Funnies: Did your mom give you this advice? originally appeared on BloggingStocks on Sun, 04 May 2008 19:10:00 EST. Please see our terms for use of feeds.

This month saw great improvement after last month's disaster. Having to conclude my findings on a specific month end day, or any day, depending on the news, sometimes distorts results. For example news on March 31 sent the market down and on April first my picks shot up an unusual amount; hopefully the trend will continue.

My riskiest stock pick Newcastle Investment Corp (NYSE: NCT) was down the most in March but recovered about 35% of the loss in April leaving Valero Energy Corp. (NYSE: VLO) the dubious honor of being my worst performer, down over 30% in the first four months of the year.

April showed improvement as many companies reported positive earnings reports or beat expectations.

The Dow Jones Industrial Average gained some ground in April as did the Standard & Poor's 500 Index, and the technology heavy NASDAQ Composite Index was up with stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) improving significantly on very strong reports. Google is up over 25%.

Most of my picks improved. Higher food prices no doubt helped Bunge Limited (NYSE: BG) which recaptured losses moving up 23% from its recent bottom. My two winners Raytheon Co. (NYSE: RTN), the high tech defense contractor, and Reliance Steel & Aluminum (NYSE: RS) were joined by a third, Anglo American plc (ADR) (NASDAQ: AAUK) which had a 10% swing entering positive territory.

Continue reading Chasing Value: 8 stocks for 2008 -- April Bunge's back

Chasing Value: 8 stocks for 2008 -- April Bunge's back originally appeared on BloggingStocks on Thu, 01 May 2008 15:58:00 EST. Please see our terms for use of feeds.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

The story of Nike Inc. (NYSE: NKE) and Under Armour (NYSE: UA) is just one more David and Goliath scenario. Just like in the biblical story, David's battle (UA) was more one of survival against the odds, while Goliath (NKE) truly did want to vanquish the diminutive challenger. Under Armour is capitalized at $1.28 billion while the long-established and legendary Nike has a capitalization more than 20 times the size at $26.38 billion.

NIKE, the world's #1 shoemaker, does more dominating than assisting, to capture more than 20% of the U.S. athletic shoe market. It designs and sells shoes for a variety of sports, including baseball, cheer-leading, golf, volleyball, hiking, tennis, and football. Under Armour is proving its mettle as an apparel warrior. Since its foray into the sporting goods market, the maker of performance athletic undies and apparel has risen to the top of the industry pack, boasting a big portion of the compression garment market.

In addition to playing a dominant role in the shoe market, Nike has retail and wholesale outlets that sell a broad range of branded sports gear, including clothes, watches, balls, hats, and an expanding array of accessories. Under Armour is expanding as well, trying to get a foot-hold (could not resist) in the shoe market starting with a series of cross-trainers. They hope to capture perhaps 10% of the market as they promote their up-and-coming brand.

Continue reading Battle of the Brands: Nike vs. Under Armour

Battle of the Brands: Nike vs. Under Armour originally appeared on BloggingStocks on Tue, 29 Apr 2008 13:58:00 EST. Please see our terms for use of feeds.

Every time I see a story about Amazon.com, Inc. (NASDAQ: AMZN) I am infuriated and bewildered. How in the world can a 13 year old company have a P/E ratio of 70 and $32 billion capitalization on 37% year over year growth. The top line growth is great and so is the growth in net earnings but does it justify a P/E of 70?

Yesterday Amazon impressed Wall Street by beating expectations in many areas. However, two areas that disappointed were it's reduced earnings projections for the year and a lack of transparency or specifics in certain segments of its enterprise. Also if earnings were lowered by 4% to 6% then why is the stock only down 3%?

The stock is down about $2 from yesterday's close of $81 fluctuating in the the high 70's. From my perspective the stock is way too high and the limited number of shareholders is still holding up the price. Last year I wrote Who owns Amazon.com - really? and not much has changed in this regard.

Continue reading Serious Money: Infuriated by Amazon numbers?!

Serious Money: Infuriated by Amazon numbers?! originally appeared on BloggingStocks on Thu, 24 Apr 2008 16:31:00 EST. Please see our terms for use of feeds.

Last Friday, April 18, Precision Drilling Services TR (NYSE: PDS), the Canadian Trust, announced that the Board of Trustees has approved a cash distribution for the month of April 2008 of $0.13 per trust unit of Precision. The distribution will be payable on May 15, 2008 to unit holders of record on April 30, 2008.

The current dividend yield of 5.8% remains very generous and far above most other stocks in the sector. After some of my high dividend stock recommendations either under performed or simply cut their distribution, it is reassuring to see that PDS not only is maintaining its dividend, but in this particular case continues to pay out monthly, allowing for better compounding of the yield.

The stock closed today at $27.15, up 75.5% from $15.47 when I recommended the stock three months ago. If you got into the stock back then you would still be receiving over a 10% yield. Last year I had several high flyers but not all of them stayed up so I am watching Precision closely for signs of weakness or changes in the business.

Continue reading Chasing Value: PDS up 75% in Q1, announces distribution

Chasing Value: PDS up 75% in Q1, announces distribution originally appeared on BloggingStocks on Mon, 21 Apr 2008 17:01:00 EST. Please see our terms for use of feeds.

While analysts have proven over and over again that they are human (can't be more polite than that) the impact that they have on short-term stock values is clear. Intuitive Surgical Inc. (NASDAQ: ISRG), which closed yesterday at $348.50, dropped to $310.54 at the opening bell and is now trading at $292.00 as I type away. I will report the closing price in an update, but for now the stock has been hit hard -- down over 16%.

ISRG the maker of the da Vinci system, which uses robotic equipment and computers to do minimally invasive surgical procedures disappointed analysts and the stock was punished. Interestingly ISRG reported strong growth and even a positive outlook, however, that outlook was not as glowing as analysts expected and the result is not pretty. Does this mean that the company is not doing very well -- no. Does this mean that the stock price will not be higher next year than it is today -- the answer is no again.

What it does mean is that like other stocks with nosebleed valuations, such as Intuitive's with a trailing P/E of 80, they remain hypersensitive to the slightest deviation from expectations, reasonable or not. This happens even when Intuitive Surgical Q1 profit almost doubled.

Continue reading Chasing Value: Intuitive Surgical drops on analyst disappointment

Chasing Value: Intuitive Surgical drops on analyst disappointment originally appeared on BloggingStocks on Fri, 18 Apr 2008 11:52:00 EST. Please see our terms for use of feeds.

Is this just a case of greed causing blindness? If so why was it so contagious among some firms and not others?

It seems to me that the reported $2 per share purchase price that JP Morgan Chase (NYSE: JPM) is paying for Bear Stearns (NYSE: BSC) would not have been enough to buy the brand name last year, never mind the whole company. What we are witnessing is the strong (until JPM reports some surprise) taking advantage of the weak. It also exemplifies how bad the market is, that no other buyer has stepped in at these fire sale prices.

Continue reading Serious Money: Bear Stearns questions and curiosities

Serious Money: Bear Stearns questions and curiosities originally appeared on BloggingStocks on Mon, 17 Mar 2008 15:32:00 EST. Please see our terms for use of feeds.

Clearly, the board was not aware of the huge risks the bank was exposed to; investing in, and promoting very questionable 'securities' -- a misnomer if there ever was one, and doing so in multiple portfolios. It is by no means clear that the Board has any idea what remaining risks middle management may know about now, but is afraid to share.

It may also be the case that the board knew of the financial instruments, at least in general, but was not capable of evaluating the risk. I am being kind in not suggesting that the directors walk the plank, because if they were not completely asleep, they at least dozed off for a time.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

Citigroup should hire forensic auditors originally appeared on BloggingStocks on Thu, 06 Mar 2008 12:43:00 EST. Please see our terms for use of feeds.

Brian and Andrea get up at 4:30 AM so that their customers may get steaming hot bagels and mini-pizzas every morning on their way to work. New York Bagel & Deli (NYBD) is the wake-up call for the Santa Monica neighborhood I work in, and recently we got one heck of a wake-up.

Brian informed me that "in the last two years he has seen his cost for a 50 pound bag of high gluten flour go from $8 to $16". After that huge rise, he recently was hit with a bigger shock to his business -- "the price went from $16 to $32 in just 3 weeks!"

He said "in some places in the country the price has reached as high as $36." Brian is very sensitive to the needs and desires of his loyal customer base and feels terrible about this increase. He is struggling with how to moderate the increases and the sticker shock on the cost of a dozen bagels. This is very difficult for him. This is a major blow to the heart of his business.

Continue reading Bagel & pizza costs skyrocket -- think gas is high, read this!

Bagel & pizza costs skyrocket -- think gas is high, read this! originally appeared on BloggingStocks on Wed, 05 Mar 2008 12:24:00 EST. Please see our terms for use of feeds.

It is alarming to me that the same people who screw up the economy (or stand by watching) are the ones that are now promoting the remedies. They have proven without a shadow of a doubt that this is not their strong suit. The proposed economic stimulus package has bi-partisan support and calls for an estimated $156 billion of tax rebates ranging from $500 to $1,000 (+ $300 for each child) that might show up in May.

If we are going to add on to our already humungous joke of national debt, than I want to invest this capital in something that will bring a higher return on invested capital (ROIC) than the paltry one time mad money. That expenditure should be for national infrastructure projects like roadways, bridges, tunnels, and waterways.

We have all heard about the poor condition of our national infrastructure and the hundreds of billions of dollars of repair work and replacement that is desperately needed.

This alternative would bring visible results that every single person in the country would benefit from and improved linkages always stimulate economic growth. Road improvements even reduce fuel consumption by shortening routes and reducing friction both strategically and physically.

Continue reading Fund roads & bridges NOT mad money stimulus

Fund roads & bridges NOT mad money stimulus originally appeared on BloggingStocks on Tue, 04 Mar 2008 17:43:00 EST. Please see our terms for use of feeds.

Many readers have been intrigued by my recent posts (Will Chase (JPM) or Wells Fargo (WFC) buy WaMu (WM)? and Wells chasing Chase for WaMu -- Act II) regarding various strategic scenarios that might make sense for either J. P. Morgan Chase & Co. (NYSE: JPM) or Wells Fargo & Company (NYSE: WFC) to acquire Washington Mutual, Inc. (NYSE: WM).

If something is happening along these lines, it is all happening quietly behind closed doors. More than one reader suggested that no deal is possible because the Washington Mutual CEO, Kerry Kilinger, does not want to give up his throne and has too high an opinion of himself and the value of the company.

From my perspective this is a deal that has to get done, and if the CEO stands in the way of shareholder, employee, and customer interests he has to go. Time to bring in the corporate raiders -- you listening Carl Icahn; can a deal be done Norman Peltz? Hey Eddie, maybe you could make back the money you lost on Citigroup (NYE: C)! If there were ever a great opportunity this seems like it. The raiders do serve a market purpose.

There are potential buyers waiting in the wings so the raiders could move in friendly like, or do it the hard way, buying in at depressed stock prices, forcing Killinger into submission and doing a quick flip. I think even 'my pal Warren' of Berkshire Hathaway (NYSE: BRK.A), a major investor in Wells Fargo, must be doing some heavy duty pondering on the subject.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of BRK.B and WM.

Icahn should raid WaMu before Chase or Wells -- Act III originally appeared on BloggingStocks on Fri, 29 Feb 2008 16:03:00 EST. Please see our terms for use of feeds.