stock picks posts
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
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
This is the fifth year that I am posting my stock picks for the year. There is a lot of foolishness in doing so because each year that I have made such suggestions, including 2009 when I owned all of the picks, it is assumed that I would hold all of the positions without responding to market conditions, or changes in the specific company. No adding to, or cutting a position. This is not the real world.
It is not possible for everything to remain static. For example, you might find that you hold a stock that made a great run through three quarters, beyond your wildest expectations, and decide it has passed a point where the metrics cannot support anything close to the price. Under normal circumstances you might sell it, except you cannot. By the end of the year the profit you might have realized fades away and you end up reporting on something that is not a true measure of your objective strategy. Nevertheless, once again I will stick with this approach because this seems to be how its done in every publication's annual picks. This year there are eleven.
Continue reading Chasing Value: 2011 Stock Picks -- 5 of 11
Looking for a shopping list of new stock ideas for 2011?
Each year for 28 years, TheStockAdvisors.com has turned to the nation's most respected and well-known newsletter advisors and asked them for their favorite investment ideas for the coming 12 months.
With 65 advisors participating in this year's survey, there's something for every type of investor, from high-quality blue chips to speculative home runs.
Continue reading Top Picks 2011: Favorite Stocks from 60+ Advisors
The list of stocks under consideration has been reduced from eleven to ten, to seven and now in today's story four. Starting with five major defense contractors and six major oil companies (see Chasing Value: You Must Own Defense and Oil for Safety), I began a search to find one stock in each sector that might be suitable for inclusion in my list of 2011 stock picks posted last week Chasing Value: 2011 Stock Picks -- The Journey Begin.
Today we continue our analysis by examining return on equity (ROE), return on invested capital (ROIC), and price-to-earnings-to-growth (PEG). Each stock is ranked by sector and metric from best to worst. Sometimes there are clear winners and others there is little to separate one stock from the next. However, in total, a picture can be drawn that does portray a superior opportunity.
Continue reading Chasing Value: Defense and Oil -- Part 3
In the middle of the summer with the stock market smoldering from the economic aftershocks of the BP (BP) oil spill, I decided to post a contrarian story emphasizing a very common refrain among value investors, "my pal Warren" being head of the class: buy on fear (sell on greed). This notion is continuing to work for what I called the toxic stock portfolio.
This is the third update to my ranting five months ago that six of the most reviled and most highly traded stocks featured by daily bad press as a group would outperform the overall market. It has, with the big winner rising from being one of the biggest losers.
Continue reading Chasing Value: Toxic Stock Update #3 -- BAC, BP, C, GE, GS, RIG
The twelve super caps are down to seven: Proctor & Gamble, Wal-Mart, Johnson & Johnson, China Mobile, PetroChina, Microsoft and ExxonMobil. Five are American companies and two are Chinese. The five U.S.-based enterprises have historically strong management teams and balance sheets. If this was the only criteria, I might take pause when considering the two Chinese companies only because I do not know enough about them to make a judgment, except that they have been very successful.
"My pal Warren" placed a large bet on PetroChina (PTR
), which he has since sold off, but he always makes a big deal about management, so we will give these two the benefit of the doubt. The two also pay the highest yields among the group.
So where do we stand today? We'll stick with all seven and here is why.
Continue reading Serious Money: Buying the Super Caps, Part 6 -- Conclusions
The market continues to be very volatile and trending down. When the seas are this turbulent you want to be on the biggest ships and thus I continue my review of the super cap stocks. This time, I'm going to examine return-on-equity (ROE) and return on-invested-capital (ROIC).
I started with the 12 highest valued companies but remained with 10 after running them through several screens. Among those 10 super, caps the company that is producing the highest returns is Microsoft (MSFT).
Continue reading Serious Money: Buying the Super Caps, Part 5 -- ROE, ROIC
For the past few weeks the stock market has been volatile and the "I told you so bears"
are coming out in droves to pat themselves on the back. Well, I'm not a stock market bull but I think they are full of it!
The market would still be up if not for the black swans popping up all over. The disaster befalling the Europeans under mountains of debt, plus the oil spill in the Gulf of Mexico running unabated, added to the colossal pending legislation to rein in Wall Street at the same time that Goldman Sachs has been threatened by the SEC and the DOJ is leaning on the rest of the street has given those already looking to make their exit plenty of reasons. However, it is not the over all economy that is the reason; that continues to improve.
Continue reading Sunday Funnies: Crazy Market, Places to Hide
It does not come as a surprise that the government leaders and bankers of the European Union have put up what they hope will be a buttress against further erosion of the Euro, and the nightmare that is the Greek economy. Over the weekend with the Sword of Damocles
hanging over their heads, they fabricated a $962 billion bailout package
not unlike some of the wonders created last year by the United States.
I was surprised by the size of this economic band-aid and while the market has bounced back on the news, the best news might be for the maker of Band-Aids, Johnson and Johnson (JNJ
). Last week Barron's was talking it up, and I did not give it much thought because there are better opportunities for growth and/or dividends. However, I think it is time to reconsider it because the economic band-aids are not solutions. They do not heal anything they only help to prevent infection. If the illness is the cancer of deficit spending, then they do even less. For real protection, it may be time to compromise on some growth and settle for blue chip stocks and JNJ is among the bluest of the blue.
Continue reading Band-Aid Economics -- J&J Loving It
The first quarter of 2010 is closed and the results are in. My picks surpassed the primary indices by a large margin. The original story, Chasing Value: 10 Stock Picks for 2010 , was the culmination of a process presented to our readers and finally narrowed down to the select group using final prices from Monday, December 28, 2009.
For comparison I tracked the Standard & Poor's 500 Index, the Dow Jones Industrial Average, and the NASDAQ. Each of these produced positive results for the quarter.
Continue reading Chasing Value: 2010 Picks Triple Market Returns
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