" Some year-end wisdom and a little talk about Internet Security as a business in 2011"

Dow Jones Industrial Average  11,573    (Up) Week ending  12-24-2010

 As we approach the end of the year 2010, I think it is a good idea to remember Hal Holbrook and his words as Lou Mannheim the sage to the younger Bud Fox (Charlie Sheen) in the original Wall Street movie.

 "The main thing about money, Bud, is that it makes you do things you don't want to do." –Lou Mannheim (Hal Holbrook) .

Holbrook, who also doles out common sense advice when he portrays Mark Twain, reminds us that sometimes people end up in situations with money where they can find no way out and are forced into criminal behavior to keep the whole thing going. Bernie Madoff, I'm sure initially had good intentions to make all his customers money. Any company no matter how small or large can get in trouble with money.  Note General Motor's bankruptcy, Lehman Brothers, Bear Stearns, A&P Stores, currently Fannie Mae and Freddie Mac, and the old Pennsylvania Railroad company.  

So if you are a small business on the brink, because the conditions of your business have diminished, or are a homeowner facing foreclosure on your home and are in desperation, seek help - before you do anything crazy in regards to money.  With regards to stocks and investments, understand that there are different levels of risk with different types of investments. With the market going up in 2010 we all may have drifted into investments with higher levels of risk without even realizing it. You may be actually speculating when you think you are investing. Be careful! Invest like it is your first $100.  Enough said.

On to WikiLeaks! (and it's impact in 2011 on stocks in the Internet security business). Of course, the government is in full force with the WikiLeaks Task Force or WTF, which in SMS language is "What the  ___bleep?".   On the corporate front, there are companies of all sizes in the business of internet security. My chosen mission is to find you a few stocks that you can make money with. 

 The first obvious choice is Cisco Systems (Symbol CSCO, $19.84),
 It's all about the network and the "Cloud" and Cisco is totally involved along the whole path. The company does billions in sales and earns billions in revenue and has billions in cash on the balance sheet to buy up other high technology companies. It has sales growth of between 8-9 % a year and net profit margins of 18.90%. What's not to like? The internet security business should just add to these tremendous numbers.

If you want a little more high octane in your Christmas punch then Radware (Symbol RDWR, $38.84) should fit the bill for you. 2010 earnings per share of 66 cents and 2011 projected earnings of $1.00 per share. This company's stock is up 155% in the last 3 years. This small cap company should continue to grow nicely.


 Another small-cap name for you is SOURCEFIRE (Symbol FIRE, $24.74), with a 5 year sales growth of 33%. This company has a 3 year total return of 133%.  Just understand that these high growth stocks can hit speed bumps and you should be prepared for 25-30% downswings if they hit a slippery quarter. You need to buy into these types of stocks taking positions over time, maybe over 3 months to a year. As I mentioned in the beginning of the article, do not go in and bet the farm on one purchase or leverage and load up on one of these guys by buying on margin!  If you buy options, you often will lose all or some of your money.

If you are looking for a medium sized , well established company , you might want to look at Check Point Software Technologies Ltd. (symbol CHKP, $45.98).  Some nice internet security profits here with 40.4% net margins. This stock has a 108% total return over the last three years.

So watch what you say on Facebook and Twitter and always be cautious when exploring the web and even the email you receive.

Have a Happy, healthy and prosperous New Year, 2011.

Freewilly

"With an abundance of natural gas now in North America we need to liquefy it and export what we are not going to use here"

Dow Jones Industrial Average  11491.91  (Up)  Week ending  12-17-2010



Cheniere - Sabine Pass LNG

 If you live here in Pennsylvania, like I do, then you know that the northern tier counties in the state like Bradford, Sullivan and Susquehanna are experiencing a natural gas drilling boom. Marcellus Shale gas deposits all across the Appalachian Basin are producing large amounts of natural gas to be processed.
Chesapeake Energy Corp. (Symbol CHK, $23.30) seems to be doing a majority of this exploration. Not surprisingly, Carl Icahn has built a 5.8% ownership position in this company. 

 In September 2010, CHENIERE ENERGY PARTNERS (Symbol CQP, $19.55) received US approval to export liquefied natural gas. Up until that time, the facility's primary purpose was to import LNG to distribute in the US.  CHENIERE has a very nice 8.7% dividend payment and a low PE of 11.5. Cheniere Energy Partners reported a deal with Chinese energy firm ENN Energy for 1.5 million tonnes per annum of bi-directional LNG from the Sabine Pass LNG terminal in Louisiana. The MOU covers a 20-year agreement for the supply of
LNG to ENN, should regulatory approvals proceed as planned.

Boone Picken's Plan to use natural gas to power cars and most importantly 18 wheeler trucks, which use 33% of the barrels of oil that we bring in for diesel to move goods around the country, continues to gain traction. Natural gas is also used in many power plants in the country to produce electricity.

Apache Corp. (Symbol APA, $116.95)  owns 51% and  EOG Resources Inc. (Symbol EOG, $91.67) owns 49% of the planned liquefied natural gas (LNG) export terminal to be located at Bish Cove, near the Port of Kitimat, about 405 miles (652 kilometres) north of Vancouver, British Columbia. Planned capacity of the proposed Kitimat LNG terminal is about 700 million cubic feet of natural gas per day or 5 million metric tons of LNG per year. In November 2010, members of the Haisla Nation voted overwhelmingly in favour of approving a lease of reserve lands required for the construction and ongoing operation of the Terminal. Federal and provincial environmental authorizations for the initial design of the Terminal have also been obtained.

The plan is to export LNG to Pacific Rim countries from
Canada and plenty of it.

Out of these stocks I like Cheniere and Apache the best for shorter term one year trades and Chesapeake and EOG more as longer term 3 year investments.

I think that Liquified Natural Gas is a good energy product to balance our trade deficit and is an excellent clean fuel for use here and abroad. We need to add more storage capacity for LNG as a country as a matter of national energy security. It is definitely an integral energy source for this decade.

Enjoy your holiday gatherings with friends and family this week.

Freewilly

"Fundamental analysis depends on analysts' data, but what if estimates are too conservative and do not account for momentum?"

Dow Jones Industrial Average   11,410. (UP) Week ending 12-10-2010

Richard H. Driehaus


Greetings fellow shoppers. In his 1997 book "Investment Gurus" , Peter J. Tanous interviews legendary momentum trader Richard H. Driehaus, of Driehaus Capital Management, LLC. http://www.driehaus.com/index.cfm . Driehaus states when interviewed , "I've seen in the past that when companies report very positive surprises that analysts were almost all low. The analysts seem to prefer to be conservative rather than accurate. But when you are at a fulcrum or turning point, both analysts and companies can under-estimate growth."  Richard looks for earnings acceleration and positive earnings surprises.

        So we need to look at PE and make it "P" (price) divided by "E" (earnings) to the "X" power and put in an earnings acceleration factor in our fundamental analysis calculations. "X" could be the average earnings growth percentage gain in the last six quarters. This would give us a more accurate idea of the dynamic earnings growth and value of the company.

   So that is a lot of explaining to do, just to get to talk about Skyworks Solutions (Symbol SWKS, $28.04). SWKS has a one year Total return 95.4% and 3 year total return of 226.2%. "Skyworks Solutions, Inc. is an innovator of high reliability analog and mixed signal semiconductors. Leveraging core technologies, Skyworks offers diverse standard and custom linear products supporting automotive, broadband, cellular infrastructure, energy management, industrial, medical, military and mobile handset applications."  They have solutions for all air interface standards, including CDMA2000, GSM / GPRS / EDGE, LTE, WCDMA, WLAN and WiMAX. And here lies the fulcrum, the enormous exploding growth of the 4G and the above named interface markets.

Skyworks Solutions on November 15th, 2010  announced that "two of its power amplifier modules are enabling the first commercial long term evolution (LTE) handset in the United States. Samsung's newest 4G mobile phone, the Craft(TM), was launched in Las Vegas by MetroPCS and leverages the SKY77702 and the SKY77703. The carrier expects to cover 19 markets by 2011 and approximately 110 million LTE customers in major cities such as Dallas, Los Angeles and New York. Today's 4G systems offer a comprehensive solution where data and streamed multimedia are available to consumers anytime, anywhere at higher data rates than previous generation networks. In July 2010, Skyworks enabled the world's first commercial LTE device, Samsung's high speed 4G USB modem."


  Skyworks manufactures Gallium Arsenide (GaAs) power amplifiers.
 GaAs has some electronic properties which are superior to those of Silicon. It has a higher saturated electron velocity and higher electron mobility, allowing transistors made from it to function at frequencies in excess of 250 GHz. Unlike silicon junctions, GaAs devices are relatively insensitive to heat. Also, GaAs devices generate less noise than silicon devices when operated at high frequencies. They can also be operated at higher power levels than the equivalent silicon device because they have higher breakdown voltages. The chart below shows Skyworks Solutions market share.
 

The company will earn $1.46 per share in 2011 and $1.79 in 2012.
 
 With the discussion above, I feel these analysts earnings estimates may be too low. Sometimes you just need to acknowledge success
and  put the thing in your portfolio and "let it ride", (to quote Bachman Turner Overdrive.)
 
So add some Skyworks Solutions into your Christmas stocking
or give it as some Hanukkah Gelt, but get it tucked in for 2011. 
 
Happy Holiday Shopping,    Freewilly  
 
 

"3 Industrial companies, 2 Commercial banks, and a partridge in a pear tree"

Dow Jones Industrial Average 11,382.09 (UP) week ending December 3rd, 2010

Caterpillar

When you load stuff up to your blog you need to remember that
it may be up in cyberspace for a long, long time and that any one of your blogs could be read out of context at a future time. So I, like
Jack Finney in his time traveler short stories "About Time" , must
leave notes for future readers that will stand the test of time, to be read and relevant in the future.  Last week I put up mostly momentum stocks. This week we are back to fundamentals and good earnings growth.

Caterpillar Inc. (Symbol CAT, $90.35) is a rock solid company whose machinery sales were up 48% over the 3 months ending in October. Annual earnings for 2010 of $4.02 and projected 2011 earnings of $5.70 per share. Cat is also buying Bucyrus International to fuel their revenue growth. They also are doing a one billion Yuan bond issued for two years that is well received. 12 month Total return of 59.5% for CAT. This one will stand the test of time.

Carpenter Technology Corp. (Symbol CRS, $ 38.68) the manufacturer and fabricator  of specialty metal alloys has taken a sudden and rapid earnings turn to the positive and I think it is because of  demand for Titanium products. Earnings for 2010 are going to $1.40 and 2011 are projected at $2.79 per share.  Carpenter Technology announced "Expansion of Titanium Facility to Support Growing Aerospace Fastener Wire Demand". Titanium is an amazingly strong and light metal. A piece of it has held my hip and femur bone together for the last ten years after a car accident, so I can personally vouch for it.  

The third industrial stock is Joy Global Inc. (Symbol JOYG, $79.14). This company has a return on equity of 45.90%. 5 year earnings growth of 26.92%. The company has been building cash reserves for the last 5 quarters. This producer of machinery for mining Copper, Coal, and Iron ore should keep going strong with the world growth in China, India and Brazil.

My two banks are Bank of America (Symbol BAC, $ 11.57) and HDFC Bank ADR (Symbol HDB, $179.10).

 These two banks have the size and earnings power to be competitive in the global banking arena. 

Bank of America with it's Merrill Lynch operations in Asia have made great strides to grow and HDFC based in India has been on a 5 year, 41.5% revenue growth  expansion that shows no signs of letting up. Both companies will have rapid earnings growth in 2011. Bank of America reported today that they are bringing back a more substantial dividend.  Both 10 years from now will be around if you are reading this in 2021, unless they merge or are bought out.

I also promised you a partridge in a pear tree from the The Twelve Days of Christmas (song). The song which could be of English or French origin will also certainly be around in the future and has many more stanzas, but I could not come up with that many stocks!  So here is your partridge. Why he ends up in the tree, I am not sure? 

Make sure to sing a happy tune and enjoy the capital gains tax staying at 15%!     Freewilly 

              

"Maybe the medicine you need to improve your financial health can be found right in the Healthcare sector stocks"

Dow Jones Industrial Average   11092.00  (Down) week ending November 26th

TEVA PHARMACEUTICAL LTD

I keep hearing on the news that everyone keeps talking about their
401K accounts being down so many % points and needing to be restored to health. So the doctor is in the house to see if we can give these sickly accounts a booster shot and restore them back to health. 
TEVA PHARMACEUTICAL LTD. (Symbol TEVA, $50.69) stock price, despite the company doing well, has been on "the paddles" in 2010 suffering from a case of Obamacare worries. 18 analyst's love Teva as a buy, but can't seem to get their money out of their wallet with the stock being down in price year to date. Teva's five year revenue growth rate is 22.47%. Earnings for 2010 are looking like $4.57 and for 2011 is $5.24 per share.  For disclosure's sake, I did take a position in this one because it was so ridiculously cheap here.

If you are looking for something more like a shot of adrenaline
then  Alexion Pharmaceuticals Inc. (Symbol ALXN, $76.85)
may be the medicine you need for that IRA account. If that pulse is weak, hold on, because Alexion has a 5 year revenue growth rate of 290.72%. That combined with 62.10% NET profit margins will get the heart racing a bit.

If your retirement literally needs its heart fixed up,
 Edwards Lifesciences Corp. (Symbol EW, $65.94) will take care of those valves in a jiffy. Edwards has a 3 year return over 166%. 5 year earnings growth over 22% could be just the stress test your 401K needs to get in cardiovascular shape.

If you want to get a nano solution for your 401K woes you can get your microscope and zoom in to the genetic level and get yourself fixed up with some shares of Illumina Inc. (Symbol ILMN, $61.00).
Illumina has a five year sales growth rate of 61.45%. Earnings are also growing very nicely here with 75% gross profit margins.

If you keep adding to your 401K you should keep averaging up and  you will move forward as the economy rebounds. It is harder to do that in your IRA account since you do not have a payroll deduction going in. So when you retire enjoy the small things. Life is a gift and you should always be learning. Read books, they are a very good return on your investment in yourself.

Enjoy the arrival of Winter and all it brings.

Freewilly



  

 

"Time to see where the Sunny in Philadelphia gang are investing their money"

Dow Jones Industrial Average 11203.55  (UP) week ending 11-19-2010

Well we heard from Ben Graham last week here at Freewilly's Stockpicker blog so I thought we would go to the other extreme for some expert advice on investing from our local Philadelphia celebrities from "It's Always Sunny in Philadelphia" . Surely their interesting views of the world will turn up some real hits.  They all invest based on their personal interest, and of course, based on a 1-3 year Fundamental Analysis,  just like my blog.

We will start with "Mac" because he always claims to be the leader of the TV "Gang". With his Kung-fu and many kick-boxing tactics he would like the super sports picks , Under Armour Inc. (Symbol UA, $54.25) to get that slim look he wants and  CABELA'S INC. Symbol CAB, $21.86) to get all hunting gear that he needs to take on opponents. Born in Philadelphia, he truly understands the Philadelphia mentality of throwing snowballs at Santa Claus.

"Charlie", another star of the Gang at Paddy's Pub,  would definitely be looking to invest in  Snap-On Inc (Symbol SNA, $52.89) because he needs his various tools to kill small baby rats. His second pick would be PETsMART Inc. (Symbol PETM, $37.84) because Frank and him at times have been reduced to eating cat food in their slum apartment. Yuk!  Although Charlie frequently abuses inhalants such as glue and spray paint he comes in with some good insights for stock picking. As Co-owner of Paddy's pub he also has an affinity for Boston Beer Company, (Symbol SAM, $82.26) but thinks you need to wait for it to come in a little bit and change it's name to Philadelphia Beer company. But that name is taken, so then simply change the name to Paddy's Beer or Charlie's Beer. 

"Dennis", who was raised on the Mainline with his twin sister Dee and father Frank , has a very high opinion of himself. He will be mad I didn't put him first in this article. Dennis would probably go for Proctor and Gamble Co. (Symbol PG, $64.05) because of their new Dove for Men skin care soap to make him look good. He would also buy shares of Google Inc. (Symbol GOOG, $590.83) so he could look good with his friends and smart for buying such a good and high dollar stock. Though in one Episode,
he and Dee decide they are going to go on welfare and not work anymore.
They end up desperate to the point where they would probably search in dumpsters for food. So he would also like Waste Management Inc. (Symbol WM, $35.22)  because of their vast supply of dumpsters.



Dee, also known as "Sweet Dee", has an affinity to wear Angel Wings so is torn in her stock choices between Victoria's Secret owner Limited Brands Inc. (Symbol LTD, 33.01) and the super chic Philly based Urban Outfitters Inc. (Symbol URBN, $37.26) . Like most females she can't decide so she will probably buy both of them.
Deandra, who was unpopular in high school because of having to wear an aluminum back brace, aspires to be an actress, so she might have an interest in  Dreamworks Animation (Symbol DWA, $31.08).  Maybe she could turn Charlie's dream book into a movie.

Frank, what a father. He water boarded his daughter Dee in the urinal at paddy's pub to gain a confession from her.  Frank's dream is to have a Hawaiian Luau feast for his birthday and roast a Pig. He would purchase Sanderson Farms Inc. (Symbol SAFM,  $42.61) and  Hormel Foods Corporation (Symbol HRL, $47.64) so he would have a steady supply of Pigs!  Frank is also very impressed with Sherwin Williams (Symbol SHW, $73.12) because of the fine job it did with painting the dilapidated boat that they had purchased. He also loves their paint for using for doing graffiti work. Frank, the always shady business man who owned a Vietnamese sweatshop, would certainly want some Casino action and would like the low priced Boyd Gaming Co. (Symbol BYD, $8.95).

The ever strange McPoyle brothers which are the nemesis of "the gang" would buy Tasty Baking Co. (Symbol TSTY, $6.35). Why, because it's Philadelphia, and Tasty is where the Chocolate Junior comes from.


Tasty Baking, the Philadelphia based baker is an earnings turnaround story into 2011 and a possible buyout candidate.
 
 
 
The Waitress and Rickety Cricket also send their regards. The are putting their money in Philadelphia Municipal Bonds. They are hoping that the Phillies do not win another World Series and cost the city an expensive million dollar parade! 
 

So join the "Gang" and watch them every Thursday night on FX at 10:00.

Best Regards,   Freewilly

"An observation from Benjamin Graham on finding stock value when markets are up and margins of safety are thin"

Dow Jones Industrial Average 11,192.58  (Down) week ending 11-12-2010

 Benjamin Graham in his landmark investing book "The Intelligent Investor" notes that more money has been lost in the stock market by individuals buying secondary, lower quality company stocks at a value than from buying high quality stocks with a reasonable price premium attached to them when stock markets are at higher levels or have run up.  Such is the situation we find ourselves in today with many of the better quality stocks being sold and purchased with a substantial premium attached to their price.  So one should be cautious stockpicker at this time. One method to increase your odds of success in these times is to buy quality stocks that pay a dividend premium which attached together with their mild growth capital gain, will give you a good overall annual return.

 One such stock that I found this week and purchased with cash in my IRA account was BOARDWALK PIPELINE PARTNERS LP (Symbol BWP, $32.25).  Boardwalk is a partnership that owns 3 interstate gas pipeline systems plus integrated storage facilities. They currently pay a 6.39% dividend annually to the partners. The company operates at almost 25% Net profit margins with annual earnings per share from $1.39 in 2010 to $1.62 per share in 2011. My thinking here is to take the dividend and have the stock rise 10% which is a stock price of $35.50, a mild rise. This will give me a 16.39% annual return in an enviornment where the GDP is only running at 2% , so with only mild inflation risk.

My longtime friend , Michael Rodman, up in the Boston area had told me months ago about this high dividend yielding stock and I just sorta filed it away in my memory banks.  Frontier Communications Corp. (Symbol FTR, $9.00) is the company and it doles out an 8.3% dividend yield . The company is all topsy turvy`right now because of a gigantic aquisition from Verizon of telecom properties thereby tripling the company's size and doubling their debt. Frontier says they can run these propeties alot better and they are probably right. The stock only needs to see a price of $10.00 per share and you have a total return of 18.3% on an annual basis.

 My third pick is right in the middle of the Smartphone and wireless
craze and is very well managed. AT&T Inc. (Symbol T, $28.46) has a tidy dividend that pays 5.9% out of their never ending pile of cash. Amazingly the company has a 5 year sales growth of 24.45% according to the stats in SmartMoney. 17.80 % net profit margins and the company is projected to earn $2.49 per share. I can picture a total return here of 16 -18% with very little downside risk.

 So be careful out there as the captain of your financial ship.  When you are driving through icebergs, don't have the throttle on full speed ahead.
 We all know what happens when you do that!

 Have a good weekend and good luck with your fantasy football team.

 Freewilly   

Some "Last Mile of Fiber" small cap names and some other worthy Tech stocks

Dow Jones Industrial Average   11118.49  (UP) Week ending 10-29-2010

I thought I would be clever and do a blog on stocks that are making money in the "last mile of fiber" space with the Carlyle Group interest this week to buy Commscope (Symbol CTV, $31.65). What I found was  a few small cap names of interest and some other Tech names I found that would be good 1 to 3 year investments for Total Return. The old adage "you should not invest in things you don't know about" applies here, as there are all different ways to get past that last mile including: wireless, copper cable with fiber assistance (phantom DSL), cable, fiber itself, fiber-to-the-node broadband over powerline, satellite, microwave and it goes on and on.   

Alliance Fiber Optic Products, (Symbol AFOP, $11.00) is a small cap name for you. The stock is up 100% this year. Earnings for 2010 of .72 cents a share and 2011 of .87 cents a share. This well capitalized company has a lot of head room for sales increases.

DragonWave (Symbol DRWI, $8.15) is an Ottawa, Canada based company that derives allot of revenue from wireless backhaul of voice and data. DragonWave has just won a pair on contracts and are focused on the new LTE and WIMAX markets. As always these small cap names can take you on a wild ride on the stock chart, you just need to remember that your ultimate destination is up.

Ceragon Networks (Symbol CRNT, $ 11.06) Tel Aviv based company that is a provider of high capacity LTE/4G ready wireless backhaul solutions. Both Ceragon and DragonWave are both active in the cellular market in India. Projected earnings for 2010 of .42 cents and for 2011 .65 cents a share. This is another stock that has been on a wild one year ride, so hold on to your hat!

The next three tech stocks I found in my travels in no particular order are well established and will work for most portfolios for Total Return. 

F 5 Networks, (Symbol FFIV, $117.70),  Altera (Symbol ALTR , $31.24 ),  First Solar Inc, (Symbol FSLR, 137.68).  These guys are like Halliday, Oswalt, and Hamels. You may not win the World Series , but your team will definitely have 90+ Wins. 

I should always mention that tech stocks historically have always been the source of my biggest losses in markets past, but also some of my biggest gainers.  So if you are going to stand at the plate, you need to swing the bat to hit a home run, otherwise you will be out "Looking", which Ryan Howard of the Phillies can tell you, is a very bad thing. 



Be Happy..... Freewilly 



"They may be foreclosing on the house, but you can bet that the kids will get their toy gifts for the holidays"

Dow Jones Industrial Avg. 11,063  (UP) for the week ending  10-15-2010



Star Wars - Darth Tater Figure
 PlaySkool - Hasbro

  Times are tough. 462,000 people applied for unemployment benefits last week. Housing prices are bottoming and foreclosures seem to be on the rise. But you can take it to the bank  " Kids will not go without receiving their share of toy gifts during the holidays".

The most rock solid company in this area seems to be Hasbro Inc. (Symbol HAS, $45.08). Hasbro stock chart has been on a steady rise during 2010. This stock has had a one year Total return of 67.9% and a 3 year Total return of 58.6%. If you had invested $1000 five years ago it would be worth $2713 today. Earnings for 2010 are $2.65 per share and for 2011 $3.12 per share. Transformers, Dora the Explorer, Yahtzee, Hannah Montana, and Mr. Potato Head are among the over 100 brands they have.

The second very well recognized brand in this category is Mattel.  Mattel Inc. (Symbol MAT, $22.45) had got beaten up a little bit the end of this week for some soft Q3 top line sales and the stock is now a pretty good value at this price. Mattel has some long term debt to work off. They had bought out Fisher-Price back in 1993 to challenge Hasbro. Mattel and RC2 (symbol RCRC) have both been under the gun for lead paint on toys and baby bottles and have had to do some financial settlements. Don't forget Barbie and HotWheels!

My Sleeper Pick in the toys area is  SHANDA GAMES LIMITED ADR (symbol GAME, $6.52). This very profitable company is something to take a flyer out on as a more speculative pick. The financials look pretty good and I do not see any analysts following it. The stock is down this year on a Goldman Sachs, June downgrade and I think no one is paying attention to it now. It is a play on online games in China and area that surely will have allot of growth. 

In the Electronics games area I still like Activision Blizzard Inc. (Symbol ATVI, $11.37)  because of their tremendous balance sheet.


HHGREGG INC. (Symbol HGG, $23.96) which sells video games and systems looks like a younger version of Radio Shack (Symbol RSH) and appears to be growing nicely.  It has a one year total return of 45.3% and a 3 year total return of 52%.

What is America's favorite toy?  I will let you decide that.  Hopefully it is something that is creative to develop those young minds and fun most importantly. 

Freewilly     

  (We went with a new cleaner logo this week and took off the non-stock related personal stuff)

"Perk up your portfolio with some fast growing Coffee Stocks and we'll throw in a sandwich stock too!"

Dow Jones Industrial Average   10,986   -  daily close on October 6th , 2010

I want to start with a special dedication wish  to the love of my life, my wife Deborah. Tomorrow we celebrate our 30th Wedding anniversary and she is an amazing and wonderful woman who is kind, generous, hard working, sexy, funny and brilliant. Did I miss anything? Most definitely.  So anyway, we make three kinds of coffee in the morning. A pot of decaf for me, A pot of half-caff  for my wife, and a pot of full -caff for my daughter. It is no wonder that the coffee stocks are doing well with everybody having their own special pot! Such is the secret of coffee's success. Everybody likes it a different way.

     Green Mountain Coffee Roasters (Symbol GMCR, $28.67) has a long term growth rate of 37.37%. Earnings per share in 2010 are .69 cents and in 2011 $1.18. The 3 year Total return on shares of the stock is 225%. Get the picture?  You just take the little single serving cup and plunk it in the machine at work and out comes the coffee. No burnt coffee sitting in pots like the old days!

  Peet's Coffee and Tea, Inc. (Symbol PEET, $33.80) is a company with a 17.33% long term earnings growth rate.  5 year sales growth is 14.15% and these guys will deliver groceries to you too! 2010 earnings per share are looking like $1.29 for 2010 and $1.55 for 2011. This California based company has a Quick ratio , (assets to liabilities) of 6: to 1, and plenty of space for upside revenue growth.

Caribou Coffee Company (Symbol CBOU, $10.44) is our low priced stock entry here. This Minnesota based company is up 38.86% year to date and 54.24% over 3 years. Sales are growing about 8% a year, but if you are in Minnesota it is cold in the morning and you will need your coffee to warm up. This is worth a look as a Small Cap holding in your portfolio. 2010 earnings of .42 cents per share and 2011 is projected at .56 cents per share. 

Of course you can't do an article about coffee without including the mega growth company, Starbucks Corp. (Symbol SBUX, $26.10). This company even after all these years of expansion is still growing at 11.5% a year in revenues. Kudos to Starbucks for making medical benefits available to part time employees. It shows companies can still make money and help people Too! 2010 earnings will be $1.24 and 2011 projected at $1.42 per share. One year Total Return of   38.6%. Enjoy your Mocha FrapaChino.  Starbucks is also the inventor of a whole new language that you get to learn to speak!  

......and now for your sandwich course we will be serving up Panera Bread Company, (Symbol PNRA, $88.66).  This dynamo has a 5 year sales growth rate of 19.6%. A one year total return of 48.6 % and 3 year total return of 123.5%. 2010 earnings of $3.54 and 2011 earnings projected at $4.16 per share make this bakery-cafe business the best of bread and coffee.

They are an excellent long term BUY.

These big company logos are messing up my spacing!  But you can buy any of these stocks with a 3 year time horizon and you should do well.

Have a wonderful day. Stay healthy and safe.    Freewilly