Why play at the card table, when you can own the House?

Dow Jones 10,325.26 (Down) Week ending 02-26-2010

Well, are you tired of buying and selling stocks and not having the mathematical advantage? It is sort of like being a player at the casino Blackjack card table. Well, why not own the "house" instead and to quote gamblers parlance,"work off the juice". You can do this by purchasing the stock of the stock exchange,
NYSE Euronext (Symbol NYX , $26.38). This stock has a 4.55% dividend yield so you get paid why you wait for the exchange volume to increase. The PE on the stock is a reasonable PE 11.42. The 12 month total return on the stock of 63.4%. Earnings for 2010 are projected at 2.31 per share and $2.61 per share for 2011. Not too shabby for a $26.00 dollar stock.

If you wanted to look at a second option for owning the "house" you can also look at IntercontinentalExchange Inc. (with the cool symbol , ICE , $107.29) This fast growing exchange has a five year revenue growth rate of 60%. They operate at 31.8 % Net margin numbers. The stock has estimated earnings of $5.34 per share for 2010 and $6.16 per share for 2011.

I also want to note at this point to the amateur investor, that the stocks I have mentioned in the last two weeks blogs at $100 and $200 a share actually may be much less expensive, based on value, than stocks that trade for $1 or $5 per share. Those low price stocks may be highly leveraged with many more shares outstanding, which dilutes the earnings of each share.

There are other "houses" of note certainly, among them the well known CME Group Inc. Cl A (Symbol CME) and Goldman Sachs (Symbol GS). One other one that I like and own in this group, which I feel is a good value, is Morgan Stanley (Symbol MS, $28.18). The PE on the stock is only 9. Solid earnings of $3.11 in 2010 and $3.54 in 2011. There is a vacuum now in the investment industry with Lehman Bros. and Bear Stearns being gone, so all these "houses" should become stronger.

So deal yourself a winning hand and add one of these to your diversified portfolio.


Sincerely,

Freewilly

Catch the next Shooting Star? Investing in who will deliver your next movie

Dow Jones 10,402.35 (Up) week ending 2/19


Wall street is littered with companies that have burst on to the scene providing movies and video content and game cartridges. There is probably an imprinted chart pattern out there somewhere that they all repeat. A growth pattern spurt and sudden rise in the price in the stock; then a rise up to a stock price with too much expectation built in which is unsustainable. Later, a sudden precipitous fall from grace and a never ending downdraft in the stock price. Look familiar Blockbuster??

The next up & coming "American Idol" star in this area is CoinStar(Symbol CSTR) with their REDBOX DVD and game cartridge rental machine. As of 8/13/09 they had rented their half Billionth DVD. On New Years Eve they rented 2 Million DVDs. So much for Dick Clark and Ryan Seacrest. I should do my blog on Tuesday, because I would have saved you some money, the stock was up 6% this week. I would say for the one year investor you are still ok to buy it here. 5 years sales growth has been 27.95%. As noted in the shooting star title these are trading stocks. You need to know when to exit ahead of time.

The reigning superstar of this area is of course Netflix (Symbol NFLX). It is pegged right now at a PE of 26, curiously a number very close to that Coinstar 28% growth rate.

The 12 month Total Return on the stock is 83.9%. Return on Equity (ROE) of 42.10%. Things look generally good. But 5 analysts have strong sell recommendations on the stock. "Chicken Little, the sky is falling"! Maybe they have already studied the aforementioned shooting star pattern. Or they have an overwhelming fear of Comcast,Time Warner,Amazon & Tivo, Apple I-Tunes, Game-Stop and a million other ways to deliver this content to you, including free DVDs being lent at your local library.

All I'm saying is, you can do a little trading here. There seems to be a big enough pie in this video and game content area to divide up with everyone.

I will also make a prediction here that the hockey team of the Russian Federation will win the Winter Olympic Gold. Sorry, Canada, Sweden & USA, I need to call them like I see them.

So where you gettin' your movie today?

Freewilly

Apple Computer - The I-Pad will be a success

Dow Jones 10,099 (Up) week ending 2/12


Well I think I finally drank the Kool-aid. I watched the video about the I-Pad on the website of Apple Computer, (Symbol AAPL,$195.50), and also the Stanford University commencement speech with Steve Jobs discussing his life and his ideas about life. I am a believer. The I-Pad is the perfect Internet surfing device. Period. They have rewritten all the Apple software programs and have made them optimized for this device. It invites the whole application community to use their creativity and invent new uses for the Pad device. It can be a page turning down-loadable book. It is sold at the amazing price point of $499.00 U.S. dollars. It is a winner.

I only wish that I had been paying attention to Lieutenant Dan's stock picks back in 1996, when in the movie Forrest Gump,(referring to Apple Computers), Forrest said "He got me invested in some kinda fruit company". Forrest would say today, "Momma says that Lieutenant Dan is one smart cookie"

Apple has put together some mind boggling numbers. $15.7 billion in sales in their Christmas quarter 2009. 5 year sales growth of 29%. 12 month return of 124+%. 5 year 52.65% earnings growth. These folks are dedicated to excellence in every way.

So what started on April Fool's Day 1976, when Steve Wozniak and Steve Jobs released the Apple I computer and began the personal computer age, is now a technology inventing mega-machine. It keeps rolling out the hit products and has $33.6 Billion dollars in current assets on the balance sheet. I see another great sales and earnings year coming in 2010.


So add some Zen enlightenment to your portfolio, and buy some Apple.

Freewilly

Eat Well >> Feel Well, ... Look Well >> Feel Well , >> ... Make money?

Dow Jones 10,012, (down),(DJI day low Friday 9,835), week ending 02-05-2010

My daughter Molly told me last week that she feels good on the days that she shops at these two stores, Whole Foods Market Inc. (Symbol WFMI) and Urban Outfitters Inc, (symbol URBN). So I thought that I should check out these businesses to see if they were good investments. I thought that if people have an emotional bond or response with a shopping experience that they certainly would visit that store again. She is in the 25-30 female demographic and I would think that they are vibrant shoppers.

Urban Outfitters offers lifestyle merchandise through four brands: Urban Outfitters, Anthropologie, Free People, and Terrain. While the majority of sales come from the retail segment, which includes over 300 stores, catalogs, and the Internet, a portion comes from the wholesale division. Urban Outfitters targets young adults aged 18 to 30 through its unique merchandise mix and compelling store environment. So are they a good investment? Well the 12 month total return was 85.3%. 5 year projected earnings growth of 22.2% and 5 year projected sales growth of 18%. Those numbers work for me. It has corrected a little bit here so jump in at will.

The Whole Foods Market Inc. story, "Back in 1980, we started out with one small store in Austin, Texas. Today, we’re the world’s leader in natural and organic foods, with more than 270 stores in North America and the United Kingdom". Their mission: "Whole Foods — We search for the highest quality, least processed, most flavorful and natural foods possible because we believe that food in its purest state — unadulterated by artificial additives, sweeteners, colorings and preservatives — is the best tasting and most nutritious food there is". Invest now? Whole Foods has a 12 month return of 125%. They are a supermarket though, and their paltry 1.80% net profit is considered high in the supermarket industry. So for this Green++ rated company, that says it will have 16-17% growth in sales and earnings, I would say to look for a lower price entry point to buy in.


So what are us older age 55-65 Boomer demographic buying? Izod shirts, which are owned by Phillips-Van Heusen (Symbol PVH) and the new Chocolate Cheerios from the General Mills Company, (Symbol GIS). I would rate PVH a strong buy and GIS a moderate buy here.


If you're bored with all this shopping talk and just want to stay home, you can pick up a deal on Xilinx,(Symbol XLNX), here, which designs, develops and markets complete programmable logic solutions. The stock is selling for $23.17 and is projected to earn $1.75 a share next year, not bad numbers. Strong buy.

So check out the store or product you love, and see if their numbers make sense!

Freewilly