Saturday, May 15, 2010

"These stocks get no pricing respect from Wall Street for their good balance sheets"

Dow Jones 10620.16 (UP) Week ending May 14th, 2010

Rodney Dangerfield.
I get no respect.

"When I was born I was so ugly the doctor slapped my mother."

"I went to a fight the other night, and a hockey game broke out."

"A girl phoned me the other day and said... Come on over, there's nobody home. I went over. Nobody was home."

"I told my psychiatrist that everyone hates me. He said I was being ridiculous - everyone hasn't met me yet."

No respect. This is the same case on Wall Street with a lot of stocks. The first one is Activision Blizzard (Symbol ATVI, $10.69). 23 analyst recommend this stock but none of them are stepping up to buy it. Five year growth rate of 26.88%, No long term debt, great balance sheet. No Respect. Nervous nillies worrying about April game sales. DECEMBER is what matters in the game business.

The second one is Motorola Inc. (Symbol MOT, $6.79) This one I bought this week. Mot's got the mojo back in their handsets with Google's Android inside now (Android sounds like Steroid and acts that way for Moto sales!). 3 Billion in cash and 5 billion in short term investments on the balance sheet. This company has been reforming itself for ten years. My guesstimate is 2011 earnings of .53 to .55 cents a share. Now is the time to buy.



The next company is Garmin Ltd. (Symbol GRMN, $33.53). This company has zero long term debt on the balance sheet. It trades at a PE of 11.64. The company has a 5 year revenue growth rate of 31.86%. This low cost operator even throws a 4.47% dividend your way. Sales and earnings have slowed up a bit here, but still a good company based on the numbers.

Another company where sales growth has slowed up a little bit, but still solid numbers is Ebay Inc. (Symbol EBAY,$22.25). Ebay has embedded in it Paypal which is an excellent business. Ebay operates at 27.3% net profit margins which is outstanding for a retailer. The 2011 earnings are projecting at $1.60 a share. I don't think there is much downside risk here. The wow factor may have worn off and Meg Whiteman is gone, but Ebay still cruises along with 18.99% revenue growth over the last 5 years.

So give these 4 some respect. While your at it, how about them Philadelphia Flyers! Better give them a little respect too! Go Flyers!

Freewilly

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