Request Weekend - Part II - takes us to startup Tesla Motors in California which just went public in late June 2010

Dow Jones 10,151  (Down)  Week ending August 27th

Tesla Roadster

Well what a perfect way to end the summer
to put the top down and talk about and take a cruise in the Tesla Roadster the Electric Beauty to the right. http://www.teslamotors.com/roadster
   To be honest when I got this request I was thinking in my head "Delorean, they'll be out of business in a year" but as I started doing my investigation I discovered reasons that I think they will ultimately be successful.

 TESLA MOTORS, INC (Symbol TSLA, $19.70) stock debuted at $17.00 and the low so far on the stock has been $14.98 and the high $30.42 . The stock had it first quarterly report and like most start ups it recorded a loss in it's first quarterly report of $5.08 per share. They have a profitable business model but just needed to bring sales up to a point where they cover their high SGA and Research and development expenses. You almost have to think about these guys like they are a bio-tech stock trying to find the cure for cancer, except they are trying to find the cure for our dependence on foreign oil. It takes time and money to get going, so keep an eye on cash-burn.

     Why will they be successful? People are fed up. They are angry about the oil environmental disaster in the Gulf of Mexico. They are sick and tired of being held hostage by the oil companies from foreign countries and having to pay ever increasing prices. You push people hard enough and they dig their heels in to fight back. If you drive one of these vehicles 15 years you save over $20,000 in gas and oil cost , around $1300 per year at current prices.

       Some other reasons, there are a lot of mutual funds looking for "green" investments like this and are willing to hold this type of investment for the long term. Also it appears that they have a lower cost Model S version (pictured left) to get their pricing down a bit.  Also don't forget that all the cool new stuff starts in California and then heads east, like the personal computer, Jimmy Hendrix, The Grateful Dead and The Beach Boys. 

Tony Helmholdt inventor of twin powered
Electric motorcycle 

I also found an article about a 23-year-old named Tony Helmholdt who works for Tesla Motors in Chicago.  About 25 or 30 Chicago area drivers own Teslas, and Helmholdt is helping owners maintain their $100,000 sports cars. But more importantly he has invented and built a a twin-powered electric motorcycle. Now there would be something with a mass market appeal that would give Tesla the cash flow to sustain their car line until sales ramp up. I have no idea if or when Tesla would produce this item. What is certainly clear is that all this electric stuff is coming soon so get used to it.

On purchasing the stock, I would would wait until October 2010 since the earnings report is already out and a lot of the newbies that bought it on the public offering will get impatient and probably dump it. I would look to buy it as a 3 year long term investment in the price range of  $15 - 17 per share range, which I think you will see again. This is, be warned, a High-Risk Investment.

So honk a horn, so I hear you coming and take a cruise in a Tesla Roadster!
Joe, you should test drive a Roadster on that road that goes between San Mateo and Half Moon Bay. While you are in San Mateo stop in at Nick's Deli if it is still there. Try the Chicken salad sandwich.

Freewilly 

"It's request weekend at Freewilly's Stockpicker blog . I have intial 4- pack request , but ask away via the comment section"

John Jacob Astor

Dow Jones 10,214 (Down) Week ending 08-20-2010

I am not as rich as John Jacob Astor was
so I cannot purchase every stock that I mention in my blogs. John when asked when he was dying if he would have done anything differently said "I would have bought every square inch of Manhattan".
       I however did purchase Potash (symbol POT ), from my own recommendation from my blog two weeks ago, before  BHP Billiton made it's buyout offer last week . I had said that the stock was worth $150.00 per share based on the projected earnings. Well the stock is now at $149.75 (Up 35% in two weeks) so I guess some folks in Australia, where BHP is, must be reading my blog.
     Although you do not see a lot of comments on my blog, a lot of folks contact me through email and FACEBOOK directly about stocks. I have a  4-Pack request this week for the stocks of  RIMM, MSO, MHS, and IACI.
 

RESEARCH IN MOTION (symbol RIMM, $48.75) is the first stock asked about and it faces the battle of the "Buzz" on the street. Even though they have 60.54% sales growth over the last 5 years and have zero long term debt, the Apple I-phone and the Google Android  Smartphone buzz on the street has completely drowned out the opinion on this stock and has drawn downgrades from the likes of Morgan Stanley. The quarter by quarter numbers still show revenue growth but not at a 60% clip , but are we supposed to hate 30% growth? The stock is projecting earnings of $5.56 in 2011 and $5.92 in 2012 a PE of 8.
 RIMM also has another Ace up it's sleeve , Security. Any company that has the Saudis complaining that it's network is too "secure" for them to spy on, you gotta like.  You can see how important security is this week with Intel Corp buying out McAfee the web security company. Also this company would be a very good buyout candidate for someone like Nokia or Dell who are also being drowned out by the "Buzz". I would say you can start buy/accumulate it here, i.e. buy into it in stages.

Martha Stewart

    
MARTHA STEWART LIVING OMNIMEDIA (Symbol MSO, $4.75) is the creator of one of the few magazines that we receive that actually has good content in it. The company has tremendous franchise value in name. Unfortunately their 5 year sales growth is running at 3.95% . The company also competes head to head with the likes of Sherwin-Williams in the paint business where the "painters" seem to go. Their partnership with Home-Depot is a plus and the new addition of their show to the Hallmark channel is also a plus. Because their SGA is always going to be high to maintain the quality of their product, profits
are going to be more hard to come by.  I would say to buy their products which are high quality but as a stand alone company the MSO stock is going to continue to struggle, so any money put into it would be in the category of Speculation .

Medco Health Solutions Inc. (Symbol MHS, $45.26) , this is an
easy one. Health cost containment is a major focus of the US government and MHS will be a major beneficiary of this. The projected 2010 earnings are $3.38 per share and 2011 $3.92 per share. 15.67 % projected earnings and lots of analysts like the stock. This is a BUY at a discount at present levels.

Barry Dillar

IAC/InterActiveCorp. (Symbol IACI, $23.75)  is a company run by Barry Dillar a dynamic builder of Internet franchises and John Malone the large owner at Liberty Media Holdings (Symbol LCAPA).  The problem here is Barry wants to make more acquisitions and John Malone wants to split the company up to get the value out of it. The stock has done nothing for 5 years and you would have lost 50% of your money during that time period. There are also alot of other ways to play this space, like Blue Nile, Amazon, and Ebay. I would take a pass on this one until John Malone get's his way and they split it up. The only thing in the way is Barry Dillar's ego.

A shout out to my best buddy Mark, who is an excellent basketball player in Jersey. Here are the recommendations from your old coach and friend.

Send in your request via Comments,

Thanks,

Freewilly  

"It is never a bad time to look north of the border to find some quality stocks in Canada"

Dow Jones 10,653.60 (UP) Week ending 08-06-2010

I do a lot of business in my job with companies in Canada and it just seems like they keep rolling along up there doing business without as much stress as here in the US. It may just be their healthy attitude towards life in general. You can understand it better with the magnificent show Canada put on in the Winter Olympics this year that showed all the beauty of Canada and the kind nature of its people. They seem to be very in touch with their history and culture. Well enough of the compliments, on with the stocks.

The first one I want to talk about which is a great value right now, is Suncor (Symbol SU , $33,25). Suncor is having a nice recovery in earnings in 2011 projected at $2.39 a share. The stock is about even this year and you can buy it here as a best idea.

The next two ideas are cookie cutter safe total return plays. Canadian National Railway (Symbol CNI, $64.20) has a 1.64% dividend and a 12 month total return of 35%. Canadian Pacific Railway (Symbol CP, $60.55) has a dividend of 1.70 percent and a 12 month total return of 28.5%. Pick one and go with it for your IRA. These two companies deliver the abundant resources of Canada to market.

The money has to go somewhere in Canada so add to the list The Bank of Nova Scotia (Symbol BNS, $49.22). This bank has projected earnings in 2011 of 44.57 per share. It also has a nice 3.72% dividend to kick into your total investment return. Their bank is usually seen with that red "Scotiabank" logo on it.



Lest we forget Canada's great potash businesses that are focused in Saskatchewan, Mosaic Company (Symbol MOS, 51.09) with 2011 earnings projected at $4.00 even and a PE of 12. Also POTASH Corp. of Saskatchewan (Symbol POT, $113.11). Potash has taken off since June when it announced that Potash's earnings had doubled for the quarter. Projected earnings of $7.62 for 2011 could make this a $150 stock. With the wildfires in Russia and them not expecting to export any Wheat this year to the rest of the world, these two companies should fair well. The world needs to eat!

These companies should give you strong total returns for the next few years ahead. It is always good to reevaluate these companies every 6 months to make sure they are still on track in your long term investment portfolio.

Thank you for reading, as always comments welcomed.

Freewilly

Time to go Old School. In the old days when a Bull Market began, it started out with a rally in the chemical stocks. Are the Chemical stocks rallying?

Dow Jones 10465.94 (UP) week ending July 30th

I knew if I tried hard enough I could work an old picture of my elementary school class into a blog. Way back when I started following stocks back in the 60's, (I charted Gulf Oil out of the stock listings in the Camden Courier Post newspaper), I used to listen to the business announcers on the old Philco TV and they would say that you could not have a bull market until the chemical stocks rallied.

So I decided to gather up all the symbols of these stocks and see what is going on in the US Markets beginning from Jan. 1st, 2010 year to date to July 31st. Here they are by symbol:

BASFY +22% DOW +26.94% LZ +63.74% DD +32% HENOY +36.39% SIAL +11.2% KWR +95.13% ADES +67.53% CYT +98.33% ALB +45.45% FUL +1% PX +14.8% SDTH (-18.5%) OMN +41.56% CCC +3.6% BAK +83.87% SQM +5.24% FTK (-36.76) OMG (-18.55) SYMX +13.68

ODC +37.61 CBT +67.23 BIOF +167.24% APFC (-41.73) KRO +210.80% FSI +11.11% PPO +92.33% SXT +18.12% VRNM (-65.59%) WLK (-1.83%) WDFC +17.44% GRA +53.35% ALTI (-62.12%) IOSP (-7.87%) GPRE +15.89% NEV +38.65% MEOH +38.89%FOE +117.76%.


(Left: Frank-the-Tank in OldSchool, not thinking about stocks at all!)

Of course many of the Integrated Oil companies have chemical divisions and it is hard to extricate those numbers out on their own. It does seem in general though that the major Chemicals have rallied here so Old School rules say it could be the beginning of a Bull Market. The companies that are down are mostly more speculative and are working with new technologies like Enzymes and Nano Chemistry things with a promising future, but that are not producing big financial returns yet.

So better living through Chemistry, (I think Dupont has the trademark on that phrase?) and add a winning mixture to your portfolio.

Freewilly