"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