"Everytime I look at a Mid-Cap portfolio I notice that the stock of Acme Packet is listed in the middle of all of them. Who are these guys anyway"

Dow Jones Industrial Average 12,442 (UP) Week ending 05/27/2011

Whenever I hear about an ACME company, the old Looney Tunes -Roadrunner and Wile E. Coyote cartoon comes into my mind. ACME had a catalog with rocket jets, gigantic elastic band catapults, a wide variety of forms of transportation and probably the most popular, a giant magnet to catch any bird that eats iron bird seed can be found in the catalog. Of course there are anvils, fake holes that a train can drive through and dehydrated boulders can all be found in the catalog as well. So whenever I see that word "ACME" it pops out at me. Meep , Meep!  (roadrunner sound)

Acme Packet Inc. (Symbol APKT, $73.53) is "the leader in session delivery network solutions. They enable the delivery of interactive communications—voice, video and multimedia sessions—and data services across IP network borders."

"Acme Packet Net-Net session border controllers (SBCs) provide critical control functions to allow mobile service providers to deliver trusted, first-class interactive communications across IP network borders. A broad range of 3G (CDMA and UMTS) and 4G (LTE and WiMAX) services and applications are supported ranging from basic VoIP to any IMS enabled service—voice, interactive video, video share, presence, instant messaging, IPTV, video on demand, RCS, IPX, and femtocell and WiFi-enabled fixed-mobile convergence."

So why is Acme Packet Inc. showing up in all these portfolios? Let's take a look at the numbers.

2011 earnings are going to come in at .89 cents per share and 2012 earnings of $1.27 per share. 5 year sales growth of 30.10% afford this stock a very PE of 82. The company has produced eye-popping Total returns with a one year return of 150.9 % and 3 year total returns of 716.1 %. No wonder it is showing up in all these portfolios.

Is this stock too expensive?  With only 254 million in revenues I would say that this one has a long way to go.
I would look to buy it on any pullbacks along the way here.

It is a great company to single out for Memorial Day since they do everything here in the USA as you can see from the comment of their CEO Andy Ory to the left pictured. Bedford is out there by Lexington in Massachusetts, where the Revolutionary War began, and the Boston area, home of the Red Sox and Patriots storied sports teams.

 Investors Business Daily stated the following:  "Bedford, Mass.-based Acme Packet's third-quarter sales jumped 56%, with per-share profit soaring 122% from the year-earlier quarter. Acme's stock has rocketed 400% in 2010."


So enjoy your Memorial Day Weekend and parades  in the US, and if you are elsewhere I hope you have a good Monday. Honor your soldiers who preserve your freedoms    ...............................................

                     Oh, and keep an eye on that Roadrunner too!

Freewilly

"Even if all your stocks are crashing down like it's Judgement day on wall street, people are still going to need to eat and drink"

Dow Jones Industrial Average  12,381 (Down) May 23rd , 2011

Well I survived May 21st to live and talk another day. That was supposed to be Judgement day. I think God decides himself how and when we will make our exit from this earth.

Many sadly did perish in devastating F5 tornadoes and floods in the Central USA region.  I tried to find out how many people on average die each day on earth and it looks like 150,000 per day. Maybe the "Rapture" is like a Rolling Stones concert and you have to wait in line each day until its your turn to get a ticket. So it is going on all the time, non-stop everyday. The good news is that 200,000 people are born each day so we are gaining a surplus of people, give or take a few plagues, epidemics and wars.

At any rate, these people all need to eat and drink, so you should be safe with the stock of

J.M. Smucker's ( Symbol SJM, $77.37) . Smuckers will preserve 2011 earnings per share of $4.77  and  perk up 2012 earnings of $5.09 per share. The J. M. Smucker Company on Strawberry Lane in Orrville, OH.  is engaged in the manufacturing and marketing of branded food products on a worldwide basis.


OH MY GOD! OMG!  This is the longest blog to write in history. May 25th now.  I have just been informed that Mark Haines, pioneering Anchor of the CNBC  business show Squawk, has passed away today at the age of 65.

Mark Haines, who history will remember along with Sue Herera as the first anchors of what is now the formidable shows of CNBC "Squawk Box" and "Squawk on the Street ". They started out working on cardboard boxes and a couple desk. Mark told Sue not to sell her house in case this thing doesn't work out! Wow!

 As a lifelong follower and worshipper of business television, I am crushed and devastated at the lost of Mark Haines. He was the Rock of CNBC.  What Louis Rukeyser had began on Friday nights, Mark Haines brought to daytime TV, first thing, every morning and expanded infinitely . He cared about the individual investor highly, and he would scrutinize every guest that would cross his path for their benefit . Where would we be without the invention of CNBC television. Lost somewhere in the 1950's I guess.

Rolling Stones ticket. Enjoy the concert Mark. I salute you with a tip of the glass of Pinot Noir and a bag of Cheetos dipped in Ketchup, your favorite. 
                                                               
 No way to segway here. Mark was on duty on the CNBC show reporting as the 9-11 day news broke on the World Trade Center attacks. He handled it, and I will handle his loss here. Mark would want the reporting to continue and the valued information to get out to individual investors.

Coca-Cola Co. (Symbol KO, $66.91) is the next stock I would take a look at. Coke just looks cheap to me here. 2011 earnings projected at $3.86 per share and 2012 projected earnings of $4.28. Just about 9% five year sales growth, 17.3 % five year earnings growth, and 31.7% net profit margins make this one dynamic stock. 41.50% Return on Equity an a 2.81% dividend yield will put some fizz in your portfolio.

Another food stock and piece of Americana like Coke, is the American icon Kellogg Co. (Symbol K, $56.78). Similar dividend yield as Coke at 2.88%, Kellogg will have 2011 earnings of $3.48 per share and 2012 earnings of $3.80 per share. This is a very conservative investment which will give you a 11-12 % return annually between the dividend and capital appreciation. (52.7% Return on Equity by the way.)

 Cereal for breakfast, Mac and Cheese for lunch.
 Kraft Foods Inc. Cl A  (Symbol KFT, $34.62 ) with a 3.37% dividend and decent revenue growth of 7.37% annually  is the next stock choice. Kraft posted staggering revenue numbers of $50 billion in sales. If they could get a little more of that to fall to the bottom line, things could get real interesting here. Kraft has a nice chart since February 2009 and should continue to rise. Good steady return on your equity. Need to cut a little debt.



Mark Haines - CNBC Icon - we will miss you

Rest in Peace Mark.

Freewilly

"DSW Inc. - Designer Shoe Warehouse - wouldn't Imelda Marcos like this store! So would Peter Lynch."

Dow Jones Industrial Average 12,596 (Down) Week ending 05-13-2011 

I talk to my friend Paul in the morning about stocks. He mentioned that he always see people in this store buying stuff no matter what was going on with the economy or gas prices. DSW Inc. - Designer Shoe Warehouse (Symbol DSW, $45.00) is one of those stocks Peter Lynch would have looked around and put it in his portfolio at  Fidelity Magellan. DSW is projecting 2012 earnings of $2.70 per share and 2013 earnings of $3.16 per share. 

To some folks, SHOES, are a Religion.  Imelda Marcos the prolific collector of shoes actually has a museum with mostly her shoes in it in the Philippines. Imelda showing them on the tour to the right here. She is Very proud.

On the show "Sex in the City" based in New York City poor Carrie Bradshaw is actually robbed of her most favorite shoes on one episode, her prize possession and most valuable commodity.

People seem to find money in their budget for shoes no matter what happens. DSW is the place they go. It has a Return on Equity of 20.70% and a 1 year gain of 55.8 % and a three year gain of 204.7%. DSW has 311 stores in 39 states and an E-Commerce site and has plenty of room for expansion. DSW employees 10,500 people in the USA.   

Of course nothing is simple. "DSW Inc. (NYSE: DSW), a leading branded footwear specialty retailer, and its largest shareholder, Retail Ventures, Inc. (NYSE: RVI), announced the two companies have signed a definitive merger agreement providing for RVI to become a wholly-owned subsidiary of DSW in a tax-free exchange of shares at an exchange ratio of 0.435 DSW shares per each RVI share."


"For accounting purposes, DSW will effectively retire the 27.4 million class B shares currently owned by RVI (approximately 62% of DSW's fully diluted shares outstanding). As a result of the merger, the separate corporate existence of RVI will cease and the surviving entity will continue as a wholly owned subsidiary of DSW. DSW estimates that it will have slightly fewer diluted shares outstanding as a result of this transaction."

So unless the world ends as predicted on May 21st, 2011 , I think you are good shape picking up some shares of DSW Inc.  I think people will keep buying shoes and handbags.

So what is the most expensive pair of shoes?   

What happens when Carrie Bradshaw circa 1995 meets the Grand Sultan of Land-'O-Money? This £140,000 shoe (around $228,452 US) encrusted with 30 carats worth of diamonds, made with solid gold, and a surprising lack of taste. "The aim of this was to create a unique form of jewellery which you can wear on your feet. It's a bit like if you found these on an archaeological dig in thousands of years time they would be regarded as a treasure—a treasure of the feet," said Christopher Michale Shellis, designer of said shoes.

Better dust off my docksiders, I think we are going dancing.

Have a good one,

Freewilly   

"A layer of risk is removed from the market and a look at Semiconductor stocks where we have all been burned before"

Dow Jones Industrial Average 12638.74 (Down) Week Ending 05-06-2011


Double Pinochle

Sometimes you just to get a little bit lucky. The US Government and our President Barack Obama took a calculated high risk chance to capture the world's number one bad guy and drew Double P's. More like Double P's and a Run. If you are a Pinochle player you understand what this means and the feeling it emotes.   Not only did they capture and kill Osama Bin Laden but took possession of computers and disk drives with a mountain of bad guy data and plans. Evidently Al Qaeda did not study American Film-Noir or history about justice and understand that we always catch the bad guy. Ask Al Capone, John Dillinger, Bonnie and Clyde, Pablo Escobar and Manuel Noriega. That is how it always ends in real life and the movies.


Aces around

With this development, a whole bunch of air was let out of the world risk balloon. It was suddenly "Serenity Now" time. With Bin Laden gone, a layer of terrorist command and control is removed from the world scene and at the minimum Al Qaeda is disrupted in the short term, although still in cell groups that can do damage autonomously.  Commodities relaxed and dropped in price. Crude oil came all the way down to $97.00 a barrel. Maybe we can get back to looking at the clean fundamentals of business when evaluating stock values .

I decided to talk this week about Semiconductor stocks. If you have been around awhile trading you probably have gotten burned in the past like in late 2008 by some of these stocks and have shyed away from them as a group.  But there is allot of buzz going on right now. Blackstone Group LP (Symbol BX)  are offering an IPO of  Freescale Semiconductor Inc of 43.5 to 50 Million shares at $22 to $24 dollars per share. Freescale Semiconductor Inc is also part owned by TPG Capital, Carlyle Group and Permira Advisers LLP privately. Freescale Semiconductor is making the chips for Alcatel-Lucent's new lightRadio cubes.

Also Nvidia (symbol  NVDA, $19.82)  is to acquire Icera, to add 3G/4G baseband to it's mobile processor line. So that puts them in good position along with Qualcomm, Broadcom, and Mediatek as having the ability to integrate 3G/4G baseband right on to their chips. Icera owns 550 patents.(Source RCR Wireless).

So what can you buy based on fundamentals? Nvidia (NVDA) as mentioned above is good. Altera Corp.(ALTR) and Xilinx Inc.(XLNX) look fine.

Triquint Semiconductor Inc. (TQNT), Skyworks Solutions (SKWS), Qualcomm Inc. (QCOM),  and Atmel (ATML) all could find a place in your portfolio.

Don't forget about my small-cap favorite in this group, that I have mentioned a fw times before LTX-Credence Corporation (LTXC, $8.72). Still a good buy.

If you are looking for a dark horse in this semiconductor area, one pick might be to purchase Marvell Technology Group Ltd., (MRVL, $14.80). Marvel has filed a lawsuit in San Francisco Superior Court against Goldman Sachs and two account executives, alleging Goldman Sachs manipulated the 2008 financial crisis to defraud the two Silicon Valley executives of more than $100 million. Certainly they haven't done a good job promoting the stock.                                                                                                                                                                                                                                                                       

So what are you going to buy tomorrow? (Probably some speculative commodity, gold or oil stock!) These Semiconductor stocks are probably a better idea, stick with one of them.

Freewilly  

"Here we go again. The calendar has flipped over from April to May. Do we "Sell in May and go away"? Or, stay on the Magical Mystery tour with this Bull market?"

Dow Jones Industrial Average 12,810.54 (UP) Week ending 04-29-2011

The Dow Jones Industrial Average in Oct 2008 was at a top of 13,930.01. It then precipitously dropped in 5 months to 6626.94 on March 2nd, 2009. If you had capitulated, thinking it was the end of the world, and turned all your long term stock and capital into cash at this point, you made a grave investment mistake. Because since then to now April 29th, 2011, the Dow Jones has recovered most of that to now being at 12,810.54. If you were new money coming in at this bottom you are up 93.31% in two years. If you are looking at the chart of the DJIA for the last decade it looks like a big"W".  I will let you technicians figure out what that means on a Macro level. My inclination is that we have come this far and will eventually test the old highs which is some 1100 Dow points to the upside from here.

We should deter to The Wisdom of old Mr. Partridge in Reminiscences of a Stock Operator, who says it was never his thinking that made big money for him but his sitting tight in a bull market that had been successful. "Have the courage to stick to your convictions until you think the bull market is over". "The big money was made not in the individual fluctuations but in the big market movements".

So do you sell in May and go away? I think you should do both. In your front end/taxable accounts I think you raise some cash and take some equities off the table as your companies announce earnings. I would especially dump companies with weak balance sheets.  Go to 30-35% cash. In your long term accounts, like 401K's and IRA's where you may have money going in all the time, you should stay the course and keep buying equities. 

So what should you buy for growth once QE2 Quantatative Easing is all sorted out in June?




WILLIAMS PARTNERS (Symbol WPZ, $55.80) specialty chemical and gatherer, transporter, processor and treater of natural gas and fractionating and storing natural gas liquids.







Nasdaq OMX Group Inc. (Symbol NDAQ, $27.12) -  a global exchange group that delivers trading, exchange technology, securities listing, and public company services across six continents.

Human Genome Sciences Inc. (Symbol HGSI, $29.47) - a commercially focused biopharmaceutical company advancing toward the market with three products in late-stage clinical development.








SWISHER HYGIENE (Symbol SWSH, 8.77) - H. Wayne  Huizenga run  Hygiene and Sanitation Solutions Company. A green play and very agressive on the acqusition front. Huizenga has a great track record with other businesses.








What an eclectic mix of stocks to boost your porfolio long term growth, huh?

Out to the garden now to battle the weeds.

Freewilly