Saturday, January 28, 2012

"This week we go to Dublin, Ireland to find a healthcare company with great earnings and fundamentals, Covidien PLC"

Dow Jones Industrial Average  12,720 (Up) Week ending 01-20-2012

For some reason I was looking at the Medical Equipment suppliers, I guess because I was looking for businesses that will have growth no matter what the economy is doing. That brought me to the spin off from the old Tyco Healthcare
which is the Dublin , Ireland based Covidien PLC (Symbol COV, $51.69),  the price was $48.04 when I started writing this article last weekend. 2012 annual earnings looking like $4.26 per share and 2013 earnings of $4.61 per share 

Covidien PLC's (COV) fiscal first-quarter earnings rose 16% as the medical-products maker posted improved sales in its key medical devices business and strengthened margins. Dow Jones reports that "The maker of operating-room gear, generic drugs and other items has in recent quarters boasted strong sales in its medical devices segment, which it has reshaped in recent years. The business, which accounts for roughly two-thirds of the company's top line, reported sales grew 5.7% in the latest quarter to $1.98 billion. "

Ireland, which charges some of the lowest tax rates on businesses , has been a shining model for the rest of the world on how to do it right. COV now has 20 analyst that have strong buy recommendations on the stock. The Total three year return on the stock is 41.2%. The stock also pays a 1.74% dividend rate currently giving you a nice annual return on investment combined with its growth. The company also operates at a  has a nice Net Profit Margin of 16.5%.   The Fidelity Select Medical Fund has 12.84% of their fund invested in this stock. Their YTD return so far is 8.73%

COV, I believe, based on fundamentals can make up a solid part of your diversified portfolio. The stock trades on the New York Stock Exchange and Ireland may take a small piece of the dividend paid. My daughter has visited Ireland and she says they are very welcoming to visitors.    
             So Freewilly says "Go Irish!"         Freewilly    
                                       


















Wednesday, January 18, 2012

"Patents, Patents who owns the Wireless Patents? One name that you should hear about"

Dow Jones Industrial Average 12,422  (UP) Week ending 01-13-2012


Google (GOOG) is out there buying Motorola Mobility Solutions (MMI) for $40.00 per share just to get their wireless patents. Motorola the grand old dame of cellular wireless has been stacking up these communications patents going all the way back to their co-invention of the "Walkie-Talkie".  

LG Electronics, Motorola Mobility, InterDigital, Nokia, Samsung, Apple, EMC, Ericsson, Microsoft, Research In Motion (RIM) , Nortel, Huawei, Freescale, NEC, Sony, HTC, Samsung,  ZTE, Oracle, Google, and of course Qualcomm all are lined up in the wireless patent owners parade, 2G, 3G and 4G.

As pure patent investment plays Qualcomm (Symbol QCOM) and Interdigital (IDCC) have done very well over the past few years.  Enter here a new name that came to my attention the end of last week in the NASDAQ unusual sales volume column on their website.

Acacia Research Corp. - Acacia Technologies (Symbol ACTG, $42.69).    


I started working on this blog back on the weekend and if I had typed faster and got it posted, I would have saved you a few bucks per share on ACTG that went up over the last few days. This pure patent play had 2011 earnings of $1.24 per share and 2012 projecting out at $1.82 per share.

5 year sales growth is 33.13%. One year Total Return is 63.8% Three year total return is a staggering 1,168,8% . (Stats from Smartmoney.com Peer comparison page).   The forward PE on the stock is 23.8 .      
Speaking of Patents and Content idea PiracyFreewilly's Stockpicker Blog supports the Wikipedia, Google and other websites today in protest of the government proposals in Anti-Piracy laws, (SOPA), on the Internet. Writers on the web need to responsibly cite public content sources with references when using content from other sites, just like you would with writing in any other media venue.   We do not need or want the government and lawyers imposing censorship at there own whims for content on the web like the Chinese do.  
If someone has a good idea share it, and cite it! You can also include  links back to the original content in your articles if it is relevant to explain what you are trying to say.                                                   
 So keep coming up with those great wireless ideas to patent and make sure you are getting full credit for them!                Freewilly       Keep speech Free and unencumbered on the web!          

                                                           






Sunday, January 8, 2012

"Looking to capitalize on the next Black Swan event. Where and when may the next one pop up. I think Real Estate"

Dow Jones Industrial Average 12217.56 (Down) Week ending 12-30-2011 - End of Year

Dow Jones Industrial Average 12359.92 (UP) Week ending 01-06-2012

 

The Black Swan Theory or theory of black swan events is a metaphor that encapsulates the concept that "The event" is a surprise (to the observer) and has a major impact. After the fact, the event is rationalized by hindsight.

The theory was developed by Nassim Nicholas Taleb to explain:

1.The disproportionate role of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology

2.The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities)

3.The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs
(Source Wikepedia)

The largest black swan economic event of the last 5 years was certainly the collapse of the Mortgage Backed Securities market worldwide and the downturn in values in the US real estate market. Trillions of dollars in investor equity being loss. My thinking now is that the Real Estate market has over corrected This will create at some point a boomerang effect and possibly a "Black Swan" event going rapidly in the other direction to return to the mean.

So I am looking this week at some of the Real Estate Investment Trust (REIT'S) that you may be able to take advantage of this bounce back in prices. I am not drifting to far a field from some familiar names because they are the entities with the largest capital and purchasing capabilities to take advantage of this turn when it happens.

EQUITY RESIDENTIAL (Symbol EQR, $55.69) of Chicago , IL. the developer of apartment properties would be the first one to look at. EQR operates at a Net profit margin of 52.20% , not to shabby. It has a 4.08% dividend yield and the stock has profited from people not being able to afford houses and moving into apartments instead. EQR has produced a 3 year return
 on the stock price of 152. 3%.


Simon Property Group Inc. (Symbol SPG, $126.82 ) would be the next REIT to look at. It has been extremely profitable and very successful even without a black swan event. Lets say to the tune of a 3 year return of   215.2%.

SL Green Realty Corp. (Symbol SLG, $69.78) are the "Kings of New York City" real estate guys and gals. Own SLG and you can be like Donald Trump, a real estate magnate. Net Profit margins for the company are 54.90% and the 3 year Total return on the stock is 354.5% . Think about a Black Swan event happening and them really doing good! Throw in 5 year sales growth of 14.68 %.

You probably drive by one of these on your way to work everyday and never notice it,  PUBLIC STORAGE (Symbol PSA, $132.28) .  You have to empty out a bunch of houses and the stuff has to go somewhere. People are hoarders, they never throw anything away due to the fear of lost value.
5 year earnings growth here at Public Storage is 40.49%. Net profit margins run 45.2%. ( By the way credit all these stats the fine work of the people at Smartmoney.com , great job by them). Total 3 year return of 128.2%. So somebody has been making money in the real estate downturn.

  Of course you cannot have real estate without mortgages. (unless you happen to be really rich). With Fannie Mae and Freddie Mac
sorting out their current quagmire, the logical place to look for investment in this area is Annaly Capital Management Inc. (Symbol NLY, $16.06).  49.10% Net Profit Margins here at NLY.  5 year sales growth of 14.76%.  This one has a 14.20% dividend yield to keep your interest in case you get bored. A three year total return of 56.5%.  Remember that before the "big fallout" that this was a very profitable business for a long time.

If you think of other Black Swan economic events for 2012 please comment on my blog and share them with everyone and we can try to flush out investment ideas for it.

Thank you and happy hunting,

Freewilly