"Looking ahead at the great debate in Washington DC about Medicare , I thought I would take a look at the Healthcare stocks. (My tech stock run is over!)

Dow Jones Industrial Average 13,158  (Down) Week ending 08-24-2012

 Sorry that I missed you last week, I was on vacation in 
the mountains with no computer.  Nothing on hand, but 
a copy of the Wall Street Journal. There is a lot of 
gas line activity up there which  is providing  work and 
is a boom for the lodging industry. In contrast it seems
 to be hurting the tourist industry because their are no
 rooms available for people to stay at , thus 
hurting the traditional summer industries like retail.

 I thought you were probably sick of the run of tech stocks so I moved
 over to take a look at the Healthcare stocks.  I am doing the same
 thing in my personal life in about a week, moving from wireless technology sales over to sales 
of medical equipment hardware. I look forward to my next great learning experience.


To take a look at the Healthcare Stocks , I went to Morningstar's Sector website 
and did a screen of the best performing stocks for a 3 year period. 
Below are the stocks in order going down from the best 3 year gain % : 


Stock Name                            Symbol         _YTD         3 month      1 Year        3 Year
Regeneron Pharmaceuticals  (REGN)         161.75        11.86         155.44        87.53
Alexion Pharmaceuticals Inc. (ALXN)           49.29        14.65          99.48         67.89
Valeant Pharmaceuticals Inc.  (VRX)            11.59           8.45          22.82        57.46
Perrigo Company                    (PRGO)           13.72          7.43          18.21         55.81
Edwards Lifesciences .              (EW)             40.28        13.57          37.20         46.08
Biogen Idec Inc.                         (BIIB)           33.60        11.68          59.73        43.72
Novo Nordisk A/S                      (NVO)           37.26        11.77          56.13        38.67
Watson Pharmaceutical Inc.      (WPI)            38.08        14.51          27.28        33.27
Intuitive Surgical, Inc.          (ISRG)            9.18         -4.89         44.55         29.85          

3 year is a good time period to look at because, as you can see, the stocks vary wildly in their movement over the three year period. Any of these stocks would have been a good investment and looking at the 3 month and 1 year they continue to have momentum.

You'll notice I have not posted the stock prices of these stocks
just their performance numbers. You should pick one of them as the Healthcare component in your portfolio and decide how much you want to allocate in dollars, then buy however many shares you can for the money that you allocated.

I am looking forward to this fall and NFL Football. Watching Peyton Manning and the Denver Broncos in preseason while I write this blog, and he is looking good so far. You need to multitask on weekends to maximize your time and get everything done.

All the best,

Freewilly

"WOZ , two weeks in a row? Well, Steve Wozniak is the Chief Scientist at Fusion-IO, and Fusion I/O is on the move"

Dow Jones Industrial Average (Up) 13,207.95  Week ending 08-10-2012

 Steve Wozniak

Like James Mason, Pat Boone and Arlene Dahl in the 1959 version of the movie  "The Journey to the Center of the  Earth",  I seem to be following a path and like the explorers in the movie,  I keep looking for the three notch marks that denote the clues that you are on the correct trail. This is why I am now talking about Steve Wozniak again, for the second week in a row. He just keeps popping up on the path, like some Alice In Wonderland character.

Steve Wozniak reveals himself as the Chief Scientist at data software storage specialist,  Fusion-IO.

Fusion I/O (Symbol FIO, $26.86) showed up on the radar last week with a +5.84 point gain day on Friday Aug 10, up 27.78%

There's that WOZ again, What is he up to now and why did his stock move up??

Well, Fusion I/O Inc. reported 82% revenue growth in Fiscal year 2012 with its most recent quarter. 

Revenue growth has looked like this:

          2008  -          $648,000
          2009  -    $10,150, 000
          2010  -    $36,216,000
          2011  -  $197,204,000
          2012 -   $359,349,000


Quarter this year $106.6 Million over quarter last year $71.7 Million. Non-GAAP gross margins are 57.6%.

This is not a stock I would go out and buy on Monday after this big run-up. I would pick a good entry point ($23 - 25$ per share) when you see it and plan on holding this for 3-4 Years.  R&D and SGA expenses are high right now because of the rapid product development and revenue growth, so earnings are yet to come on stream in abundance. 

These guys do Flash Memory Server Acceleration Technology and SAN - storage arrays. I consider them in a niche space very close to VM Ware.

Piper Jaffray's Andrew Nowinski currently has a target price on the stock of $38.00 per share.  He feels that their technology along with combining with companies like  NetApp, that they should be able to compete effectively against the likes of EMC/ VM Ware. 

"Lazard Capital Markets’s Edward Parker, who rates Fusion stock a Neutral, wrote that ION, “which is essentially a server bundled with Fusion-io drives and new data management software such that the server, or a cluster of servers, can effectively operate as a storage array or a SAN,” is a positive step, given that Fusion’s traditional sales of so-called PCIe cards may not be sustainable over the long term. However, Parker thinks it may be a tough route to market for Fusion without having the product bundled by Hewlett-Packard, (HPQ), or another vendor" this as quoted in Tiernan Ray's August 3rd, 2012 Barron's article.

So, in review, this is a stock to put on your Watchlist, that you can add at the right price, as a building block, for a long-term aggressive growth portfolio. If you don't have a Watchlist you should start one. You get the picture. Hopefully FIO will shoot you to the top of the volcano, like the people below coming back from their "Journey to the Center of the Earth".

I hope that you are having an "Olympic" Gold Medal summer and have gotten some vacations or holidays in there. Take some time for yourself, the rest of this stuff will be here when you get back.

Freewilly

Shhhh! Very quietly, start accumulating the stock of FB, (I.e. Facebook), but keep it on the down low"

Dow Jones Industrial Average 13,096  (UP) Week ending 08-03-2012

Personal Computers and the Internet grew out of the Hippie Movement in California. They didn't seem to like them much. They where trying to change the established social order. Nobody   thought any good could come out of their wild use of mind expanding drugs and their carefree lifestyles that contradicted everything that had been established at the time, that was the correct way to live your life. They wanted a new society.

But out of this liberating and creative activity 
sprung the genius of Steve Jobs and Steve Wozniak to build the personal computer. IBM thought it was a silly idea that only hobbyist would purchase. One of Xerox's people had designed the "Mouse" for a personal computer and the company dismissed it as folly, and sold it off to another garage hobbyist start-up guy named Bill Gates. What would they ever do with a mouse? How would they ever make money with something like that?

 Then there was this crazy guy named Bezos. He had no business whatsoever and was spending fortunes building gigantic distribution centers. Somehow he was going to just start selling everything on this new intranet system without even having a brick and mortar store.  What Folly! Sears and J.C. Penney laughed at him.  What folly was this, this company called "Amazon" of all things, that had no business whatsoever.
How would you price the stock of such a thing?  There was nothing to compare it to and surely it had to be highly speculative.  It was certain that it would run out of funding quickly and go out of business.  A change to the social order, sales without a traditional brick & mortar store, just a silly idea.

That brings us to present day.  The advent of the capitalization of Social Media.  Very powerful dynamics and exposure to many customers, but how would they make money?


Facebook (Symbol FB, $21.07) stock launches on the NASDAQ and it is a catastrophe.  The stock opens and trades all the way up to $42.00 a share, but the company  pre-announces a earnings warning mid-offering and throws the NASDAQ and Morgan Stanley into total turmoil with people buying and cancelling orders at the same time and trading in the stock all screwed up. The stock tumbles all the way down to bounce off of $19.90 a share this week.  The stock must be a bust and the unlock on the stockholders has not even happened yet. Gloom and Doom prevails.        ........     This is a message to me to take my first position ever in the stock at a price $20.07.  .............


The lockup guys are not going to come out and sell their stock at $20.00 when they know they have already seen $42.00 on the stock. The core business of Facebook is intact and the revenues continue to rise rapidly each year by billions of dollars.  Social media is here to stay. There is no box to put it into to try to group it with any other kind of business. Maybe Google?
That stock is trading at $639.00.  Linked-IN?  $99.00 per share. 


One way or another this stock has to be worth more than $20.00 per share. It is that single time in history, that moment stand still, where you can execute this trade for the long term and sit back and wait for results.

So enter onto the Wall Street stage one Mark Elliott Zuckerberg. Again a new face trying to change the social order of the way we live and not being accepted well for not playing by the traditional Wall Street rules. What does he have to offer? How about a company with 5 year sales growth of 465.10%. Well you can make percentages look inflated with small numbers, right?.   Facebook sales revenue from Smartmoney charts below: 

Fiscal Year Ending 2011	Fiscal Year Ending 2010	Fiscal Year Ending 2009	Fiscal Year Ending 2008	Fiscal Year Ending 2007
Sales/Revenue	3,711,000	1,974,000	777,000	272,000	153,000

Slide the top numbers over to the right a bit and you get the idea of the rapid growth here. In Q1 , the company did already over 1.2 Billion in revenue , so they continue to stay on the growth path with sales. The rest of the stuff will sort itself out over time.  They are still spending a lot on infrastructure and development, so earnings will catch up to the rapid growth of sales at some point.


You need to BUY Facebook tomorrow, or at least start Accumulating some shares here. It is simply a great opportunity. Some day you will be sitting like a Fat Cat. (Well, or at least a muscular cat like Oscar below.

Oscar, one of our 4 cats. We also feed the neighbors cat.


So stay cool and out of this sweltering heat. Need to get the blog done, before the next storm comes in and knocks out the electricity.

Peace , Freewilly