"I saw that Coach had a little bit of an off quarter and I started wondering why. It may be because of the rise of their competitor Michael Kors Holdings Ltd."

Dow Jones Industrial Average 13,895.98 (UP ) Week ending 01-25-2013

Headline: "Coach Inc. was profitable and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. "

I saw this headline last week and I started wondering if this was some kind of symptom of some new competition to their business?, or just a blip on the radar. I started looking around at companies in their space and came upon "MK"

..... a thinking Michael Kors

Michael Kors Holdings LTD. (Symbol KORS, $58.08) is a company on the move. It fits well within my investment criteria with a PEG ratio of 0.67 and a Return on Equity of 33.26. These are my guidelines to judge price safety compared to growth and return on the money they are investing as a measure of financial health of the company.

I checked out KORS in the IBD paper and it had a SmartSelect rating number of "99", which is as good as it gets. Smartmoney says that there are 12 analyst with a"buy" recommendations on the stock.



Michael Kors is projecting 2013 earnings per share of $1.58 per share and 2014 earnings of $2.04.
The revenue has increased in all 3 quarters that this stock has reported, so maybe you can get in early on this stock's rise. I am always looking for the next "Ralph Lauren", which has performed great over the last 3 years.

The long term earnings on KORS is projecting out at 52.25%.
The 12 month Return on the stock is 94.57% , so if you were in,  you doubled your money. 

I would say that you can pick this one up anywhere along the way here. It may correct, but certainly would bounce back quickly.

Today is my 59th Birthday. I looked out the window where I write my blog this morning and saw a beautiful Red Fox sitting around by my bird feeder. Then he headed for the creek down below our yard.  Funny to see him in full daylight, but I think he was coming to wish me a Happy Birthday! 

Freewilly

"Infrastructure. Can't live without it. Always need more of it. Mastec is the company that builds it."

Dow Jones Industrial Average 13,649.70 (Up and a 5 year high) - Week ending 01-19-2013

Each year our population rises and demand on the services provided by of our infrastructure continues to  increase. Electricity, Water, Gas, Sewers, Communications and all the delivery systems  that provide essential services to people must be expanded, improved and repaired to keep up with demand. One company that fills all these needs is a company called MasTec Inc.  

MasTec Inc. (Symbol MTZ, $26.85 ) is a company that does all these things.

Return on Equity 14.48 and PEG ratio 0.86.
(ROE is slightly below my 15.00 minimum requirement rule, so a slight bit of speculation here, but I wouldn't lose sleep over it.)

MasTec is described in it's profile on CBS MarketWatch as " an infrastructure construction company. The company is engaged in designing, building, installing and maintaining infrastructures which include the engineering, building, installation, maintenance and upgrade of energy, communication and utility infrastructure, such as electrical utility transmission and distribution, natural gas and petroleum pipeline infrastructure, wireless, wire line and satellite communications, wind farms, solar farms and other renewable energy, natural gas and petroleum pipeline infrastructure, wireless, wire line and satellite communications, industrial infrastructure and water and sewer systems. Its customers are primarily in the utility, communications and government industries." 

Earnings per share for Mastec for 2012 are looking like $1.47-$1.49. For 2013, they are projecting $1.89 per share. The One Year total return on the stock is 47.85%. The 3 year return is 108.9 percent , so this stock has done well.  The 5 year average sales has bee 37.99%. The one year earnings growth has been 48.4% , but the five year rate -246%, so earnings have not shown consistency. I think you can take up a position in this stock right here when the market opens on Tuesday.

Things should get off to a fast start this week with Apple and Google reporting earnings. These two stocks were the mainstay holding of allot of mutual funds in 2012 and could be a bell-weather of where we go from here. Also reporting will be IBM, 3M Company , Microsoft and Johnson & Johnson. 



The markets are closed tomorrow for the Martin Luther King Jr. holiday so we will have a short trading week. So if you are able do something good, help someone in need this week. It could even be your older neighbor next-door, they always need help with something.  

Leave me a comment with your favorite stock and we can look at it together.

Freewilly

"The Canary in the Coal Mine for detecting a Bull Market can usually be found in the Chemical stock Sector. Let's take a look."

Dow Jones Industrial Average 13,488.43 (UP) Week ending 01-11-2013

Going back to some "Old School" thinking , one early indicator in the beginnings of a Bull Market was to look at a rise in Chemicals Sector stocks as an early indicator to detect an uptick in economic activity.So this week I decided to take a look at 4 chemical company stocks.

LyondellBasell Industries N.V. Cl A (Symbol LYB) ,

Cytec Industries Inc. (Symbol CYT) 

Eastman Chemical Co. (Symbol EMN) 

PPG Industries Inc. (Symbol PPG) 

So what can we gleen about the state of the bull market from these four? Well for one thing, the One Year and the 3 Year performances of these stocks has been stellar already.

Here they are:
(Stats from Smartmoney.com)

LYB -  1Yr - Up 64.38%      2.1Yr. -Up 173.3%
CYT -  1Yr. - Up 48.17%      3 Yr. - Up 86.59%
EMN - 1Yr. - Up 56.56%     3 Yr. - Up 152.82%
PPG -  1 Yr. - Up 63%          3 Yr. - Up 142.25%

Two of these stocks qualify for my criteria to purchase of being below a PEG ratio of 1.50 and have a Return On Equity above 15%. Those are LyondellBasell & Eastman. 

PPG has a PEG ratio that is too high right now, so you need to wait for it to come in a little bit, but it is an excellent company.


Cytec has improved there product mix with higher margin products and will have a big run up in earnings. Their Return on Equity is a little light right now, but I would put this one on your watchlist. 

So I would say from our Canary analysis that the bull market is well on its way already. You might want to add LYB or EMN into your diversified portfolio.

 My preference would be Eastman Chemical , Symbol EMN)  because of it's quarterly year over year revenue increases and consistent dividend. 

So keep an eye on all 4 of these stocks to keep a barometer on this slow moving bull market.

Freewilly

"The next 50 days in the stock market could seem like a visit to Harry Potter's "The Deathly Hallows". Scary"

Dow Jones Industrial Average 13,435.21  (UP) Week ending 01-03-2013

Whoa Nellie. If you feel like your portfolio has death-eaters and dementors swirling around it and dark clouds with skeleton heads appearing in them and looming over you, YOU are not alone. You are currently living through our version of Harry Potter's "The Deathly Hallows" with the government hitting Debt Ceiling limits, Run Away Government spending, and with leaders that have just raised your social security taxes 2% and that want to raise your taxes another trillion dollars. Oh and if that's not enough, the US Government is going to stop "Twist" and other artificial manipulations like buying up the surplus treasury bonds when issued, so interest rates will be surely be going up. Talk about uncertainty. 55 days or so from now we get to face Fiscal Cliff 2, (the postponed appointment with Fiscal Cliff 1 !)  

A scary place to be right now. So it may be a good time to get your financial house in order, and sell off some stocks that might have question marks on their revenues or earnings. You can carefully pick up on stocks that you know will bounce back if we do have a temporary downturn. One of these stocks I will mention below and is the subject of this week's blog.

Gilead Sciences Inc. 

(Symbol GILD, $75.72, Split 2:1 - $37.86)

Return on Equity 33.91% PEG Ratio 0.76

Gilead Sciences Inc. is projecting 2012 earnings of $3.84 per share and 2014 earnings of $4.42 per share. GILD has had 5 year sales growth of 20.02% and 5 year earnings growth of 22.37%. The company did 8.46 Billion in sales revenues in 2011 so it is a Mid Cap heading on it's way to becoming a Large Cap stock. I had starting writing this article on Saturday and just finishing now, so the stock has run up a little this week along with Celgene (CELG), so you may need to pick a spot to purchase it. The stock also currently has 21 Strong Buy recommendations and 4 Overweight picks in from analyst. The company has had a 3 year Total Return of 70% with most of that happening this year.

So grab your magic wand and prepare to do battle in 2013, which should be a wild ride with all the government hi-jinx going on. I will try to be on time for this weeks blog.

Keep those spells and potions in hand in case you need them to fend off demons.

Freewilly