"Here is the recap of the 2014 Freewilly Blog Picks. I had 7 Up, 6 Down and 1 Even. 3 sectors underperformed - 3D Printing, Oil/Energy, and Heavy Equipment-Rental "

Dow Jones Industrial Average 18,053.71 (Up) Week Ending 12-26-2014

Well I would have done a lot better if I had sold my 3D Printer stocks, DDD and SSYS, back in August at the peak, when they were on the plus side. That is called hindsight and is not allowed in Annual stock picking. Semiconductors, Oil, and Heavy Equipment Rental were not my friend. So my overall total return for my 14 for 2014 stock picks was (-1.164), a small loss for the year.

Here are the winners:
Hain Celestial (HAIN)      UP 31.84%
Arris (ARRS)                     UP 29.23%
Direct TV  (DTV)              UP  29.17%
Berkshire Hathaway "B"  (BRK.B)   UP 28.27%
Yahoo  (YHOO)                  UP 25.12%
 Nike  (NKE)                        UP 23.64% 

If I had just stuck with this group above I would have been in really good shape!

Maybe the more you are diversified, the lesser is your chance of success? That is what Warren Buffett and George Soros think. Maybe something to look at is "Over-Diversification" as an issue in your investing style.

That brings us to the three stocks in the middle. All monster gain stocks in 2013.


Polaris Industries (PII) Up 5.05%
Google (GOOG)  EVEN  0
Golar Nat Gas Transport (GLNG) (-0.25%)

Apple (AAPL) would have been a much better anchor stock for you in 2014 then Google. That may flip flop around in 2015.

 So much for the GOOD and the BAD, I guess I need to tell you about the UGLY and here they are. ALL would have done much better as 6 month picks rather than 1 Year picks.

So here they are:

3D Systems (DDD)  DOWN (-64.20%)
Cree (CREE)  DOWN  (-48.16%)
Stratasys (SSYS)  Down (-35.64%)
Manitex International (MNTX) Down (-21.02%)
Holly Frontier (HFC) Down (19.35%)

It  is amazing that five little stocks could do so much damage to your annual results. 3D Systems and Stratasys and also Google were pouring money back into their business development, instead of worrying about their short term results. Wall Street had no patience for that. Maybe a little too much hyped expectations . CREE did great growing in their LED lighting business but fell short in their semiconductor business. Manitex fell in sympathy with its sector with Hertz Global and United Rentals going down. They are starting to recover now.
 

 
So what can we glean from the results?

1. Don't own too many stocks. It makes it difficult to be successful.
2. When the hype gets ahead of the results in stocks in new technologies like 3D, head for the sidelines. Don't take excessive risk in your investing.
3. Stocks who are tied to commodities like "Oil" can come down no matter how well the company is doing individually.
 
So next week, I will give you my "15 for 2015" Freewilly's Stockpicker Blog picks.

Happy New Year!        


Freewilly

" You always hear from analyst about Mastercard,Visa, and American Express as popular stocks to buy. But for my money here, the best value is Discover Financial Services (Symbol DFS)."

Dow Jones Industrial Average 17,280.83 (Way Down!) Week Ending 12-12-2014
Dow Jones Industrial Average 17,805 (Way UP!) Week Ending 12-19-2014

I can only hope that we have put in some type of bottom for a while with this drop in oil price. It will allow us some kind of baseline data to calculate how companies will do in 2015.

One company I like here with consumers having that oil savings in their pocket is Discover Financial Services (Symbol DFS, $65.09). (The price a week ago when I started writing this article was $61.81. Busy Christmas chores have delayed me.)

Discover meets my baseline investment criteria having a PEG Ratio of 1.22 and a Return on Equity of 24.09. Pretax ROE is 36%.

Annual revenue for this lesser noticed credit card company is $8.568 Billion dollars. Nothing to sneeze at. Revenue growth has been 6.1% annually.The company offers a annual dividend yield of 1.55%

The company gives off Quarterly Free Cash Flow of $1.026 Billion dollars.

On the Earnings side, the company currently has a low PE of 11.8. The 3-5 year earnings growth has been 35.6%. Earnings per share for 2013 was $4.96 per share. 2014 is projected at $5.25 per share and for 2015 it is projected at $5.53 per share.

The two year stock chart on this stock shows a nice steady and stable rise. The Year to date stock return is 12.24. The One year total return on the stock is 14.41%. the 3 Year return on the stock is 166.8%. So a good long term investment prospect for my taste. I think this would be a good investment for the "Financials" section of your diversified investment or retirement account. Don't try to be a hero in 2015. We have had 3 double digit gain years in a row, so this year you should look to stocks that have given steady returns. I would buy this one on a dip here.

Happy Holidays and eat and be well!

Merry Christmas - Freewilly   

(next week we will review the Freewilly 14 for 2014 picks to see how I did).

"Wild times as the Dow Jones approaches 18,000. Best to stick to basics here, Peg Ratio less then 1.5 and Return on Equity, (ROE) of 15% plus + "

Dow Jones Industrial Average 17,959 (UP) Week Ending 12-05-2014 

It seems like our TV is always on one of the shows presented by this network. Whether it is Food Network with Chopped, Drive-ins Diners and Dives or Restaurant Impossible or on HGTV with Love it or List It or Flip or Flop,  they all seem to be on my television all the time.

 Scripps Network Interactive, Inc. (Symbol SNI , $80.28) is a stock that meets my criteria as a stock to invest in here.  I like the PEG Ratio to be below 1.5 or bless and the stock currently has a PEG ratio of 1.22 according to GuruFocus website. The Return On Equity I like to be at 15% or better and Scripps steps up with a 27.43 ROE, (Return on Equity).

The stock is up 10.2% this year and it also adds a 1% dividend payment. That adds up  to a pretty nice annual return of 11.2%. I think in 2015 you will need to pick out stocks that give you that 10-15% return with the dividend included. It will be tougher to find those 30+ plus returns in 2015 and you may subject yourself to unwarranted risk trying to attain it.

The company has a market capitalization of $11 Billion dollars. SNI generates quarterly Free Cash flow of $248.42 Million dollars. Profit Margin is 40.1%. The company has a healthy balance sheet with a Quick Ratio or 6.3 dollars in Assets for every 1 dollar of Liability. Revenues last year were $2.651 Billion dollars.

 5 Year earnings growth for the company has been 16.4%. Earnings per share for 2013 were $3.68 and for 2014 we are looking at $3.90 per share and for 2015 we are projecting $4.47 per share. The current PE is 20.4 and the future PE based on projected earnings is 17.97. Expected earnings growth for this year is 12.07%.

Annual Net income for the company is $522 Million dollars. The IBD rating on earnings is 69 and the SMR Rating, (Sales+ Profit Margins+ ROE) is rated "A". The company has 102.8 millions shares outstanding.

The secret of this company is that there customers are interactive with their TV shows. The last Food Network Star for example was picked by the audience in the last show. This one is a winner that you can buy at anytime here. Stock symbol SNI.

Two of my favorite characters above from the show based on the real estate market in Toronto Canada, Love It or List It.

Freewilly

"Oil stocks and crude oil are crashing down in price, but let's not "throw away the baby with the bathwater". There are still some good energy stocks"

Dow Jones Industrial Average 17,810 (Up)  Week ending 11-21-2014
Dow Jones Industrial Average 17,828 (Up)  Week ending 11-28-2014

 Well, with the OPEC big four countries decision not to cut production, crude continued it's slide on Friday with West Texas Intermediate crude trading down to $66.15 per barrel, down 11.4 % and the Brent Crude fix at $70.15 , down 10.85%.

Just like any other sector in a downturn, every energy company in the group is not affected in the same way. The oil service companies, midstream pipeline companies, and some refiners will probably not be as adversely affected by the drop in crude pricing.

How about Murphy USA, (Symbol MUSA, $63.72), that has most of their gas stations near WalMart stores. The stock is up 38.4% this year.

Energy Transfer Equity, LP. (Symbol ETE, $59.39), which has a PEG Ratio of 0.81 and a 2.8% Dividend. The stock is up 58.86% this year.
 

Triangle Petroleum Corp. (Symbol TPLM, $4.82) has a PEG Ratio of 0.34 and a forward PE of 9.3. It has a Return on Equity of 17.46 and 2/3 of it's business is in midstream pipeline and oil services. It also has a 18% Operating Margin.

Kinder Morgan Inc. ,(Symbol KMI, $41.35), is probably the best quality of the group. The consolidation of Kinder's properties makes it the largest midstream pipeline provider in the country. It pays a 4.26% dividend and it is up 15.37% this year. Jim Cramer of CNBC and The Street has been pounding the table on this one for a couple years now.

So don't run for the hills when you see an area crashing down. Look for the opportunities that come available for good long term investments that would normally not be available to you to buy at these prices.

 Off to start a great December month,

Freewilly

Sometimes when you find a good stock and you're fairly sure of it, you need to press your bet. I think that Edward Lifesciences Corp., (Symbol EW), is one of those stocks.

Dow Jones Industrial Average 17, 634.74 (UP) Week ending 11-14-2014

Stanley Druckenmiller and George Soros

When Stanley Druckenmiller was asked about what he had learned from George Soros in Jack D. Schwager's 1992 book "The New Market Wizards , Conversations with America's Top Traders" he responded this:

"I've learned many things from him, but perhaps the most significant is that it's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you are wrong. The few times that Soros has ever criticized me was when I was really right on the market and didn't maximize the opportunity"

So when you're right, and you know you're right, you need to press your bet and take a large position or add to your position. Such is the case with
Edwards Lifesciences Corp. (Symbol EW, $124.50).

Edwards to start with has a one year stock price change for the trailing 12 months of 91.57%. The three year return is 77.05%.

The PEG ratio is kind of wacky because of a large one time earnings quarter so I have seen 2.25 and 0.1625. Also the Return on Equity I have seen 25.30% and 46.99% both of which are very good.

This designer, developer, manufacturer and marketer of products to treat stage cardiovascular disease has annual Revenues of $2.241 Billion with EBITA of 590 Million and annual Net Income of 779.6 Million.

EW operates at a Gross Margin of 74.5% and has an Operating Margin of 22.2%. The Quick Ratio for the company is 3.66 to 1 and the Current Ratio is 4.99 to 1, so very financially healthy.

Earnings per share for 2014 are projecting at $3.39 per share and for next year 2015 it is $3.95 per share. The forward PE is 36.88.
One year EPS Growth 14% and the Earnings for the next 3-5 years is projected at 19%.
 

The IBD rating on Edwards is 99-82-98 so it is probably a hold rating here. Look for a "buy-in" entry point to get into the stock.

Analysts have 12 Buy ratings on the stock and 11 Hold ratings. 

Insider buying on the stock looks good with 71 Buys and 73 Sells for the year.

So when you get the opportunity to buy this one put your heart and your money into it and bet large like Soros and Druckenmiller would do. 

You may already have some sure winners in your portfolio that you should add money to. Take another look at that also. Demand that your money works hard for you.

Take your best shot,

Freewilly

"The Dow Jones is at 17,500 but nobody is cheering like it's a grand bull market. Many a company here has been taken out by an earnings report landmine. Better to stick with a company with a backlog of business like Air Lease Corporation (Symbol AL)"

Dow Jones Industrial Average  17,390.52 - Week Ending 10-30-2014
Dow Jones Industrial Average  17,574.00 - Week Ending 11-07-2014

With the Dow Jones Industrial Average near all time highs you would think that people would be jumping for joy. But many a growth stock has sustained serious damage with revenues beating expectations  but earnings missing sometimes by just a few cents and taking down stock prices by high percentages.

So one way to give yourself a margin of safety is to invest in a company that has a large backlog of business. 

One such company is:

AIR LEASE Corporation , (Symbol AL, $37.60). Air Lease Corp. leases jetliners to just about every carrier in the world. Their main business is providing airlines worldwide with operating leases on new aircraft delivering from direct orders with Boeing, Airbus, Embraer, and ATR. The leases offer customized, creative and flexible leasing structures. 

They also offer sale/lease-back transactions and provide lease expertise to third parties.They also purchase, sell, and remarket aircraft with airlines, manufacturers, financial institutions, and investors worldwide.


As of May 2014, Air Lease had a fleet of 200 aircraft with another 327 aircraft scheduled for delivery over the next 10 years. 

With the current lease backlog of $6.2 billion for 200 aircraft, it is likely that the backlog will nearly double over the next five years with the delivery of another 145 aircraft.

Here are some of the details. The PEG Ratio is 0.414 and the Return on Equity of 9.49%. The PE ratio is 16.58. 

Earnings per share for 2014 will be $2.32 per share and for 2015 it is projected at $2.76.
The dividend yield is 0.43%
 
The company did $1 Billion dollars in Revenues and has a 23.83% profit margin.


The IBD Rating on Air Lease Corp is 84-95-75.
I love that fat earnings growth number.(It is the middle number in the IBD rating).


Analyst have 11 Buy ratings on the stock and 2 hold ratings.

The stock returns for the company have been very respectable and are as follows:

    YTD Return 21.26%    1 Year Return 25.12% and  3 Year Return is 65.48%

I would say that you can go ahead and purchase Air Lease (AL) right here or on any price correction. 

Men with Briefcases. (Mr. & Mrs. Lloyd George, Winston Churchill, Mr. Clarke)

Leasing Airplanes is a good business and should continue to be a good business.


Have a great week and I hope your football team wins.

Freewilly

"I can't see why you wouldn't load up here on Yahoo Inc.(Symbol YHOO) with their motherload of $$billions of dollars of Alibaba stock. But on a sadder note, the sudden passing of television financial anchor and New York Post stock columnist Terry Keenan"

Dow Jones Industrial Average  16,805.41 Week ending 10-24-2014

Terry Kennan - An original producer of Wall Street Week

She was everywhere. PBS, CNN, CNBC, Fox,  The New York Post. No one had a resume that could touch Terry Keenan. 

Suddenly, now at a young 53 years old, she is gone.  Here is a link to a better description of all her achievements. 
Terry Keenan - A life dedicated to Finance and the Stock Markets.

Here is a link to her current work, her weekly New York Post Financial Column. Terry Keenan - her weekly New York Post column .

I love this picture provided to the press by Terry's sister Linda Keenan, of Terry and Louis Rukeyser, one of her mentors back in the early days which was the very beginnings of financial TV and reporting. Terry Keenan help set the standard that all others must live up to.  

Terry Keenan and Louis Rukeyser

So this week's blog is dedicated to the memory and the successful life of Terry Keenan.


Terry would want me to tell you about the enviable position of Marissa Mayer, The CEO of Yahoo.

Yahoo Inc. (Symbol YHOO, $43.50)

Yahoo, sold 120 million of its 524 million Alibaba shares in the initial public offering for $9.8 Billion dollars. That would leave 404 Million shares of Alibaba stock owned by Yahoo Inc. . Alibaba, (symbol BABA), stock closed on Friday Oct. 24th at $95.95 per share. That would make their remaining shares worth $38.763 Billion. Forbes calculates that Yahoo's 35% investment in Yahoo Japan is worth $5 Billion and it regular web business and it's other investments like Tumblr are worth $10 Billion. 

Marissa Mayer , CEO of Yahoo

Well, when I plug that all into my little calculator I come up with $63.563 Billion dollars.

In the immortal words of the former United States Senator - Everett Dirkson, "A billion here and a billion there and pretty soon we are talking about real money."

I just went to CNBC's website and they tell me that at today's price the company's Total Market Capitalization is $43.3 Billion dollars. Hmmn? Interesting.

Now there is certainly a good chance that Marissa is going to deploy some of this cash to buy some companies that are growing faster than Yahoo, so there could be some good synergy there.

Also, the price of Alibaba is more than likely going to rise from here.

 Yahoo Japan is in a Japanese economy that is showing signs of recovery.

So with a Return on Equity already of 58.4 % on this stock and a PEG Ratio of 0.0104 ,  I see a good "margin for safety" here and lots of room for stock appreciation.

 I would say to buy this YHOO stock right here and on any dips. 

These two are a stock picker's match made in heaven!

Enjoy every moment of your life and strive for excellence like Terry Keenan did.


Freewilly

"Well that was a fun two weeks . The US markets took a repeated drubbing, hedge funds were forced to liquidate positions, and Ebola talk scared the hell out of everybody. The facts are though, that the price of crude oil came down and there are other signs of Deflation"

Dow Jones Industrial Average 16,544.10 (Down) Week ending 10-10-2014
Dow Jones Industrial Average 16,380.00 (Down and Ugly) Week ending 10-17-2014

OMG! Well in the immortal words of Louis Rukeyser after the 1987 crash , "It's just your money, not your life".

 Personally, my IRA account which is mostly growth stocks has been hammered down 12.25% off of it's highest values of the year in this two week rolling sell off. But the one thing you must remember is you still own the same amount of shares in these high quality growth companies that you have picked out, so nothing has really been lost or changed.

The market at the end of this week reminded me of a Carnival shooting gallery. Opportunities arose at different moments of the day and then suddenly disappeared.

Schlumberger Ltd. (Symbol SLB) with its tremendous backlog of business flashed for a moment at $85.00

a share, by the end of the day it was back to $94.78 in aftermarket. 

Honeywell (Symbol HON) with its good business and its steady 2% dividend

slipped down to $85.00 also, only to end at $90.30 in aftermarket. Just like ducks moving across in rows waiting to be shot at. 

Celgene Corp. (Symbol CELG) tumbled down to $85.00 dollars per share after I had recommended it last week at $95.00 in my blog. That one I jumped in and bought, (took my shot!) and it ended the week at $88.15.

Gilead Sciences (Symbol GILD) had also dived down to $92.00 per share only to end back up at $100.95.

I added to my positions in two oil stocks, Continental Resources (CLR) and Triangle Petroleum (TPLM),  taking advantage in the temporary downward spiral in West Texas Crude oil prices.

I was selling positions in the shaky semiconductor area, such as Cree and Invensense, and adding to positions in the more solid Buffalo Wild Wings (BWLD) and Constellation Brands (STZ) consumer goods companies.

I think if you get another travel Ebola scare this week and the airlines get knocked down , I would look to buy some  Delta Air Lines Inc (DAL) at a bargain price.

The point is in this discussion is that with this wild volatility you need to to have some cash set aside to take advantage of such opportunities as they briefly show themselves. 

Just think of it like the target shoot at the Carnival. Take your shot when it is the best probability to add quality names at a discount to your portfolio. Get rid of names that you do not want to hold in your 2015 portfolio going forward to raise cash.

All that said, I think this week we could still have a little more downside. So if your duck briefly shows up, take a shot at him and buy in on a sweet deal!

"Life is a carnival"  ... rock group The Band

Freewilly

What's stocks are going to be hot in 2015. According to all the TV commercials I see and the news on every channel, its DRUGS!"

Dow Jones Industrial Average 17,009.69 (Down) Week ending 10-03-2014

Every other commercial on TV these days is some kind of DRUG commercial. I feel like I am living in Ray Bradbury's movie "Fahrenheit 451", where in the movie Julie Christie is watching all the drug commercials on Government TV and all the books in the world are going away and being destroyed. It's all happening as predicted. Aldous Huxley's Brave New World with everybody on the Soma compound! Well if that's the deal , I should take advantage and practice some Reflexivity like George Soros, and buy a rock solid, no risk, drug stock ahead of the curve.

  Celgene Corp. (Symbol CELG, $95.21) is a stock to buy into as we go through the 4th quarter and going into 2015.

 Celgene is part of the big drug machine economy. Last year CELG had $7.033 Billion dollars in sales. 3 year Sales growth has been 17%. Those sales produced $1.414 billion in Net Annual Income. Celgene operates at a Gross Profit Margin of 94.72%.

What about my Freewilly standard measures of ROE and PEG?  Return on Equity for the company is 27.92%, (and IBD says that the annual Return on Equity is actually 45.43%?).  The PEG ratio on the stock is 1.19. So both of these numbers are excellent.

 Earnings look good. 3 year annual earnings have been 26% and over a 5 year period they have been 24.40%. Earnings per share for 2013 were $2.99 and for 2014 projected at $3.68 per share. 2015 earnings are projected out at $4.86 per share.

The ratings on Celgene in IBD are 99-95-91 and A+ and A. Insiders buying looks good. Analysts have 18 buy recommendations on the stock. 

The one year total return on the stock is 21.08%. Quarterly Free Cash Flow is $478 Million dollars. The Quick Ratio and Current ratio both look good on the stock. 

All in all this is a solid pick for your 2015 portfolio. It is fairly valued here, so accumulate it on tips in the market.

Just finished in time for the NFL One o'clock Football games to start. 

Have a great week and enjoy this beautiful weather in the eastern US.

Freewilly

"Bill Gross's shocking departure from PIMCO to join Janus Funds this week caused Janus stock to go up by 43%. So I decided to look around in the sector for other good mutual fund stocks to buy."

Dow Jones Industrial Average 17,113.15 (Down) Week Ending         09-26-2014

I guess that you will all be very happy to hear that I am not writing about another $60 or $80 dollar stock this week. It seems like many of the great growth stocks fall in that price area right now.

So I thought it would be a nice change of pace to recommend a low price stock that you could possibly maybe buy 100 shares of.

Hennessy Advisors Inc. (Symbol HNNA, $18.50) has $5 Billion dollars under management in their mutual funds. A small company among giants in that regard but very well managed and profitable. The IBD rating on this one is 98-99-98 so a real flyer.

 Hennessy does well with my main two investment criteria with a Return on Equity of 21.72% and a PEG Ratio of a very low 0.1776.

HNNA had 32 Million dollars in revenue on an annual basis and the company trades at a PE of 15.85. Earnings for the last quarter was $0.35 cents per share.

 Neil Hennessy

The company has quarterly free cask flow of $2.39 Million dollars.
HNNA pays an annual dividend of 0.86% so a little revenue kicker.

The great news on Hennessy is that the return on your invested stock has been great. Year to Date Return has been 57.45%. The 1 Year return was 105.6% and for the 3 year return it is 516.7%. 

So this company is small and growing and has a great future to look forward to. You can buy the stock right here, or buy it in small increments.

So have a great fall and don't get scared out of the market but always be cautious. If you have a bad feeling, then sell off a little of some stuff that hasn't worked this year, and raise a little cash.

Have a great October, and look to buy stocks that you want to own going into 2015.

Freewilly