"One of these days the US real estate market is going to recover, and when it does, you will want to be owning the stock of Lennar Corp. (Symbol LEN)"

Dow Jones Industrial Average 16,065.67 (Down) Week ending 03-14-2014
Dow Jones Industrial Average 16,303.00 (UP) Week ending 03-21-2014

Well, it looks like we are moving from the early recovery phase of the Real Estate market where cash buyers were making the most of the buys from a bloated inventory of houses that included many foreclosures to a more normal housing market with people buying houses with mortgages and the supply of houses is more limited.

One company that will benefit from these conditions is the home builder, Lennar Corp (Symbol LEN, 39.57). 

Think about this. The 30-Year Mortgage national Average interest rate right now is 4.27%, (4.24% in PA.). While this is not at the all time low rate, it is historically a very low interest rate. This rate bodes very well for Lennar's business. 

Lennar Corp.  has a PEG ratio of 1.34 on the Nasdaq web page and a PEG ratio of 0.63 on the website Y-Charts. The 5 year PEG ratio is projected at 1.04. The company has a Return on Equity of 13.05 %. The IBD earnings rating is 98, which is excellent. 

Lennar just reported a stellar quarter here this week with a $.35 cents over $.26 year over year earnings gain. At the same time, Revenues rose 37.69% in the quarter. The stock rose up to $42.00 per share this week, but the market turbulence at the end of the week pushed everything back, so a good buy price right now here at $39.57. 

The company is projecting for 2014 $2.46 cents per share and for 2015 we are looking at $3.20 and a forward PE of a low 12.68. The one year earnings growth is 21.5% and the 3 year earnings growth is 46.7% and, mind you, this was during a housing recession.

The Current ratio for the company is an amazing 30 to 1. The Quick ratio is a healthy 1.69 to 1.

I think if you just get a little pricing power back into this real estate market and just a little rise in the prices of properties, it will greatly help the earnings of Lennar, who also is an investor in properties with their Rialto Capital Management group.

Looks good to me. Sit down and have a sandwich and a beer in your new Lennar built kitchen.

Enjoy your beginning of Spring and let's put some money to work in the stock of Lennar Corp. (Symbol LEN) this week.

Freewilly

"The ongoing dispute in Ukraine, with the government instability and the involvement of Russia, may create an opportunity for the North American potash and phosphate producers."

Dow Jones Industrial Average 16,452.72 (UP) Week ending 03-07-2014



 Potash - in it's natural state

I have always liked the balance sheet and the financial strength of this company, but the business it was in seemed to usually be in turmoil.

Mosaic Co. (Symbol MOS, $49.73) is a company that was born out of a spin-off from Cargill back in May 2011. MOS is a producer of Phosphate and Potash for fertilizer for agriculture use around the world.

 In February 2014, Mosaic authorized the buy back of $1 billion of their stock, which includes 8.2 Million Class A shares from its former owner, Cargill. Also, in February 2014, Mosaic announced the opening of a plant in Brazil that will employ 1,000 people. Mosaic employs 8,400 people worldwide. 

Mosaic Co. is a leader in the Phosphate and Potash industry, with an excellent global distribution network. The world needs to eat and the world population increases by 75 Million people per year, so there is plenty of ongoing demand for their products.

So, here are the numbers: some good, some bad in the short term. The IBD earnings rating on the MOS stock is 18. Not exactly a ringing endorsement for the stock. The PEG ratio on the stock is 1.98,(NASDAQ), and the Return on Equity is 12.05.

The company does pay a 2% dividend while you wait for the world to get hungry. The Current ratio is 2.48 to 1 and the last 12 months Insiders have been buying up their stock.

 

 Revenues for the company for 2013 were $8.17 Billion dollars with Net Income of $1.584 Billion dollars. The current PE is 19.58 and the forward PE was 17.30. Earnings for 2014 are projected at $2.79 per share and for 2015, the earnings per share look like $3.43. 

The 1 year Total Return on the stock for the trailing 12 months is (-16.21%), but for the last month, it is up 7.06%. The book value for share MOS is $26.53 per share.

So, I see this investment as a 3-5 year long term investment with a lot of upside to come. I think that you should buy the stock here at the current price. We will always need more productive farming and more food in the world. There is never enough.

So, buy this stock and start your own vegetable garden,

Freewilly

"You have been selected for a 5 year mission away and you have to make a 5 year long term investment decision. Do you buy 10 ounces of Gold or do you buy 10 shares of the common stock of Google?"

Dow Jones Industrial Average 16,321.71  (UP) Week ending 02-28-2014

How you answer this question will tell you a lot about whether you are a growth or value investor and about your general investment philosophy.

Do you buy the 10 ounces of Gold at the current COMEX price fix of $1321.60 an ounce?

Or............. Do you purchase 10 shares of Google stock priced currently at $1215.65 per share? You cannot make any changes for 5 years once you make the decision because you will be away.

There are many ways to look at these choices. 

You know that $1,896.50 per ounce on the morning of September 5, 2011 was the all time high for GOLD, so Gold here appears to be at a value based on that price at 66% of that value. But if we continue to have a deflationary economy and housing prices stay stagnant, gold could go down lower from here. On the other hand, all this monetary stimulus by the US Federal Reserve to pump up the economy could de-value the US Dollar by adding too many dollars to the money supply and Gold could become the safe haven and increase dramatically in value. But Gold is a commodity, and it cannot have growth like a company with Cash flow and profits to reinvest and compound.

So what about Google, (Symbol GOOG, $1215.65)? 

Anyone I talk to says Google has run up and is expensive here at this price.  So here are the facts on this muscular company. First, you should know that Google went on a hiring spree and hired all the smartest people coming out of college from all over the world. It was like there was a sports "draft", and they got all the draft picks. So here we go.

GOOGLE had a 1 year, trailing twelve month percentage change in the stock of 50.79% and a 3 year TTM percentage of 98.18%. Formidable numbers.

 The PEG ratio is 1.61 to 1.84% depending on your source. The Return on Equity is 16.30%. The company at the end of 2013 had $72,886 Billion dollars in Assets with $59 Billion of that in cash. The current ratio, (ratio of assets to liabilities), is 4.582 to 1.

I think I am leaning towards Google for my 5 year investment!   Google Search advertising, Google Fiber, Google Glass, Google new robotics company, Google diagnostic medical products, Google Android, YouTube, the Blogger that I type on as we speak here, Google, "only God knows what the blazes is currently in their R & D laboratories", these are the growing branches of a great company.

Google is projecting 2014 earnings per share of $52.71 and 2015 earnings of $62.67 per share, (a forward PE of 19.29). 

GOOG had 2013 Revenues of 59.88 Billion dollars. The company earnings rating in Investor's Business Daily is in the 89th percentile; amazing for a company of this size.


So the 5 year contest will be on total percentage gain in the investment as of 03-02-2019. God willing, we will all be here to come back here and review the results.

So, when he takes off on his Virgin Airlines 5 year expedition trip to MARS, Freewilly will officially throw his money in on the capital growth company common stock of 10 shares of Google.

What will you do with your money and why? Please comment below. We would be glad to hear from you. 

See you on MARS!

Freewilly