"Here are a couple of Small Cap stocks you want to buy when things settle down a little in the market, (so not on Monday morning!). Myriad Genetics (MYGN) and Dorman Products (DORM)"

Dow Jones Industrial Average 16,361.46 (Down) Week ending 04-25-2014

At some point, the unrelenting pounding of the momentum stocks is going to slow up or stop. Dividends are nice, but you need that growth component in your portfolio to really have the great gains over time. I have picked two stocks here that will probably go down more before they go up, but they are the kind of stocks that you will need in your portfolio to produce the above average returns that you seek. 

Myriad Genetics Inc. , (Symbol MYGN, $38.8), is the first of the pair I am bringing to the table. When you go to buy, I would purchase this one first. MYGN has a PEG Ratio of 0.2772, so lots of growth per price of the stock and a Return on Equity (ROE) of 27.44%. 

It also has great Quick Ratio , (9.28 to 1) , and Current ratio , (6.75 to 1). 

Myriad is a major company with $613 Million in Revenues. Revenues have increased every year for the last 5 years and Wall Street loves revenue growth. The company's stock price has a 1 Year gain in the TTM , (Trailing twelve months of 41.52%.)

With a PE of just 16.28, MYGN is a BUY on any kind of pullback, maybe at $37. Earnings per share for 2014 is projected at $2.20 cents per share.  

The second choice when the time is right to purchase is:

 Dorman Products, (Symbol DORM, $57.12). 

This one is kind of a Ben Graham stock: just a "good old solid company" and is a maker of truck parts; not a very glamorous business. 
 But to put it in a different light,  this stock in Peter Lynch parlance has been a "4 Bagger" in the last 3 years going from a price of 15 to a price of 60.

The company had 2013 Revenues of $664.47 million dollars and has had revenue gains every year in the last 5 years. The 3 to 5 year earnings growth on the stock has been 33.2%.

Like Myriad, Dorman has great Current and Quick financial ratios. The Quick ratio is 4.58 to 1 and a Current Ratio of 4.714 to 1. Again, great financial condition.

The PEG Ratio on the stock is 1.76 and is a little high and the Return on Equity is 21.98%, so very good. The PE on the stock is currently 25.59.

The earnings per share is going from $2.20 per share in 2013 to $2.64 per share in 2014 and moving to $3.06 per share in 2015. (Are we really talking about 2015? Yikes!!).

There are currently 6 BUY recommendations on the DORM stock. I would wait until you could get this one on a dip for around $55.00 per share. 

Although storm clouds can be very pretty and photogenic, we will wait for some clear skies in the market before we purchase these two stocks, but we should definitely add them to our "Wish List" or "Tracking List" for future growth purchases.

Have a Sunny week and smile,

Freewilly

"Last week, I was telling you to sell a dividend stock to buy a growth stock. This week, I am telling you to buy a dividend stock because of its hidden growth and rising cash-flow. The stock is Verizon (Symbol VZ).

Dow Jones Industrial Average 16,409, ( Way UP), Week ending 04-18-2014

Verizon Communications, Inc. (Symbol VZ, $47.60) is not a stock you would normally expect to see in this venue. The fact of the matter is, though, that once Verizon purchased the other half of Verizon Wireless that they did not own from Vodaphone, they suddenly became a major cash generating machine. They made the purchase with really cheap money and it did not really cause a problem to their balance sheet.

 The price of the stock has never really reflected the impact of this tremendous asset purchase.

Let's talk first about Free Cash Flow: $5.484 Billion dollars. Also with that, you still get your 4.5% dividend payment every quarter. The PE on the stock is only 11.99. The company has an IBD earnings rating of 83.

My key measures Return on Equity of 34.5% which is excellent and a PEG Ratio of 1.30, also very good. Verizon operates at a Gross Profit margin of 61.49%. The company is currently sitting on $53.5 billion dollars in Cash and Cash equivalence. 

Earnings for 2014 are growing at a rate of 23.83%. 2013 earnings per share was $2.80 per share. 2014 earnings are projected at $3.50 per share and $3.85 per share for 2015. Verizon reports earnings on Thursday and they are projecting .85 cents per share for the quarter.

Verizon has partnered with Redbox for an instant streaming package to compete with Netflix and others. 

19 analysts have a Buy rating on the stock. The one Year return on the stock is (-8.17%), so you are getting a bargain here.

Some other interesting numbers: The company has a Market Capitalization of $198 Billion, but has an Enterprise Value of $293 Billion. There seems to be a disparity of value being recognized here. Time is working in Verizon's favor, and yours, if you own the stock.

So, I think you you can see the potential here and get 4.5% while you wait for it to happen.
I would buy the stock and get plenty of sleep at night. I think you can expect a 12 -15% annual total return from this one.

Hope you have a great week.  All the best with your intelligent stock trades,

Freewilly

"This was the week that it became apparent to take profits on my GE stock and its comfortable 3% dividend and pour it into an Under Armour (UA) stock that had dropped 25% from its highs in the great swoon"

Dow Jones Industrial Average 16,026.75 (Way down) Week ending 04-11-2014

At the end of this week with all these fine growth stocks beat up and portfolio managers re-balancing their portfolio mixes into the slower growing but less volatile large cap dividend stocks, I decided it was a good time for me to go in the exact opposite direction. 

My GE stock was unscathed in this downturn and it is a stock that I used like a "bond" in my portfolio with its dividend and stability. So I took profits on it and gave up the dividend and put it into a super growth stock which I already knew was going to be splitting 2 for 1 shares and was 25% off of its highs, so it was time to make the move. That stock, which I owned once before, is Under Armour.

Under Armour Inc. Cl. A. (Symbol UA, $101.88) is a company that had $2.33 Billion in sales in 2013. It has a Return on Equity of 17.81% an a PEG ratio of 2.869. UA had 2013 earnings per share of  $1.45 per share. 2014 earnings per share is $1.85 per share and 2015 is $2.32 per share, so a nice earnings growth curve.

 Under Armour operates at a healthy 51.31 percent Gross Margin quarterly. They are financially healthy with a 2.646 Current ratio on the balance sheet.  

The YTD return on UA is 16.7% and the 1 Year return is 81.83%. The 3 year return on the stock is 178%. I will take that any day.

Some other stocks that look like a great buy here after the sell-off are Red Hat Inc. (RHT) and Mastercard (MA).  I also like Disney (DIS)  because of the Captain America success and the upcoming Star Wars series of movies.

I also like all three of the 3-D Printer stocks here, as they have been decimated in this downturn.       (I own all three!) .

They are:

3-D Systems (DDD) , Stratasys Ltd. (SSYS), and Exone (XONE). 

So, think like Anthony J. Drexel and J.P. Morgan and corner the market while everybody else is panicking, (like in 1873), and buy the great growth stock names while the other guys are dumping them.

Enjoy these wonderful Spring days in the US, and keep the faith in growth investing.


Freewilly

"Man, that was one UGLY Friday 4-4-2014 with the NASDAQ down over 100 Points, but the Dow Jones keeps moving on up, and I have a two-pack of stocks that will make you happy by the end of the year."

Dow Jones Industrial Average 16,323.06  (UP) Week ending 03-28-2014
Dow Jones Industrial Average  16,412.71 (UP) Week ending 04-04-2014

Well, this Friday past, it looked like the haters were out, smashing the high flying momentum stocks on the NASDAQ and taking no prisoners. Netflix, Google, Amazon, Apple; they didn't care what the name was, they were just selling it if it was listed on the NASDAQ.  Evidently, there is some kind of UGLY rotation play on now to sell fast growing stocks and to replace them with stodgy old slow growers.

I guess they do not pay any attention to the William O'Neill - Investors Business Daily, "a priori knowledge"that stocks cannot move any higher until they break through their old highs? Me, I listened. I am holding my shares, because I know where they are going. (UP!)

So, here is an April Two-Pack of stocks for you.

Lions Gate Entertainment (Symbol LGF, $26.79) keeps rolling out the hits and continues to build their library of great media content. See http://www.lionsgate.com/   Revenues for the company are $2.694 Billion dollars and YOY Quarterly EPS growth is 118.5%.  The PEG ratio on the company is 0.0404 and the Return on Equity is 70.96%.  The Twelve Month Trailing Net Income is $265.85 Million dollars. They have Movies, TV Shows, and TV Channels: what more could you want? InvenSense (Symbol INVN, $21.22)

is really a 2015 story,  but the mutual funds have already started to accumulate shares. InvenSense is a play on the next wave of consumer devices in the "Wearable Electronics" market that is expected to explode up to over 400 Million devices. InvenSense will manufacture the motion-sensing chips for this market. The Motley Fool is all over this one.

CNBC describes their profile as such: "InvenSense, Inc. is engaged in devices for the motion interface market that detect and track an object's motion in three-dimensional space. Its Motion Tracking devices combine micro-electro-mechanical system (MEMS) motion sensors, such as accelerometers, gyroscopes and compasses, with mixed-signal integrated circuits (ICs) and algorithms and firmware that intelligently process, synthesize and calibrate the output of sensors for use by software applications via an application programming interface (API). While its solutions have broad applicability, the Company targets consumer electronics applications such as smartphones and tablets, console and portable video gaming devices, digital still and video cameras, smart televisions, navigation devices, toys, and health and fitness accessories." 

InvenSense currently has Revenues of $248.74 Million dollars, so really it is just in its infancy, as far as revenue growth. Earnings growth this past year has been 44%. The current PEG ratio is 2.15 and the Return on Equity is 9.39%. Zack's has a buy recommendation on the stock. This is a little early, but when the dust clears from this current stock rotation, you will be in good shape with this one. 
The one year chart for InvenSense looks good, moving from $10.00 up to this $22 area. 

Here is a picture of the InvenSense 9 axis SDK kit

Apple, Samsung, Nike, Under Armour, will all be head long into this new Health and Fitness "Wearable electronics" product market category.

 Nike already has their own"Fuel" device out there. You can see it below:









So, all this should be enough to keep your mind busy during these wild market swings. Cream always floats to the top, and these two stocks will be great additions to your portfolio and end up as top investments.

So keep smiling. Spring has finally arrived.

Freewilly