Monday, February 22, 2016

"Things move so fast in this market that two blog subject topics that I had picked out ran away before I could even get to discuss them. Well maybe the third idea is now the most timely. Life moves fast!"

Dow Jones Industrial Average 16,392 (UP) Week ending 02-19-2016

I had it all setup perfect for the this week's blog. IBM was sitting there at $123.00 and had a 4.4% dividend and was going to earn over $14.00 a share next year. I was going to tell you all about how Warren Buffett was really right about IBM and that it was a great value purchase here. I even tweeted about it early in the week. Perfect setup. Then the stock went up $3.00 one day and then $7.00 dollars on the next day and  it was at $133.08. What happened? It had not moved in ages? Evidently people must have been swooping in for that dividend with very little downside risk. It is still cheap here but not as magical as it was at $123.00. Oh well.

Not to be deterred , I watched ARRIS Corp., ,(Symbol ARRS), get beaten down to $20.70 in it's last quarter as a separate company. ARRIS has done an inversion merger with PACE from the United Kingdom and the combined company will be number one in cable modem/wireless routers. They will be doing an efficiency layoff because of overlapping jobs and also combined will earn $3.23 per share. The earnings report had missed and they were guiding down for next quarter because of an expected write-off with the layoffs. ARRIS will also be picking up the tax savings from the inversion transaction. On this one I went in and bought some shares, (after my IBM experience), things move fast!.  The stock of course bounced back 8.6% once people realized it. Great for my investment, but the opportunity vanished for the blog purchase opportunity. Sorry!

Thank God for the weekend! It gives stocks a chance to stop for 2 days and you can get some stuff figured out for investment ideas. So frozen in time here a second, I like Gray Television Inc. (Symbol GTN, $10.78). This one has been all over the place earnings wise and on the investment chart. $0.84 cents per share last year, $0.59 cents this year and $1.68 to $1.76 per share projected for next year. 

These guys own a whole bunch of TV stations in mid size and small markets. They also had just had acquired Schurz Communications and should be juiced up for a spurt in sales and earnings the end of this year, 2016.

Analysts are 4 Buys , 1 Overweight and 0 Holds so light coverage here. 

Here are the rest of the numbers. A forward PE 6.98. PEG Ratio 1.86 and ROE is 15.50%. No dividend here. Quick and Current Ratio is 2.5 to 1. Price to the current Book Value is 1.85. 

Price to Cash Flow is 7.64, (below 10 is good for me), Sales Q/Q is 14.70% gain and Sales for the Last 5 Years were 24.5% gain.

Price target on the stock is $20.40 , (but I am looking for more like $17.00, 57.69% gain, which it has reached before, a nice gain).

EPS this year will be up 156.30% and EPS next year will be $205.39%. 

This just looks like a nice Value trade to me. Value Stocks seem to be in, while Growth stocks this year seem to be mostly treading water.

So buy some Gray Television Inc. (GTN) here and sit back and wait a while for this one to develop and play out for you. This is a 12 - 18 month investment. (Not a short term trade).

Thanks and have a great week,


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