Sunday, February 14, 2016

"Time to take a look around and nibble on some bargain quality stocks to add to your portfolio. It feels like the storm has mostly passed"

Dow Jones Industrial Average 15,973.63 (Up) Week Ending 02-12-2014

Well that was fun! I finally stuck my head out of the foxhole after two weeks to see if the sky was still there (and it was). I thought it might be a good time to put some of that cash to work that we had stashed over on the sidelines.

So I did not venture far out just to my backyard for a local company in Philadelphia. Lannett Co. Inc. (Symbol LCI, $25.51) is a Philadelphia PA. based generic pharmaceutical company that had just purchased another company called Kremers Urban Pharmaceuticals. Kremers just this past week got FDA approval for Temozoloride capsules, so more to add to the honey pot. Lannett founded in Philadelphia in 1942 has seen it stock price go down from a high of $72.44 to this current level of $25.51. Some of that was coattails of the Mylan Labs sell off, another generic pharma company.

At it's current price it appears to me by my metrics to be a great bargain. The company is projecting 2016 earnings of $3.74 per share which is a PE of 6.55. 2017 earning are projected at $4.04 per share and a forward PE of 6.17. IBD rating is 68 and B.

Financials are strong here also with a Return on Equity of 24.10 and a PEG Ratio of 0.72.
The Current ratio is 4.2 to 1 and the Quick Ratio is 3.3. 2015 Sales growth was 46.6 %. Target price for the stock is 37.  I would say you can buy a full amount of shares here at this price.

The next one I would nibble on is Synchronoss Technologies Inc. (Symbol SNCR, $23.46).  The company is involved in Wall Street's favorite two words: "Mobile" and "Cloud". They help companies to synchronize those two with their business platforms. No mystery here, pretty straight forward. The 52 week high on the stock is 52. Sorry for the guy that bought it at that price!

SNCR will earn $2.36 per share in 2016 and $2.88 per share in 2017. That is a forward PE of 8.05. The company has a PEG Ratio of 1.59 and an ROE of 8.80 % and is trading at 1.67 times current book value. The IBD rating is 95 and "A".

Analyst right now are 7 Buy and 1 Accumulate. The company is doing a $100 Million dollar buyback of its stock. The company has a healthy Current and Quick Ratio of 5.7 to 1. The 5 year sales growth rate is 28.80%. I would buy it here, (and have purchased both of these here).

One last thing I would add for some yield here is a company that has done very well during the market downturn. 

AT&T (Symbol T, $36.47) has an IBD rating of 80 and "A". This one you are buying for the 5.26% dividend yield. The company grew big last year because of the acquisition of Direct TV. (Must have been the Hanna and the horse commercials.) This year it will only grow at 6 -7 % so really you are buying this to act like a "bond" and give some stability to your portfolio. (I own it from an earlier point). 
It has a 15.5 PE , so you don't have to be real aggressive buying it here. Nibble. The company will earn $2.84 per share in 2016 and $3.00 per share in 2017. 

(The aforementioned Hanna and her horse AT&T/ Direct TV commercial)

So don't get too crazy this week but you can probably put a little money to work on Tuesday when the stock mark reopens.  We are celebrating Lincoln and Washington's Birthdays on Monday.

(the aforementioned George Washington and Abraham Lincoln, US Presidents)

Thanks and have a great week and Valentine's Day today, here in the USA,


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