2020 , a new year and decade and a list of selected stocks to get you started. Put a 20% money market fund base in first, then pick some stocks.

2020, moving to a bold new decade trying to figure out where to find value in these stock markets. I came up with a "diversified list of stocks that I feel have the best chance to give the highest total return including their dividend and that also provide you a margin of safety by either being really cheap or really "market tested" good". I am also suggesting this year that you put 20% of your funds in Money Market to be available for purchasing opportunities that will arise in what is expected to be a very volatile market year.

 Occidental Petroleum - (OXY) a merger asset value play

I had grouped stocks together in 4 groups of 4 stocks last year and it worked out really well so I am doing it again for the 2020 picks. I think an overriding theme this year  is ,"Quality and Opportunity" , with a fairly "Case-hardened" list of stock picks.

Group A
___________

Occidental Petroleum (Symbol OXY)
Boot Barn Holdings Inc. (Symbol BOOT)
Waste Management Inc. (Symbol WM)
Phillip Morris International Inc. (Symbol PM)

Group B 
___________

Paypal (Symbol PYPL)
Goldman Sachs Group Inc. (Symbol GS)
Goodyear Tire & Rubber Co. (Symbol GT)
Progressive Insurance (Symbol PGR)

Group C
___________

Eli Lilly (Symbol LLY)
Nestle S.A. (Symbol NSRGY)
Berkshire Hathaway Inc. - B shares (Symbol BRK.B)
Timken Co. (Symbol TKR)

Group D
___________

Adobe Systems (Symbol ADBE)
Levi Strauss & Co. (Symbol LEVI)
Medtronic PLC (Symbol MDT)
Mylan Labs (Symbol MYL) -  ***(Merging with Pfizer's Upjohn division to form new company, "Viatris")

Those are my picks after about 5 revisions. I wanted to make sure that each pick was worthy to stand on its own.

I love these Memes with the cat! They were the best thing from 2019, aside from my stock picks!

I hope that 2020 brings you a healthy, happy and prosperous new year. I am making these picks on 12/30/2019, but the clock will start 01/01/2020 for calculating returns. 

This is the 11th year of Freewilly's Stockpicker Blog and my hopes are that these are my best suggested picks ever. As always, contact your licensed financial advisor to go over any investments you are going to make to be sure that they are appropriate for your particular financial situation. 

All the best.....  Freewilly

It is time to recap how I did on my 2019 Value stock picks. Blackstone (BX) lead the way with a 79.91% YTD gain

Dow Jones Industrial Average 28,135.28  Week of 12/13/2019 
S & P 500 3168.80

It is that time of year when I review how my 2019 stock picks did that I made at the beginning of the year.  I have been doing this for a number of years, however no year has ever done as well as this year. I broke the stock picks into four groups A-B-C and D with 4 stocks in each. 
      The top winner of all groups this year was Blackstone (BX) run by Stephen Allen Schwarzman an American businessman, investor, and philanthropist. Blackstone which switched this year from being a REIT to becoming a Corporation killed this year with a 79.91% YTD gain. (He also gave you a truckload of dividends and I actually owned this one). 

Stephen Allen Schwarzman

Stephen is a graduate of Abington High School in Pennsylvania and his township actually borders with the township I live in. Even with such high returns he is a very conservative investor and is always guarding against undo risk in Blackstone's investments. 

So next I will give you the list of the 4 groups and their capital gains returns. There are no guarantees that I can do this again next year!!!

Group A

Alibaba Group Holding Ltd (BABA:NYSE) - Up 49.49%

United Rentals Inc (URI:NYSE) - Up 58.72%

Citizens Financial Group Inc (CFG:NYSE) - Up 34.95%

Altria Group Inc (MO:NYSE) - Up 1.56 % ( Altria had diversified into Juul and Cronos (Cannabis) and has written down $4 Billion of the investment.

Group B

Alphabet Class A (GOOGL:NASDAQ) - UP 28.89%

Capital One Financial Corp (COF:NYSE) - Up 38.07%

Penn Virginia Corp (PVAC:NASDAQ) - Down (51.37%)

AT&T Inc (T:NYSE) - Up 34.06%

Group C

Whirlpool Corp (WHR:NYSE) Up 38.88%

Bristol-Myers Squibb Co (BMY:NYSE)/Celgene Corp (CELG:NASDAQ) (Merger) - Up 22.78%

FedEx Corp (FDX:NYSE)  - Up 2.69%

Intel Corp (INTC:NASDAQ)- Up 23.14%

Group D

Micron Technology Inc (MU:NASDAQ) - Up 61.36%

Oshkosh Corp (OSK:NYSE) - Up 48.46%

ZTO Express (Cayman) Inc (ZTO:NYSE) - Up 36.26%

Blackstone Group LP (BX:NYSE) - Up 79.91%

My biggest loser Penn Virginia, (symbol PVAC), actually has a PE of 1.5 and a Return on Equity of 70.30%! Unfortunately it is in Wall street's hated sector of Natural Gas and is shorted by funds along with my Gulfport Energy, (stock symbol GPOR), that was one of my picks earlier in the year. I would wait one more year before investing in this group. (too early!)

If you merge all the numbers together overall I had a 31.74 gain average return and that beat the S&P 500. I used the cutoff date of 12/13/2019 to calculate all returns.

I apologize for the small number of post this year. It was frankly difficult to post value stocks that had a good margin of safety at the current prices.  I would recommend working towards a 25% money market base in your accounts in 2020, (cash not bonds), and then invest the rest in good quality value stocks. I should have my 2020 picks posted in a few weeks.

 31.74% Gain, not too shabby. Hope 2020 brings sunny skies!

Have a wonderful and joyous holiday season.  Please stay tuned for my 2020 stock picks.

Freewilly

Has the tide finally turned to Value stocks? Did I mention also that treasury bonds with their inflated asset value pose some risk here.

Dow Jones Industrial Average: 27,219.52       09/15/2019
S & P 500 Index: 3,007.39

We have been told our whole life to barbell bonds with our stocks to be the "safety" part of our portfolio. Most balanced funds traditionally are 60% stocks and 40% bonds. But maybe with the asset values of intermediate treasury bonds so inflated and their payment yields down in the 1's , we should be comparing them to money market funds instead of stocks.  Why be holding the bonds and assuming the risk of their asset value going down,  when you can have the safety of a Money Market fund with 1 to 1 and 1/2 % less yield, but with no risk at all and a tiny yield. Be Safe. Move some of your intermediate term bond asset holdings into money market to be exposed to less bond asset risk. Enough said.

First on the value stocks, I want to apologize for my Mallinckrodt pick (symbol MNK). I could  never have imagined that a company with $3 Billion dollars in revenue a year and the maker of Methadone that helps people with heroin addiction could be driven out of business by hundreds of states and counties attorney generals suing them for their production of pain killers. What about the DEA who monitored the production numbers of these pain killers and the doctors writing all these scripts for them?  Where is their culpability and responsibility in this?
The lesson learned?  Don't buy stocks with large debt loads that could get caught in a situation 
where they might not be able to get financing if surprise events occur. Avoid this risk.

So what stocks do I like here? :

ADT (Stock symbol , ADT, $5.94) is a stock liked by famed Value investor Bill Miller.  I am on board also for this alarm and security company that is in partnership interfacing their alarm systems with Amazon's Alexa. Good things should happen here and they pay a 2.36% dividend. 2020 earnings per share are projected at $1.08 per share.

I like a couple beverage stocks here. National Beverage (symbol FIZZ, $46.53) maker of the very popular La Croix beverage brand. 

 Also Monster Beverage  (symbol MNST, $58.86) , who is part owned by Coca-Cola is a stock I like here.  Both of these stocks have compressed a bit from their high points and present a rare opportunity to be purchased here at value prices for stocks in this hot beverage sector. 

I usually hate semiconductor stocks because I have been burned by this cyclical semiconductor industry in the past but right here I like Xilinx, (symbol XLNX, $105.24).  7 to 1 Current ratio here, (staying away from companies with debt), and a very good Return on Equity.  When things with China and the tariffs get sorted out a bit this company should be in great shape to take advantage of it. 

 "I'm dumping bonds and moving to large cap value mutual funds" 

Hope that you have a great weekend and a profitable Q4 in the stock market. 

Check the stocks you own for debt levels and move some money into some decent Value stocks.

Freewilly

TIMKEN - keeping the world in motion with its bearings, gears and power transmission products. A family business that runs smoothly and profitably.

Dow Jones Industrial Average  26, 599.96  (UP) Week ending 06/28/2019
S & P 500 - 2941.76

TIMKEN (Symbol TKR, $51.34) is a company we do not talk or think about much, but their products have a profound effect on everything around us. TIMKEN designs a growing portfolio of engineered bearings and power transmission
products. Agriculture, Automotive, Aerospace, Commercial vehicles, Construction, Defense, Energy, Food and Beverage, Industrial machinery, Metals, Mining, Outdoor Power Equipment, Rail and Wind Turbines all use TIMKEN products.

This company is ranked #1 in its area on IBD, (Investors Business Daily),  with a Rank 91 and A rating in their category. The company is very quietly up YTD 37.57% and pays a solid 2.18% dividend.

Current earning projections for the year are $5.25 with a PE of 9.58. Next years earnings for 2020 are projected at $5.62 and a Forward PE of 9.03, very reasonable in this market. 

2018 sales growth was 19.2%. Recent quarter over quarter sales were up 10.90%. (From one quarter to the next). The company did $3.58 Billion dollars in sales last year. 

On the financial side, the company has a Current Ratio of 2.53 and a very solid Return on Equity of 20.04.  I think even Warren Buffett and Charlie Munger would like this stock and its businesses, but probably would not be able to gain a large enough position in the stock with the market cap of only $4 Billion dollars. Good for us retail value investors.  

TIMKEN , buy it Monday to kick off the second half of your investing year.  The first half was sweet, with my 401K account being up 17.89% with a nice mix of stocks and bonds.

Enjoy your summer and 4th of July holiday in the USA.

Sincere regards,

Freewilly 

Gulfport Energy - Oppenheimer downgraded it with a target price of 14. The stock is at $6.67 and is trading at 0.34% of book value. The company has no debt and can buy back shares. I think I am getting the hang of this value investing thing.

Dow Jones Industrial Average 26,543.33   Week Ending 04-26-2019  (UP and very high)
S&P 500  2939.88


First good morning. I wanted to welcome value investors Mohnish Pabrai and Paul Lountzis to my side bar of important Value investors. They both should have been there long ago, and there are other folks that should also be added to this forum.

You have not heard from me much past my 2019 New year selections this year because these Value stock ideas are not plentiful at this time with the Dow at 26,543.33.

Let me first say that Natural Gas is a sector that wall street likes to ignore. It is not sexy.  Sometimes to the point where it becomes stupid. Gulfport Energy ( Symbol GPOR , (like "get poor") is trading at $6.67.  

What is it that I like?

In the last 12 months insiders have been buying the shares at a rate of approximately 10 to 1

The company did $1.36 Billion in sales last year and produce $430 in Income.

The current Book value of the company is $19.42 cents per share.

The company has very little debt, no leverage.

Sales the last five years are up 38.80%

Although earnings are coming down this year the company still has a forward PE of 5.13 in a stock market with a PE of 18. 

Management runs this company very well and is always looking to shareholder value.

Their assets are in the safe confines of the USA in Ohio and Oklahoma.

Someday LNG will take off with a vengeance!

So Freewilly says buy this one now and hold it for a couple years.

Hope you had a better April than me. It was all funerals for me and my favorite cat Bowie passed away. To all we lost, hope you are all now in heaven.

 My Bowie boy. a friend to all people and animals.

Well on to May we go. Will the traders sell in May and go away? Maybe not.


Best Regards,

Freewilly

Sometimes when you are Value investing you need to go ugly. United States Steel Corp. is my offering up in that category and is trading below current book value - Stock Symbol " X"

03-17-2019

So if you always wanted to be like Andrew Carnegie or J.P. Morgan and wanted to own U.S. Steel,  now is your chance. After years of slumbering and having foreign countries dumping steel in their markets, United States Steel Corporation, Symbol X, $19.66, now seems to be able to compete on a leveler playing field in their business again.

Many of the "Value guys" have owned this stock and lost patience and moved on, including David Einhorn and Leon Cooperman. Currently David Tepper and Joel Greenblatt hold some positions in the stock. David Tepper is very familiar with this area in Western PA with his college Alma mater located there. 

So here is what I like about the stock. The stock currently has a breakup value of $23.86 per share or trading at 0.82% of current book value. 

The company currently offers a Return on Equity of 29.40%.

The PEG Ratio on the stock is currently 0.24

The Price to Cash flow is 3.39

The price to Sales is 0.24. 

If you were looking at these numbers without knowing the name or business of this company you would be jumping in quickly.  

Current Ratio  1.5 to 1.

Sales Quarter over Quarter up 17.80 %

am I starting to get your attention??

The earnings will be dropping from a spike up year last year with the tariffs helping them out and the tax breaks. But they, (X), is still sporting a Forward PE of 7.89.

I think there is a lot of headroom in this stock and if a favorable trade deal comes through there could be better times ahead.

So be like Andrew Carnegie and own US Steel!  Remember when Carnegie had that elephant walk across the new steel bridge to prove that it wouldn't collapse? 

Here are some of Andrew's old shares. 

Sometimes you just need to go ugly. Yeah you could buy NUCOR , (NUE) and snooze yourself to sleep. But we are here to make some real money. So buy some X , and then just wait awhile.

Have a great St. Patty's Day!  

Freewilly

So what lies ahead for the new year 2019. I will present what I think are the best value stock purchase opportunities for the year. Good Luck.

Dow Jones Industrial Average 23,995.95 (UP) Week ending 1/11/2019
S & P 500 2596.26  

Well here we are again,  resisting the call of those swanky growth stocks and bringing to the table the best ideas in the Value stocks, that I think that will present the best chance for you to make a very good return on your invested money.  

I decided to put them in groups of four this year because there are 16 stock picks. We will start the clock on Jan. 1st and end 12-31-2019.

So here they are stating with Group A:


Group A:

Alibaba Group Holding Ltd (BABA:NYSE)

United Rentals Inc (URI:NYSE)

Citizens Financial Group Inc (CFG:NYSE)

Altria Group Inc (MO:NYSE)

Group B:

Alphabet Class A (GOOGL:NASDAQ)

Capital One Financial Corp (COF:NYSE)

Penn Virginia Corp (PVAC:NASDAQ)

AT&T Inc (T:NYSE)

Group C: 

Whirlpool Corp (WHR:NYSE)

Bristol-Myers Squibb Co (BMY:NYSE)/Celgene Corp (CELG:NASDAQ) (Merger)

FedEx Corp (FDX:NYSE)

Intel Corp (INTC:NASDAQ)

Group D:

Micron Technology Inc (MU:NASDAQ)

Oshkosh Corp (OSK:NYSE)

ZTO Express (Cayman) Inc (ZTO:NYSE)

Blackstone Group LP (BX:NYSE)

Some of these names I have mentioned during the year and continue to support them in 2019,  while others are totally new ideas. Some like Altria , are disrupting into other businesses of Juul Vape and Marijuana. Some are merging into powerhouses like BMY/CELG and will be dominant leader in the cancer medicine business. Others like Whirlpool are strongly focused on creating shareholder value.

There were lots of automotive stocks that look cheap here like FCAU, GM, and KMX,  but I steered away from them this year for now. My concern is revenue growth with them. 

Well the other thing going on this afternoon is the Saints/Eagles football game. I think my cat Bowie has placed his vote for the winner.

I hope that you have a healthy and prosperous new year.

Freewilly

Battered but still standing and holding value stocks, the 2018 trading year is mercifully over. Here are the results of last years picks as of 12/27/2018.

Dow Jones Industrial Average 23,327.46  (Down)  as of 12-27-2018
S & P 500 Index  - 2506.85  (Down)

Like Rocky Balboa the famous Philadelphia fighter we are battered and bloodied but refuse to go down and remain standing with our Value stock holdings. Some of them had been up during the year where you could have sold them off, two of them actually got bought out but if you continued to hold the stock of the purchasing company you ended up being down. 

Truth be told, if you had closed out your positions at the end of September you would have been up on most of the stocks.

So here are the results for better or worse:

Alaska Airlines- Symbol ALK   (-19.12%) add 2.12% dividend offset
J.P. Morgan - Symbol JPM        ( -10.17%)  add 3.13% dividend offset
Andeavor ANDV, bought by Marathon Petroleum Symbol MPC - (12.79%)  add 3.16% dividend.

InTEST Inc. - Symbol INTT    (-33.18%)  
Express Scripps-  Symbol ESRX , bought be CIGNA Symbol CI -( 7.11%)
Gilead Sciences-  Symbol GILD - (14.62% ) add 3.68% dividend offset

.... and now the three winners: Mastercard -Symbol MA - +22.66% plus 0.71% dividend add
                                              Square - Symbol SQ - +59.04% 
                                              Discovery Communications -Symbol DISCA - + 9.27%

and then there were three more losers..........

Manulife Insurance Symbol MFC (-33.43%) add 5.31% dividend offset

Jazz Pharmaceutical - Symbol JAZZ - (-10.89%)

Brown Forman B issue - Symbol BF.B - (-13.82%) 

If you wring that all out overall,  and count the dividends in,  you end up with a (-14.34% Loss for the year for the overall portfolio.  That is better than the 16 % YTD loss for the S &P 500 and the 21.5% loss for the NASDAQ, but if you add in the dividends they are about on par with the average losses in the market. (I.E. Value investing this year was no better at protecting you than what the Index averages would have given you.)

But remember Howard Marks said that the top performing value mutual fund managers are often in the lowest quarter percentile for some years, so some hope there.

Next week my Value Picks for 2019.

 "Good time to buy some Value stocks, but only in small increments."

Have a great 2019 investing year,

Freewilly