Investing in the old 5 & 10 store concept - now inflated to $1 dollar

This is a picture of Sines 5 & 10 cents store in downtown Quakertown, Pa. that was in our Pennsylvania magazine July/August issue. They are fine example of a long time retail concept of putting a whole fun store together of inexpensive items. Woolworth's and Ben Franklin stores are my personal favorites. So I thought in these hard times with 10% unemployment and no Olympics coming to Chicago, that I would see how these stores were doing from an investment standpoint.
The company doing the best with just tripling earnings is Dollar General Stores. 8300 stores.The only problem is they are owned by privately held KKR Kohlberg Kravis, & Roberts. You can purchase on the Euronext Amsterdam exchange, (symbol KKR) for $8.96 cents a share. That symbol represents a 30% interest in KKR and its whole porfolfio of 49 companies, so that is pretty diluted ownership of the "dollar store".
Over a three year period your best bet would have been to own Dollar Tree , (symbol DLTR). It has been up 47% over that period. This one would be the best long term investment for an IRA account. 99 Cents stores , (symbol NDN) , would have had you up 9.6% over the last 3 years. Family Dollar Stores , (symbol FDO), is down <-3.9%> over the last three years, but that was mostly because of a last quarter miss on earnings and downdraft of the stock. This investment may be the best from a value purchase standpoint, with decent earnings per share, ($2.02 in 2009/$2.26 in 2010 forecast) and pretty good growth , 12-13% projected sales growth. So if your not spending your $1.00 on a lottery ticket, go and buy something at your local 5 & 10 store . One worth a visit is the Jolly Trolley store, in sunny Dushore, PA. It is at the corner where the only stop light exist in Sullivan County, PA.

Happy shopping,

Freewilly

The late Mitch Hedberg tribute on the Stockpicker blog

Welcome to the first tribute to Mitch Hedberg, my favorite late comedian. If Mitch were here , I think he would give us something like this.
" Welcome to my first late Mitch Hedberg tribute on the Stockpicker blog. We will have fun. I don't know why people call me "late", because I arrived here in heaven "early". There were no escalators or stairs. Hedberg party of one. Sir you have arrived too "early". We are not ready for you yet. Please stand aside over by the fire exit. Wow. I do not want anything to do with fire at this stage in my travels. I will stand over here quietly and have one of these delicious Cinnamon rolls. They are a tasty treat.
"While I wait, I will tell you what happened when I called a stock broker. He told me I should buy something that I can relate to. Well me and my friends after a night of drinking ,drive over to a , Jack in the Box (symbol JACK). We pull in to the drive thru and start talking to the little red post with the person's voice inside of it. Two words that you will need to remember to say, no matter how drunk you are, without laughing. "Bonus Jack". This is the code word. You pull up to the window and the young lady will hand you a big red & white bag. It is delicious because you have the munchies. You have no idea what you are really eating.
Then we will drive over to Micky D's , that's right McDonald's (symbol MCD). Beware of the clown dude there, he is very scary. We will buy mouth watering french fries with salt. The fries box is deceptive. You will be fooled. You see the gold and white stripes on the inside of the fries holder and think you have more fries then are really there. Bummer. You gave away all your fries. You will need to buy more. These companies must have great returns on equity, because twice we have been been duped. Hey wait, we will buy their stock, and get our money back. Thank you for coming to my late Mitch Hedberg tribute on the Stockpicker blog. It was fun to be the guest host. I think I will sit down for a while now, till it is my turn to enter heaven."

Mitch, thank you for coming on the blog. You are the best. Thank you for the great food stock
picks.

Freewilly

Transport stocks have bottomed and make a turn

My dad was a bus driver. He worked for Public Service in New Jersey back in the
Fifties driving Pennsauken to Camden to Philadelphia. He passed away when I was very young. But I can remember when I was five, he pulled the bus into our driveway. To me it looked like the size of an aircraft carrier,very impressive. My kudo's go out to all the bus drivers out there, (especially my buddy "Coop" , John Cooper devout Eagles fan), that turn that big round steering wheel around racking their back and maneuvering these mighty vehicles around in city traffic.
Anyway this is my segue over to discussing the trucking transport stocks and a shipping stock. I have been tracking YRC Worldwide (symbol YRCW), the old Yellow Freight, in my watch list forever, to see if there was any life in the sector. I was going to recommend it last week at $2.50 but I got busy and needed the above Public Service bus postcard image scanned from my collection and never got around to blogging the post. Well the stock shot up last week 46% to $3.66 a share. (the stock traders lament, the one that got away). Well you can probably still buy it. I would wait till though till after options expiration the third Friday in October.
Some other names to look at in the transports would be Knight Transportation, (Symbol KNX), DryShips (Symbol DRYS), and J.B. Hunt Transport Services, (Symbol JBHT). I have traded DryShips between the $5-7 price range and this was a stock that traded as high as $116.00 share. It is a traders stock to move in and out of.

Happy trading. Be careful with October coming!

Freewilly

Divine calculations and stock picking

I was watching a rerun of the movie the DaVinci code last week with all its many puzzles and calculations that they go through to get to what appears to be the truth. Well it of course made me think about how many times I had bought stocks because it just felt right at the time when the "stars of the market", kinda of the place where everything sat at that moment frozen in time, just seemed to click into alignment to make a certain purchasing decision.
Well , even though Snagglepuss told me to exit stage left, which I did, going to many cash positions, I still have been having these "feelings" about the compelling value of some of the tech stocks here the last couple of weeks. They have done a great job managing their inventories this time around in recession and could turn some earnings around to the bottom line very quickly. These companies are also are showing respectable revenue growth and have good quick ratios (%'s of assets to liabilities on the balance sheet).
So I followed my imaginary "Rose line" and it took me to AT&T Inc. (symbol T). It has a a 6.3 % dividend and plenty of cash to back it up. Current ratio is 1.6 to 1. That beats a half percent at best on sitting cash.
My second pick was to add a high tech/ higher beta tech stock to the IRA account
to add some horsepower to bring life back from the Oct-2007 to June 2009 downside debacle.
That stock is Marvel Technology (symbol MRVL). It has a lot of interesting technologies going forward. It has a 3:1 current ratio. I was lucky enough to buy it two days in front of earnings and guidance, which were good, at 14.25 and it is now up near 15.75 on the announcements. They reported the same day as Dell , so it generated some "daily tech interest".
With that I will warn you that on review in the past I have lost more money in speculative technology stocks than in any other investment category during the old"dot.com" days. These two are not speculative investments. Also other disclaimers, I do not have a series 7 license
and am not a professional investment advisor. Just a guy following my "Rose line" where it leads me.

Sincerest regards,

Freewilly

Exit - Stage Left - Compliments of Snagglepuss - some stockmarket advice

If you remember SnagglePuss , the Pink Lion from 1959

who appeared on the old "The Quick Draw McGraw show" and "The Yogi Bear show" he had a few famous lines he always used.

"Heavens to Murgatroyd" was among the catch phrases. The one

that the lion would use when he saw trouble brewing was "Exit, Stage Left" and he would make a fast escape from the tiny hunter "Major Minor", and dart off out of the way of trouble.

Well the point of all this is that this market has come a long way without any kind of major

correction. It would behoove you to exit stage right (or left )and take some profits (or tax losses) and move a good portion into cash for this September- October time frame. The market, even in good times ,will have issues in October, and in bad times with revenue growth being questionable and unemployment staying even or getting worse , it is a good time to be very risk adverse.

There will always being another stock value coming along later. You just need to have patience.

Exit , Stage Right......

Freewilly

Little surprises, and an inflection point with viewing quarterly earnings

Yes, Zooey Deschanel is guilty of eating frozen yogurt. Or maybe she has that surprised look on her face because she, like me, had sold her Garmin (GRMN) stock at a 21% gain, had the current quarter earnings come in as predicted down 33% , and revenues down 27% YOY (year over year) and promptly watch the stock go up 6 points on the news!#$%$?????
Why you ask? because the reality of their current business for the quarter now does not seem to matter to wall street. We have hit an inflection point. Business Wire by the way reported this as, and I quote, " Improved results and sequential growth" because Garmin did not perform as bad as the most dire preditions. So we have made a turn in the road where if the underlying company is giving future guidance as good, the current results are simply disregarded.
If you had instead invested in one of the retailers that Zooey may shop at , Philadelphia based retailer Urban Outfitters, (URBN) , according to my watch list you would be up a cool 68% plus this year. They sell hip clothes to people who don't want to look like they just
got their wardrobe at Walmart. (I am certainly no fashion statement). Likewise the 6 month chart of stazy retailer Aeropostele Inc, (ARO), is up 85% with the retailing industry in the doldrums. Go figure?

Have a good weekend. Weather prediction: it will be 96 degrees on Monday.

Freewilly

Beware the "Ides of August" - there are just too many people who are too bullish right now

It really scares me when I hear whole panels of people on the finance shows and they are all so bullish after such a run-up we had in the month of July. There is no way that this thing is going straight up from here. it just doesn't work that way. So patience is the watch word and if you have taken profits here keep them on the sidelines for now.
There are a few technology stocks here that you can keep in mind that have very good balance sheets. Two semi-conductor stocks that have 3:1 Asset to debt ratios. Those are Marvell Technology, (MRVL), and Triquint Semiconductor , Inc. ,(TQNT). I do not own either of these yet but would be interested after the correction.,
My favorite stock in the technology sector and one that I do own is InterDigital , (IDCC) , that is a company I consider to be a baby Qualcomm in the 3G cellular space. They own 3000 patents in the 3G technology and are very well positioned for the transition in cellular phone technology for voice and data. The proliferation of the Apple I-Phones and the RIM Blackberry's sucking up bandwidth with video and Internet web browsing are taxing the current cellular systems and changes will need to be made quickly to keep up with customer demand.

So. for the short term , keep your powder dry and raise some cash for the sidelines.

Best Regards,

freewilly

The Flyers method - mucking and grinding and fighting for gains

Like Dave Schultz and Bobby Clarke of the Philadelphia Flyers sometimes you just need to dump the puck in and then work hard, work hard to make something happen.

I dumped in today and sold some shares of good companies with good balance sheets that had 18-20 % gains , (GRMN) Garmin and (ADM) ArcherDanielsMidland. Sometimes, just like in hockey , you need to take shorter shifts, to get all four lines on the ice and keep everyone fresh. It just seemed like both issues were fully valued here.

I picked up some value stocks to plug in with defensive positions. I am not as bullish here as most of the soothsayers. I do not see a fast recovery at all. (BMY )Bristol Myers Squibb has a 6.2 % dividend yield, so you get paid to wait for a stock gain. They are also in a product partnership with Gilead Sciences , (GILD).

Foster Wheeler AG, (FWLT), a play on rebuilding infrastructure in heavy construction and engineeering. Both stocks are value plays that are lower beta volitility than Garmin and ADM. We'll see if we can get a quick goal here if the puck bounces right! These activities are in an IRA retirement account, so are a little bit more conservative picks.

Thanks,

freewilly

Market Update -7/12 or "Dogs marching up a hill"

I have always loved this picture from the web and needed to work it into a blog post. These dogs are working so very hard to get up the hill and seem to be on a mission. I am not sure where they are going. ?

Well the picture is like the current stock market here in the US (as of 7/10). You can have the best quality stocks in your portfolio and be working very hard to improve your positions , but you really don't know where it is going over the last 6 weeks or the next six. I guess we should have all "sold in May and went away." I say every year that "were not going to get fooled again" to quote The Who, but we are probably more fully invested at this time in stocks versus cash than we should be. Hunker down time.

Some things you can do right now is to re buy positions where you have an unrealized capital losses and then sell your original position in 31 or 32 days. You can lock in tax losses for 2009 and sometimes get a little uplift in the stock price. You can also re balance the diversification of your portfolio by buying and selling like priced stocks in different sectors.

I think what we need here right now is for the 30 year interest rates for mortgages to be cut down to the 4 % to get all this debt in the system refinanced and get the housing market moving again.

We also need stimulus grants to small businesses to get them moving again, because they create 60 to 80 % of the new jobs in the US.

We also need to put back in place the "uptick" rule for shorts in the market so that these super "bear" hedge funds with their pools of money cannot continue to strafe good stocks with earnings and decimate them.

Enjoy your week. .............(If you are an employer, hire somebody and put them to work on a project to create new growth at your company.)

Freewilly

Summer Time - some pharma stocks to look at with a 2 year time horizon

Dendreon Corp., (Symbol DNDN), located in Seattle, Washington, trading around $24.50 is up today in a summer doldrums market. One analyst has moved the target price to $36.00 and on CNBC they off-handedly threw out a $49 target handle projected on the stock. Story here is a big cancer breakthrough in prostate cancer treatment.

Another stock to keep an eye on as we go into the next flu season is Gilead Sciences Inc., (Symbol GILD). Sometimes after a big flu threat year like with the swine flu the following year is even worse. This Forest City, Ca. company is very well positioned for medical solutions in this area. The stock trades at $45.36 today. (7/6) Last quarter earnings were growing at 24 % plus.

Either of these stocks could also be targets for buyout from the "bigger fish" in the pharma area. As always buy in with smaller positions and average in with your purchases.

Happy hunting, P.S. disclaimers. I have 37 years of personal trading experience, (and I have had many bumps and bruises along the way), but no degrees in finance or Series 7 licencing. These are just observations based on my experience.

Thanks,

Freewilly

What about that 1953 Plymouth Cranbrook in my profile?

Some folks have asked about why do I have a picture of a 1953 Plymouth Cranbrook on my profile. Well that was my first car that I ever owned. My neighbor Jim Thoms fixed it up and gave it to me for free because I only had enough money to pay for the car insurance in New Jersey. My car even had a name , the "Arnold" , named of course after Arnold Ziffel that used to be the neighbors family pig on the TV show "Green Acres". (That song from the show is still imprinted in my brain). Anyway I still have the stick shift for that car up in my drawer because someone sawed if off when we were down the jersey shore. The Cranbrook with its 218 cubic inch flat head "6" engine had a 3 speed shifter on the column and I had to drive home using the stub of the shifter only. The Arnold machine was all Silver and then had a Black roof, hood, and trunk like a limousine. I can tell you that the "Arnold" was like honey , attracting the young lass's. Certified babe magnet. We also snuck-in once 4 kids into the Pennsauken Drive-in, in the trunk of the Plymouth ,with plenty of room to spare. I also picked up a copy on eBay of the original sales brochure for the 1953 Plymouth series with the Cranbrook and Cambridge shown. I will post it sometime.

Best regards,

Freewilly