"Here we go again. The calendar has flipped over from April to May. Do we "Sell in May and go away"? Or, stay on the Magical Mystery tour with this Bull market?"

Dow Jones Industrial Average 12,810.54 (UP) Week ending 04-29-2011

The Dow Jones Industrial Average in Oct 2008 was at a top of 13,930.01. It then precipitously dropped in 5 months to 6626.94 on March 2nd, 2009. If you had capitulated, thinking it was the end of the world, and turned all your long term stock and capital into cash at this point, you made a grave investment mistake. Because since then to now April 29th, 2011, the Dow Jones has recovered most of that to now being at 12,810.54. If you were new money coming in at this bottom you are up 93.31% in two years. If you are looking at the chart of the DJIA for the last decade it looks like a big"W".  I will let you technicians figure out what that means on a Macro level. My inclination is that we have come this far and will eventually test the old highs which is some 1100 Dow points to the upside from here.

We should deter to The Wisdom of old Mr. Partridge in Reminiscences of a Stock Operator, who says it was never his thinking that made big money for him but his sitting tight in a bull market that had been successful. "Have the courage to stick to your convictions until you think the bull market is over". "The big money was made not in the individual fluctuations but in the big market movements".

So do you sell in May and go away? I think you should do both. In your front end/taxable accounts I think you raise some cash and take some equities off the table as your companies announce earnings. I would especially dump companies with weak balance sheets.  Go to 30-35% cash. In your long term accounts, like 401K's and IRA's where you may have money going in all the time, you should stay the course and keep buying equities. 

So what should you buy for growth once QE2 Quantatative Easing is all sorted out in June?




WILLIAMS PARTNERS (Symbol WPZ, $55.80) specialty chemical and gatherer, transporter, processor and treater of natural gas and fractionating and storing natural gas liquids.







Nasdaq OMX Group Inc. (Symbol NDAQ, $27.12) -  a global exchange group that delivers trading, exchange technology, securities listing, and public company services across six continents.

Human Genome Sciences Inc. (Symbol HGSI, $29.47) - a commercially focused biopharmaceutical company advancing toward the market with three products in late-stage clinical development.








SWISHER HYGIENE (Symbol SWSH, 8.77) - H. Wayne  Huizenga run  Hygiene and Sanitation Solutions Company. A green play and very agressive on the acqusition front. Huizenga has a great track record with other businesses.








What an eclectic mix of stocks to boost your porfolio long term growth, huh?

Out to the garden now to battle the weeds.

Freewilly

"With the Royal Wedding coming this week, will this spur a new fashion age with sales of Fancy hats and Revlon makeup?"

Dow Jones Industrial Average  12,595.37 (UP)  04-26-2011 Tuesday



Royal princess Kate Middleton

 Nothing like a Royal Wedding to launch a new wave of fashion and makeup trends, especially since the new princess already is known for her fashionable hats. It also doesn't hurt that she is the loveliest lady to arrive at Buckingham Palace since it was graced by William's mother, Lady Diana. (I wish Diana were here to see it, but I know she is here in spirit and will certainly be present in everyone's mind).



One company that will certainly benefit from this new and exciting trend will be the well known brand and franchise of Revlon Inc. (Symbol REV, $16.20).  

I do not think that Revlon's stock has really priced in the value of their worldwide reknown leading brand. I could see their own possible marriage to an Avon or an Estee Lauder Cosmetics company.

Revlon, Inc. through its subsidiary, manufactures, markets and sells an array of cosmetics, women's hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products. They live at the high fashion address of  237 Park Avenue, New York, NY 10017.

 Revlon was founded in the midst of the Great Depression, 1932, by Charles Revson and his brother Joseph, along with a chemist, Charles Lachman, who contributed the "L" in the Revlon name. Starting with a single product — a new type of nail enamel — the three founders pooled their resources and developed a unique manufacturing process. Using pigments instead of dyes, Revlon developed a variety of new shades of opaque nail enamel. The company has had a wild history including Michael Milliken junk bonds at one point being involved in a buyout.

It has not been a bed of roses for Revlon, with the stock dropping to as low as $2.37 back on March 10th, 2009.  In April 2006 , the stock was at $34.40 per share. Talk about Beta. This is not my traditional stock pick based on the fundamentals because the numbers are just too crazy. The company has $25.26 in revenues for every share of the company and the company operates at 70.51% Gross margins, outstanding. The flip side is, the company has a negative book value and $22.17 a share in long-term debt. Such is the world of high fashion, not for the faint of heart.

Revlon's stock has a 3 year total return on the stock of 69.3%.
Earnings for 2011 look like $1.33 and for 2012, $1.43 per share, so they are making money. It looks to me like there is a trade here, with a target price of $23-$24.  Revlon reports earnings this week on Thursday, April 28th with a slew of other companies. I think beauty products will benefit from having a whole world market to expand in to. Most cultures embrace a whole range of beauty products.

Revlon also sells to the growing market for hair colors for covering that gray, and also even sell wigs!

Jessica Biel

Lot's of celebrities with Revlon's advertising including spokeswoman Halle Berry, Jessica Biel, Jessica Alba and others.

So get on the Revlon Trolley, (pictured below Hong Kong tram) and take a ride to a nice capital gain. Happy earnings report week.


     Freewilly

"A sudden silence in the financial community with the tragic loss of the very young and eloquent Joseph Battipaglia"

Dow Jones Industrial Average (Down)  12341.83

Joe Battipaglia 1955-2011


I was stunned. It was Thursday night, April 14th, and I was watching the Larry Kudlow show on CNBC like I do every night and Larry made the somber announcement that Joe Battipaglia, one of the steady and  level headed voices on wall street had passed away today. I sat frozen on the couch in disbelief. I felt a blow to the stomach like I had lost a member of my family.
     
       Joe Battipaglia, 55 years old, and two years younger than me, who was a star guest analyst on CNBC and Fox continuously and leader in the financial industry for decades was gone. I will defer to Neil Cavuto of Fox Business News for a personal remembrance: Remembering-Joe-Battipaglia . Joe grew up in the New York City borough of Queens, the only child of a city sanitation worker and the first in his family to go to college, according to CNBC.com. My sincere condolences to his family and especially his children. My father died when I was five, so I know what it is like to experience that grief as a young child. Joe would want us to continue to talk about the thing he loved, business and stocks, so that is what I am going to do.

 LTX-CREDENCE, (Symbol LTXC, $8.57) is a stock that I mentioned last year and own personally.
 Verigy was supposed to purchase LTX Credence but then came along Advantest and they bought out Verigy. The cancellation of the deal will result in LTXC receiving 15 Million dollars that will go right to the bottom line. LTXC already has a low price earnings ratio of 7.4. The company is growing at 16% and is expecting to have 2011 earnings of $1.08 and $1.32 in 2012.  Joe Battipaglia's firm Stifel Nicolaus had  reiterated a buy recommendation on this stock on 12/10/2010 to a $10.00 price. The company has a return on equity of 24.30% with a PE heading towards 6.49 with a 15 million dollar kicker. I wouldn't be surprised if Advantest went after them also as an acquisition target. (I think they will want to get their 15 Mil back.)

There are lot's of bargains out in the NASDAQ stocks right now.

 Ebix Inc. (Symbol EBIX, $22.54) the Atlanta GA. insurance and health care "cloud" CRM and application software company was taken down 25% in price the other week by an anonymous blog of all things. (Probably a disgruntled competitor). The company has a 5 year sales growth rate of  43.68% mostly due to acquisition and a 5 year earnings growth rate of 61.75%. These are the facts. Ebix runs with net profit margins of 44.60%. They have a one year total return of
38.5% and a 3 year total return of 139.0%. These are also facts, indisputable. The company plans on buying back 45 million shares. I would prefer that they continue to use their money instead to acquire other companies, but no harm here. All the major ETF holders in the stock have nice gains on their investment.

I will leave you with 2 links with  Joe Battipaglia from April 2011 from the Larry Kudlow CNBC show.

We will miss you Joe. 

http://video.cnbc.com/gallery/?video=3000014418

http://video.cnbc.com/gallery/?video=3000015715

Live your life to the fullest everyday and remember Joe in your prayers.

Freewilly

"A late Easter and a rise in Cotton prices has led to some bargains in Retail Apparel stocks"

Dow Jones Industrial Avg. 12,380 (UP) Week ending 04-08-2011

We have all heard about the meteoric rise in the price of Cotton. Demand is steady and in high volumes to China, India and Pakistan.

What the newsmen have not told you is that demand for cotton has actually dropped by 7 million bales since 2006.  This is similar to another commodity, Oil , where speculation has driven the price higher, while worldwide demand is leveling off.

As we have all seen in the housing market, speculation or what Alan Greenspan called "Irrational exuberance," eventually comes to an end and prices return down toward the "mathematical mean" price.  When this happens with cotton, it will be a windfall to some well run apparel retailers.  Easter being late in April this year is also going to create soft sales numbers for apparel retailers for their Q1 2011 number comparisons to Q1 2010 figures. Q2 numbers on the other hand, should be excellent comparisons. Here are a few names that should benefit from this phenomena. I would buy them now and hold into the Christmas holiday.
    

Aeropostale Inc. (Symbol ARO, $25.62)  even without cotton prices  going down currently has a Return on Equity of 49.2%. ARO also has a 5 year sales growth of 15.31% and 5 year earnings growth of 31.85%. Sometimes you need to shop in the off season to get investment bargains. Don't forget that this stock's share price is up 91.51% over the last 5 years.



Limited Brands Inc. (Symbol LTD, $37.17)  is projecting 2012 earnings of $2.31 and 2013 earnings of $2.64 per share. LTD has  Return on Equity of 42.5% and offers a too reasonable dividend of 2.15%. This stock has a three year total return of 132%. March sales have been surprisingly strong against lowered expectations with a backdrop of unusually cold weather, bubbling gasoline prices and the shift of Easter into April.

Urban Outfitters Inc. (Symbol URBN, $30.91) is a company to like for a lot of reasons. 2012 earnings are projected at $1.74 per share and for 2013 looking like $2.08 a share. Urban has a great balance sheet with a Current ratio of 3.81 to 1 and has no long term debt.
 This company with a 5 year sales growth  rate of 16.15% is a real bargain at this "off the rack" price. These three are all quality investments; a piece of the puzzle.

These are 8 month investments, so don't worry if they bounce up and down in price between now and then.
 Just pick one out and go with it.

Freewilly

"With the markets increasing volatility it is never a bad time to put a solid financial stock in your portfolio to lower your beta"

Dow Jones Industrial Average 12,376.72 (UP) Week ending 04-01-2011

It may be time to cash in one of those highly volatile tech names that you own that have run up a bit and put a little balance back into your portfolio with a solid bank and financial service name. PNC Financial Services Group Inc. (Symbol PNC, $63.72) a bank that caters to business could be a good place to start. PNC is projecting 2011 earnings of $5.63 per share and for 2012,  $6.38 per share so it trades at a very reasonable PE ratio. PNC has had a very nice 5 year sales growth rate of 18.12 % and a Net profit margin of 19.50%. Not much of a dividend here, but a bank of large enough size to be a possible acquisition candidate.

REPUBLIC BANCORP A (Symbol RBCAA, $19.99) trades at a remarkably low PE of 5.  This  Louisville, KY bank has a decent dividend yield of 2.85%. Republic has Net profit margins of 23.8%
and a Book value of $17.72 per share so it is a great value here. It has a Beta volatility rating of 0.97 so it will not rock the boat of your moving portfolio value. It also has a steady 5 year sales growth rate of 8.81% , which is not to bad for a bank.



J.Pierpont Morgan


I would be remiss if I did not mention here, for a conversation on stability and low beta , the bank founded by John Pierpont Morgan the lender of last resort to railroads, banks, and governments. A one man "federal reserve" , they said to look into his eyes was like looking into the headlights of an oncoming freight train.

JPMorgan Chase & Co. (Symbol JPM, $46.35) has a low PE of 9.7 . Book value on this stock is $44.28 per share and it has a low beta volatility 1.15 so you can sleep at night here with this one. Earnings for 2011 are projected at $4.78 per share and for 2012 , $5.61 per share. They have on their balance sheet 2.18 Trillion dollars in assets, (and big liabilities to go with them), and 930 Billion in deposits. (Maybe they should keep our Social Security payments from our paychecks here so it doesn't get spent!).

I would also like to include a savings and loan financial institution in the small cap category. New York Community Bancorp Inc. (Symbol NYB,  $17.37 ) offers a  5.76% dividend yield. NYB has a Beta volatility ratio of 0.75, operates at Net profit margins of 24%, and has a five year sales growth of 10.24%. The stock has not moved much, (Total return 12 month, 11.5%) because the dividend is an 80% payout ratio. but you will certainly hold on to your principle.

Remember what Will Rogers said , " The quickest way to double your money is to fold it and put it back in your pocket."

So reign in the volatility a little bit on your high beta portfolio and plug in one of these names in your list of diversified stocks.



         Freewilly  

"Blog #83 "The Rainmaker". Alcatel-Lucent, Freescale Semiconductor, and Hewlett Packard collaborate to hit a Gran-Slam with lightRadio Cube & portfolio. A scalable,green, combo tower & cloud backend solution to handle the Smartphone Tsunami** "

Dow Jones Industrial Average 12,200.59  (UP) Week ending 03-25-2011

We have been blessed here in Philadelphia with a long history of home run hitters. Ryan Howard, Michael Schmidt, Greg "the Bull" Luzinski, Dick "Richie"Allen, Cy Williams, Chuck Klein and Del Ennis going back.

  Well ...  Alcatel-Lucent ADR (Symbol ALU, $5.34), Freescale Semiconductor (owned by Blackstone Group, Symbol BX, $18.74), and Hewlett Packard (Symbol HPQ, $42.53) have gotten together and hit an IBM tape measure shot Grandslam of Epic proportion. A Rainmaker. One Harry Kalas would say "That ball is out of here!". (Happy Birthday Harry today).  We are talking here like the Roy Hobbs moon shot in the movie "The Natural" that hits off of the top of the light tower and explodes it into showers of streaming light. Are we starting to get the picture here?

Roy Hobbs


lightRadio Cube is a game changer. Everything that exist now for this functionality is suddenly now 10-fold obsolete. Ancient history. Wim Sweldens - the President of the Wireless Division of Alcatel-Lucent  in the press conference on this portfolio from Bell Labs compares it to the "Invention of the transistor".  What is it?  I will need to quote Alcatel Lucent for that:
 
 

 
"lightRadio is a flexible architecture that distributes intelligence throughout the network so that it can dynamically expand to meet growing demands.


lightRadio Cube

 This is accomplished by creating a new architecture where the base station, typically located at the base of each cell tower, is broken into its component elements and distributed through the network or ‘carrier cloud.’ Additionally the various cell tower antennas are combined and shrunk into a single powerful, Bell Labs-pioneered multi frequency, multi standard (2G, 3G, LTE) device that can be mounted on poles, sides of buildings or anywhere else there is power and a broadband connection.

Leveraging Bell Labs innovations in active antenna technology and advanced CPRI compression and partnerships with Freescale and HP, Alcatel-Lucent is first in the industry to announce products in this space.

The lightRadio product family is comprised of the Wideband Active Array Antenna, the Multiband Remote Radio Head, the lightRadio Baseband Processing, the lightRadio Control, and end-to-end management using the 5620 Service Aware Manager (SAM). The product family depends on a number of breakthrough innovations and technologies from Alcatel-Lucent’s Bell Labs research arm and ecosystem of companies."

Here's the skinny on it. Alcatel Lucent has over 200 patents on the portfolio of lightRadio products that they are going to release every six months out into 2014. Freescale Semiconductor has put all the electronics that used to be in a cell tower into a chipset that fits into a cube that  can sit in palm of your hand. The cubes can be put anywhere there is power and a connection.

They can increase the current capacity on a tower by 30 X times.

Oh, and did I forget to mention that   lightRadio reduces energy consumption of mobile networks by up to 50% over current radio access network equipment.

Hewlett Packard is doing all the back end "cloud" work for this partnership. No small task.

The partnership has garnered acceptance from Verizon Wireless, Orange, and China Mobile to uptake this technology. I recommend that
you sign up and watch the press conference. Here is a link.  lightRadio Press conference , green box on right side

This is the advent of a modern day transportation system comparable to Vanderbilt's New York Central Railroad or that  Philadelphia institution the Pennsylvania Railroad. But instead of moving people and freight they are moving information, data, voice, and streaming video all over the world. The greatest railroad of all-time.

I recommend that you accumulate all three of these stocks, (ALU, BX, and HPQ) as a solid 5 year investment.

Freewilly   

** Credit CNBC's Jim Cramer with coining of the term "Smartphone Tsunami"

"Cisco declares a dividend, usually a sign with a large cap tech stock that high growth has ended . So where is the growth in their sector?

Dow Jones Industrial Average 11,859 (Down) Week ending 03-19-2011 

Cisco Systems Inc. (Symbol CSCO, $17.14) has been growing for years by buying 5 to 6 small companies a year to add to their core competency's and maintain growth. The company's 5 year growth rate is 7.93 % . But currently with annual revenues of 42 billion dollars it is very hard to have any growth impact without a major acquisition. It appears now, with the stock down 34.2% for 12 months, that John Chambers and the Cisco board does not currently see a business that fits in with their long-term strategy goals so they have decided to declare a dividend instead. They have 40 billion in cash and short term investments so it is not like they couldn't do it at any time if they wanted to. Unfortunately, when other large techs like Microsoft and Intel have done this their stocks they have sat dead in the water for years. So I would say to avoid this stock for the time being.



Shogi

The terrible events that took place in Japan are definitely going to cause supply interruptions in electronics and other industrial parts. Wafer manufacturing, Flash memory, Electronic epoxies and automotive electronic parts will all be affected. Brilliant new century idea: STOCK SOME FRIGGIN INVENTORY AT YOUR COMPANY AND IN THE SUPPLY CHAIN! Then when we have supply interruptions and you embarrassingly have to report it to wall street and you have to explain to your management why your company stock took an 8 point hit, you will tell them that it is actually not a problem. The Japanese are a resilient people and they should get this stuff back on line quickly with help. I admire their spirit and determination. Then we can get back to Shogi.

So if Cisco is not going to get it done for you, where should you look for growth?  Just a note here and I have witnesses. I start saving my logos for my blog on Thursday in preparation for writing it. So when I went to WAWA to get some dollar change for the car wash that my car desperately needed and pick up a $3.00 copy of Investors Business Daily, I was surprised and a little disturbed that IDB had Riverbed Technology Inc. (Symbol RVBD, $37.52) not only ranked, but ranked NUMBER #ONE on their Top100 list for 03/21/2011. Riverbed is where I am going to lead you to for growth in this sector. 5 year sales growth of 80.50% and projected long term earnings growth of 27.6% make Riverbed the best choice in this sector.

My suggestion though is that Tech stocks will be under pressure this week, as these supply shortages start popping up, and that you look to buy this stock on a little bit of a pullback as the other tech stocks get beat up.  If it does not go down, then feel free to buy it at this price at the end of the week and hold it for a one to three year investment.

 Everyone should continue to support Japan both financially and with prayers. Even after the nuclear issues have been resolved, the country still has sustained tremendous damage and will need allot of assistance.  

Japanese Proverb:

“Fall seven times and stand up eight.”

 Freewilly

"Some Small Cap names for MARCH with catalyst or dynamics for rapid growth. EBIX,THC,CPHD,TZOO,CYH"

Dow Jones Industrial Average 12044.40  (down) Week ending 03-11-2011

 March Comes in Like a Lion, Sangatsu no Raion, lit. March Lion; alternatively called Sangatsu no Lion or 3gatsu no Lion; officially translated as March Comes in Like a Lion. This ironically is the name of a  Japanese TV series set in Tokyo, Japan following the everyday life of a 17-year old Shogi player. Japan has had a roaring March so far, with earthquakes, a 33 foot tsunami washing whole cities away, and now up to 6 of its Nuclear plants affected by these tragic events. All the people and countries of the world need to come to their assistance.

Our US stock markets have been weathering their own storm in March. But alas, spring will arrive here with the Crocuses poking their colorful heads up in white, purple and yellow. The Red winged black birds have arrived at the bird feeder so the green of springtime cannot be far behind. 

So a look at some small cap stocks with budding growth. EPIX Inc. (Symbol EBIX, $28.13) provides a series of application software products for the insurance industry ranging from carrier systems, agency systems and exchanges to custom software development for carriers, brokers, and agents involved in the insurance industry. They have been compared by some analysts to Salesforce.com (CRM). They are buying up companies an expanding quickly.

Tenet Healthcare Corp. (symbol THC, $7.09) has a recent Return on equity of 124.3% . Allot of that was due to a million dollar tax credit on the balance sheet but EBITA is improving at this center city health care provider. When ObamaCare kicks in they should get paid for allot of services that they now give away for free at the emergency room. Earnings per share for 2012 projected at $0.44 cents.

St. Patricks Day this week on March 17th. My stock pick for last year on St.Pat's day was Boston Beer Company (Samuel Adams) (Symbol SAM), and was my best pick of the year last year up 68%.
This year how about some TravelZoo (Symbol TZOO, $ 44.98) to put some green in your beer and in your wallet. 2011 earnings per share of $1.09 and for 2012 $1.48 per share.

Also drink to your health with a couple of healthy stock picks.

CEPHEID (Symbol CPHD, $26.18) is a Sunnyvale, CA. company
that is a molecular diagnostics company that develops, manufactures, and markets fully-integrated systems for testing in the Clinical market, as well as for application in the company's legacy Bio threat and Industrial markets. 5 year sales growth of 21.19% and projected earnings growth of 25%. Earnings ramp up in 2012 to $0.48 cents per share. Get in early.

..... and one last one to go with your Black and Tan above would be
Community Health Systems Inc. (Symbol CYH, $39.61) that is in the hospital business and has plenty of earnings. 5 year sales growth of 31.96%. I guess all us oldsters are ending up at the hospital more. Good numbers, but not allot of institutional buyers in this stock.

All these stocks are higher beta volatility than the stocks that I usually put in this venue, so be careful, but you do need some small cap for growth in your portfolio.

So hope for Springtime and pray for the people in Northern Japan that they can put their lives back together.

Best Wishes for a splendid St. Patty's Day,

Freewilly 

"We throw up our hands at the prices at the gas pump. Why not profit by owning some of the top Oil stocks?"

Dow Jones Industrial Average  12,170  (Down) Week ending 03/02/2011

$3.47, $3.54, $3.68 and outrage in Pennsylvania USA at the gas pump. Little do we know that in California, and international markets they have already been above $4.00 and $5.00 a gallon and someone told me in Amsterdam it is $8.00 a gallon.  Shame on you Royal Dutch Shell.   The threat of oil shortages from the turmoil in Africa to the supplies of Italy, France and Spain is causing a premium in the price of Brent Crude and is pulling up the average price of oil worldwide.  So what is a person to do?


How about taking some positions in Oil companies with good fundamentals that will profit from this turmoil. This would give you a hedge on the price rises. PETROLEO BRASILEIRO (Symbol PBR, $41.48) is a oil and gas driller with gigantic revenues that still trades at a current PE of 13. PBR has earnings of $3.45 per share for 2010 and next year 2012, with current oil pricing premium, probably around $3.70 per share. 5 year sales growth in the company is 13.72% and the stock price has not run up on this current oil price rise.


Devon Energy Corp. (Symbol DVN, $91.12) has tremendous numbers for growth and earnings and trades at a PE of 15.37. The 2011 earnings are a healthy $5.92 per share and projected for 2012 of a healthier $7.65 per share. 49.8% Net profit margins and a 42% 12 month total return make this a great anchor stock for a portfolio.
                                                   
Helmerich & Payne Inc. (symbol HP, $63.33) trades at a PE of 16.4. HP also gives you a kicker of owning some commercial real estate.  2011 earnings of $3.92 and 2012 of $4.32 per share. 5 year sales growth of 14.51% and a 12 month Total return of 68.8% makes this a solid fundamental pick for your account. The 3 year total return of 38% and a very strong balance sheet will let you sleep good at night with this stock.


 Two other names I like here and feel confident in are Apache Corp. (symbol APA, $120.97) and Petrohawk Energy Corp. (Symbol HK, $21.80). Both have great growth dynamics and will deliver great results to help you offset your cost of rising gasoline prices.
 

As always,stay diversified and do not load up totally on one stock category. The oil prices will not keep going up but will settle out at a higher level than last time.US government policies towards oil drilling must change or our economy will be stymied. Of course we need all the alternate energy solutions also, including nuclear power.


We do not want to see gasoline signs that look something like this:
 
So ride your bicycle or pay up and drive. Own some of these stocks and hedge your gasoline bill with some capital gains.
 
Freewilly