"Not too large, Not too small, Just right" a Goldilocks and the Three Bears variation and why Mid-Cap stocks are just right to add growth to your IRA

Dow Jones 10424.62 (UP) Week ending July 23rd, 2010

Just like Goldilocks is conflicted about what decisions to make when she strays into the foreign place of the Three bears house in the woods, many people are not sure what decisions to make with their allocations in 401K or IRA accounts for retirement. One thing I would make sure is that you have a good dose of Mid-Cap mutual funds or stocks. Mid-Cap stocks are companies with a market capitalization generally between $2 and $10 billion dollars. I would say as much as 30-35% of the stock allocation in your IRA should be devoted to Mid-Cap. (I would not even have bonds in your portfolio until you are 50 years old, you need capital growth to retire!).

So unless you are like Winnie the Pooh and have an endless Honey Pot out in Hundred Acre Wood to keep you going in retirement, (don't get stuck in the rabbit's door), then you should probably jot down some of these names. I would look to buy into these stocks as they have small corrections, since they are all doing pretty well here, so buy them with a margin of safety built in.

Roper Industries Inc. (symbol ROP, $62.01) is a good steady growing company. 5 year revenue growth of 12.67% and earnings growth of 14.05%. Well managed and well liked on Wall Street, it has a 12 month Total Return of 30.4%.


The second Mid-Cap to bolster your IRA growth is Mead Johnson Nutrition Co.(Symbol MJN, $54.55). This spin-off from Bristol-Myers Squibb has had quite a year with a 12 month Total return of 52.2% and is digesting a little of that here. Earnings for 2011 are projecting $2.72 per share. Long term earnings growth is projected at 9.3%. People will continue to buy their baby formula with their great brand recognition with the product Enfamil.

Dr Pepper Snapple Group Inc. (Symbol DPS, $39.82) is another familiar brand to most people. This company has a 12 month total return of 64%. A bonus 2.5% dividend yield adds to the pot. $2.79 a share earnings for 2011 and 9% long term earnings growth makes this pick probably the one to buy first.

Fidelity National Information Services Inc. (Symbol FIS, $28.10) is projecting 2011 earnings per share of $2.37. This Jacksonville, Florida company has earnings growth projected at 13.17% FIS Inc.'s (FIS) second-quarter earnings jumped 52% following last year's acquisition of Metavante. The provider of payment-and bank-processing services closed the $2.9 billion deal in October. It gave FIS a bigger presence in the financial information-technology market. This company has a solid balance sheet and should do well going forward.

So have a Goldilocks retirement and "Be a Pepper" and deploy some quality Mid-Cap stocks or mutual funds in your 401K.

Stay Cool (99 degrees today)

Freewilly

"All you can do after that ugly wreck of a week on Wall Street is have a drink and a cigarette"

Dow Jones 10097.90 (Down and ugly) Week ending 07-16-2010

What an ugly end of the trading week on Friday down an ugly 261.41 points on the DJIA. Maybe capitulation could be around the corner next week as retail traders throw in the towel in disgust. Well if your like me and need to make money in bad and good markets, it may be time to look at the tobacco stocks. With unemployment still rolling along at 9.5 to 17% depending on if you count the fall offs, Tobacco and liquor stocks should be performing just find and pay you a dividend to boot.


The first stock in the group I would look at is Reynolds American Inc (symbol RAI, $55.17). This stock has a dividend of 6.53% and earnings that are growing at 6% a year. The 12 month total return on the stock is 35%. The industry revenues are going flat to down a little but it is still a very profitable business.

The next stock I would take a look at is Philip Morris International Inc.(Symbol PM , $49.67). This company pays a 4.67% dividend yield. This company operates at 25.30% net profit margins and is growing at 10% a year. People are going to smoke and drink and swear, just like they always have.

Of course we can never forget about Wall street's forever darling Altria Group Inc. (Symbol MO, $21,26). "MO" has a 6.59% dividend yield and a one year and 3 year Total return of 29%. I will take that number in this trading environment, no problem! With $2.00 a share earnings in 2011 the stock is just flat-out cheap here.

So buy and hold these stocks till unemployment gets down to 4% and enjoy the dividend.

Please comment. I will answer questions on any stock subject. Just throw it out there for the readers. All ideas are accepted here.

Freewilly

It's all about turning the corner and surging forward out of the slipstream ..... just like in Le Tour de France "

Dow Jones 10,198 (UP) week ending July 9th

Sorry I missed you all last Saturday. Sometimes there are more important things in the world going on than the stock market. No not the World Cup!

Of course I am speaking of the beginning of the 21 stages of Le Tour De France beginning on July 3rd, which is also my vacation week.

I love the ebb and flow of the race with the sprinters taking charge in the flat lands, (Mark Cavendish with HTC - Columbia pictured winning back to back Stages 5 & 6) and now swinging towards the Alps where Alberto Contador of Astana and Lance Armstrong of Radio Shack hit their best paces. Just like in the stock market different teams lead the Peloton, then out from behind a team bunched together at the front comes a sprinter to turn the corner and surge forward with a burst of speed to the finish line.

So what sprinters are going to break away from the pack in this Stage and turn of the corner in the stock market?

Google, Inc. (Symbol GOOG, $467.46) . It is time for this great leader to step it up and show it's paces. The stock is cheap here. Projecting earnings of $24.82 a share this year and $28.69 next year (PE 16). This company has a 5 year sales growth rate of 42.43% and a 5 year earnings growth rate 43.57%. What gives it the catalyst to surge into the slipstream? Issues in China are starting to settle out a bit here, so there is no longer anything holding it back.

It is also time for my "lead-pipe" cinch stock pick of the year from earlier, Monsanto Co. (Symbol MON, $51.21) to finally surge ahead here. I thought for a minute that people had stopped eating or something crazy like that. The stock has a 12 month total return of -41.9%. But I think we hit the down hill race here and Monsanto surges back into the 60'S. Growth in earnings will be the catalyst that brings this quality company stock higher.

I did take my copy of Barron's on vacation with me and found you a cheap stock to buy while I sipped a frosted mug of ice cold Yuengling Traditional Lager amber beer (privately owned co.) and that stock is Goodyear Tire & Rubber Co. (symbol GT, $10.89). Earnings are surging from .23 cents a share this year to $1.55 per share next year.

So keep the rubber to the pavement with Goodyear and Le Tour De France and catch the next single good stocks that are moving to the front for a win!

Go Lance Armstrong and the Radio Shack team.

Freewilly

"Sometimes you can read the tea leaves in one stock sector and gleen some good information about another stock sector"

Dow Jones 10,144 (Down) Week ending 06/25/2010

My friend Dave Thomas at work is always leaning over my cube to talk about the Phillies and to ask me why the stock of QUAKER CHEMICAL CORP. (Symbol KWR, $29.03) keeps going up and did I buy it yet? We started looking at the stock back when it was trading at $12-$14 and I kept telling Dave, who lives in Conshohocken where Quaker is based, that I could not figure out why the stock was rising this dramatically. (The KWR Total Return for 12 Months is 125.4%!).

So I listened to advice instead of giving advice this time and decided to check it out. Quaker Chemical is a global provider of process chemicals, chemical specialties, services, and technical expertise to a range of industries-including steel, automotive, mining, aerospace, tube and pipe, coatings and construction materials. I discovered that their chemical coolants have high demand in the Steel and Aluminum processing and grinding environment and that KWR had won a contract for a major automotive powertrain manufacturer. They had vastly improved their processes with their expertise in this area, certainly a value-add to the customer. Only 2 analysts cover this stock and both have a buy recommendation, so I would say you can go ahead and buy it here. So why all the demand you ask? The tea leaves lead me to the Steel industry sector and what appears to be explosive earnings coming in 2011.

The first thing I like about Precision Castparts Corp. (Symbol PCP, $ 108.56) is that "The Chairman" Mario Gabelli's GAMCO funds own a chunk of it, which is pretty reassuring. The company is projecting 2011 earnings per share of $7.43 and $8.58 per share in 2012. The company has a 5 year sales growth rate of 16.57%. It looks really good here.

The research on Quaker also lead me to United States Steel Corp. (Symbol X, $ 43.24). Between the improving automobile industry, (the average age of a car right now is 9 years, so people are due for a replacement), and the demand for steel in China and India, this looks interesting The earnings per share for 2010 is $1.87 and then ramps up dramatically in 2011 to $5.76 per share. The long term growth rate for earnings per share is 30%. Another buy.

Then if you are looking for a lower priced stock that you can buy a few more shares of, Steel Dynamics Inc. (Symbol STLD, 14.08) might be the ticket for you. They just had a soft quarter and the stock has come down since March so you get a bargain purchase. Earnings should recover nicely in 2011 to $1.95 per share.

So searching in chemicals led me to the Steel sector. I will keep a look out
for other cross currents across sectors that may bring up more bargains.

Sincerest regards and Go Phillies,

Freewilly

Ferris Bueller; "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it. "

Dow Jones 10450.64 (UP) Week ending 06-18-2010

Ferris Bueller. Sometimes it's fun to view the world through his eyes. His famous quotes like; " I do have a test today, that wasn't bullsh**. It's on European Socialism. I mean, really, what's the point? I'm not European. I don't plan on being European. So, who gives a crap if they're Socialists? They could be fascist anarchists, it still wouldn't change the fact that I don't own a car.". But it's his "Life moves pretty fast and needing to take a look around once in a while. (or you will miss it)" quote that I want to talk about today.

I was driving to work Tuesday morning and was about 5th in line at the stop light at Fitzwater and York Rd's,(in front of Giuseppe's restaurant). Sometimes on Tuesday mornings on the way to work I have car crashes. That has happened twice, but this was not one of those mornings.

I stopped to take a look around and saw a long freight train was coming by on the tracks that run by the PA. Turnpike. The first engine was a Norfolk Southern (Symbol NSC, $59.10) followed by a Burlington Northern Santa Fe engine which is owned by Warren Buffett and Berkshire Hathaway Inc. (Symbol BRK.B, $79.90) which all seemed pretty normal. But then I starting seeing car after car of double trailers of freight being hauled down the line. Most of the flat cars or spine cars that were going by had the truck trailers of J.B. Hunt Transport Services Inc. (Symbol JBHT, $35.01) on them. Yellow sign after yellow sign on the trucks went by. (It must have been a long red light!) Ben Stein pictured, a financial wizard himself, still calling; "Bueller? Bueller? Bueller?"

It got me to thinking that if we are in economic recovery mode that some of these transport stocks are certainly going to need to be part of it. So I took a look at JB Hunt Transport services(JBHT) which does look good here and also Oshkosh Corp. (symbol OSK, $35.26) which has a PE of 4 and also Paccar Inc. (symbol PCAR, $43.65) which has been really beaten up here but looks to be projecting a huge earnings rebound in 2011.

This Proustian-like experience also propelled me to discover in the transports the stock of Navistar International Corp. (Symbol NAV, $56.89) , another company projecting large earnings growth in 2011 from $3.07 to $5.09 per share.



So if you pay attention to Ferris when he says; "A person should not believe in an "-ism," he should believe in himself. I quote John Lennon; "I don't believe in Beatles, I just believe in me." , then you will probably believe in yourself and make some good Transport picks like these in the stock market.

Freewilly

"Corning continues to roll out it's trademarked Gorilla Glass product for the mobile device market and its uses are only limited by your imagination"

Dow Jones 10211.07 (Strong UP) week ending 06/11/2010

Gorilla Glass. You gotta like that name. What is Gorilla glass? Corning® Gorilla® glass is an environmentally friendly alkali-aluminosilicate thin sheet glass
that is better able to survive the real-world events that most commonly cause glass failure. Its superior composition allows a deeper layer of chemical strengthening than is possible with most other chemically strengthened glasses — making it both strong and damage resistant. Currently, Gorilla glass is available as-drawn in thicknesses ranging from 0.5 mm – 2.0 mm. It is perfect for all portable devices that are subject to having the glass broken and is excellent for all touch screen devices.

Corning Inc. (Symbol GLW, $18.14) which was already trading at a discounted forward PE of 8.6 since dropping off in the latest market sell off after a nice run from November 2009 to April 2010 seems to be a great bargain here. 13 analysts love the stock and it appears that 2010 earnings estimates were adjusted up but not the 2011 earnings estimate. So oddly it shows earnings going down next year?? You need to stay ahead of the numbers.

To read about Gorilla Glass you can go to Corning's website at: http://www.corning.com/gorillaglass/why_gorilla_glass.aspx

So if you have Gorillas or Elephants around your house that are always standing on, driving over, throwing because they are mad at relatives or boyfriends, dropping phones on a porcelain tile floor, scratching or otherwise defacing your portable mobile devices then you will probably need Gorilla Glass to solve your problems.

Add some Corning Inc.(GLW) to your portfolio and make it indestructible and scratch resistant! You need that in these markets!

King Kong survives! ..... Freewilly

DNA, RNA, Retrovirus, Epigenetics, HERV-W, Immune System infections, what does any of this have to do with the Stock Market ?

Dow Jones 9,932 (Strong Down) Week Ending 06-04-2010


The reason I went to college and became a Psychology major in 1972 was because I wanted to learn more about the bio-chemical determinants of the mental illness Schizophrenia. A close friend of my brother was schizophrenic. The research that has gone on between then and now has moved light years forward. Human genome research holds the key to solving the riddle of a large swath of medical conditions,
Schizophrenia, MS, HIV, Cancer, Diabetes, Lupus, bipolar disorder, Alzheimer's disease and the retrovirus's that awaken them like herpes, toxoplasma, cytomegalovirus and Epstein- Barr virus and HERV-W. Environmental Stress also has the capability of changing epigenetic code within one generation. Just incredible research, mind boggling research.

Two must read articles for you. DISCOVER Magazine, June 2010 issue "The insanity virus". Second, Time Magazine, January 18, 2010 issue , "Why Genes Aren't Destiny".

Here are a couple ideas where all this work will not only pay off in alleviating allot of human suffering but could also make you some strategic investment returns. The stocks I will mention first are more speculative.


Human Genome Sciences Inc. (Symbol HGSI, $24.62) has 3 products in late stage development to treat Lupus, chronic hepatitis C, and type 2 diabetes mellitus. 13 Analysts have buy recommendations on it. Second is KERYX Biopharmaceuticals (Symbol KERX, $4.80) based out of New York City.

Third is Dendreon Corporation (Symbol DNDN, $40.84) with their just approved Prostate cancer drug PROVENGE. They are poised for rapid growth. DNDN has a 12 month return of 63.4% even though they do not have any sales and earnings yet. The 3 stocks I just mentioned can all be very volatile.

On the more conservative investment side you can buy Cephalon Inc. (Symbol CEPH, $59.11) with plenty of strong earnings.

Celgene Corp. (Symbol CELG, $51.55), and Gilead Sciences Inc. (Symbol GILD, $34.70) would also be solid portfolio additions with rapid growing business's.

Hopefully they will break the code and figure out the cure for all debilitating
illnesses.

Freewilly

America celebrates Memorial Day this weekend, "the land of the free, and the home of the brave". A look at some uniquely American stocks.

Dow Jones 10136.63 (down) Week ending 05-28-2010

Memorial Day is traditionally the kickoff day to the summer season here in the US. But more importantly, it is a time of remembering the men and woman who have fought to preserve our freedom by giving their lives to protect our country and our ideals.


It is with that freedom that they have provided, that I am able to write today freely in this blog without government censorship, like in some countries in the world, and am able to share ideas with you whether they be about stocks, religion, politics, or any subject I choose. The empty chairs and coffins to the right are a stark reminder of the high cost of these freedoms.

For their ultimate devotion, I thank them from the bottom of my heart.

To assist our Veterans that have been disabled with a financial donation, you should go to:"http://www.dav.org/donate/Default.aspx". I am a lifelong devotee to this cause and would personally thank you.

Now on to buying those great American stocks. There is probably no more recognized American stock then is The Walt Disney Company (Symbol DIS, $33.42),except for possibly McDonald's Corp. (Symbol MCD, $66.87).

Disney's "Alice in Wonderland" has just broken the billion dollar mark at the box office making it the sixth movie in history to do so. The stock is up 39.31% over the last 12 months. Earnings this year of $1.91 and in 2011 projecting $2.30 per share. Of course Disney also owns the popular
ABC Network and ESPN. Disney had also at the beginning of the year merged with Marvel adding to it's cast of characters. Disney was saddened by the passing of Art Linkletter this week who had hosted Disneyland's groundbreaking live opening day broadcast on ABC in 1955.

CEO Jeffrey Katzenberg's DreamWorks Animation SKG Inc. Cl A (Symbol DWA, $29.69) has had it's stock beat up pretty good over the last 8 weeks. The reason? Shrek fatigue at the box office! Who would of thunk it. I didn't think the big green guy looked that tired to me. It has created a buying opportunity here at the $27.00 to $29.75 range. Most of the soft money is out. Steven Speilberg and the top 7 mutual fund holders of the stock are all low turnover folks, so I think you can start buying in here. Earnings of $2.40 projected for 2011. This stock can rocket when they hit a mega hit, be patient.

Now let's circle back to the aforementioned McDonald's Corp. (Symbol MCD, $66.87), whose stock has been on a steady rise since 2005. Truly an American institution who is recognized worldwide. It has a five year earnings growth rate of 16.07%. The stock is beaten up a bit recently in the latest market turbulence, but it will be back. Total 3 year return of 44.7%. It was in the Freewilly blog baseball lineup in October 9, 2009 blog, batting out of the 3 slot. Not a bad hitter!

So celebrate this American holiday with some respect and remembrance,
and next week buy some American stocks.

Later, Freewilly

"Let's face it, the Baby Boomers have most of the wealth, so what are they spending it on?"

Dow Jones 10,193 (Strong down) Week ending 05-21-2010

Ah yes, the Baby Boomers, born generally 1943 to 1960, getting older in body but still strong in spirit. They control 67% of the countries wealth some 28 trillion dollars and everyone is trying to get at it, including Uncle Sam who is now named Uncle Barack or Barry to his friends. Boomers have about three trillion in disposable income. Most Boomers plan to buy a new home when going into retirement. So what are they planning to spend their money on?

Boomers are usually hard working and tired by the end of the day and want to get a good night sleep so their back doesn't hurt. So the first thing is a Tempur Pedic International Inc. (Symbol TPX, $31.37) mattress. This stock has a 12 month total return of 185.3%. It has an earnings growth rate just shy of 14%. Operating income has been increasing the last 5 Quarters.


When they are not sleeping, Boomers are off to the islands taking those Carribean cruises and shopping duty free. CARNIVAL Corp. (symbol CCL, $35.61) is the most profitable in this space. Carnival is projecting $2.74 earning per share for 2011. Royal Caribbean Cruises Ltd (Symbol RCL, $28.34) is also very well positioned in this space. 2011 earnings projected at $2.62 per share. And what are the boomers buying at these duty free shops?




Polo Ralph Lauren Corp. (Symbol RL, $84.27) has projected 2011 earnings of $5.55 per share. Williams-Sonoma, Inc. (Symbol WSM, $28.84) WSM has a 12 month total return of 126.7%. Also some of those 50 and 60 year olds with their new diets are squeezing into those Guess? Inc.(symbol GES, $36.79) Guess by Marciano jeans. Whoa! Guess 2011 earnings projected at $3.47 per share. Now that is sheik. All good names for your portfolio.

Last but not least, the Boomers will be buying that new home. If they are going to Florida it will probably be purchased from Lennar Corp. Cl A (Symbol LEN, $17.47) which has big real estate holdings in that state. I own this one because I found it to have the best 2011 earnings projection of .86 cents per share for the homebuilders stocks. It already has had a 12 month return of 85.4%.

Boomers also love food and gardening and Scripps Networks Interactive Inc. Cl A (symbol SNI, $43.52) rules the roost in this area of TV with Food Network, Home and Garden TV, (which also does real estate), and other similar channels. Network stars like Bobby Flay and Giada Delaurentis keep ad revenues jumping at this network. SNI operates at 24.20% net profit margins.

So put your old Woodstock tie-dyed T-Shirt on and put some of these stocks in your retirement portfolio.

Good Eats and Bon Appetit,

Freewilly

"These stocks get no pricing respect from Wall Street for their good balance sheets"

Dow Jones 10620.16 (UP) Week ending May 14th, 2010

Rodney Dangerfield.
I get no respect.

"When I was born I was so ugly the doctor slapped my mother."

"I went to a fight the other night, and a hockey game broke out."

"A girl phoned me the other day and said... Come on over, there's nobody home. I went over. Nobody was home."

"I told my psychiatrist that everyone hates me. He said I was being ridiculous - everyone hasn't met me yet."

No respect. This is the same case on Wall Street with a lot of stocks. The first one is Activision Blizzard (Symbol ATVI, $10.69). 23 analyst recommend this stock but none of them are stepping up to buy it. Five year growth rate of 26.88%, No long term debt, great balance sheet. No Respect. Nervous nillies worrying about April game sales. DECEMBER is what matters in the game business.

The second one is Motorola Inc. (Symbol MOT, $6.79) This one I bought this week. Mot's got the mojo back in their handsets with Google's Android inside now (Android sounds like Steroid and acts that way for Moto sales!). 3 Billion in cash and 5 billion in short term investments on the balance sheet. This company has been reforming itself for ten years. My guesstimate is 2011 earnings of .53 to .55 cents a share. Now is the time to buy.



The next company is Garmin Ltd. (Symbol GRMN, $33.53). This company has zero long term debt on the balance sheet. It trades at a PE of 11.64. The company has a 5 year revenue growth rate of 31.86%. This low cost operator even throws a 4.47% dividend your way. Sales and earnings have slowed up a bit here, but still a good company based on the numbers.

Another company where sales growth has slowed up a little bit, but still solid numbers is Ebay Inc. (Symbol EBAY,$22.25). Ebay has embedded in it Paypal which is an excellent business. Ebay operates at 27.3% net profit margins which is outstanding for a retailer. The 2011 earnings are projecting at $1.60 a share. I don't think there is much downside risk here. The wow factor may have worn off and Meg Whiteman is gone, but Ebay still cruises along with 18.99% revenue growth over the last 5 years.

So give these 4 some respect. While your at it, how about them Philadelphia Flyers! Better give them a little respect too! Go Flyers!

Freewilly

"Damage control , Scotty? Can you give me some auxillary power? What do we have on the ship that's good?"

Dow Jones 10380.43 (Strong Down) Week ending 05-07-2010


"Captain, we have quite a bit of damage down here. Some fumble fingered guy hit the wrong key on the panel and the warp drives went all haywire. The whole crew tried to fix it, but we were working in all different directions. We're gonna need a bottle of single malt Scotch and some more DiLithium crystals. You know it controls the amount of power generated in the reaction chamber, channeling the energy released by mutual annihilation into a stream of electro-plasma. Kirk: Yeah,right Scotty. Kirk: "Can't we just throw some Greece or Portugal A- bonds into the furnace to get us home?" Scotty: "Aye Captain, but the whole place is in an uproar now, we need to calm them all down first" Kirk: Damn it Scotty, we need that power to get to Dow 12,000. Do the best you can.
Kirk: "Bones give me a shot of something, I have a wicked migraine headache now." Bones: " Jim, I'm a doctor not a miracle worker. This Dow 12,000 thing is going to take some time"

Well the stock market had a perfect storm of events this week that made them realize that they need circuit breakers not only on the overall market, but also on individual stocks. Europe's got itself all tied together in one big financial EURO knot. Calls for austerity in Greece has put the citizenry in a very foul mood. A lender of last resort must step forward.

So what to do now? Well, one thing to do is see what stocks were UP on Friday.
Here are some names: Luminex (Symbol LMNX, $16.33), Activision Blizzard (Symbol ATVI, $10.56)), Goldman Sachs (Symbol GS, $142.99), Direct TV (Symbol DTV, $35.89), Marvell Technology (Symbol MRVL, $18.86), InVentiv Health (Symbol VTIV, $25.00), Maxim Integrated Products Inc. (Symbol MXIM, $18.50).. If you didn't get a chance to gooble up some Accenture when it dropped from 41.00 down to $0.14 cents on Friday or to stash some Proctor and Gamble at $39.00 when in jetted across to the NYSE ARCA for a firesale on the NASDAQ, then maybe some of these names might suit you well.

So don't get nervous, Capt. Kirk and the Enterprise NCC-1701 always pulls us out of these precarious situations.

All the best and Happy Mother's Day,

Freewilly