Ben, I just want to say one word to you, "Plastics" - from the movie The Graduate (1967).........Fast-forward to 2010

Good morning and Happy 2010. If they were remaking the movie The Graduate today in 2010, when Mr. McGuire pulls aside young Ben Braddock (Dustin Hoffman) and says," I just want to say one word to you", "are you listening", the word would be "Synthetics". "There's a great future in Synthetics". "Enough said". What are some of the names of these producers of specialty compounds and chemicals you ask? Well the one everyone loves for the long term is Sociedad Qufmica y Minera de Chile S.A. ADR, (Symbol NYSE: SQM), the miner of lithium and potash. The Hybrid automobile market needs boatloads of Lithium to make all those car batteries, not to mention the batteries in all those cell phones, I-phones and I-pods. The Andes mountains hold 90% of the world's lithium brine. Enough said. Rated a hold currently because of being fully valued and having some pesky cash problems with paying their dividend, this is a good 3-year investment at the right buy in point.
Praxair Inc.(Symbol PX) would be the next stock I would mention. They produce Oxygen. Pretty important stuff for life. Good sales growth 14.8%, good earnings, good dividend, 43% operating margins. Enough said.
Calgon Carbon Corp., (Symbol CCC), falls into the synthetics group also. They purify dirty water and do Mercury removal. Important stuff for human existance. This stock is up 141% in 3 years. Earnings are starting to advance nicely. Enough said.
I should mention that I am not a registered financial advisor and that everything that I report is just from my common sense observation. I do have a degree in Psychology from Rutgers, Camden NJ., (symbol R.U.C.C.A.S.), if that gives you some comfort, so I can console you on any bad trades you make.
Last, but not least, is Albemarle Corp., (Symbol NYSE: ALB).
These guys have three operating segments: Polymer Additives, Catalysts and Fine Chemicals. Earnings estimate for this year are $1.80, for next year $2.47 per share. 12 month total return is 74.8%. 5 year earnings growth of 21.92%. Look it up if you don't beleive me. http://www.smartmoney.com. The link is on my blog.

So if you want to find your Elaine (below) .............


you better do your homework, and look at the numbers.

Enough Said,

Freewilly

Instead of a grand 2010 prediction list -how about just one Energy stock idea

I tend to be contrary to doing the predictable. It may be the Scotch, Dutch, Irish, or Italian decendency that makes me that way, and I will let you decide. I did not want to do the big 2010 "roundtable list" and throw a dozen names at you. I thought it better to give you one good idea from public information.
On December 7th, Bloomberg News reported that McDERMOTT International Inc,(Symbol MDR - price $24.01) whose price has doubled this year, will seperate itself into two distinct companies. One will be named J. Ray McDERMOTT and be in the offshore Oil & Gas engineering business. The other will be Babcock and Wilcox Company which builds reactors for the US Navy and the government. This will allow Babcock to have a better opportunity to win more government bids and also make it a desirable takeover target. Analysts think that J.Ray McDERMOTT could be worth $21.00 and Babcock $12.00 a share at the breakup. Well do the math, and you could come up with a fairly low risk one year investment with a 38% return plus any rise in the stocks, in a year that they say there could be some rough sledding in the market.
I beleive (MDR) should earn a spot in your investment lineup in 2010.

Please comment with your good idea stock for 2010.

All the best , Freewilly

Macao, Taipa, Macau - will this "city of dreams" bring you a 2010 Casino investment?

I thought I was going to write a buttoned up nice little article on investments to profit on the thriving Macau casino business's, but it turned out to be a more complicated discussion than I first thought. Pictured to the right is the Casino Lisboa which is owned by Sociedade De Turismo E Diversoes De Macau, (Symbol HK: SJM) which is owned by Stanley Ho(Hung-Sun) and his family and trades on the Hong Kong stock exchange. Stanley has had a monopoly franchise on the Macau casino business for 40 years before anyone else arrived. All the current folks have only been there 10 years. Taipa is the smaller of the two islands in Macau Special Administrative Region of the People's Republic of China (formerly the Portuguese colony of Macau).Craig Stephen's "This Week in China" on Marketwatch.com is an excellent source on keeping you up on events in Macau. The Chinese government holds the ultimate trump card here, like many other things in the world, so add a dose of measured risk for that fact. Also there are Hong Kong exchange stocks and US exchange stocks with varying levels of exposure to this market and the associated risk. Wynn and Las Vagas Sands have stocks on both exchanges. If you want to see the Hong Kong stock exchange it is listed at http://www.hkex.com.hk/index.htm, I will limit my discussion to the US investment stocks. WYNN (Symbol WYNN) and Las Vegas Sands (Symbol LVS) which owns the largest hotel in Macau, The Venetian Hotel Resort, are safe ways to get exposure to the Macau action. Melco PBL Entertainment LTD ADS (Symbol MPEL) with the "City of Dreams" on the Cotai Strip should also be one to look at. All of us were cheering for Playboy (Symbol PLA) with their Macau location to be a boom for the company, but evidently they are playing with such a "short stack" at the poker table that Iconix Brand Group (Symbol ICON) that makes London Fog raincoats, walked away from a buyout opportunity of PLA last week. That must be one ugly Bunny balance sheet.
If you are in the market to just look at some good casino stocks and don't care about China, WMS Industries (Symbol WMS) and Penn National Gaming, Inc (symbol PENN) are both worth a look.
If anyone has comments on the other Hong Kong exchange traded stocks in Macau with more information, I invite you to comment on this blog and share with others your insight.

Season Greetings and Happy New Year,

Freewilly

What If you had to pick just one superstar stock ........

Ah Yes, If you could just pick that one stock that is a sure shot superstar. As a purveyor of stock advice you will time and again get the request from a friend that has a CD coming due that they are making 0.25% interest on and want to put it into a can't miss superstar stock. Well the last time I got this request back in 2000 I told my friend to purchase Lucent Technology which had been growing at 40% a year for multiple years in the optical electronics business and also Pfizer (Symbol PFE) which had just purchased Warner-Lambert and their superstar growth drug Lipitor. These stocks just like Tiger Woods a few months ago, appeared to be rock solid, can't miss safe bets. Well they both ended up crashing down in stock value and both were investment disasters. Tiger still has his golf talent, but faces a tough road ahead bringing his life back in order. I feel sad for his wife and children.
That brings us to today, December 19th, 2009 where the superstar question is posed again. Well based on the premise that people will continue to eat and there will continue to be more people in the world, I will pose to you an agriculture stock. Thomas Jefferson would have been happy about that. The name I will pick is Monsanto (Symbol MON). The stock is up 58% over the last 3 years, 18% net profit. Sales growth around 13% and continued earnings growth.
From an excellent group of Potash (POT), Agrium (AGU), Mosaic (MOS) and Scotts Miracle Grow (SMG), I picked out Monsanto because it also has the kicker of selling the material that goes inside all the airbags in automobiles. I can be sure people will eat and also cars will continue to collide together as we have 20 Inches of snow coming down in the northeast right now. The stock trades north of $80.00, so you will need to pick an entry spot for purchase. Maybe during a lull in February 2010, when everyone else is piling into the tech stocks.
I guess Tiger took his guidance from the "Advice Dog" over to the right, and he is an easy target right now so I will not take cheap shots at him, but golf needs him to come back and bring the magic back to the links. He should also get some corrective lenses, because he apparently is not able to see his wife Elin, who is a knockout.

So chow down and buy some Monsanto,

Freewilly

2010 - Distress in real estate continues. Will it create an investment opportunity in stocks or REIT's?

Peter Lynch, possibly the greatest fund trader of all-time with his Fidelity Magellan fund, states early in his book "One Up on Wall Street" that one needs to pass a "mirror test" first before you start to study the financial section to look at stocks. Peter said "before you buy a share of anything there are three personal issues that ought to be addressed." Well it is issue number one that I want to discuss, 1. Do you own a house? Well in 1989, when Peter wrote his book, it was a great idea and over the long term it has been a great idea. However, recently with the bank credit crunch, foreclosures due to too much leveraging of financing, and some over supply conditions, the value of real estate has gone down in the short term. Add to that pressures in the Commercial real estate market continuing in 2010 and you get some very distressed property values for those that have to sell. At the same time an opportunity is created for some of the real estate investment trust, (REIT'S), with new infusions of cash from high net worth liquid investors to make some once in a lifetime buys.
I should note at this point that banks should exhaust every option to help a homeowner stay in their house and not foreclose on them. It is devastating and could happen to anyone given a bad turn of financial circumstances, such as loosing your employment.
Anyway , some REIT's that you may want to look at to make some money are: CGM Trust: Realty Fund, (Symbol CGMRX)$20.86 NAV,which gives you a blend of real estate investments. If you like the Washington DC play on real estate you can go First Potomac Realty Trust , (Symbol FPO) $11.85 NAV or Liberty Property Trust (Symbol LRY) $31.25. If you are looking for a value play here with a good dividend my broker Vince likes Duke Realty Corp.,(Symbol DRE)as a longer term pick. If you are looking for something to invest in on the mortgage side you may like Annaly Capital Management Inc. , (Symbol NLY) $18.38. I think as tempting as it looks, it is a little early in 2010 to buy the home builders, unless we have a dramatic drop in interest rates. I keep my eye on Lennar (Symbol LEN) and Beazer Homes, (symbol BZH).

Happy Holiday portfolio shopping,

Freewilly

Baltic Dry Index and the bulk shipping business has been on the rise lately, but is there trouble ahead?

Up to a couple months ago, I did not really think much about the bulk shipping business. I had seen some folks jumping in and out of DryShips Inc. (Symbol DRYS 6.29), in the $5.50 - $7.50 trading range and it seemed to be tied mostly to the Chinese economy and how much stuff they are gobbling up.

Well, I can tell you two things about this business. When it is going well it has great margins and is extremely profitable. Second, it is extremely capital intensive to buy ships and finance them in all kinds of creative ways. So you are either doing real well or really bad, earnings wise with rapid swings.
Some companies that have performed pretty well in this space and seem to make money are Diana Shipping, (Symbol DSX), and Kirby Corp.,(Symbol KEX). Both of these have done pretty well over a one year period. Some names I would avoid are Eagle Bulk Shipping, (Symbol EGLE) and Overseas Shipping Group, (symbol OSG). OSG leads in sales revenue, but not so good on the bottom line of the balance sheet. Some prognasticators are calling for softness in the bulk business in mid-2010?

So go with whatever floats your boat, I personally like DSX.

Freewilly

Gold has taken off in price, will Silver try to catch up?

With the continuing fall of the US Dollar, Gold on the COMEX has jetted up to a friday close of $1116.80 per ounce. Yet Silver on the Comex sits at a Ho-hum $17.39 an ounce? There seems to be a disparity here and common sense seems to dictate that silver needs to rise from here. Well there is alot to look at here, including bullion and coins. I'm no millionaire and can't afford stocks like BHP Billiton or RIO Tinto the mega player miners in this space, but not pure silver plays. You can look at the Junior mining stocks on the Toronto Stock exchange but your equity risk increases dramatically with these names.
So here is my recommendation: I-Shares Silver Trust , (Symbol SLV), from the Barclay Global Fund Advisors. The price currently is $16.92. It is up YTD 59.86 % and 84.07% for 1 year. Let these guys figure out what to buy. You get a 100% Silver play and don't have to try to figure out a miner's balance sheet. If anybody has other suggestions on Silver, please I invite you to post them in comments.

Dreary, rainy weather continues in PA. and Jersey,

Freewilly

Getting near the end of the year - time for a longshot?

Well the 2009 stock trading year is rounding the bend towards a close and you are still looking for that one 3-point shot at the buzzer to win the game at the end of the year. You have dice in hand and should be playing with the houses money if you have been involved most of the year. So I thought I would roll out some speculative names for sporting purposes only. (Speculative means you can lose or make a lot of money quickly. Some luck and good timing is required. If you cannot afford to lose your money you should not speculate).
The first name I will throw out is BioCryst Pharmaceuticals Inc. (Symbol BCRX). BioCryst received an initial order for 10,000 courses of its intravenous flu drug peramivir, valued at $22.5 million, under a contract from the Department of Health and Human Services (HHS). Demand will remain strong for their product that is also marketed in Japan.
Next up, Clearwire Corp. (Symbol CLWR). Their 4G highspeed
wireless internet services using WIMAX to cover your home, business , and mobile internet needs. The 2G and 3G carriers are quickly running out of spectrum with continued high growth. WIMAX makes your world one big hot-spot. Side bets on this stock are Sprint , (Symbol S), who owns 51% of Clearwire's stock and Motorola (Symbol MOT), that is cranking out with factories humming WIMAX infrastructure equipment for their towers.
Third, we need to acknowledge the boom in Gold recently. So at least let's pick one with a pretty good return on equity. ELDORADO GOLD CORP , (Symbol EGO). All I know is that all that glitters is not gold. I also know that the dollar keeps getting a haircut because of our low interest rates, making it worth less and less. So people are looking for somewhere to preserve their equity.
For full disclosure, of these stocks I currently only own Clearwire. That does not make it any better or any worse than the other picks!.

So roll the dice, 2010 is coming soon.

Freewilly

Fightin Phils Win and a fantasy baseball lineup of stocks

Well you should have had your Dicks Sporting Goods, (Symbol DKS), stock in hand from last week's blog because once the Phillies "Little Red Machine" won, (that is what Jimmy Rollins has coined them as, since they are the first NL team to repeat since those '75 REDS), Phillies fans have swarmed into DKS stores buying up shirts,hats($30.00 bucks right now for a Phillies red hat), and all merchandise RED.
I thought it would be fun to put together a fantasy baseball lineup made up of stocks based on the current Phillies positions in their lineup with speed being faster growing companies and power the steady consistant players. We will need a powerful lineup to take our revenge finally for the 1950 World Series loss to the Yankees ,(4-0 sweep no less, three consecutive one-run decision games,Fightin's scored no more than 2 runs), to Joe Dimaggio and the series MVP "Scooter" Phil Rizzuto.
The '49 and '50 Yankees had a wicked good pitching staff with Raschi, Reynolds, Lopat, Byrne, and Whitey Ford.
Well here is the lineup by position:

Batting order:

1. InterDigital Corp. (IDCC) SS
2. Adobe Systems (ADBE) CF
3. McDonalds Corp. (MCD) 2ND
4. Conoco Phillips (COP) 1ST
5. Caterpillar Inc. (CAT) RF
6. Nucor (NUE) LF
7. Gilead Sciences Inc. (GILD) 3rd
8. SPX Corp. (SPW) C
9. Urban Outfitters Inc. (URBN) P

Well Harry Kalas would say that ball is out-of-here! Whitey Ashburn played
on those 1950 World Series Phillies and both their spirits will be here with us in that booth in the sky above that sees all.

Go Phils!

Freewilly

How about those Gun Ammunition stocks - is there an investment opportunity here?

Some of my gun toting relatives tell me that the ammunition business is going hot as a pistol right now and wanted me to investigate opportunities that might exist for making some money on the craze. Well there are lots of companies in this space. Corbon/Glaser-Dakota Ammo Inc., Hornady Mfg., Remington Arms Co., and PMC/Eldorado are all privately held or part owned by venture capital partnerships. The two you can invest in are Federal Cartridge Corp. which is owned by Alliant Tech Systems inc. (Symbol ATK) and Olin Corporation, (Symbol OLN). Neither of these are pure plays, and the stocks are just about even for the last 3 years.
If you really want to eye up your scope on the gun and ammo area, the stocks that are benefiting from this action and also the general rise in interest in sporting goods and hunting are the following: Big Five Sporting Goods,(Symbol BGFV), up 162% for one year, Cabella's, (Symbol CAB), up 77.6% for one year, and Dicks Sporting Goods, (Symbol DKS), up 57.5 % for one year. Smartmoney as of 10/10/09 rates BGFV and DKS as a "moderate buy" and CAB as a "hold" right now. Bass Pro Shops, as a side note, does not appear to trade on an exchange and should probably take their company public.
One other thought may be to buy Sturm Ruger, (Symbol RGR), the firearms manufacturer that trades for around $12-13 a share. This stock is up 81.5% over the last year. Financials look pretty good.

Happy Shooting,

Freewilly

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