Dow Jones Industrial Average 13029.26 (UP) Week ending 04-20-2012
(Photograph by Deb Wilson)
We have a place nearby called "Harvest Books" where you can pick up some of the finest financial books ever written for $2.00 each. So last week I picked up a copy of The Motley Fool's Rule Breakers, Rule Makers, The Foolish Guide to Picking Stocks by David and Tom Gardner. Oops, I started reading and I was supposed to read there other two books first, Oh well.
I took a particular interest, (and I can't believe that I had not read this book up to this time, because it is really great original thinking), in David Gardner's section on Rule Breakers.
In Chapter 8, David summarizes the Rule Breakers and gives a continuous lesson in William Shakespeare's "Henry" historical plays. David will be glad to learn that we own 1 of 500 signed leather bound copies of "The Annotated Shakespeare" , signed by A.L. Rouse. We love books and love investing, what can I say.
"Catherine of Valois was the daughter of King Charles VI of France when her husband essentially won her in battle. King Henry V, Shakespeare’s famed ‘King Hal,’ insisted on the long-discussed marriage after his victory at the Battle of Agincourt, and he was even more urgent once he saw how pretty the young French princess was."
So here are David Gardner's tenants:
"A Rule Breaker must be the Top Dog and first-mover in an important, emerging industry."
"It must possess sustainable advantage gained through business momentum,patent protection,visionaries, or inept competitors"
"The Rule Breakers stock will have demonstrated past price appreciation equivalent to relative strength performance of 90 or greater"
The stronger it's consumer appeal, the better it will attract customers,habituate them, profit off of them, and protect it's business"
and last , "You must find documented proof that it is grossly overvalued, according to the financial media"
David mentions three stocks in his book that hold true to his tenants, Apple, Amazon, and Starbucks which all have performed well. Here is my list going by his tenants and my fundamentals view.
Qualcomm (Symbol QCOM). The impregnable fortress of chips-sets and patent lawyers. Facing up against Qualcomm is like trying to cross the bridge that Lancelot, of Arthurian Legends is defending. A very difficult task. They have a strangle hold on the Smartphone chip business . Hy-Fi™, HSPA+ Advanced & LTE Advanced, mirasol® Displays, Vuforia™ Augmented Reality are just a few of their current concepts. Don't mess with Qualcomm!
Chipotle Mexican Grill (Symbol CMG). What is the secret sauce at Chipolte? Food with Integrity. Chipotle tenant " It means serving the very best sustainably raised food possible with an eye to great taste, great nutrition and great value. It means that we support and sustain family farmers who respect the land and the animals in their care." But the real secret is their unique employee development program that makes them better than everyone else. Not since Charles Tandy of Radio Shack said to his managers, "Whatever % of profit you make to sales revenue, I will pay you that % of the profit", has their been such a dynamic employee development program. Other managers take note.
Priceline.com (Symbol PCLN) . This one is a CFO's dream. The perfect combination of high revenues and earnings without investing a large amount of capital. It is the "perfect-storm" of capitalism, a virtual profit creation machine. The Negotiator has it all over the competition.
Union Pacific Corp. (Symbol , UNP) . You have tons of Coal and LNG energy products that will need to be moved to the west coast to ship off to Pan-Asia countries, (since we refuse to use it here!). The way it will get their is on the Union Pacific Railroad on hopper and tanker cars unless you want to run a pipeline through YellowStone Park.Yogi and Boo Boo would not like that. Not to mention the thousands of miles of dark fibre that they have in the ground running next to their track right of ways for future communications connections. Talk about looking ahead!
Ebay Inc. (Symbol EBAY) and Verifone Systems Inc. (Symbol PAY). These two, (Ebay with Paypal) are the pay with your credit card via your Smartphone guys. They currently have this business monopolized. It's good to be King!
LIONS GATE ENTERTAINMENT (LGF) - This one is my Rule Breaker baby pick. LGF reminds of the early days of Gulf & Western's - Paramount Pictures Company. They are building a powerhouse library of media content and are breaking the rules along the way with such ground breaking hits as "Madmen", "Hunger Games", "Margin Call","Crash" , and "Safe". This one does not fit all the criteria yet, but is heading in that direction.
Well, sorry to write a novel here, but there was a lot of material to cover. There are also allot more of these companies like Schlumberger and Allergan that could have been added here.
Dow Jones Industrial Average 12,850 (Down) Week Ending 04-13-2012
Nadine from Burger Castle in the SNL (Saturday Night Live) skit offers some sound financial advice. She says "Simmer down now"."Simmer Down Now Skit on SNL" . Some of you will go off now on a YouTube tangent into oblivion , never to be seen again. To those folks we say another SNL line, (Ba-Bye!).
It is time to do a little balancing of the ecology of your portfolio and add a little green. You should probably have 15 -20% of your investments in high yielding dividend stocks. Not so exciting, but very effective.
So today I will present a few good dividend stocks , their trading symbol and their annual dividend yield. The first place we look is as at Natural Gas Pipeline Master limited partnerships.
Here are a few names: Kinder Morgan EnergyPartners LP , symbol KMP, 5.65% ,(and a Jim Cramer favorite), Boardwalk Pipeline Partners L.P. , symbol BWP, 7.97%, (and a Freewilly favorite) and Mesa Royalty Trust, symbol MTR, 8.07%, (and a Boone Pickens favorite).
Another place to find some high dividends is with container ships which require allot of capital and ocean oil rig drillers. Two I like are Box Ships, symbol TEU, 13.94% and SeaDrill LTD. symbol SDRL, 8.63%.
Simmer done now! No Lululemon (symbol LULU) here. You can also look to the bank preferred stocks and financial instruments.
Wells Fargo & Co , symbol WFC'J , 6.77%, JPMorgan Fixed-to-Floating Rate Security, symbol JPM-PZ, 7.6% variable, Morgan Stanley Capital Trust III 6.25% Capital Secs, symbol MWR, 6.44% dividend yield. I will also throw in here cash cowVerizon Communications Inc., symbol VZ,5.37% dividend.
Donna Summer , Queen of Disco
Jester Fries? Simmer, simmer down now. Castle Kids meal with no figurine? Simmer down now. The Queen of Disco's name in the phone book? Summer, Donna. Stretch it out now, please.
I am always being asked about "Small ball" stocks with low prices, and a little more speculative so that folks can buy more shares. These stocks are like a nice juicy Burger Castlecheeseburger with fries, they can taste really good but then make your stomach hurt really bad!
But alas, I will give you a five pack: Standard Pacific (symbol SPF) a housing stock doing business in Texas, Arizona, and California. Telular Inc. (symbol WRLS) in the wireless security business. Tenet Healthcare (symbol THC) in the hospital business and just won a settlement. My two favorites though in this area are, Alcatel Lucent , symbol ALU, owner of Bell Labs and Clearwire Corp. Class A, symbol CLWR , owner of lots of up and running 4G, LTE and Wimax network infrastructure and service.
Freewilly would like to thank Cheri Oteri and the whole SNL team, and special guest Toby McGuire for such timeless comedy material.
Make Simmer down now! , and buy some dividend stocks!!!
Dow Jones Industrial Average 13060.14 (Down) Week ending 04-06-2012
Samuel Adams helped start a Revolution. His cousin John Adams, the Esquire and future President of the United States stated that " Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence."
Well the facts and evidence in this case show the numbers on this stock to be indisputable and are very good. First of all there are only 13,741 shares of the stock outstanding as of 12/31/2011.
Boston Beer Company Inc. (Symbol SAM, $103.38) is projecting $4.18 per share for 2012 and for 2013, $4.72 cents per share. How about if we start with the first fact: 5 year earnings growth of 42.84%. "Abigail call my stock broker!" . How about a Return on Equity of 37.68%. Nothing but the facts.
We should also mention here that the 3 Year Total Return on the stock is 330.75%. SAM had annual revenues last year of $513 million so there is lot's of room for growth in this name. So this story is just beginning.
In honor of the French giving us a hand and assisting in our Revolution for Independence, I added La Bourse De Paris , the CAC-40, to my side column of stock exchanges. This is also known in modern times as Euronext Paris.
Battle of Lexington
So in Conclusion, the Opinion for our case summary is that you would be a darn fool if you didn't put a little SAM into your portfolio. So put some Eggs into your Easter basket portfolio and search no further. Monday morning go buy some SAM. I recommend 25-30 shares in your IRA account.
Dow Jones Industrial Average 13,212 (UP) Week ending 03-30-2011
Your probably wondering why I am recommending the purchase of a stock Under Armour Inc. Cl A (Symbol UA, $94.00) that has a forward trading PE of 42? Well how about because it has a Consensus Estimate of GAP earnings of a rise of 63.54%! (.60 cents over .37 cents per share). This dude has got game!2012 earnings per share are projected at $2.33 and then rises in 2013 to a projection of $2.99 earnings per share.
The financials on this stock are very strong. UA's Current ratio is 7 - 2 , Assets to Liabilities to speak in horse racing odds, and I thing this one will be a pace setting runner. 5 year sales growth for the company has been 28.36%. It has projected long term Earnings growth of 27.53 %.
They also have a very healthy Return on Equity of 17.37%. I would consider this a very aggressive growth investment to fill that part of your portfolio for high growth. (my broker Vince likes this one too for this purpose. I told him I wanted to be in the game!). It will of course have a high beta to go along with that, with the price moving around rapidly.
Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. They make really slick stuff and do really slick marketing of that stuff. Here is their website. www.underarmour.com .
4.68% of the company's stock is owned by the Berkshire:FocusFund. They are currently up 28.45% on their investment. The one year total return on the stock is 28.36% and the 3 year total return is 420.2%.
"Slick stuff for Slick Willy". Maybe I could even golf decently if I donned the Under Armour wear. Probably not!
Wishing you a Happy April Fool's day and also Palm Sunday if your are a Christian in around an hour and 10 minutes if you are in the USA eastern time zone.
Dow Jones Industrial Average 13,232.62 (Up) Week ending 03-16-2012. Dow Jones Industrial Average 13,081 (down) Week ending 03-23-2012.
The folks that do the fine work that is Smart Money Magazine celebrated their 20th Anniversary last week. They are a continuing source of reliable financial information and we thank them. Sarah Morgan there decided to put together the stats to see what stocks had performed the best as far as appreciation over the last 20 years and I decided to tell you about Number 1 & Number 2 that still both have good fundamentals.
KANSAS CITY SOUTHERN (Symbol KSU, $70.45) turned out to be the number one performing stock over the last 20 years. It has gone up an astounding 19,090%. They used to be a conglomerate but spun off the Janus Capital Group and are now just the railroad. What makes them special? Not only do they have the very desirable West-East railroad routes but they also crisscross with North-South routes going from Canada to Mexico.
KSU continues to roll out the earnings with $3.48 per share projected for 2012 and $4.12 per share for 2013. Long term earnings are projected at 17.7%. The one year total return has been 29.4% and the 3 year total return motored at 454.3%. This train just keeps rolling down the track. Also if they don't build all these pipelines their tanker cars will be filled with crude oil and liquefied natural gas to get the stuff to the refinery locations. This one still looks good to me after 20 years of growth.
So who was number #2? That would be Middleby Corp. (Symbol MIDD,$99.72) . Who the heck is that and what business are they in? Sounds like an episode from the old show the Twilight Zone. (next stop Willoughby!) Well when you go on Friday night and pick up a pizza it was probably baked in one of their commercial ovens.
Middleby had a leisurely Total return since April 1992 of 14,330%. You didn't know you had eatin that much pizza! Middleby "makes ovens and other equipments for restaurants, but "it's probably more of a technology company than an industrial or equipment company," says Anton Brenner, an equity analyst with Roth Capital Partners, LLC. "It's the most innovative company in the industry," Brenner says. They regularly add new labor-saving features to their equipment, he says. They've also grown through M&A: The stock really took off after Middleby merged with Blodgett, a division of Maytag that also made commercial cooking equipment." (from Sarah's article).
MIDD is projecting earning per share for 2012 of $5.81 . 2013 is shapingup as projecting at $6.62 per share. 5 year sales growth has been 14.84% and the Long Term projected earnings growth is 22%. (all these stats are from SmartMoney of course). The company runs at a Buffett like20.30% Return on Equity. The Total 3 year return has been a meager 207.5% , enough to boost up your kid's college fund.
My brother Howard says my little articles with the logos reminds him of the AMC show "Madmen" produced by Lionsgate Entertainment (symbol LGF, $14.50) (and no slouch itself, just produced "the Hunger Games" !) . Well I hope it entertains and informs you at the same time.
Do not be afraid to ask questions via the comment portion of this site to share ideas on these subjects.
Have a pleasant Spring day if you are in the Northern hemisphere. If you are in the Southern Hemisphere 12 more weeks of Winter.
Dow Jones Industrial Average 12,977.57 (Down) Week ending 03-02-2012 Dow Jones Industrial Average 12,922.00 (Down) Week ending 03-09-2012
Burton Malkiel in his landmark book "A Random Walk Down Wall Street"which was first published in 1973, (I have the Six edition, 1996), examines his basis thesis that "the market, prices stocks so efficiently that a blindfolded chimpanzee throwing darts at the Wall Street Journal can select a portfolio that performs as well as those managed by experts". In other words, just throw away your fundamental or for that matter technical analysis of stocks and just go buy S&P Index funds from Burton's buddy Jack Bogle at the Vanguard Group of Investment Companies.
Before I start jumping all over this thesis, I would recommend getting a copy of this book, because it is loaded with good information about "Risk" and "Beta" and speaks on a range of investment vehicles. First, Index funds are by definition "Average" . They purchase all the stocks in a sector both good and bad and you can only end up with average. Now average, might look good if you are an investor with no discipline in your purchasing of stocks and are always speculating on bad stocks and losing money. The reason that the Index investing has worked at all over the years, is because of another investment premise that is very good, that of purchasing small amounts of stock consistently over time whether the market is up or down. This is a very good method, but why not apply it to good fundamental stocks instead?
Malkiel finds weakness in Fundamental Analysis at three points. First the information and analyst may be incorrect. He challenges that stock analyst cannot be clairvoyant on earnings predictions. Well with the Sarbanes-Oxley rules on financial disclosure and the wealth of public information available this is not as much of a concern. It must be understood that random events can influence a companies earnings. Second, he says the analyst"s estimate of "Value" may be faulty. Well if Freewilly is your analyst, I will admit that sometimes I find estimating revenue growth for a company as somewhat problematic. I will keep you out of trouble though because of the many alternate investment choices. Third , the stock market may not correct it's "mistake" and the stock price might not converge to it's true value estimate. (Witness the stocks of GM and Ford last year, GM my biggest loser! Serves me right for investing along side the US government!). Yeah, that happens sometimes, but not to often with well managed companies.
Never under estimate the intelligence of a Chimpanzee. Nor that of an amateur stock blogger. I have been so busy that I didn't get my pick out to press last week but I purchased it anyway based on fundamentals and a double catalyst.
Verifone (Symbol PAY, $47.80) I purchased on Monday and it was down on Monday. On Tuesday with the Dow down 200 Points, Verifone (Pay) was up 3 and 1/2 points. What are the catalyst? ................................
"VeriFone to Enable Isis NFC Mobile Commerce Access for Millions of Retail Checkout Lanes Nationwide. VeriFone Systems, Inc. (NYSE: PAY), today announced an agreement with Isis, the joint venture between AT&T Mobility, T-Mobile USA and Verizon Wireless, to integrate the Isis Mobile Commerce Application in current and future NFC-enabled product lines. The companies have also agreed that their sales, marketing and implementation teams will collaborate to target large retail and petroleum/convenience merchants in previously announced Isis launch markets of Salt Lake City and Austin." The Smartphone strikes again!The second catalyst is something I picked up in conversation. That is the rumor that with the advent of the SIM chip on the credit card and the new layers of security being put in place, that basically every credit machine that is in the field, is in effect, currently, obsolete, because they can not read the new SIM chip cards. This is not a bad bit of news for Verifone, who just bought Hypercom and who along with Ingenico, make most of these machines.
The company, which already had a 5 year revenue growth rate of 11% and a Return on Equity of 31.3%, looks to be in a very good position. 2012 earnings per share is projected at $2.66 and for 2013 it is $3.25 per share (if you can believe the analyst!).
So I will conclude, randomly, by saying that a group of good fundamental stocks will beat an index of average stocks hands down every time. Best of luck and buy in small increments over time.
Also, Freewilly welcome the IDX -Indonesia Stock Exchange to our site this week to be added to our Stock Exchange column on the right side.
Dow Jones Industrial Average 13,005 (Up) - the close Tuesday , February, 28th
"Founded in 1919, Halliburton is one of the world's largest providers of products and services to the oil and gas industry. It employs nearly 70,000 people in approximately 80 countries. Halliburton's fascinating and proud history reveals a continuous focus on innovation and expansion that began with the company's founder, Erle P. Halliburton. After borrowing a wagon, a team of mules and a pump, he built a wooden mixing box and started an oil well cementing business in Duncan, Oklahoma." This is how it started according to Halliburton's website.
Halliburton Co. (Symbol HAL, $37.68) and other Oil Service stocks have been lagging the market recently despite the great rise in the price of West Texas Intermediate Crude ($106.60 per barrel). This despite having 25 Strong Buy recommendations from analyst and 9 Overweight ratings. Halliburton is projected to earn $3.93 per share in 2012 and 2013 earnings are looking like $4.58 per share. This reflects a forward PE of 9.6 which is way below the market average. A couple reasons for this are the fact that earnings from gas drilling are expected to slow up a bit because of a supply glut and nowhere to store the surplus natural gas. Second, Halliburton's name has been mentioned in the big BP and TransOcean oil rig leak in the Gulf of Mexico, because they were the cementer.
But there is no denying the numbers. HAL, (like in 2001 a Space Odyssey), has a company Return onEquity of 25%. Also, although the one year total return on the stock is -19%, the three year Total return on the stock is actually 137.5 %. Ebitda continues to rise each quarter and Revenues have been on a steady quarterly rise. Plus one of these days they are going to let you do some offshore drilling off the coast of the USA. We better do it quick because the Chinese already have a rig in production off the coast of Cuba!
Halliburton states on their website that "As we work with our customers and suppliers to develop global energy resources, sustainability is an integral part of our business strategy and a key driver in all of our business activities. Our innovative technologies and our operational experience and expertise enable us to minimize our environmental impact and successfully manage the social challenges and inherent risk that are present in our industry."
So Freewilly says Drill, Drill, Drill and make some investment in the great stock value which is Halliburton"
Dow Jones Industrial Average 12,950 (Up) Week Ending 02-17-2012
First a report from Bloomberg NEWS:
"Feb. 17 (Bloomberg) -- Enbridge Inc. fell the most in almost three year after disclosing that Noverco Inc., which owns 8.9 percent of the Canadian pipeline company, plans to sell a third of its stake.
Enbridge, the largest transporter of Canadian crude to the U.S., fell 4.1 percent to C$37.58 at the close in Toronto, the biggest decline since Feb. 23, 2009.
Noverco, a holding company that’s 61 percent-owned by Caisse de Depot et Placement du Quebec, Canada’s largest pension fund,plans to sell 22.5 million of its 69.4 million Enbridge shares. Enbridge owns the other 39 percent of Montreal-based Noverco. The sell off will result in $300 million for Enbridge, the Calgary-based company said in a statement.
Noverco is selling the shares to rebalance its asset mix, Enbridge said in the statement. The sale represents 2.9 percent of Enbridge’s outstanding shares, according to data compiled by Bloomberg."
This news should create and opportunity to buy some Enbridge (Symbol ENB, $37.73)herein the next few weeks at some discounted prices. Enbridge owns some of the premier oil pipelines of the world with 2 more projects planned that could really expand them.
One, the TransCanada's Keystone XL pipeline which is an expansion of the existing Keystone pipeline has been initially stalled on the US end by President Obama.Stephen Harper ,Canada's Prime Minister ,says "if we can't send the oil south then we will send it west to countries that want to buy it."
Which is the second project:
Enbridge Northern Gateway project. There is opposition to this project by the Regional Districts and the Indian Coastal FirstNations. Under the current proposal, the controversial pipeline $5.5-billion would carry 525,000 barrels of oil sands-derived crude from Edmonton to Kitimat,B.C. One concern is the environmental impact of tankers coming in and out of northern coastal waters with risk of a spill in the major fishing areas along the coast.
I believe that Apache Corp. (symbol APA) is getting ready to start mid-2012 a Kitimat LNG project and terminal for Liquified Natural Gas. So there will be tankers coming in and out of this port already anyway. The Canadian government will need to plan this well and have a sophisticated traffic scheme in place to avoid any accidents that would effect the local fishing industry and ecosystems. I believe that both of these projects will eventually get approved and built.
Enbridge, symbol ENB, should earn $1.65 per share in 2012 and $1.86 per share in 2013. Enbridge pays out a 3% dividend yield and has a 12 month Total Return of 29.4% and a 3 year Total Return of 170.8% . This is why Caisse de Depot needs to rebalance their portfolio!
So look to buy this in the $34-$37 range and be patient for it to come in.
My thoughts and prayers are with my brother-in-law, George Zwicker, who we lost this week on Valentines Day, Feb 14th to a heart attack during a hospital procedure. George lived in Berlin, New Hampshire, USA and grew up in Springfield, PA. and he will be greatly missed.
Zwicker is certainly a recognized last name in Nova Scotia and the eastern coastal areas of Canada.
Dow Jones Industrial Average 12801.23 (Down) Week ending 02-10-2012
Everybody seems to want everybody else's old stuff. It is like the Yankee Magazine swap page gone wild. Ebay, Craig'sList, Amazon, pawn shops, swap meets, flea markets and people swapping texts and emails on their smartphones makin deals and trades. Odd ball items of all sorts changing hands. Everyone trying to raise cash and parlay it forward into more exciting stuff.
It was no surprise to me that someone has made a real business out of surplus assets. But what really surprised me was when I discovered that Liquidity Services, Inc. ( Symbol LQDT, $40.12)showed up as Numero Uno in IBD's top 100 list from last week. CNBC's profile says that "Liquidity Services, Inc. is an auction marketplace for surplus and salvage assets. The Company enables buyers and sellers to transact in an automated online auction environment offering over 500 product categories." Looks like 'swap-meet gone global'.
They don't sell & collect any antique pinball machines but they have all kinds of other stuff. It is more likely that they have government surplus half-track trucks or motorcycles for sale. Projected long term earnings growth here is 30% per year.2013 earnings are projected at $1.62 per share. The one year Total Return on the stock is 150.2%. The 3 year Total Return has been 755.3%.
I have been talking about a lot of high momentum stocks here in 2012. They do have a degree of risk to them, and do not have the traditional year over year fundamentals that I usually look for and recommend. I guess the 2012 election year has me looking forward to better times. These stocks have also run up a bit this year, so I would approach them cautiously and buy in in increments, rather than all at once. I think you are OK on this one though, they are growing pretty quick.
Could be a tense week, with the Iranian's spouting off about their current Nuclear acheivements. It could give the market an excuse to take a little profit of the table this week.
Dow Jones Industrial Average 12862.23 (UP) Week ending 02-03-2012
Takeru Kobayashi mastered Philadelphia's annual Wingbowl noshing event by eating 337 chicken wings in a half-hour before a crowd of nearly 20,000 at Wing Bowl XX at the Wells Fargo center in Philadelphia , PA.. Kobayashi beat the record of 255 set last year by Jonathan "Super" Squibb. WingBowl was founded in 1993 by Philadelphia talk-radio hosts Angelo Cataldi and Al Morganti as a celebration of gluttony. The contest was first broadcast on WIP
The WingBowl was invented to distract us from the fact that another year passes by without our Phillly Iggles (Eagles) being in the SuperBowl. Another fact is that you can be making money off of this national craze for football and chicken wings.
BUFFALO WILD WINGS (Symbol , BWLD, $70.30) is a company on the move. There ranking in Investors Business Daily is 99-95-88 B+ B+. This fast growing company will have 2011 earnings per share of $2.67 and 2012 earnings per share of $3.20 a share. They are taking all their money and plowing it back into the company into new stores. Five year sales growth here of 21.46% and earnings growth for five years of 23.32%. One year total return of 32.7% and 3 year Total Return on your stock investment of 127.7%. No chicken left on bones here as far as productivity. You can eat healthy here too with a nice spicy Chicken wrap sandwich.
You also will need something to wash down all those wings. Monster Beverage Corp. (Symbol MNST, $105.70) will kick up the energy for you. This little diddy has a one year total return on the stock of 83.7%. The 3 year Total return is a cool 217.6%. That will put a little energy is your step. The return ROE (Return on Equity) for the company is 24.9 %. Now I know why they call it Monster!
It is 6:10 PMEST and it is time for my SuperBowl prediction. I should note that I am better picking stocks, then I am football scores. Patriots 31 -Giants 27
I am a closet Eli Manning fan and Freewilly will be cheering for our NFC East division rival New York Football Giants as Howard Cosell used to call them.
Dow Jones Industrial Average 12,660 (Down) Week ending 01-27-2012
This was the week that the FED said that they were not going to do anything with interest rates until 2014. Hmmn?? Just a quick pick here this week based on that little tidbit of information. SILVER WHEATON, (Symbol SLW, $36.23, up today Feb 1st) is a company that according to their profile operates as a silver streaming company in the world. There are Eleven strong buy recommendations on this stock. 2011 earnings per share of $1.64 and projected 2012 earnings of $2.29 per share make this a very interesting story.
SLW records a Net Profit margin of 75.3% and has a Total 3 year return of 448.1%. Starting to get the picture here? They even throw in a 1.01%dividend yield.
Silver has had quite a run here and this may look like a trap trade based on history, but these are rampant deflationary times (especially in housing) and people will look to retain the value of their assets. Silver gives you a lot more leverage than Gold because of the lower price point.
The company also has a fantastic balance sheet. It has a current ratio of almost 6:1.
Have a good week. February usually presents some good opportunities for purchasing stocks.
