Bubble? What bubble? I see plenty of good stocks to buy for 2017. This market has been in a self correcting mode all year in individual stocks.

Dow Jones Industrial Average 18,308.15  Week ending 09-30-2016

I am finally back. My first two picks are Growth stocks that are being offered at a value right now. You don't always need to look at companies trading below book value to find a margin of safety and a good value investment. The first two stocks are both discount product retailers.

Five Below ($40.20 Symbol FIVE) is a stock I have been following for a long time based right here in Philadelphia PA. This is the first opportunity I have seen it at a price that it can be purchased. The company has a PEG ratio of 1.49 and a Return on Equity of 26%. The company has no debt and a Current Ratio of 2.80. EPS for 2016 is $1.32 per share and projected to be $1.61 for 2017. I like this to buy here and to trade up the $55 per share. Sales for the last 5 years have been 33.4%.

Dollar General Inc. ($69.99 Symbol DG) is a stock that I like at a margin of safety here down from a $95.00 price. The company has a PEG ratio of 1.20 and a Return on Equity of 22.90%. The company is projected to open 1000 new stores in 2017. The company is projecting 2016 EPS of $4.27 and 2017 earnings of $4.91 per share with a forward PE of 14.26. This 75 year old company has EPS growth for the last 5 years of 16.70%. The company also pays a 1.43% dividend to kick in to your pot of wealth. I would buy it here and ride it back up to that $95.00 number. The 2017 earnings justify it. 

Community Health Systems Inc. ($11.54 Symbol CYH) is a pure value play here. This one has a current book value 0.68 and a Price to sales of 0.07. Community took a big right off hopefully cleaning the books so they can sell the company. The company is projected to earn $1.99 per share in 2017 which is a forward PE of 5.8. Sales in the past 5 years have been up 9% per year. Current Ratio is 1.80. I like this one back up to $17-$18 per share. 

GreenLight Capital RE, LTD ($20.44 Symbol GLRE) is the company of the famous hedge fund manager David Einhorn. This company will have 2016 earnings per share of $1.16  and projected earnings of $2.97 per share for 2017 which is a forward PE of 6.88. The company has no debt.
The current Price to book ratio is 0.96. The quarter over quarter sales are up 29.90%. I like it as a trade up to $30.00 per share.

Insys Therapeutics, Inc. ($11.79 Symbol INSY) is a biotech pharmaceutical company. Back in the 1980's every company ended with "-tronics". Now in 2016 every pharma company ends with the name "therapeutics"! This company is an odd combination of being a speculative pick and a value pick all at the same time. 2016 earnings per share are projected at $0.66 per share and for 2017 look like $0.86 per share. The company has a PEG ratio of 0.64 and a Return on Equity of 20%.  Also this "Therapeutics" company did $311 million in sales last year. A healthy Current Ratio of 3.30 , this company should trade up to its target price of $24 per share. EPS for the next 5 years is projected at 28% a year. I think any bad news is behind them and this is a great entry point. This company has some dynamic pharma products in the area of pain management. 

"It's about time Freewilly wrote another blog entry. I miss his value picks"

So don't panic here. The stock market is not coming to an end, it is just getting a little more complicated. Keep some cash handy so you can pick up bargains on your target list when they show up cheap on your radar. 

Enjoy the rest of your weekend.

Freewilly

"Not a great time to be jumping into the market, but I found a nice boring paper and forest company with a nice steadily rising dividend over the years. Benjamin Graham would probably like this one"

Dow Jones Industrial Average 18,395.40 --- (Down) - Week ending 08-26-16

Schweitzer-Mauduit International Inc. (Symbol SWM, $39.15)

I think this company started out by providing cigarette papers and cigar wrappers to the tobacco industry. A pretty mundane business. They happen to be the largest producer of cigarette papers in the world. 

According to Google business and Reuters this is their diversified business now:

"Schweitzer-Mauduit International, Inc. is a producer of specialty papers and resin-based products. The Company manufactures and sells lightweight specialty papers, which are used in manufacturing ventilated cigarettes, reconstituted tobacco used in producing blended cigarettes and banded papers used in the production of lower ignition propensity (LIP) cigarettes. The Company operates through two segments: Engineered Papers, and Advanced Materials and Structures. Its Engineered Papers segment produces both tobacco-related papers and non-tobacco-related papers. The Company's tobacco-related papers include various porous papers used to wrap parts of a cigarette, such as tobacco column and filter, and reconstituted tobacco leaf (RTL), which is blended with virgin tobacco in a cigarette. It manufactures and sells a range of engineered resin-based, rolled goods, such as films, nets, foams and other non-wovens. The Company operates approximately 20 production locations."

 Benjamin Graham - The Father of Value investing

The reason I am suggesting it as a buy is because it pays a 4.09% dividend and has raised the dividend since 2012. The stock price has been on a wild ride this year with a big drop back at the end of February/March  2016 trading as low as $29.00 share. But it has climbed all the way back to near its previous 2016 highs.

SWM has a lot of stats that Ben Graham would like to go along with the steadily rising dividend and the business being boring. The Return on Equity is 19.40 and the PEG Ratio is 1.27. The price to the current book value is P/B of 2.30. Graham really likes the Price to Book to be under 1 and other noted value investors seem to like P/B to be below 1.4. (Christopher Browne, John Heins &Whitney Tillson). 

SWM also is in good financial condition to maintain that nice dividend with a Current Ratio of 3.50. They also had quarter over quarter sales increase of 19.50%.

On the earnings front, The foward PE is 11.53 and trailing 12 month earnings are $3.09 per share and 2017 earnings are projected at $3.40 per share. The current PE is 12.3, well below market average.

I would wait until this market corrects a little and try to buy this stock around the $37.00 price point. But you should see that sometime within the next 30 days. 

 SWM should give you a nice steady stream of dividends. Someday people will stop smoking cigarettes and cigars,  but I don't think it is going to happen for a long , long time. 

Freewilly

"The numbers keep leading me to the home builder stocks. Analysts seemingly hate this one, but I like it. We are talking about Meritage Homes Corporation , (Symbol MTH, NYSE)

Dow Jones Industrial Average 18,576.47 (UP) and hit All-time high this week ending 08-12-2016

The last 5 out of 6 analyst reports on this stock have all been downgrades. JP Morgan, Deutsche Bank, Credit Suisse, FBN Securities, and Sterne Agee CRT have all downgraded this stock. For me though, the numbers tell a very different story for the long term investor. 

Meritage Homes Corporation, (Symbol MTH, $34.92) is a Top Ten home builder in the USA that is focused on building new houses in 9 of the fastest growing states in the USA. I found the stock looking for companies that were trading at close to current book value, plus that had run at least a 10% quarter over quarter sales gain, and that had a Return on Equity of better than 10%. 

MTH fit the bill. It trades at a Price to Book of 1.05 or just about at the current book value of $33.16 per share. This Scottsdale Arizona company had a 33.5% quarter over quarter sales gain and a 35.2% quarter over quarter earnings gain. The Return on Equity is 11.40% currently. 

I should mention at this point that the US markets are at all time highs and that it may be a good time to take off an item or two that have not worked in your portfolio. You should also take a little bit off the table of things that are approaching fully valued even though you still love them. Raise some cash so that you have it available if we get a correction to prices in the next few months.

If you look at the insiders's on Meritage Homes they are buying in at a 3 to 1 ratio. The company had $2.86 Billion in sales last year and for the past 5 years the sales have been up 22.3% so good long term trends. The Price to Sales is 0.49. Interest rates for mortgages are still cheap here in the US and should not rise dramatically.  

On the earnings side, MTH earned $2.97 per share in 2015 an is projecting $3.58 per share in 2016 and $4.08 in 2017. This is a current PE of 10.15 and a forward PE of 8.58. The PEG Ratio is a very healthy 0.95. (I like it below 1.5 as a general rule). EPS for the past 5 years have been up 52.91%

The company has a Market Cap of only 1.39 billion dollars so maybe could be a possible take out candidate. So how has the stock price done recently? YTD the stock is up 2.74% and for the last half year up 15.51% but the one year change has been -17.6% , so it has been moving up recently. 

So I would suggest to take a small position in this stock and then add to it on a dip and look to hold it for 2 to 3 years. It is mid August, and the rich guys are stacking up cash, so don't go crazy with anything here and don't speculate to try to increase your returns right now. 

Enjoy the sunny summer time and the summer wild flowers and dream about peaceful things.

Thanks for stopping by,

Freewilly

I was looking over at the Vanguard Funds and the Vanguard REIT Index (VGSIX) jumped out at me with a 23.75% return this year. Some of that is a bid for dividends and total return, but maybe there is more to this US Real Estate story. Let's take a look at Toll Brothers (Symbol TOL).

Dow Jones Industrial Average -18516.55 (UP) Week Ending 07/15/2016


There seems to be something afoot in the Real Estate part of the stock market. I had already discussed Tri-Pointe, (Symbol TPH) ,earlier this year which is doing very well and now I am taking a look at Toll Brothers which is the number 1 builder of new luxury houses in the USA. 

Toll Brothers (Symbol TOL, $27.40) is a company with steadily increasing sales and earnings. It has a PEG Ratio of 0.68 and an ROE (Return on Equity) of 9%.

TOL has a current PE of 13.3 and a forward PE of 9.73 so looking very good as opposed to an overpriced market. The company did sales of $4.5 Billion last year. The one year EPS is up 37.2% and the 3-5 year EPS growth has been 34.3% as the real estate market slowly recovers.

2015 earning per share were $1.97 and 2016 is projecting at $2.58 cents per share.  2017 looking out is projecting at $2.97 per share. 

I think we might want to talk about book value now. The company has a Price to Book ratio of 1.11 which is very low and a current Book value of $24.62 a share. Also the Price to sales is also 1.01 so this stock has not been awarded its due value.

The target price on the stock is $36.62 which would be a 33.64% gain from these prices. Government policy seems to be pointing to keeping interest down and the jumbo loans have come down recently,  all are pointing towards a favorable real estate market.

I have already taken a small position in TOL and plan on adding to it at these prices or below as the market corrects a little. Of course, everyone just needs to have the open floor concept, and the double sinks with the Jacuzzi in the On-Suite- Master bathroom. (Not found in my house!). But alas , there are many people that have lots of money and they will buy Toll Brothers houses and make the stock price go up. The lest I can do is to financially benefit from their good fortune. 

Happy house and stock hunting,

Freewilly

Pokemon Go! Can I buy the stock. Nope, not at 22,480 Yen! (Nintendo Co. Ltd., PE 166). So I may as well tell you about a hard luck deep value stock. Community Health Systems Inc. (Symbol CYH) $12.87

Dow Jones Industrial Average 18,146.74 (UP) Week ending 07-08-2016

Pokemon Go! People are walking out into the street and into buildings playing this game. Stop it! You are going to end up in a bad place. Instead buy this value stock and make your real reality better than your virtual reality.

Community Health Systems Inc. (Symbol CYH, $12.87) is a stock that is having a down 2016 earnings year compared to its 2015 earnings year. So the stock has been pummeled to the point that the stock is down to $12.87 cents a share today. So we look to 2017 and a projected earnings of $2.67 per share and a forward PE of 4.82. Now you have my interest peaked. 

The current ROE and PEG Ratio are ugly. PEG 2.30 and ROE 2.20%.

But you are looking at a current Price to Book value of 0.35. This is a Book value $36.31 per share. A Price to Sales of 0.07 and a Price to Free Cash Flow of 4.17. Wacky numbers.

The company with this earnings down-draft has a 18.81% Short Float. If these earnings come in as predicted these shorts will need to be covered. This is really simply a recovery of earnings story.

I put up the map for their hospitals and they seem to be in markets where they can produce good margins. What I really like is that this company employees 137,000 people all in the United States.

Sales have averaged up 9% for the past 5 years. Yet, this year up only 1.80%, hence the low stock price. The current target price on the stock is $16.47. That would be almost a 28% gain from here. I like that in this market.

So what do the Community Health Systems insiders think? In the Last 6 Months there have been 40 Buys and 21 Sells. Very Favorable sentiment.

So I think you can go out and buy this stock here with the market up close to it's highs. I have been buying value stocks like this and peeling off layers of shares of my big winners , (MBLY, DG,and DEPO), to build up some cash to shop with later.

So lets keep that bull market running thorough the summer with these low US Treasurer Bond interest rates.  It is giving the market some spring in its step , but alas , it will not last forever.

" But when I heard your ragged voice, something switched in my perception, and I knew I was the victim, of a beautiful deception. All my once exact beliefs, like tangled threads unraveled, I walked out stunned and liberated and so began my travels. Keep the river on your right and the highway at your shoulder, and the front line in your sights, Pioneer. Keep your eye on the road, remember what you told her, this is all in code, my dear"    

Song the Long Strange Golden Road - The Waterboys


Have a great and peaceful Summer,  Freewilly

" It is time for this value investor to invest with confidence with one of the best value investors, David Einhorn. I am putting my money to work in Greenlight Capital RE LTD.. The stock is a great value right here and insiders are buying it. "

Dow Jones Industrial Average 17,865.34 (Down) Week ending 06-10-2016.

Greetings. I guess you have all heard of Berkshire Hathaway run by Warren Buffett's value investment team with its Geico Insurance company. Buffett takes the cash flow from his stock investments and invest it back into value stocks.

Well,  Greenlight Capital RE LTD.  (Symbol GLRE, $19.73 ) is in a number of different insurance and reinsurance businesses. Their cash flow is managed and invested by DME Advisors that is headed by hedge fund manager and prolific Value investor, (and also Chairman of the company ),  David Einhorn. David runs a Long/Short value based strategy with the companies investments and traditionally has done very well. 

Greenlight ,GLRE is a great buy right now because David is coming off of a real klunker of year in 2015 , with a per share earning loss of (-$9.07) per share. Sun Edison, Micron Technology and a double down on Consol Energy the big culprits of that 2015 loss year.  

So that has provided a great opportunity to get in the stock here at a ground floor price and have David Einhorn be involved with making himself and you some big money. GLRE back in 2014 and 2015 was trading at $35.00 per share. 

 David Einhorn - Value Investor

Greenlight is projecting 2016 earnings per share of $2.61 per share a PE of 6.36 and 2017 earnings per share of $3.29 per share with a forward PE of 5.64. 

Similar to MetLife, that I wrote about in my last blog article, Greenlight is trading under current book value at a 0.86 ratio and has a current book value of $23.04. The target price by analyst on the stock is $31.00 per share. I calculate that at around a 57% gain if it just returns to that historical mean number and target.

Sales Quarter over quarter are up 137.3 % and EPS Q/Q are up 218%. Very easy comparisons to go against from 2015. 

David is heavily weighted in consumer cyclical stocks at around 35% of his portfolio. We will just let him do his thing and get back to his winning ways. He has almost $6 Billion dollars under management. 

Einhorn, along with Soros and Buffett, has recently been buying up shares of Apple Inc., (Symbol AAPL) , at bargain prices here.

I like this stock as a buy and hold till it gets to its target price then I would review the situation again at that time. 

Mr. Einhorn is also a prolific poker player and prolific philanthropist.  I like that!

Have a wonderful summer. Remember you don't have to own every stock. Just own a few that give you the best odds in your favor of making some money. GLRE is one of them at this time.

Freewilly

Looking around for great values and found MetLife Inc. trading way below current book value and that pays a nice 3.72% dividend. Too big to fail? Not according to the judge. Feds are fighting the ruling.

Dow Jones Industrial Average 17,535.32 (Down) Week ending 05-13-2016

When us Philadelphia Eagles fans drive up the Jersey Turnpike towards New York or New England we will inevitably pass by the N.Y. Giants football stadium with it's sponsor's logo on the front of the stadium, "MetLife". Now us Eagles fans aren't real kean on those NY. Football Giants because we play them twice a year and the games are very "Physical" because of our rivalry in the NFC EAST division, (which also includes the Dallas Cowboys and the Washington Redskins).

I have however taken an interest in the company that sponsors their stadium, that being MetLife Inc. (Symbol MET, $42.99). The company trades at an amazing low Price to current book value of 0.62 with the current book value at $68.83 per share. Part of the reason for this situation is because since the 2008 financial crisis the government had deemed them as "Too Big to Fail" and had added regulation and high capital requirements that the company had to abide by.  Well last month in court a judge had over-ruled that decision and declared that MetLife Inc. would no longer be under those rules and regulations and that they are free to run their finances as they wish. I hope that this will be a key catalyst to the stock price.

Well that has the "Snoopy Dog", the MetLife mascot symbol,  jumping for joy. Here are some of the numbers that the company sports:

A Peg Ratio of 0.78 well below my 1.5 criterion.

Earnings per share for 2016 are projected at $5.48 per share and for 2017 projected at $6.04 per share.  That is a current PE ratio of 9.21 and a forward PE of 7.12 , well below the current market. The expected 5 Year earnings increase is forecasted at 11.80% per year.

The ROE, return on equity has been low because of the regulations but that should rise in the future with the new financial freedom. 

The P/FCF Price to free cash flow is 4.55 , which is well below 10. The company did sales of almost $70 billion dollars in 2015 so there is allot of energy for forward synergy here. 

The company pays a nice dividend of 3.72% , so MET pays you a decent wage even if it doesn't rocket up right away. 

Zack's company says that analyst ratings are 9 Strong Buy and 2 Buy with 3 Hold ratings on the stock. There is a target price on the stock of $51.07 , but I would hope that the company could return to at least "1 times book value" which would be $68-69 dollars a share.

I would say that you can buy it right here in this rocky stock market. So take a little ride on the MetLife blimp and see your assets rise up also.

Have a great week. Sorry I have not been posting every week. It is not because of a lack of interest, but more about being very very busy. Always keep some money on the side lines , (10% to 15%) for good buying opportunities. 

Freewilly

Welcome viewers from Germany! I had 158 views in one day and I hope you enjoyed reading. Today I am back looking for another Value investing stock pick. My search led me to Mallinckrodt Pharmaceuticals PLC (Symbol MNK).

Dow Jones Industrial Average 18,003.75 (UP) week ending 04-22-2016

I decided that my goal now is to become the "Peter Lynch of Value Investing" and to pick out 75 to 100  good value stock investments. No small task indeed.

This week I have picked out a Mid-Cap Value International investment. Mallinckrodt Pharmaceuticals PLC (Symbol MNK, $66.27) Yeah, it would have been nice if I picked this one out 30 days ago when the price was lower but I think there is still plenty of room on the upside with this one. 

This stock is not without controversy though. It was shorted back it March by that blogger, which will remain unnamed, that likes to short a company's stock and then trash them in the press by creating doubts about what the company is doing at the present time. Well my blog is based on the facts as presented by the numbers presented in the company's audited financial reports, not on presumptions and innuendo.

...and here is what the numbers tell me:

First, MNK is trading at 1.47 of current book value. Earnings per share for this year are projected at $8.05 per share and for next year $8.77 per share. EPS quarter over quarter are up 34.3%.So the forward PE on this stock is 7.07 at the current price. The stock was trading last August, (2015), at $125.00 per share.

The price to free cash flow is 7.31 and I prefer it to be 10 or under. My traditional measurements of PEG and ROE are 1.77 and 10.20, so both a small bit out of my comfort zone. The Current ratio is 1.80 and the Quick is 1.50 both are fine. I had blogged about a stock earlier this year with similar dynamics an story which was Lannett Pharmaceuticals, (LCI), which I also still like and own.

MNK is 92.6 % institutional owned with T. Rowe Price and the Vanguard Mid Cap Fund firmly committed to the company and it shares. The company has a target price of $93.00.  Sales quarter over quarter have been up 19.10% and for the past 5 years have been up 10.30% annually. The stock just broke thorough its 50 Day Moving average to the upside. 

What do the Analyst think about the stock of this company based in Dublin, Ireland where they have the low corporate tax rates?  13 Buy and 3 Hold. 

Many of the Gurus have owned this one. Ken Heebner, Joel Greenblatt, George Soros, Mario Gabelli, David Dreman and John Paulson according to Gurufocus.com.

The Investors Business Daily earnings ranking on this stock and sector is 91 and "A" and they are ranked 4th overall in their group. I just think it would be a good acquisition to purchase some shares for a 2 to 3 year buy and hold purchase. I think that you will be well rewarded.

Besides, you can always go and see Dublin at the shareholders meeting. You need to get away sometimes, don't you?

Best wishes for good investing and good health, Sláinte !

Freewilly

"Yellen, Chair of the Federal Reserve and Economist, holds off on an interest rate hike and the market is smiling for a change. Here are a few value investment ideas and a couple of Bio-tech speculative picks for you."

Dow Jones Industrial Average 17,792.75 (Up) Week ending 04-01-2016

Sorry for being away and not writing my blog. My paying job gets ranked first in the pecking order and I was also traveling. The markets have filled back in nicely here, but there are still some bargains to be found out there. 

One company that I like based on my value criteria is JetBlue Airways Corp. (Symbol JBLU, $21.33). I had purchased this stock before I had heard any rumors about an interest in Virgin America Airways. This company has a current PE or 10.83 and a forward PE of 8.55.

The company is projecting earnings of $1.97 per share for 2016 and $2.49 per share for 2017.  Q/Q earnings were up 115.40% and the Sales Q/Q are up + 10.2 % . The company operates at Gross Margins of 68.7%.

JetBlue fits well with my investment parameters with a PEG Ratio of 0.32 and a Return on Equity of 23.10%. The company pays no dividend currently.

The company trades at a price to Book value P/B of 2.12 to 1 and trades at price to forward cash flow of 10.42. I like companies that trade at less than 3 Times current book value , (P/B),  and with a P/FCF of under 10.00. 

My next pick is a Closed-End management fund named , Tekla Healthcare Investors (Symbol HQH, $24.52) located in Boston, MA. First off, the fund boost a dividend yield of 9.95% and they reinvest your dividend in more shares so you have a compounding effect with your money. 

The fund has a PE of 8.9 and produced earnings of $2.76 per share. 

The thing I really like is that this fund trades at a Price to Current book value of 0.85 (P/B). So if they ever liquidated the fund you would have an instant 15% gain. The fund currently has a Return on Equity of 30.60. 

Quarter over quarter sales were up 170% and EPS for the last 5 years ave averaged 27% gain year. 

......... And now for some fun speculative Biotech-Pharma picks for you. This is for money that you would spend on the lottery or gamble at the casino, money that you could sustain a loss on with these investments. I own a little each of these.

Depomed (Symbol DEPO, $14.38).  Depomed is a specialty pharmaceutical company focused on pain management and other central nervous system conditions. Depomed has sales and products already to market and have a 5 Year growth rate of 33.52%. They just had their patents upheld in court against Purdue Pharmaceuticals.

Egalet (Symbol EGLT, $6.89). 

First of all the company is holding $5.81 per share in cash on the balance sheet so you are getting the rest of the company for practically nothing. "Egalet, is a fully integrated specialty pharmaceutical company, focused on developing and commercializing medicines for patients with moderate to severe pain. It has the first and only approved immediate-release oxycodone product formulated to deter abuse via snorting, for the management of acute and chronic moderate to severe pain where the use of an opioid analgesic is appropriate." Quarter over Quarter Sales/Revenue is +387.30% and next year earnings are projected to be up 63.7%. Analysts have a target price for EGLT of $18.20. and chronic pain while helping to protect physicians, families, and communities from the burden of abuse.

Flexion Therapeutics, Inc. (Symbol FLXN, $9.42) is the most speculative pick of the three picks because they do not have a product to market yet so no sales revenue.  "Flexion Therapeutics is a specialty pharmaceutical company focused on the development and commercialization of novel non-opioid pain therapies. The company is currently advancing a portfolio of injectable drug candidates that have the potential to provide better and more persistent analgesia compared with existing therapies." They are very well financed with a Current Ratio of 13.80. The price to Book value P/B is 1.95. The target price by analysts on the stock is $35.50 per share. Be careful with any of these three. They are to add a small position to your already well invested and diversified portfolio.

NCAA Final Four college basketball tonight here is the USA.  Go Villanova Wildcats, our local Philadelphia, PA. entrant in the fray.

Freewilly

When I do my stock screening sometimes it seems like I am channeling The Chairman, Mr. Mario Gabelli. We seem to like the same value stocks to invest in. Here are two of them, Viacom B and Tri Pointe Group Inc."

Dow Jones Industrial Average 17,006.77 (UP) Week Ending 03-04-2016

The Chairman, Mario Gabelli is one of the legendary Value stock investors of all time. He is the founder, chairman, and CEO of Gabelli Asset Management Company Investors, (GAMCO Investors) an investment firm headquartered in Rye, NY.   






Some of the Chairman's great investments have been Precision Cast Parts, Madison Square Garden, Cowles Communications, Keurig Green Mountain and Chris Craft. Gabelli is a leading proponent of the Graham-Dodd school of security analysis. (Ben Graham and David Dodd). Graham's most well known disciples of Value Investing include Warren Buffett, William J, Ruane, Irving Kahn and Walter J. Schloss.



One of the stocks that Mario initiated coverage on on June 29th, 2015 is Tri Pointe Group Inc. (Symbol TPH, $10.68). Mario's target price for the stock is $19.00. From the Tri Pointe website, " TRI Pointe Homes became a publicly held company, trading under the symbol “TPH” on the NYSE. It was the first IPO in home-building to emerge after the downturn. Within 5 years, the company merged with Weyerhaeuser Real Estate Company (WRECO), which operated as five distinct home-building companies in seven states, to become TRI Pointe Group. This merger has created one of the top 10 largest public home-building companies in the United States based on equity market capitalization." 

 Here are some of their franchise names around the country:

• TRI Pointe Group                                         
• Maracay Homes
• Pardee Homes
• Quadrant Homes
• Trendmaker Homes
• TRI Pointe Homes
• Winchester Homes

Here are the numbers for Tri Pointe Group Inc.. The current PE is 10.68 and the Forward PE is 7.73. The PEG Ratio is 0.31 and the ROE is 10.70%. Price to current Book Value is 1.38. 

IBD has the earnings rank at 75 and gives it a "B" Rating. EPS for this year is +149.60 and EPS for the next 5 years is a rate of 34.39%. Sales Quarter over Quarter is 35.6% and the EPS Q/Q is 342.90%.  I like this stock here and have taken a position in it.

The second one of Mario's value picks he has owned for a number of years as a storehouse of value. Mario is often looking far ahead down the road for values. Sales have been down every year here at VIAB for the last 5 years, but I guess he thinks that the assets intrinsic value is not being realized or capital is just not being deployed properly.  The company is Viacom Inc. B (Symbol VIAB, $38.82). VIAB has a PE of 8.29 a Forward PE of 6.81. This one pays you to wait with a 4.12% current dividend payout. The company had 2015 sales of $13 Billion dollars and Income of $1.87 Billion.

One idea is that Viacom will start unlocking value by leveraging its high quality asset as owner of Paramount Pictures with some type of joint venture. 

A look at my normal measures show a PEG ratio of 0.91 and and ROE of 60.30. The price to free cash flow is 11.05, (I like this number to be 10 or under), and the Price to current book is 4.17 , (I like under 2.5). The current consensus target price on the stock is $48.55. 

Earnings for the trailing 12 months have been $4.68 per share. 2015 earnings were $5.22 per share and next years 2016 earnings are projected at $5.55 per share. So with the stock at $38.82,  this stock is inexpensive even with the company running the way it is currently, (i.e inefficiently for the great assets that they have). 

The IBD rating currently is rated at "63" for earnings and a "B" rating. 

I don't think something is going to happen quickly but I think we are finally at a "Starting Point" here. So I would buy in smaller positions and take a position over a one year time frame. (25 or 50 shares at a time).

 Mario Gabelli wearing a name tag? Who doesn't know him!

So a couple of ideas for a stock market that has been up for the last 3 weeks. Just be careful here in stocks that have already run up. There has been allot of speculating going on with the swings in the price of Oil.

I want to take a moment and wish the love of my life, my wife Deborah, a Happy Birthday today. She trust in me to do the right things financially for our family. My hope is to provide us financial security and to also help people who are not as well versed in the stock market to invest their money smartly and carefully. 

All are welcome to ask me questions in the comment section here on the blog or follow me on Twitter at @freewilly555 and ask questions there.

Thanks and hope you become a great investor,

Freewilly

"Things move so fast in this market that two blog subject topics that I had picked out ran away before I could even get to discuss them. Well maybe the third idea is now the most timely. Life moves fast!"

Dow Jones Industrial Average 16,392 (UP) Week ending 02-19-2016

I had it all setup perfect for the this week's blog. IBM was sitting there at $123.00 and had a 4.4% dividend and was going to earn over $14.00 a share next year. I was going to tell you all about how Warren Buffett was really right about IBM and that it was a great value purchase here. I even tweeted about it early in the week. Perfect setup. Then the stock went up $3.00 one day and then $7.00 dollars on the next day and  it was at $133.08. What happened? It had not moved in ages? Evidently people must have been swooping in for that dividend with very little downside risk. It is still cheap here but not as magical as it was at $123.00. Oh well.

Not to be deterred , I watched ARRIS Corp., ,(Symbol ARRS), get beaten down to $20.70 in it's last quarter as a separate company. ARRIS has done an inversion merger with PACE from the United Kingdom and the combined company will be number one in cable modem/wireless routers. They will be doing an efficiency layoff because of overlapping jobs and also combined will earn $3.23 per share. The earnings report had missed and they were guiding down for next quarter because of an expected write-off with the layoffs. ARRIS will also be picking up the tax savings from the inversion transaction. On this one I went in and bought some shares, (after my IBM experience), things move fast!.  The stock of course bounced back 8.6% once people realized it. Great for my investment, but the opportunity vanished for the blog purchase opportunity. Sorry!

Thank God for the weekend! It gives stocks a chance to stop for 2 days and you can get some stuff figured out for investment ideas. So frozen in time here a second, I like Gray Television Inc. (Symbol GTN, $10.78). This one has been all over the place earnings wise and on the investment chart. $0.84 cents per share last year, $0.59 cents this year and $1.68 to $1.76 per share projected for next year. 

These guys own a whole bunch of TV stations in mid size and small markets. They also had just had acquired Schurz Communications and should be juiced up for a spurt in sales and earnings the end of this year, 2016.

Analysts are 4 Buys , 1 Overweight and 0 Holds so light coverage here. 

Here are the rest of the numbers. A forward PE 6.98. PEG Ratio 1.86 and ROE is 15.50%. No dividend here. Quick and Current Ratio is 2.5 to 1. Price to the current Book Value is 1.85. 

Price to Cash Flow is 7.64, (below 10 is good for me), Sales Q/Q is 14.70% gain and Sales for the Last 5 Years were 24.5% gain.

Price target on the stock is $20.40 , (but I am looking for more like $17.00, 57.69% gain, which it has reached before, a nice gain).

EPS this year will be up 156.30% and EPS next year will be $205.39%. 

This just looks like a nice Value trade to me. Value Stocks seem to be in, while Growth stocks this year seem to be mostly treading water.

So buy some Gray Television Inc. (GTN) here and sit back and wait a while for this one to develop and play out for you. This is a 12 - 18 month investment. (Not a short term trade).

Thanks and have a great week,

Freewilly