Why play at the card table, when you can own the House?

Dow Jones 10,325.26 (Down) Week ending 02-26-2010

Well, are you tired of buying and selling stocks and not having the mathematical advantage? It is sort of like being a player at the casino Blackjack card table. Well, why not own the "house" instead and to quote gamblers parlance,"work off the juice". You can do this by purchasing the stock of the stock exchange,
NYSE Euronext (Symbol NYX , $26.38). This stock has a 4.55% dividend yield so you get paid why you wait for the exchange volume to increase. The PE on the stock is a reasonable PE 11.42. The 12 month total return on the stock of 63.4%. Earnings for 2010 are projected at 2.31 per share and $2.61 per share for 2011. Not too shabby for a $26.00 dollar stock.

If you wanted to look at a second option for owning the "house" you can also look at IntercontinentalExchange Inc. (with the cool symbol , ICE , $107.29) This fast growing exchange has a five year revenue growth rate of 60%. They operate at 31.8 % Net margin numbers. The stock has estimated earnings of $5.34 per share for 2010 and $6.16 per share for 2011.

I also want to note at this point to the amateur investor, that the stocks I have mentioned in the last two weeks blogs at $100 and $200 a share actually may be much less expensive, based on value, than stocks that trade for $1 or $5 per share. Those low price stocks may be highly leveraged with many more shares outstanding, which dilutes the earnings of each share.

There are other "houses" of note certainly, among them the well known CME Group Inc. Cl A (Symbol CME) and Goldman Sachs (Symbol GS). One other one that I like and own in this group, which I feel is a good value, is Morgan Stanley (Symbol MS, $28.18). The PE on the stock is only 9. Solid earnings of $3.11 in 2010 and $3.54 in 2011. There is a vacuum now in the investment industry with Lehman Bros. and Bear Stearns being gone, so all these "houses" should become stronger.

So deal yourself a winning hand and add one of these to your diversified portfolio.


Sincerely,

Freewilly

Catch the next Shooting Star? Investing in who will deliver your next movie

Dow Jones 10,402.35 (Up) week ending 2/19


Wall street is littered with companies that have burst on to the scene providing movies and video content and game cartridges. There is probably an imprinted chart pattern out there somewhere that they all repeat. A growth pattern spurt and sudden rise in the price in the stock; then a rise up to a stock price with too much expectation built in which is unsustainable. Later, a sudden precipitous fall from grace and a never ending downdraft in the stock price. Look familiar Blockbuster??

The next up & coming "American Idol" star in this area is CoinStar(Symbol CSTR) with their REDBOX DVD and game cartridge rental machine. As of 8/13/09 they had rented their half Billionth DVD. On New Years Eve they rented 2 Million DVDs. So much for Dick Clark and Ryan Seacrest. I should do my blog on Tuesday, because I would have saved you some money, the stock was up 6% this week. I would say for the one year investor you are still ok to buy it here. 5 years sales growth has been 27.95%. As noted in the shooting star title these are trading stocks. You need to know when to exit ahead of time.

The reigning superstar of this area is of course Netflix (Symbol NFLX). It is pegged right now at a PE of 26, curiously a number very close to that Coinstar 28% growth rate.

The 12 month Total Return on the stock is 83.9%. Return on Equity (ROE) of 42.10%. Things look generally good. But 5 analysts have strong sell recommendations on the stock. "Chicken Little, the sky is falling"! Maybe they have already studied the aforementioned shooting star pattern. Or they have an overwhelming fear of Comcast,Time Warner,Amazon & Tivo, Apple I-Tunes, Game-Stop and a million other ways to deliver this content to you, including free DVDs being lent at your local library.

All I'm saying is, you can do a little trading here. There seems to be a big enough pie in this video and game content area to divide up with everyone.

I will also make a prediction here that the hockey team of the Russian Federation will win the Winter Olympic Gold. Sorry, Canada, Sweden & USA, I need to call them like I see them.

So where you gettin' your movie today?

Freewilly

Apple Computer - The I-Pad will be a success

Dow Jones 10,099 (Up) week ending 2/12


Well I think I finally drank the Kool-aid. I watched the video about the I-Pad on the website of Apple Computer, (Symbol AAPL,$195.50), and also the Stanford University commencement speech with Steve Jobs discussing his life and his ideas about life. I am a believer. The I-Pad is the perfect Internet surfing device. Period. They have rewritten all the Apple software programs and have made them optimized for this device. It invites the whole application community to use their creativity and invent new uses for the Pad device. It can be a page turning down-loadable book. It is sold at the amazing price point of $499.00 U.S. dollars. It is a winner.

I only wish that I had been paying attention to Lieutenant Dan's stock picks back in 1996, when in the movie Forrest Gump,(referring to Apple Computers), Forrest said "He got me invested in some kinda fruit company". Forrest would say today, "Momma says that Lieutenant Dan is one smart cookie"

Apple has put together some mind boggling numbers. $15.7 billion in sales in their Christmas quarter 2009. 5 year sales growth of 29%. 12 month return of 124+%. 5 year 52.65% earnings growth. These folks are dedicated to excellence in every way.

So what started on April Fool's Day 1976, when Steve Wozniak and Steve Jobs released the Apple I computer and began the personal computer age, is now a technology inventing mega-machine. It keeps rolling out the hit products and has $33.6 Billion dollars in current assets on the balance sheet. I see another great sales and earnings year coming in 2010.


So add some Zen enlightenment to your portfolio, and buy some Apple.

Freewilly

Eat Well >> Feel Well, ... Look Well >> Feel Well , >> ... Make money?

Dow Jones 10,012, (down),(DJI day low Friday 9,835), week ending 02-05-2010

My daughter Molly told me last week that she feels good on the days that she shops at these two stores, Whole Foods Market Inc. (Symbol WFMI) and Urban Outfitters Inc, (symbol URBN). So I thought that I should check out these businesses to see if they were good investments. I thought that if people have an emotional bond or response with a shopping experience that they certainly would visit that store again. She is in the 25-30 female demographic and I would think that they are vibrant shoppers.

Urban Outfitters offers lifestyle merchandise through four brands: Urban Outfitters, Anthropologie, Free People, and Terrain. While the majority of sales come from the retail segment, which includes over 300 stores, catalogs, and the Internet, a portion comes from the wholesale division. Urban Outfitters targets young adults aged 18 to 30 through its unique merchandise mix and compelling store environment. So are they a good investment? Well the 12 month total return was 85.3%. 5 year projected earnings growth of 22.2% and 5 year projected sales growth of 18%. Those numbers work for me. It has corrected a little bit here so jump in at will.

The Whole Foods Market Inc. story, "Back in 1980, we started out with one small store in Austin, Texas. Today, we’re the world’s leader in natural and organic foods, with more than 270 stores in North America and the United Kingdom". Their mission: "Whole Foods — We search for the highest quality, least processed, most flavorful and natural foods possible because we believe that food in its purest state — unadulterated by artificial additives, sweeteners, colorings and preservatives — is the best tasting and most nutritious food there is". Invest now? Whole Foods has a 12 month return of 125%. They are a supermarket though, and their paltry 1.80% net profit is considered high in the supermarket industry. So for this Green++ rated company, that says it will have 16-17% growth in sales and earnings, I would say to look for a lower price entry point to buy in.


So what are us older age 55-65 Boomer demographic buying? Izod shirts, which are owned by Phillips-Van Heusen (Symbol PVH) and the new Chocolate Cheerios from the General Mills Company, (Symbol GIS). I would rate PVH a strong buy and GIS a moderate buy here.


If you're bored with all this shopping talk and just want to stay home, you can pick up a deal on Xilinx,(Symbol XLNX), here, which designs, develops and markets complete programmable logic solutions. The stock is selling for $23.17 and is projected to earn $1.75 a share next year, not bad numbers. Strong buy.

So check out the store or product you love, and see if their numbers make sense!

Freewilly

Now I know how Brett Favre felt with that New Orleans blitz pounding away at him

Dow Jones 10,067 (down), trading week ending 1/29/2010

If you had jumped into the market after those couple down days, buying on the dip,
you were hit with a major hail storm of stock selling and had "your head handed to you" in football slang parlance. Now I know how Brett Favre felt in the NFC Championship game with the New Orleans Saints smacking him down to the ground. It hurts!

The Big Dogs on the street, which have all reported well, Apple Computer (Symbol AAPL), Microsoft Inc.(Symbol MSFT) and Google Inc.(Symbol GOOG), all took their licks this week and were down. Our president, whose friends call him "Barry", gave the State of the Union speech on my birthday 1/27 and the Q4 GDP number came in at 5.7% percent Friday. The street has seen higher numbers in the past coming out of a recession, so good was seen as bad.

One bright note, it is my mentor's birthday today, Louis Rukeyser, who was born 1/30/1933. Happy Birthday Lou!

So, what did do well in January? I went in search to the NASDAQ exchange Sector Performance page for some help on that.

Culp Inc. (Symbol CFI), who is in the textile industry,
"Textiles, are we actually talking about the US textile industry?"
(reference to Allen Iverson - Phila. 76er and his famous quote about "practice"), was up 30.26% in January and continues to elevate. Sales and earnings here seem to be rising. I was looking to buy it on a dip to the sub $10.00 area, but it shot up to $13.06 by the end of the week. I will be patient.

A list of some others which I did not research and am just reporting:
Bare Escentuals (Symbol BARE) up 30 plus % on a tender offer. Mindspeed Tech (Symbol MSPD) up 34.75% in January 2010. LTX Credence (Symbol LTXC) up 41.01%.Libbey Inc. (Symbol LBY) up 34.14%. Radio One Inc.(Symbol ROIA) up 26.73%. Also Houston America (Symbol HUSA) and Crocs Inc. (Symbol CROX) were both up 25% plus.

What does all this mean? That February is coming, and it's cold, and Ground Hog Day is coming up soon here in Pennsylvania,(Phil will see his shadow). These things I am sure of. Everything else is left to chance. Be patient is all I can tell you.

Best regards,

Freewilly

If you want to cruise along in 2010 - you better "Hang 10" and not "Wipeout"

< Dow Jones 10,172.98 (down).

In USA - Cell Phone text "Haiti" and send to 90999 to help with Haiti relief aid. $10.00 will go to Red Cross.

My friend Colton who lives in Hawaii is always sending me cool pictures so that I will come out and see him there. One of the things on my bucket list is to go to the North Shore of Oahu and witness "The Eddie", one of surfing’s most prestigious events, with expected 30 to 50 foot high waves. "It is the ride that electrifies thousands of fans who descend on Waimea Bay, the famed surfing cove where Eddie Aikau, a legendary surfer and lifeguard, once plied the waves".

Well with great risk there can be great excitement, buy it is not always the best idea to try to find this excitement by doing wild and crazy moves in your investment portfolio. Save that for your surfboard action. So let's talk about some insurance company stocks for solid investments. (boy, that's a buzz kill, huh! total letdown). I would rather keep your investments in the 3 foot waves, like in Wildwood, New Jersey.


Lincoln National Corp. (Symbol LNC $24.50) a life insurance company and sponsor of our very own beloved and maligned Philadelphia Eagles and their home stadium aptly named "the Linc", is my first suggestion. Projected 5 yr.sales growth rate of 13.42%, 12 month return of 62%, PE 7.76, Earnings 2010 of $3.16 and 2011 of $3.38 per share. No waves here!

Chubb Corp.,(Symbol CB $48.02), a property and casualty insurer with a dividend yield of 2.92% is representing that group. Forward PE (price to earnings) of 9. Growing at 7.72% with a net profit margin of 15% and 2010 earnings of $5.39 per share. No Tsunami warnings here!

AFLAC Inc. (Symbol AFL $49.10) is an accident and health insurer of supplemental insurance. It has a 12 month total return of 116.4%. Projected long term earnings growth of 14.5%.
Dividend of 2.28% and 2010 projected earnings of $5.28 per share which is a PE of 9.3. Ducks can swim, so no problem with the water here.

So keep your head above the water and stay on top of the waves,

Freewilly

That Energizer Bunny keeps going and going ...... for consistent profits.

I must have batteries on the brain! Portable Energy Storage Devices. The storage and movement of energy with electricity, liquefied natural gas including Methane and Hydrogen, Wind, Solar, Water Hydro, Geothermal, and Nuclear will be important and large businesses in this new decade. Monitoring the movement of this energy is something the company I work for, Numerex Corp.,(Symbol NMRX), does very well, with Device, Application, and Network services brought together and offered as a combined solution.(D-N-A).

The disciples of Charles Tandy, John Roach, Bernie Appel and Lew Kornfeld at Radio Shack Corp.,(Symbol RSH), are forever inventing new electronic gadgets for you to put batteries into. Boom boxes, electronic toys, musical keyboards, home fire alarms, TV remotes, flashlights and the list goes on ad infinitum. Warren Buffett, at Berkshire Hathaway (symbol BRK.B) even figured out how to put a battery in a disposable razor blade to get the little hairs on your chin to stand on end! So where is all this leading to you ask?

Energizer Holdings Inc.,(Symbol ENR), the company engaged in the business of manufacturing batteries, flashlights and personal care products in the wet shave, skin care, feminine care and infant care product categories. It has a 12 month total return of 33.6%. The PE ratio is 13.48 based 2009 earnings of $4.72 a share. Projected 2010 earnings per share $5.30 share, 2011 is $5.89 per share. Gross margins are 49.73% overall. It is frankly a somewhat boring business. 10% projected sales growth. I think it will be a winner in what I think will be a tumultuous 2010 trading market as the Fed starts to slowly drain liquidity out of the markets. Caution is the watch word for 2010 trading.

So recharge your batteries and get back into the fray!

Freewilly

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