" Sometimes you just need to put a muscular and unbreakable stock on your team, so that you can sleep easier at night"

Dow Jones Industrial Average 12,231 (UP) Week ending 10/28/2011

I don't know if it is because it has been raining ice and snow all day and it has taken down some of my trees or if watching a rerun of "GI Jane" and watching the grueling training that the US Navy Seals go through, but it just put me in the mood to write about a stock that is "tough as nails", with numbers that just never quit. The nails analogy is good here, because this stock has just the tools to hammer in those nails. I am talking about the stock of  Stanley Black & Decker Inc. (Symbol SWK, $66.69).  

     The marriage of Stanley Tool Works and Black and Decker took a little while to get back in operational line, but they are in lock and load mode right now, unbreakable.  Last quarter proforma earnings were up 38% to start with. 2011 earnings ending in December is projected at $5.11 per share. Moving to 2012 , $5.91 per share. 5 year sales growth at this company is 17.55% with the 3 year total return of 116.5%. The stock had a dip down in 2008-2009 when the rest of the market took a tank and bottomed on March 5th, 2009, but from then on things have looked pretty good.


Demi Moore in GI Jane


P.S. after watching Demi Moore do push ups in the movie, I wouldn't go messin with her if you know what's good for you. SWK is up 9.56% year to date. The real tell on this stock is the 2.46% dividend of $1.64 a share. Stanley Black and Decker have raised the dividend in every year for the last 5 years. This is always a very good sign for any stock that you are investing in.

Something else you should know about this company is that they are benevolent. This press release just came out. JOPLIN, Mo., Oct 20, 2011 (BUSINESS WIRE) -- Stanley Black & Decker (NYSE: SWK) a Fortune 500 provider of hand tools, power tools and security solutions, today announced a $350,000 tool donation to the Joplin, Missouri, rebuilding efforts. Our friend and builder of our kitchen, Andy Doyle, just donated his time and went to Joplin and built a new wooden children's playground out there in Joplin. So good things can happen when corporations and individuals work together for a cause.

I must be old, because I remember Demi Moore as the girl with the raspy voice on the TV show "General Hospital"  that was on  in the afternoons. She does a good job in the movie GI Jane, if you get a chance to see it.

Have a good snowy end of October. November should be fun with the market moving up. I like some of the commodity stocks going forward with a hint of inflation showing up in interest rates.

Jacko-Lantern in snow - Deb Wilson


All the best ,    Freewilly

"Diversify your IRA or 401K by purchasing stock in dollar blocks of $1500-$2000 to keep things managable for you"

Dow Jones Industrial Average 11808.79 (UP) Week ending 10/21/2011

I am always looking for stock positions to diversify my IRA portfolio that tend to be broken down into blocks of $1500 to $2000 to form building blocks. So in a $10,000 portfolio you may have 4 or 5 stocks
that are Large cap or Mid cap , then maybe one or two stocks that are Small capitalization companies. So I am looking for good fundamental value as far as price to earnings and revenue growth and preferably a stock that I can buy a fair amount of shares of. In this current trading environment it does not hurt to have a dividend.

So what would I buy on Monday?  NOKIA Corp. ADR (Symbol NOK, $6.61) , (logo the work of Atakos.com , Design and Marketing blog)                                                                                        

You could buy 250 shares here for $1652.50. This would fill a large cap stock position in your portfolio. NOK pays a nice dividend yield of 7.26 percent. Revenues and earnings have been sickly here the last year because of a short term lack of competitive product to compete with the Apple I-phone and multi-platformed Google Android phone lines. However the word is that the Nokia smartphone with the new simplified Microsoft phone interface in it will be out for the Christmas sales season. I think this new simplified phone interface will be well accepted internationally. Remember, even in an off year,this company did over 58 billion in revenue.

Another stock I like right here is NVIDIA Corp. (Symbol NVDA, $14.48). You could buy 125 shares for $1810.00. NVDA has a long term growth rate of 16.91%. Earnings for 2012 looks like $1.00 per share and for 2013, $1.18 per share. The company's "best 3D technology for the PC just got better with the introduction of new NVIDIA(R)3D Vision(TM) products, which deliver greater realism and immersion than ever for 3D games, movies and photos".  The company pays no dividend but has the major plus in these leveraged times of having zero long term debt. Tech stocks as a sector seemed to be ready for some upside movement in this 4th quarter.


People tend to diversify by market sectors, but don't forget to also diversify with large cap, mid cap, small cap and international stocks.  

Have a good last trading week of October. Still have Halloween on the following Monday. Make sure you don't eat all the candy before the kids get there!

Freewilly

                                                                                                                                                                                                

"Occupy Wall Street? Heck for Twenty Six dollars and Fifty-Three Cents you can own Wall Street, with the shares of NYSE Euronext"

Dow Jones Industrial Average 11644.49  (Up) Week ending 10-14-2011

Everybody is mad at Wall Street. Citizens are mad at the banks that were too big to fail, and bankers that still got their fat bonus checks.Those banks took capital risk that they normally would not have taken, knowing they would be bailed out if they screwed up. And screw up big time they did! The banks along with Freddie Mac and Fannie Mae made high risk loans to people to buy houses who put very little money down and that they could not afford. Everybody was making money in real estate, and the activity drove home prices to speculative levels that could not be sustained. So now we are stuck with this wicked multi year financial hangover and lingering 9% unemployment.

So why not just own Wall Street and have them pay you? NYSE EURONEXT , (Symbol NYX, $26.53) stock gives you ownership in the New York Stock Exchange. First you start out with getting paid a 4.41% dividend. The stock trades at a meager value PE of 10.38. Average 5 year sales growth of 17.70% and earnings growth of 10% a year. You wrap all that together and you are bound to get a pretty good annual return. The stock was trading as high as $41.55 in May of this year, so you have plenty of headroom here.

You could also take your protest to other cities around the world because NYSE Euronext owns:    The New York Stock Exchange, Amsterdam Stock Exchange, Brussels Stock Exchange, Paris Bourse,  London (LIFFE) and the Lisbon Stock Exchange. You would have a lot of curbs to sit on and not get kicked off because you would be the owner!

 
So get your Protest groove on , and keep it peaceful, that's how Martin Luther King Jr. and Mohandas Karamchand Gandhi would have done it. The voice of the people. Let's get a job for everyone that wants one.

Freewilly

"Some ideas extracted from Investors Business Daily and some from Jim Cramer's Mad Money TV show"

Dow Jones Industrial Average 11103.12  (Down) Week ending 10-07-2011

Some times a small reward in your day can help you make it
through. Hershey Co Inc. (symbol HSY, $58.99) can deliver these chocolate treats and has been doing it for years. This tasty stock has a one year total return of 21.9% and a three year total return of 68.6%.  The stock pays a nice 2.34% dividend and has a staggering Return on Equity percentage of  67.00%. The IDB rating is 90-62-92. Earnings growth a little mild, but very consistent. 

Another stock that jumped out at me from IDB was not usually a stock that you would often talk about. STAMPS.COM (symbol STMP, $24.72) has a long term growth rate of 18%. Stamps has an IDB rating of 99-89-99 A+, B. , with 99 the highest rating you can get for growth. 12 month Total Return is 67.6% and the 3 year Total Return of 173.8%.   These are two stocks that I saw in Investors Business Daily that peaked my interest. They do an excellent job of extracting data and making it easy to see and understand.

Jim Cramer of CNBC , who went to the same high school as my wife Deborah here in Springfield (Montco) PA., works harder than anyone I know to bring you just tremendous investment ideas on his TV show Mad Money and on his websites. You will find his websites on the links on the right column of my blog. I was lucky enough to be watching when Jim brought on to his show the CEO of Whiting Petroleum Corp. (symbol WLL,$35.54) . This stock is flat out great value investment which is down this year. The CEO is committed to getting the stock price back up. Great fundamentals and  explosive earnings growth with 2011 earnings per share of $3.67 per share and 2012 earnings of $4.66. This company has 18, (count'em) , strong buy recommendations according to SmartMoney.

Jim , (pictured), a week later brought the CEO of Red Hat Inc. (symbol RHT,$42.88) on to his show and rolled out just another great company.
Long term growth 20.40%. 12 strong buy recommendations. The stock is only up 1.5% this year but the three year total return of 222.2%. We can live with that number!  This company helps companies save money. That is a winning concept all the time.

One  last recommendation from Jim is Big Blue,  International Business Machines Corp. (symbol IBM, 182.39).  Eleven strong buy recommendations.  The price might look high on a historical basis, but the company is projecting 2012 earnings of $14.75 per share. A three total return of 104%. Not too shabby!

 So it's OK to use the other guys recommendations when they are going to make you money. They have full research staffs to help them out and lots of eyes and ears out there to find those great ideas. Three bucks for an daily IDB and Jim Cramer gives you lots of free stuff and also offers professional services if you prefer their inside stuff and a timing advantage.

So hope for sunny fall skies and Dow 12,000. Have a good week.

Freewilly

"The continuing search for growth and fundamentals leads me to the doorsteps of Direc TV Group (symbol DTV)"

Dow Jones Industrial Average 11509.09 (Up) Week Ending 09-16-2011

Sorry I missed you last week. I was down at the Jersey Shore, at Charlies on Shore Road in Somers Point NJ,  eating  LISA's PASTA & CLAMS , chopped Clams & Tender Littlenecks sautéed in White Wine Garlic (or Marinara Sauce) over Capellini (Angel Hair).  Sometimes you just need to kick back and do that. Besides that, the market was at kind of Mexican standoff anyway. So this week I am back in sync with a very smart growth pick.

Direc TV Group ( Symbol DTV, $43.70) is up around 6% for the year, but was at a high price of $53.40 just back on July 13th this year. I see it going to a target price of $60.00, which would be a 37% gain from the current $43.70 price. The 2011 earnings per share are projected at $3.37 and the 2012 earnings are projecting at $4.23 per share. 5 year earnings growth has been running at 19.73% and is projected at 20.66% going forward from here.

The total return on the stock for the last 3 years is 66.9%. I'll take a 22% increase in the value of my stock per year anytime. The current PE is 13.56 , very reasonable. Subscriber growth slowed a little bit in August,
but going forward they should be just fine. Their $29.95 package offering with the addition of the NFL package is a very compelling offer for the 4th quarter and should take market share from Comcast and Verizon. I have Comcast and they are charging me $63.00 plus a month just for basic TV cable.??

So let's wrap it up with Direc TV as a winner for you. Mitch would say, "I wanted to order Direc TV, but the satellite dish would not fit in my suitcase when I traveled".

Freewilly

"You have been whipsawed by this market in the 3rd quarter, let the earnings fundamentals lead you forward"

Dow Jones Industrial Average 11,240 (Down)  Week ending September 2nd.


It is really quite simple. You need to own companies which have a strong demand for their products, regardless of what the stock market is doing. There is tremendous demand for Aircraft products right now.  Kaman Corp. ( Symbol KAMN, $31.59) makes aircraft specialty bearings and aircraft  components. Earnings per share will be going from $1.99 in 2011 to $2.42 in 2012. Where do you see a stock like this? Spend $5.00 on the latest copy of Barron's, and get a nice macro view of the market and earnings. We still need paper to give us a better view. It is easy to see.

The next three stocks have tremendous demand for their products and parts because of the exploding demand for Smart phones by the world. Two of them in particular are suppliers to the monster machine known as Apple.  Qualcomm Inc. (Symbol QCOM, $49.68) ,  CIRRUS LOGIC ( Symbol CRUS, $14.20) , and  Skyworks Solutions Inc. (SWKS, $19.62 ) are three stocks that should experience tremendous growth in the next few years from the growth of the smart phone market.
All three are projecting upside earnings growth that should bring their stock prices up.


Another area of growth with demand is the medical devices area. One name I like there since it has pulled back in price is ZOLL MEDICAL CORP (Symbol ZOLL $41.04) .  Again, tremendous upside earnings growth. We all need a defib after looking at our portfolio losses and this stock should be just the ticket.

 Another company with big time earnings growth is Paccar Inc. (PCAR, $35.67 ) growth theme in transportation parts and trucks. All these transportation vehicles whether it be planes, trucks, or automobiles,  are all old now and will need to be replaced soon creating demand.  

And one last one to mention that has a 6.77% dividend to go along with it is SEADRILL (Symbol SDRL, $31.90).   68% of the world is covered with water , and  Seadrill Limited, an offshore drilling contractor, provides drilling and well services to the oil and gas industries worldwide. The company also offers platform drilling, well intervention, and engineering services. They are experts in harsh environmental oil drilling.   

So that should give you something to work with. Happy Labor Day, do not do too much work today, you are supposed to be off. Have fun.

Freewilly

"A little arbitrage play for you with Motorola Mobility Holdings Inc. (MMI) where you end up with shares of Google"

Dow Jones Industrial Average 11,285  (Up) Week ending August 26th

Cape May & Atlantic Counties in NJ

It would have been convenient if they had put up a sign for us, in the middle of July, to tell us that there was a Cat 3 hurricane coming to the stock market to do massive damage to our portfolios. We have recovered a little, but there is a long way to go.  Now, after we also have weathered a rare East Coast 5.9 earthquake during the midweek, New York City is facing an actual real Hurricane coming, which could close the exchange on Monday due to flooding.

Hurricane Irene as you can see by the map is bearing down on The Big Apple. It would figure because we finally got a one day rally going on Friday. Hopefully it will all go well.                                   

One idea to try for when the market finally does open is to purchase the shares of Motorola Mobility Holdings Inc. (Symbol MMI, $37.72). This is one of those trades the Chairman, Mario Gabelli might put on.  The stock has been offered to be bought out by Google (Symbol GOOG) at $40.00 per share.  Many things could happen. At worse you get paid the $2.28 per share, 5.25% immediate return on your money and you end up with shares in the high flying Google. Kind of a running start. Or a second scenario, another suitor arrives on the scene and has a hankering for those Motorola stack of patents for the mobile world and the stock price gets bid up even further.

 Now you know while the chairman is always smiling. Only possible downside, if Google for some reason pulls their bid offer. This is low percentage but possible.

(It was at this point Saturday night that Hurricane Irene rolled in and rocked Eastern PA. and South Jersey and knocked downed trees and knocked out the electricity here for days and flooded our basement)

  ......... and because of that I will wrap this up because it is Saturday already, and I need to start the next blog.

Just a note: If I ever mention a stock that is under $5.00 in price, it is against my tenants in Blog number one (go back and check) to purchase it, so consider it a highly speculative investment.

In general, unless you are speculating, (i.e. willing to lose all your money), you should not purchase stocks under $5.00 in price.    

Best Regards,

Freewilly
 

"Just because the US government owns 26% of the stock, it doesn't mean that General Motors is a bad investment! In fact, it is a great buy here."

Dow Jones Industrial Average  10,818  (Down) Week ending 08-19-2011

Some people call it " GM - Government Motors" because the US government provided financing to General Motors (Symbol GM, $22.16) , to help it reorganize and is a holder of 26% of the shares of the stock. I guess the fear hangs out there that the government will liquidate in shares and bring the stock price down. They may as well hold on to the shares at this point. The book value on GM shares right now is $24.86 , higher than the trading price. Revenues through June 30th , 2011 are $112,449. Sales are increasing quarter over quarter for GM.

Earnings for the 2011 year ending December 31 are projected at $4.21 per share. For 2012 they are projecting $4.54 per share.  That is a forward PE of 4.88 for 2012 for a company which huge revenues and good earnings. Other typical industrial companies with this type of revenues and earnings trade in the 60-80 a share range! This stock is at $22.16. So what gives?  The share price is down 40% YTD.  Even a blind monkey throwing a dart could get this one right. This company has almost 33 Billion in cash and short term investments.  BUY GM,  with a capital B.

Some other names I like here are Union Pacific Corp. (Symbol UNP, $85.69). When all else fails you can always buy a railroad that runs east-west and transports coal for electricity. UNP has a one year earnings growth rate of over 20%.  Nothing but earnings upside surprises here. The stock is up 15% year to date.

Don't forget about Mastercard (Symbol MA, $300.16). It was one of my Top ten picks at the beginning of the year. Even after the large sell off we have had the stock is still up 45.45% Year to date. I like it and Warren Buffett likes it and owns it too.

I also started looking at the stocks related to real estate this week which I believe could provide some good value picks here. One stock that got my attention in that area is Annaly Capital Management (Symbol NLY, $17.79). This stock is showing  a 14.61% dividend right now and have decent earnings of $2.86 a share and a PE of 6. This is a "pay you while you wait" for the real estate market to make a slight turn. You will need to be patient with this one.                                                                                                                                                                 
Whatever you do, move slowly in smaller increments in whatever you purchase here, because it may be at an even better price next week.

If Chicken Little is right, and the "Sky is Falling", that will be a better strategy in the long run for you.

 Lets see if 10,800 on the Dow holds support here and turns around this week.

Freewilly

 

" Let's look at this thing from a... um, from a standpoint of status. What do we got on the spacecraft that's good? " Best to look at the Capital Goods stocks.

Dow Jones Industrial Average    11,269  Week ending 08-12-2011

2:13 p.m. EST, April 11, 1970, Apollo 13 launches from pad 39A at the Kennedy Space Center.  

"Spacecraft systems performance was nominal until the fans in cryogenic oxygen tank 2 were turned on at 55:53:18 ground elapsed time (GET). About 2 seconds after energizing the fan circuit, a short was indicated in the current from fuel cell 3, which was supplying power to cryogenic oxygen tank 2 fans. Within several additional seconds, two other shorted conditions occurred.

Electrical shorts in the fan circuit ignited the wire insulation, causing temperature and pressure to increase within cryogenic oxygen tank 2. When pressure reached the cryogenic oxygen tank 2 relief valve full-flow conditions of 1008 psi, the pressure began decreasing for about 9 seconds, at which time the relief valve probably reseated, causing the pressure to rise again momentarily. About a quarter of a second later, a vibration disturbance was noted on the command module accelerometers.

The next series of events occurred within a fraction of a second between the accelerometer disturbances and the data loss. A tank line burst, because of heat, in the vacuum jacket pressurizing the annulus and, in turn, causing the blow-out plug on the vacuum jacket to rupture. Some mechanism in bay 4 combined with the oxygen buildup in that bay to cause a rapid pressure rise which resulted in separation of the outer panel. The panel struck one of the dishes of the high-gain antenna. The panel separation shock closed the fuel cell 1 and 3 oxygen reactant shut-off valves and several propellant and helium isolation valves in the reaction control system. Data were lost for about 1.8 seconds as the high-gain antenna switched from narrow beam to wide beam, because of the antenna being hit and damaged."

At this point, NASA Flight director, Eugene Francis "Gene" Kranz asks his team, "Let's look at this thing from a... um, from a standpoint of status. What do we got on the spacecraft that's good?" One of his many famous quotes during the Apollo 13 mission. Of course his most famous is : "Failure is not an option",  which leads us directly into the discussion about your retirement and stock investment mission.

We have had a bit of an explosion here ourselves in the market these past two weeks to our retirement equity values for us Boomers in our 50's and 60's who will retire sooner then other folks. We still need to get back from the moon and have our splashdown of retirement, so we have a ways to go yet here.  Just like Gene said, "Failure is not an option". So what is the plan of action?

Two things you should not do here is sell your stocks and invest in Gold, which is at an all time high price. Second, you should not sell your stocks while they are down and move into yield-less, no risk cash positions.  What you should do is continue to invest in stocks. Although all the government entities have their balance sheets in a wreck, and the labor markets are all out of whack, the saving grace may be that companies are actually in quite good shape on their balance sheets for the most part.

 One area I would look at is the Capital Goods stocks. Some of those names would be:

Boeing Co. (Symbol BA, $61.75)
Parker Hannifin Corp. (Symbol PH, $69.58)
Roper Industries Inc. (Symbol ROP, $72.63)
Rockwell Automation Corp. (Symbol ROK, $64.93)
Ingersoll-Rand Co. Ltd. (Symbol IR, $30.39)
and my favorite is,
Cummins Inc. ( Symbol CMI, $94.47) which I mentioned 2 weeks ago in my blog.

as a bonus I will give you one outside of this group that is rock solid, Qualcomm Inc. (Symbol QCOM, $50.50). The stocks in this group may be down temporarily but rest assured they will move back up.

So the computer "war games", (investment buy and sell programs that have dominated the market), should start to slow down here and bring the VIX down into a more civil range. The above stocks should fare well going forward.

Nothing is going to get settled here quickly, so stay patient and move strategically into small positions, so you can make adjustments quickly to your portfolio.

                                                              Freewilly

"I leave you guys on your own for a week, and you lose 1,400 points on the Dow Jones Industrial Average, what's up with that?" ...... Blog #100!

Dow Jones Industrial Average 11,445  (Way,Way down!) Week ending 08-05-2011


Federal Reserve Bank


 Aug. 5, 2011, 8:46 p.m. EDT -

 U.S. loses triple-A credit rating from S&P -
 
"The United States late Friday lost its triple-A debt rating from Standard & Poor’s for the first time in its history, with the credit-rating agency saying the political system of the world’s top economy has become less stable and that budget cutting announced earlier this week didn’t go far enough."
 
 I take one weekend off from writing my blog, with the DJIA at 12,800 heading towards 13,000, and I come back and the place is a wreck. I can't leave you guys on your own for a second. Now Standard and Poors has downgraded the credit rating of the US for the first time in history. I can't believe I am writing those words. That's going to be just a great help for the market this Monday morning.
 
Somehow, I don't think Ronald Reagan would have let this happen. He would have taken action ahead of time.  Our current president needs to get rid of his current Treasury Secretary Geithner, and get himself some advisers that would have had the insight to forewarn him of the percentages of something like this happening. Worry about the debt, not about the debt ceiling.
 
Because we are still the "best of the worst", worldwide investors will still flock to our treasury bills for safety in a rattled global economy. So what to do with stocks here? I'm reminded of the line from many Laurel and Hardy films, "Well, here's another nice mess you've gotten me into".   
 

 
Well of course every genius is going to be out there to buy dividend stocks that are yielding higher than the treasury bills and that have some growth to kick in along with that. I would first put aside a pile of cash, kind of boost up your own personal reserve requirements, like the banks do in times of financial crisis. You never know what can happen. Of course do not attempt to use leverage here to load up in a down market, because things could get worse causing you financial ruin, not a good thing. (I looked at those Clearwire 2013 Call options too!, sitting out there like chocolate ice cream on a hot summer day, very tempting!) 

So lets garner a list of a dozen of these stocks:

HON    Honeywell     2.77% dividend yield
VZ        Verizon Communications    5.56% dividend yield
NOK    Nokia Corp. ADS    10.88% dividend yield
FTR      Frontier Communications Corp.  11.09% dividend yield
SPH      Suburban Propane Partners L.P.  7.77 % dividend yield
BWP     Boardwalk Pipeline Partners L.P.   7.91 % dividend yield
MO       Altria Group Inc. 5.87 % dividend yield
EXC       Exelon Corp.   5.00% dividend yield
T            AT&T Inc.   5.95% dividend yield
PAY       Paychex Inc.  4.58% dividend yield
GIS        General Mills Inc.  3.34% dividend yield
DD         E.I. DuPont de Nemours & Co. 3.47% dividend yield

 So the watch-word is Margin of Safety and dividend yield, and of course enjoy your summer where the same safety rules should apply to your activities.

Freewilly



 














 


 
 
 

"Looking for a little muscle in your stock, look no further than Cummins Inc. symbol CMI"

Dow Jones Industrial Average  12,681 (UP) Week ending 07-22-2011

 Back at the end of 2008, beginning of 2009, I had purchased at
the same time Cummins Inc.(CMI) and GE (GE) both at distressed bargain prices between $10 and $15. I doubled my money on both and then I sold one of them. I kept GE which is now trading at $19.04. I sold the Cummins and it is now trading at $106.78.  A "Six" bagger from my purchase price. What I should have done is sell half of my position in each, and held the balance. *** Lesson learned for you to pass on to your kids.


......And now I am going to tell you to buy Cummins Inc. (Symbol CMI) at it's present day price of $106.78. Talk about muscle. 2011 earnings per share are projected at $8.13 and for 2012 of $9.82 per share. Long term earnings growth of 19% and a Return on Equity of 28% make this a desirable long term investment.

"Cummins, Inc. designs, manufactures, distributes and services diesel and natural gas engines, electric power generation systems and engine-related component products." 
When thinking about the Indiana based Cummins, think powerful like the Indianapolis Colts Dwight Freeney and Robert Mathis. Unstoppable!

       We are entering a time period where winners are going to go up and the weaker stocks are going to get punished unmercifully. So load up on on the good ones that can deliver superior performance for you.

 Muscle up, and hop on the Cummins "Big tire" wagon and take a ride to 150. 

             Freewilly