"Time to be wary with the government continuing to run up its debt tab. But there are still good values out there to invest in. We still have another quarter of good upside movement in the market."

Dow Jones Industrial Average 15,570  (UP) week ending 10-25-2013

 Fiver - Could see the future in Watership Down

Many of you have read Richard Adam's classic novel Watership Down and remember Fiver, the rabbit who was a prophesier of the future. In the picture to the left, Fiver sees blood in the field and was scared because he sees the coming destruction of the warren. Well, that is kind of how I feel right now with the government not reducing any spending at all when pressed to do so. Add on top of that the Affordable Care Act law, which I believe will add another 3-4 Trillion dollars to our overall national debt. A scary view out into our future.

In the short term, full steam ahead, but sometime in 2014, we could run into a very ugly situation with a downgrade of  US credit rating and a rise in interest rates. So keep your eyes wide open here and if it starts to look dicey,  start getting some of your assets to the sidelines.

Manitex International, (Symbol MNTX, $13.87), is the kind of stock you may want to look at going into this type of period. It runs below the current of the mainstream market. The stock was mentioned in Zacks Investment Ideas as a "best Value Play" and was also mentioned on Forbes List of America's best Small Companies.


Manitex International, Inc. is a leading provider of engineered lifting solutions including cranes, reach stackers and associated container handling equipment, rough terrain forklifts, indoor electric forklifts and special mission oriented vehicles, including parts support.


MNTX stock is up 53% this year and the One year change in the stock is up 107.95%. Numbers vary depending to what site you go to. PEG ratio 0.83 on one site and 0.2375 on another. Either way, cheap compared to growth. Return on Equity is 13.60 %. This small cap stock did Revenues of $232 Million. Revenue growth has been 50% and the expected revenue growth is 20%.

1 year earnings growth has been 40% with ongoing earnings growth at 27.3%. The forward PE on the stock is 11.80. The IBD rating on the stock is 98-91-91. If you read Investor's Business Daily you know what that means. If not, you need to spend a couple bucks and buy a copy!

The 2013 earnings per share estimate is $0.86 and the 2014 earnings per share is projected at $1.20.

So, let's see how this 4th quarter rolls out and be prepared to go into a very defensive mode if the "Drunken Sailor" spending and the Fed "Non Tapering" continues down there in Washington DC. Somebody in Congress needs to step up and make a stand.

Feel free to comment your opinion on my blog.

See you next week ,   
         Freewilly


.

"Time to look ahead to 2014 and see what sectors are looking favorable. One area is Steel, and Steel Dynamics, Inc (STDL) is one company with a favorable earnings outlook"

Dow Jones Industrial Average 15,23711 (Up) Week ending 10-11-2013
Dow Jones Industrial Average  15,399.65 (Up) Week ending 10-18-2013

It sure feels like a blow-off top at the end of this week in the Momentum stocks. Google, Chipotle Mexican Grill and Amazon just exploded to the upside. But I think we are very close to a top in these Netflix and PriceLine.com type momentum stocks and folks should start locking in some profits on these names. Don't get sucked in and be buying them here!

Looking ahead to 2014, it appears that Steel will be one good area to deploy some capital.

Steel Dynamics, Inc. (Symbol STLD, $18.09) appears to be an aggressive way to play this now for 2014.  The company has been no slouch this year being up 39.15% in stock price year to date.  The PEG ratio on the company is 0.83 (according to Yahoo Finance) and the Return on Equity is a low 5.08 but improving next year. The company is paying a 2.43% dividend currently and this is expected to rise also to 2.60% dividend in the future.



STLD has a Current Ratio of 2.58,  so they are very financially stable. The Book Value on the shares is $11.10, so this seems like a pretty good value at $18.00. Operational Cash flow is $386 Million dollars for the trailing 12 months. (TTM).


Steel Dynamics, Inc. is projecting earnings per share of $0.85 for 2013 and for 2014 earnings per share look like $1.46 per share, a big rise, and one which would have the stock sitting at a PE of 12 at the current. Insiders for the last 6 Months have been doing nothing but purchasing.



And guess what? They employ a lot of people in Plants around the USA. Gotta like that!

The Company does between $7-8 Billion a year , so it is a good solid MID-Cap stock for your portfolio.

Freewilly is a big advocate for diversification between Small Cap,  Mid Cap and Large Cap stocks in your portfolio.

Too many people's portfolios are lopsided towards owning too many Large Cap stocks.

The idea here is to start preparing for your 2014 portfolio. Unload the stock ideas that have failed this year and take profits on some of your Momentum stock superstars to offset.

Sullivan County, PA,  near Laporte

Enjoy your Autumn weekend,

Freewilly

"Can't ever get enough of those Television Broadcasting stocks. Here is another one to add to your list: Nexstar Broadcasting Group Inc., NXST"

Dow Jones Industrial Average  14,994.68  (Way Down) Week ending 09-27-2013
Dow Jones Industrial Average  15,072.58  (Up)   Week ending 10-04-2013

I have loved the Broadcasting and Media stocks going all the way back to Paramount Pictures and Gulf and Western.  CBS Corp., Disney/ABC, Scripps Network, AMC Networks, Time Warner, Comcast/NBC,  LionsGate and the list of winners goes on this year.



Alexander Eule over at Barron's in his September 21st article brought this next stock to light.

Nexstar Broadcasting Group Class A., (Symbol NXST, $44.95) is the next name to add to the successful group above. Eule mentioned Nexstar and some other stocks in regards to the broadcast spectrum licenses and spectrum that they own that could be worth as much as the whole current given value of the company.

Nexstar Broadcasting, based out of Irving Texas, has a PEG ratio of 0.0041. The stock has a year to date return of 324% and is trading near its high for the year of 45.42.

There are only 30 Million shares outstanding of the stock and the company has a market cap of 1.35 Billion currently, so this is a baby Mid-Cap stock.

The company with its local TV stations across small markets around the country should benefit due to the AD market recovery and should also get a windfall from all of the political ad spending and ObamaCare advertising.

The stock trades at a low PE ratio of 7.9 and does pay a dividend equal to 1.07%. The company current ratio is 2.658 to 1.

The Big news is that earnings for 2013 are projected
at $1.05 for 2013, but then rocket up to $3.57 per share in 2014, a huge rise in earnings. The company also is a digital company that creates websites with community interaction.

The big kicker to the stock, though, is the value of the broadcast spectrum that Eule mentioned in his Barron's article, so you can buy this one and sit on it a while.

Sometimes, you just have to admit that somebody else has a great idea and just go with it.

Lou Rukeyser would happily go along with that line of thinking.

Always good to see you, Lou!  I wonder what you would say about this government circus show.

Freewilly

"What to make of the Fed continuing to buy $85 Billion of treasury bills at every bond auction? I would say: don't go out on any limbs with your stock investments and sell one or two of your high PE stocks, just to prepare for a wicked financial hangover"

Dow Jones Industrial Average 15,451 (UP) Week ending 09-20-2013

Funny Money. "Billionaire investor Warren Buffett compared the U.S. Federal Reserve to a hedge fund, because of the central bank’s ability to profit from bond purchases while accumulating a balance sheet of more than 3 Trillion dollars." Here is a link about it. Buffett lectures at Georgetown University in Washington DC. -Bloomberg .

Chris Prybal, a Quantitative Analyst at SchaeffersResearch.com, says, "Based upon statistics from the New York Stock Exchange (NYSE), Margin Debt is approaching all-time high levels."  Here is the link to  Prybal's report on Margin debt on the NYSE

Funny Money. What does this all mean? It means people and the government are all leveraging to purchase investments.

How does this usually and always turn out? Bad, is the one word that comes to mind.

What should you do to respond?  If you own some high PE stocks, (25+ PE), that pay little or no dividend, you should review what you have and in the next month take one or two of them to the sidelines and lock in your profit.

On the flip side, I would, for the time being, only buy things that are pretty sure and steady stocks. One of those stocks is:

Express Scripts Holding Corp. (Symbol ESRX, $62.05)

is, according to CBS Marketwatch, "a holding company that operates through its two wholly owned subsidiaries, Express Scripts, Inc. and Medco Health Solutions, Inc.  The company provides pharmacy benefit management services and clinics healthcare account administration services in North America."  

One thing you can be sure of is that people are still going to take their medicine everyday, whether or not Ben Bernanke or Janet Yellen decide to "taper"  the amount of bonds the FED is going to be buying.

ESRX is projecting 2013 earnings of $4.31 per share, (PE of 14.59), and 2014 earnings of $4.94 (PE of 12.71) on the current price. Express Scripts has a PEG Ratio of 1.01 and a Return on Equity of 10.37.

Revenues for the company in 2012 was $93.86 Billion. The company has 5 year EPS growth of 24.95%.

Express Scripts has very strong Institutional support with companies like Vanguard, State Street, BlackRock, Janus and Fidelity being very large holders of the stock.

So the Freewilly final word is to be careful here in the next 3 months and just own mostly stocks that could weather a financial storm. Also, lower the average PE of your stock portfolio overall as a safety hedge.

Freewilly

"Let's talk about a company that has a monopoly on a whole market segment -robotics- in our country's fastest growing industry segment -medical devices. The business media hates this one, but I love the stock of Intuitive Surgical and their DaVinci Robotic System"

Dow Jones Industrial Average 15,376 (UP)  Week ending 09-13-2013

Sometimes when investing in stocks, you have to look at a company's strategic assets and its position in its market segment rather than what is happening quarter by quarter with sales and earnings. In the medical equipment segment, there are lots of companies from which you can purchase endoscopes, surgical microscopes and C-ARMS. But if you want to buy Robotic equipment with which to do minimally invasive surgery, there is only one company in the world that you can buy it from and that company is:

Intuitive Surgical Corp. (Symbol ISRG, $375.00)

 The two greatest inventions in Medicine in the last 50 years in my opinion are the mapping of human genes to develop medicines to fight diseases and the invention of the DaVinci robot for doing minimally invasive surgery both on site and remotely. The benefit of  minimally invasive surgery is that recovery times are dramatically reduced for the patient.

The price of the stock of Intuitive Surgical has been knocked down in the last 6 months because of a quarterly revenue and earnings miss, a problem with some of the instruments that hook to the robot, and an FDA investigation about robotic surgery: All short term events that can be resolved and the company will move forward from. ISRG stock is coming off a high of $585.67, so there is a lot of headroom here to run up.  At no time have annual earnings been down.

Here are some numbers for the company.
First, the Revenues TTM are $2.337 billion dollars annually. The market cap on the stock with this low price in place is only 14.89 Billion dollars.  So basically a company, for example GE , could come in and purchase the entire company and own this whole market segment for $20-$25 billion dollars.  As a comparison, Verizon just purchased from Vodaphone only a 45% stake in the part of the VZ Wireless company they did not own for a healthy $130 Billion dollars. So this would be a prime strategic asset with a #1 market position.

 There is one other surgical company in the robotics segment that focuses only on the orthopaedic surgery market, MAKO Surgical (Symbol MAKO, $16.22) , but they have not made any profit yet, and are no threat to Intuitive Surgical's devices. With the DaVinci Robotic unit, the physician can do the surgery in 3D. They can also do the surgery remotely from a separate working console.

 ISRG has a PEG ratio of 0.9858 and a Return on Equity of 20.12, so well within my investment parameters. The median PE is 21.83. The company produced Free cash flow of $164.10 million dollars. The company does not pay a quarter dividend.

The company operates at Gross Profit Margins of 70.04% and at Net Profit Margins of 27.5%. The earnings for 2013 are projected at $15.79 per share and for 2014 they are looking like $17.41 per share.



The company reports earnings on 10-15-2013. The quarter is not supposed to be stellar. So you might want to buy a small amount of shares here then some after the earnings report.  This is a stock you buy 5 or 10 shares at a time. CNBC said reporting on some stocks, that if you had bought ISRG the same day as Google came public you would now be up 1400 + %

Think Strategically for deploying your capital among stocks. This one will be a winner!

Have a good night,          
Freewilly

"Don't try to reinvent the light bulb is an old mocking saying, but guess what? Cree (Symbol CREE) went ahead and did exactly that, with its super energy efficient LED lightbulbs."

Dow Jones Industrial Average 14,922.50 (Up) Week ending 09-06-2013

Cree Inc. (Symbol CREE, $55.58) provides another facet of the great American energy revolution. Its niche is on the conservation side, with LED energy saving light bulbs. Cree LED bulbs are sold in the USA exclusively by Home Depot (Symbol HD).

Cree is priced for growth with a PE of 75. The PEG ratio on the stock is a very reasonable 0.77 with a Return on Equity a little light at 3.27%.

1.38 Billion dollars in 2012 annual revenue. Revenue growth year over year of 27.25% is what makes this stock very exciting.

What I like best about the stock is its balance sheet. It has a sparkling Current Ratio of 10:1 which is as healthy as you can get.


CREE stock has had a steady rise up to a high of $76.00 then it got a major haircut when it reported a softer revenue growth quarter than Wall street expected, thus the more reasonable price of $55.58 to purchase it at.

2013 earnings are projected at $1.75 per share with 2014 earnings per share rising to $2.34 per share. What you would expect of a growth stock. (No dividend here).

J.P. Morgan has a "Buy" recommendation on the stock with a target price of $75.00.


CBS MarketWatch describes CREE's profile as:
"Cree, Inc. develops and manufactures semiconductor materials and devices based on silicon carbide, gallium nitride, silicon and related compounds. Its product line includes blue and green LED chips, LED Components, LED Modules, LED lighting, power switching devices and radio frequency devices. The company was founded by Calvin Carter Jr., John Palmour, Neal Hunter, Eric Hunter and John Edmond in 1987 and is headquartered in Durham, NC."

I would recommend CREE as a "BUY and hold" here for at least a two year period. It will be a good component for a Growth portfolio. Plenty of LEDs to be sold here in the next few years.

Pray for Peace in Syria. I know it seems like we are a long way away from that, but it is still possible.

Freewilly

"Strike a pose! Yahoo's CEO Marissa Mayer is equally as comfortable talking social media collaboration and the cloud as she is doing a fashion spread in Vogue magazine. Now this Yahoo stock is back in style and turning heads!

Dow Jones Industrial Average 14,810.31 (Down) Week ending 08-30-2013

Yahoo! CEO Marissa Mayer

This stock market has come down from Dow 15,800 high level to a 1000 points lower and I am starting to find and buy some good value stocks here, especially in the technology space.  One of those stocks last week was Cree (Symbol CREE, $55.14), but the second and more intriguing one to me is Yahoo! Inc. (Symbol YHOO, current price $27.12).

Yahoo's! CEO and company transforming visionary Marissa Mayer is molding this company to success through buying small bleeding edge social media companies for growth and at the same time collaborating with companies that in the past they treated as competitors such as Yahoo News with Disney and ABC's Good morning America.

(Photo from David Paul Morris - Bloomberg)

Yahoo! Inc.,which on its own, is one of the most recognized franchise names since the beginnings of the Internet, has really never parlayed this franchise value into the price of the stock.  With the exception of revenue growth, the company has some wonderful numbers. Return on Equity 29.44% and a PEG ratio of 1.27.  A Current ratio, (Assets to Liabilities ratio), of 4 to 1 and very little long term debt 1% (9 Mil.). EPS quarterly YOY growth of 70.44%

This Sunnyvale , Ca. company, YHOO gets most of their revenue from search and display advertising. They rocked Google's world this month when they showed up in the number one spot in unique user traffic veiws. Their website displays in 25 different languages.



Marissa in Vogue magazine interview.

Earnings per share for 2013 are projecting at $1.47 per share and for 2014 looking like $1.70 per share. The Investor's Business Daily IDB rating for earnings is 93. Forward PE of 17.7.

Here is Marissa's article in Vogue: Vogue magazine hail-to-the-chief yahoos-marissa-mayer/#1 

The 1 year TTM (Trailing Twelve Month) gain in the stock has been 84.87%. Annual free cash flow of 247.83 Million dollars.

Now back to that Revenue Growth: Revenues for 2012 were 4.83 Billion dollars. Investments in  Alibaba Group and the acquisition of Tumblr and other investments in growth should bring revenues along in my opinion. Here are some excerpts from a USA today article by Scott Martin on July 16th this year about Yahoo revenue:

"Yahoo is showing some signs of reversing course. Mayer has focused on revamping services, giving makeovers to the likes of Yahoo's Mail, News, Weather, Sports and Flickr photo-sharing, among others, in recent months."

Mayer touted the early signs of turnaround for interest in some of Yahoo's services on a conference call Tuesday with analysts, investors and members of the media.

"Renewed traffic growth in the face of multiple years of decline is, to my knowledge, unprecedented among industry players that operate with billions of page views," she said.

Yahoo has also gobbled up 17 companies in the past year in a bid to add popular services such as photo-blogging site Tumblr, which it acquired in a $1.1 billion deal in May. The move has given Yahoo, on a binge for talent, access to highly sought software engineers and designers to add to its ranks."

So I guess the only way to end this article is with the material girl herself, Madonna, and a Vogue - Strike a Pose image,  which idea is wholly owned hers, in concept and in spirit.

Wish me luck at the Fantasy football draft.  Hopefully, I can pick running backs as well as I can pick out stocks!

Freewilly

"What do stock bloggers do when they are on vacation? Look at other people's investments of course! Which brought me to this stock: Amphenol Corporation (APH)

Dow Jones Industrial Average 15,010.51 (Down) Week ending 08-23-2013

Good Morning. Well I went on blogger vacation and the Dow Jones went up 200 points then promptly turned around and dropped 600 points. Wasn't that fun? While I was off, I was on the prowl like one of those American Picker guys in search of good investments for you to post on the blog. So off I went and where did I land?

Go west young man! I went to the 2012 Annual Investment report of the calPERS - California Public Employees Retiree Benefits Trust. I found something interesting there. They don't ever seem to sell any of the stocks they buy. So it was like an archaeological dig of long term buy investments, with long term results shown.

What I found was that they had made money on Apple, Qualcomm, and  a bunch of Big oil company stocks, (Green state, huh?), and then one other stock that projected out to me like the "North" star, Amphenol Corp. Cl A (Symbol APH, $77.80). CalPERS has done very well being invested in Amphenol over the years.

APH, has a Return on Equity of 24.38% and a PEG Ratio of 1.21%. Amphenol is just a good steady growing business. If you are viewing Freewilly's Stockpicker Blog in the mobile version on your Apple iPhone, Amphenol supplies the all important antenna inside the iPhone 5.

Here are the numbers: APH annual Revenues were 4.465 Billion and Net income of 594.8 Million. The dividend yield is 1.03%. Gross Profit margin is 31.67%. The Investor's Business Daily earnings rating is 82 the percentile ranking for earnings growth of all stocks. (The center number of the three when you look at the columns in IDB.)

The annual Free Cash flow is 144.2 Million and insiders are purchasing more shares than they are selling over the last six months. Earnings per share for 2013 is $3.78 and for 2014, it is looking like $4.18 per share.

"What experience and history teach is this - that people and governments never have learned anything from history, or acted on principles deduced from it." 

G. W. F. Hegel

  

    

"So let us do our investigative homework and actually learn from the trail of  positive ideas that history leaves for us to study and repeat them to our advantage."

author Freewilly .

Enjoy the rest of your summer -   Freewilly

" Bowie Boy"

"On Summer Break - see you back in September with some good picks"

Dow Jones Industrial Average 15,464.00 (UP) Week ending 07-12-2013
Dow Jones Industrial Average 15,543.74 (UP) Week ending 07-19-2013
Dow Jones Industrial Average 15,558.83 (UP) Week ending 07-26-2013
Dow Jones Industrial Average 15,658.36 (UP) Week ending 08-02-2013
Dow Jones Industrial Average 15,425.51 (Down) Week ending 08-09-2013
Dow Jones Industrial Average 15,081.47 (Down) Week ending 08-16-2013

On BREAK.  

  








See you in early September, 

Freewilly 

"Robbie Robertson of The Band turned 70 this week! I had to find a stock that would hold up as well as it aged. Had to go with WD-40 (WDFC)"

Dow Jones Industrial Average 15,135.84 (UP) Week ending 07-05-2013

Some things just hold up very well over time. One such thing is the music of 
The Band, which is just timeless. Levon Helm and Rick Danko are gone now and Robbie Robertson turned 70 this week. So to celebrate I watched ,"The Last Waltz", the DVD which celebrates The Band starting with "the hawk," Ronnie Hawkins, passing by Muddy Waters, Joni Mitchell, Neil Diamond and the times on Tin Pan Alley, Eric Clapton, Van Morrison and then on of course to the voice of time itself, mister Bobby Dylan. 

So in order to keep up the reverence for the "tried and true" and come up with something in the atmosphere of the stock market that would hold a candle to a similar test of time, I needed to turn to the stock which is more dependable than duct tape and the Phillips screw driver, that is, I had to go with WDFC, which of course is the very well known brand,

WD-40 Company (Symbol WDFC, $57.78) 

Here is CNBC's description of the company: "WD-40 Company is a global consumer products company dedicated to delivering solutions for a range of maintenance needs of doer and on-the-job users. As of August 31, 2012, the Company's products included WD-40 Smart Straw, WD-40 Trigger Pro, 3-IN-ONE Professional Garage Door Lube, Spot Shot Pet Clean which is a non-aerosol Spot Shot trigger product, Blue Works product line, and a mildew stain remover under the X-14 brand. In addition, its WD-40 Speciality product line, consists of certain specialty maintenance products. The Company's three geographical segments are: the Americas, Europe and Asia-Pacific. During the fiscal year ended August 31, 2012, the Company formed WD-40 Bike Company LLC, focused on the development of a line of bicycle maintenance products for cyclists and mechanics."

I started writing this blog last week and WD-40 has already reporting earnings this week and did well. The stock shot up into the 60s then backed off by the end of the week.

WDFC has a Return on Equity of 21.3% and a PEG ratio of 2.38. The PEG ratio is a little rich, but there are only 15.47 Million shares outstanding of the stock, so a very small float.  The forward PE is 22.48.

The company has tremendous "tried and true" brand recognition on which it is hard to put a measure of financial value.

WD-40 has Zero long term debt. It pays a dividend annually equivalent to 2.10%. The Current ratio of assets to liabilities is 1.78.

2013 earnings per share is looking like $2.39 per share and for 2014 earnings per share looks like $2.61. 

Revenues last year were 353.58 Million $. The newly formed  WD-40 Bike Company should add into revenues with the ever growing promotion in media and popularity of the Tour De France and Amgen bike races.

The addition of WDFC to your portfolio should "lube up" your way to bigger annual stock gains. I like the stock as a stable 2-3 year investment that should give you a slow but steady gain.

Here is the link to the WD-40 earnings report on CBS MarketWatch: WD-40-company-reports-third-quarter-2013-sales-and-earnings   It was a report that made the WD-40 girl smile. 

So since I can't seem to catch up, I am going to take a summer break and start up again in Early September.  A well deserved break I might add.  I think we have had a good year so far.

Catch you later,    Freewilly