Wednesday, February 28, 2007

Five Biggest Bounceback Stocks on Wednesday

The five stocks that bounced up the most on Wednesday after the crash on Tuesday were:
Steel Tech (STTX) 59%
Westside Energy (WHT) 40%
Rubicon Minerals (RBY) 25%
Audible (ADBL) 20%
Cleveland Biolabs (CBLI) 19%

Author does not own any of the above.

Partnership between Ford and Microsoft

Ford Motor Co. (F) has been under severe competitive pressures from other auto companies and many investors are concerned about its survival, especially after reporting a loss of $17 billion last year. However, Ford has decided to work with Microsoft (MSFT) to develop a built-in audio system for twelve of its models, similar to an MP3 player and voice activated phone. The system will be called Sync. Let's hope it helps the company's auto sales.

Author owns F and MSFT.

Source Interlink Responds to Corporate Perk Article

A response to my Executive Perks article was forwarded to me by the PR firm for Source Interlink (SORC). Here is their response:

[Information about] Source Interlink was based on information that was in recent SEC filings (specifically, the company’s proxy statement filed 02/21/07). We certainly are not disputing the facts of the column, nor challenging the references to Source. However, we do believe this is an instance where events have overtaken what’s in the historical record. The corporate perks Seeking Alpha referenced for Source were put in place by the company’s former leadership, but new management, named in mid-November of 2006, has taken a dramatically different approach to perks.

Source’s new management is, in fact, focused on expense reductions, which it stressed in its third quarter fiscal 2007 earnings release and conference call on 12/11/06. That’s an important reason the perks cited in the recent proxy statement are listed as “historical” – they’ve by and large been eliminated.

"Now is always the most difficult time to invest." Anonymous

Other famous quotations relating to the stock market and stock market crashes:

"Stock prices have reached what looks like a permanently high plateau." Irving Fisher, Economist, (1867-1947)

"If you hear that everybody is buying a certain stock, ask who is selling." James Dines, Investment newsletter writer (1935- )

"I made my money by selling too soon."
Bernard Baruch (1870-1965) financier & economist

"It will fluctuate" when asked what the stock market will do. J.P Morgan (1837-1913) banker, financier, businessman

Quotes courtesy of investmenttrivia.com

Stock Market Stock Symbol Trivia=PZZA

Stock Market Stock Symbol Trivia

Question:

What stock has the stock symbol PZZA ?

Answer:

Papa John's International, Inc. which operates and franchises
pizza delivery and carryout restaurants.

These stock symbols are known as Personalized Stock Symbols (TM), similar to personalized license plates. The symbol spells out a word, which is not a word in the company name and is not the initials of the company name. However, the word does describe the company's business. (Special thanks to InvestmentTrivia.com )

Stock Market Stock Symbol Trivia=GROW

Stock Market Stock Symbol Trivia

Question:

What stock has the stock symbol GROW ?

Answer:

U.S. Global Investors, Inc., which provides mutual fund management services.

These stock symbols are known as Personalized Stock Symbols (TM), similar to personalized license plates. The symbol spells out a word, which is not a word in the company name and is not the initials of the company name. However, the word does describe the company's business. (Special thanks to InvestmentTrivia.com )

GunST0CKS: Almost Time to Pull theT rigger?

There are only two major gunandfirearms manufacturers in the United States, one of which isSturmR uger & Co. Inc. (RGR), which trades on the New York Stock Exchange. This Connecticut based company has been manufacturing rif lesshotgunspistolsan drevolvers since 1948. Some of the positives on this stock:
* Although the trailing P/E is 140, the forward P/E is 29.
* The stock has a reasonable Price/Sales ratio of 1.45
* Quarterly revenue growth year over year is 18.6%
* The company is has no long term debt
* Last month, the company announced a buyback of $20 million of its shares
* The company anticipates cutting its payroll by about $3 million this year from its buyouts of approximately 150 employees

The other American gunmanufacturer that you can takeashot at is the NASDAQ traded Smith& WessonH olding Corp. (SWHC), a famous name infirearms which has been around since 1856. The company was founded by Horace Smith and Daniel B. Wesson, after selling out their first company, Volcanic RepeatingArms Company, to Oliver Winchester. The company manufactures and sells revolverspistolsrifleshand cuffs, and clothing, and also ownslawenforcement training facilities. A few of the positives on this stock:
* Although the trailing P/E is 44, the forward P/E is 21.
* Quarterly revenue growth year over year is 42.7%
* Quarterly earnings growth year over year is 312%
* The company recently purchased the Thompson/Center Arms company, which will give it expansion into the huntingrifle and black powdermarkets
* The stock has a Price Earnings Growth Ratio of .72

Author owns RGR.

Monday, February 26, 2007

Trashy Stocks

It’s a dirty job but somebody’s got to do it. The garbage collection business has a big advantage over most other businesses: they are monopolies. The average homeowner isn’t given a choice of waste collection companies; they either deal with the one that has contracted with their city or take their trash to the dump themselves.

The way these companies grow is by raising rates, which they negotiate with the cities, and by acquisitions of either publicly traded companies or small private companies. For example, Waste Industries USA Inc. (WWIN) has made over 100 acquisitions over the last 16 years.

Metrics used to analyze these stocks include the usual revenues and earnings. Here is a list of the larger publicly traded companies in the waste management business, sorted in order of highest to lowest quarterly revenue growth year over year.
Abbreviations: P/E=Price Earnings Ratio, P/S=Price Sales Ratio, QRG=Quarterly Revenue Growth Year over Year

WCA Waste Corporation (WCAA) P/E 77, P/S .9, QRG 32.9%

Waste Connections Inc. (WCN) P/E 27, P/S 2.5, QRG 11.8%

Waste Services Inc. (WSII) P/E N/A, P/S .96, QRG 11.0%

Casella Waste Systems, Inc. (CWST) P/E 118, P/S .6, QRG 8.1%

Waste Industries USA Inc. (WWIN) P/E 20, P/S 1, QRG 4.1%

Republic Services Inc. (RSG) P/E 21, P/S 1.8, QRG 3.8%

Allied Waste Industries Inc. (AW) P/E 40, P/S .8, QRG, 1.8%

Waste Management, Inc. (WMI) P/E 16, P/S 1.4, QRG -2.6%

Author owns WSII.

Sunday, February 25, 2007

Speaking of Spam and Spoof Email

Speaking of spam and spoof emails (did you see my recent article on the spam from a Donald Trump organization?), do you know what to do if you receive an email that may be a spoof that is phishing for your personal information? Have you ever received an email from "paypal" or "ebay" that says something like "Please confirm your purchase". I just received two of those emails today. Here are two things you can do to see if the email is legitimate or not.

First, move your mouse over the link that says "Respond" or "Click here to challenge this purchase". But do not click on the link!!! When you do a mouseover, the link of where you will be directed to will appear on the screen. Check it very closely. If it says paypal.com, it's OK. But if it says paypal.com.xyz.com or paypall.com or xyz.com/paypal.com or some other permutation, then you won't be on a Paypal site if you click on it.

The second way is to forward the email to the actual organization, asking them if it is a legitimate email. The addresses you should use for these purposes are:
spoof@ebay.com
spoof@paypal.com
abuse@aol.com

Private Equity Investing for the Middle Class

A private equity fund is an investment pool that acquires majority stakes or entire ownership of companies in order to restructure its organization. The intent is to resell or go public with the company in a relatively short period of time. In the past, these funds have significantly outperformed the market. However the cost to get into these funds is extremely high, as much as $25 million. Even to invest in a fund of private equity funds, the minimums are high, ranging from $250,000 to $1,000,000.
Fortunately for the small investor, there is an Exchange Traded Fund [ETF] called PowerShares Listed Private Equity Portfolio (PSP) which trades on the American Stock Exchange and invests in over 30 publicly traded stocks with direct investments in more than 1,000 private businesses. This ETF provided the investor with liquidity and diversification, with no minimum investment. One of the downsides is its short track records; it has only been trading since October of last year.

Author does not own the above.

Is Donald Trump resorting to Spam Email?

I just received the following email in my personal mailbox, the one I use for friends and family, not the one I use for business or investing. When you read through it, you will see that the first half looks like a come-on for joining a multilevel sales organization. Normally I trash these types of emails without even looking at them. However, this time when I saw the name Trump in the return address, I thought maybe some fly-by-night was trying to use the trump name, so I thought I would take a look at it.

Donald Trump is the founder of Trump Entertainment Resorts Inc. (TRMP) and is also the chairman of Trump University. The letter is supposedly from the president of Trump University, and when I did a mouseover the link where it says The Trump Advantage Club [the $29.95 per month service they were trying to promote], sure enough it shows a link to the trumpuniversity dot com server. A mouseover the "I Accept!" link shows the same link to Trump University. I wouldn't have thought that Donald Trump or his organizations would have stooped to spamming.

One more interesting thing about this email. It came from trumppartner@trumploans.com. When I went to trumploans.com, it forwarded to trumpmortgage.com, which has a home page with two pictures of The Donald. I guess Trump is now in the mortgage business.


Subject: Want Some Financial Advice?
Date: 2/24/2007 3:40:46 PM Pacific Standard Time
From: trumppartner@trumploans.com

An Exclusive Invitation to Be Part of the Greatest Success Story of All - Yours

I Accept!

I would like to ask you three questions.
If I told you that a limited number of memberships had just become available in one of the most exclusive organizations ever founded, would you want to join?
What if I assured you that if you joined, you would potentially undergo a personal financial rebirth in the next 12 months?
Suppose that as a member of this exclusive club, you would have the same kind of support staff that is usually retained by the ultra-rich?
And suppose I told you that all those benefits, plus more, could be yours for a monthly fee of $29.95?

That organization exists now, and you can join. It's called The Trump Advantage Club. But before I formally invite you to become a member, you no doubt have a few questions of your own about it.

Do you accept our invitation? To get the advantage you need to succeed, register online to join or call 1(877) 508-7867.

How Can All Those Benefits Be Possible At That Price?

More than a year ago, Donald J. Trump and his faculty of experts got together to plan The Trump Advantage Club. They explored whether it was possible to provide all of the benefits listed above, even more, if possible, for a fee that would not exclude anyone.

They soon realized that it was possible to provide all those benefits for a reasonable price. How? Simply by allowing that staff of
experts to share their advice with a pool of members, instead of with just one paying client.

Want to be a part of Donald Trump's exclusive club? To have a team of financial experts you can turn to 24/7, register online to join or call 1(877) 508-7867.

And The Story Gets Even Better
In addition to the exclusive benefits I describe above, here are some additional advantages that we built into The Trump Advantage Club:

A subscription to Trump University Advantage Magazine (Valued at $10.00 an issue)
Personal financial hotlines (Valued at $29.00 monthly)
Exclusive monthly teleconferences for members only (Valued at $40.00 per teleconference)
A members-only resource center (Valued at $89.00)
A free copy of Donald Trump's landmark book, Trump 101 (Valued at $15.00)

Will You Let This Opportunity Pass You By?

I don't think you should.

Join me in The Trump Advantage Club online or by calling 1(877) 508-7867. And before you or I know it, I will see you at the top. The journey will be tremendous.

To your success,

Michael Sexton
President
Trump University

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Author owns TRMP.

Friday, February 23, 2007

Stocks with Executive Perks: Do Country Clubs Make a Difference?

There has been much ado about the high salaries that executives are receiving. But what about the perquisites? Are they too much or does it really benefit the company? After doing a perusal of the reports filed within the last week, this is what I came up with. All of the following comes from the SEC’s EDGAR pages.

Source Interlink Companies Inc. (SORC) a fulfillment and merchandising company of entertainment related products, provides its executives with reimbursement for country club dues, personal use of apartments in New York, New York and Park City, Utah, personal use of company-leased motor vehicles, and supplemental medical expense reimbursement. Stock is down 2% from the beginning of the year.

Sabre Holdings Corp. (TSG) which is in the business of providing travel services and products has an interesting severance package for their executive officers, which kick in under certain conditions. Here are just a few:
* A lump sum payment to cover financial planning, annual executive physical and country club membership
* Reimbursement of relocation expenses, if the executive moves his or her residence more than fifty miles
* A lump sum payment for the executive to purchase travel, accident, major medical, dental and vision insurance for himself or herself and dependents. Stock is up 3.2% from the beginning of the year.

Developers Diversified Realty Corp. (DDR) a shopping center and mini-mall REIT, provides certain executives with reimbursement of country club dues. Stock is up 5.9% from the beginning of the year.

The CEO of Peoples Financial Services Corp. (PFIS.OB), a bank holding company, receives reimbursement for dues for a golf membership at a country club of his choosing. Stock is up 8.5% from the beginning of the year.

Synovus Financial Corp. (SNV), another bank holding company, offers some of its executives reimbursement of country club dues, personal use of the corporate aircraft, spousal entertainment, post-retirement office space and administrative assistance, a painting worth $61,166, and here is one I haven’t seen before, security alarm monitoring. Stock is up 6.5% from the beginning of the year.

Surprisingly, four out of the five stocks above were up and outperformed the Dow Jones Industrial Average, which is up only 1.7% from the beginning of the year.

If you find these types of reports interesting, you should check out footnoted.org, an outstanding blog, written by Michelle Leder, who does what we should all do but most of us don’t like to do, don’t want to do or don’t have the time to do: comb through all the 10K reports, 10Q reports and other SEC filings. Check it out and please support her site.

Author does not own any of the above.

Thursday, February 22, 2007

Dog Stocks

If you are looking for information about the dogs of the Dow, this is not the place. Nor is this about the dogs of the NYSE or the dogs of the NASDAQ. This article is about dog stocks, or in other words, companies that sell to dogs (and their owners).

Last week at Madison Square Garden in New York City, The Westminster Kennel Club 131st Annual Dog Show was held, and broadcast on the USA with a very large number of viewers. In addition, the International Kennel Club Dog show will be held at McCormick Place in Chicago this weekend. Also, The Rocky Mountain Cluster Dog Show, the largest dog show in the western United States, is also running through this weekend. (Is this the dog days or what?) Dogs are big business and are big consumers of food, toys, medical care, and numerous other pet items. There are a few ways you can sink your teeth into this investment arena without barking up the wrong tree.

Petsmart Inc. (PETM) is a Phoenix company that is one of the few publicly traded be-all and do-all companies for dogs and other pets. In addition to selling toys, food, and other products, they also offer services such as grooming, baths, toenail trimming, and tooth brushing, training and boarding at their Pet Hotels, through their website and their stores. They recently agreed to buy 19 Canadian pet stores. Their earnings call is scheduled for Wednesday, February 28, 2007.Earnings estimates for the current quarter is .55 to .57, up from .47 a year ago. The stock has a P/E of 25, a price sales of 1, and even generates a small yield of almost half a percent.

On the dog medicine side of the business, there is MWI Veterinary Supply, Inc. (MWIV) which markets drugs, vaccines, equipment, supplies, pet food, and nutritional products to veterinarians. P/E is 26 and price sales of .6. There is also Patterson Companies Inc. (PDCO) which has a veterinary supply business. P/E 24, P/S 1.9.

Author does not own any of the above.

Yahoo Plans to Feature a Singing Newsman

Yahoo Inc. (YHOO) is planning on having a video newscast featuring a singing journalist. The broadcast will be called "Odd News Underground". The singer will not be anyone famous but has a lot of music and journalistic experience.

Tuesday, February 20, 2007

Stem Cell Stocks: The Growth Industry of the Future?

Last Friday, the state of California distributed $45 million in research grants to approximately 20 state universities and nonprofit laboratories for stem cell research. Four other states, Connecticut, Illinois, Maryland, and New Jersey, are also funding stem cell research. California is contributing almost twice as much as the Federal government towards research. Arnold Schwarzenegger, Governor of California, said "Today, we are making history."

According to StemCellsStocks.com, the research into stem cells involves finding out how organism develops from a single cell and how healthy cells replace damaged. This research can lead to cell-based therapies to treat various diseases.

The difference between stem cells and other cells are that they renew themselves for long periods of time from cell division and they can be made to become cells with special functions. Embryonic stem cells, as opposed to adult stem cells, are isolated stem cells from human embryos that are grown in labs. The embryos used in this research were produced for infertility purposes through in vitro fertilization and later donated for research with the donor’s consent. Research is being done to treat diseases such as Parkinson's disease, diabetes, and heart disease.

There are only a limited number of stocks which are pure plays or semi-pure plays in the stem cell industry. However, if governmental funding increases, if private research continues, and if there are any major breakthroughs, then this could be a very huge industry. The following list also includes cord blood stocks, a related industry.

Aastrom Biosciences (ASTM) This Michigan based company is involved in the development of cell products for the regeneration or repair of human tissues, based on its proprietary Tissue Repair Cell (TRC) technology. Negative earnings, price/sales ratio is 211.

Advanced Cell Technology (ACTC.OB) This company is involved in the development and marketing of human stem cell technology in the area of regenerative medicine and stem cell therapy. Negative earnings, P/S is 64.

Alexion Pharmaceuticals (ALXN) This Connecticut based company is involved in the development of biologic therapeutic products for the treatment of hematologic and cardiovascular disorders, autoimmune diseases, and cancer. Negative earnings, P/S is 864.

ARIAD Pharmaceuticals (ARIA) This Massachusetts company is involved in the development of medicines for the treatment of cancer by regulating cell signaling with small molecules. Their cancer products are used to treat sarcomas, hormone refractory prostate cancer, and endometrial cancer. Negative earnings, P/S is 367.

AVI Biopharma (AVII) The Oregon based company is involved in the development of therapeutic products based on NEUGENE antisense technology to treat various diseases. Negative earnings, P/S is 100.

BioTransplant (BTRNQ.PK) This company is involved in the development of therapeutics, therapeutic devices, and therapeutic regimens designed to suppress undesired immune responses, and enhance the body’s ability to accept donor cells, tissues, organs, and stem cell transplants. Negative earnings, P/S is .6.

Brainstorm Cell Therapeutics (BCLI.OB) This New York based company develops stem cell therapeutic products based on technologies which facilitates the in vitro differentiation of bone marrow stem cells to neural-like cells. They use bone marrow stem cells to produce neuron-like cells for the treatment of multiple sclerosis, Parkinson's disease, and other diseases. No earnings, no revenues.

Celera Group (CRA) This NYSE company, founded in 1937, is involved in the discovery and validation of new diagnostic markers, using proprietary genomics and proteomics discovery platforms and diagnostic products based on those markers. They collaborate with Abbott Laboratories, Genentech, General Electric and Merck. Negative earnings, P/S is 24.

Cellgene (CELG) This New Jersey company is involved in the discovery, production, and marketing of therapies designed to treat cancer and immune-inflammatory-related diseases. Their primary product includes THALOMID, for the treatment of erythema nodosum leprosum. Last year, the company received patent on placental stem cell recovery. P/E is 316, P/S is 21.

Cord Blood America (CBAI.OB) This Los Angeles company is involved in the collection, testing, processing, and preservation of the blood from umbilical cords for use in future stem cell therapy. Negative earnings, P/S is 1.7.

Cryo-Cell International (CCEL.OB) This is a Florida based family cord blood stem cell bank. P/S is 1.7.

Curis, Inc. (CRIS) This Massachusetts based company is involved in the discovery, development, and marketing of products that modulate key regulatory signaling pathways which control the repair and regeneration of human tissues and organs. It collaborates with Genentech, Procter & Gamble, and Wyeth. Negative earnings, P/S is 4.9.

Dendreon Corporation (DNDN) This company is involved in the discovery, development, and marketing of active immunotherapies, monoclonal antibodies, and small molecule product candidates to treat cancer. They manufacture the DACSĂ’SC stem cell enrichment device. Negative earnings, very high P/S of 1500.

Geron (GERN) This Menlo Park, California company develops cell-based therapies derived from human embryonic stem cell platforms for treatment of various diseases. Negative earnings, P/S is 186.

Integra Lifesciences Holdings (IART) This New Jersey company develops, manufactures, and sells medical devices, implants, biomaterials, and instruments to the neurosurgery, surgery, and soft tissue repair markets. P/E 45, P/S 3.4.

Invitrogen Corporation (IVGN) This California company sells products and services which support academic and government research institutions, pharmaceutical companies and biotechnology companies, including tools for gene acquisition, gene cloning, gene expression, and gene analysis techniques. Negative earnings, P/S is 2.6.

LifeCell Corporation (LIFC) This New Jersey company develops and sells human-derived tissue-based products for use in reconstructive, orthopedic, and urogynecologic surgery. They produce a three-dimensional structured regenerative human tissue matrix. P/E 45, P/S 6.3.

MedImmune (MEDI) This Maryland company develops, manufactures, and markets products for the treatment of infectious diseases, inflammatory diseases, and cancer. P/E 167, P/S 6.2.

MultiCell Technologies (MCET.OB) The company develops and markets therapeutics based on new drug candidates and patented drug development technology platforms to treat MS-related chronic fatigue, infectious disease, cancer, and autoimmune disease. They also produces immortalized human hepatocyte cell lines. Negative earnings, P/S is 11.2.

Osteotech (OSTE) This New Jersey company processes and distributes allograft bone tissue used for transplants. P/S is 1.3.

Opexa Therapeutics, Inc. (OPXA) This company, based in Texas, developa and markets autologous cellular therapies for the treatment of multiple sclerosis, rheumatoid arthritis, cardiovascular diseases, and diabetes, based on stem cell technologies. No revenues, no earnings.

StemCells Inc. (STEM) This Palo Alto company is involved in the discovery and development of adult stem cell therapeutics for treating damage to the central nervous system, liver, and pancreas. Negative earnings, P/S is a high 1771.

ThermoGenesis (KOOL) This California company designs, manufactures, and markets automated blood processing systems that facilitates the manufacture, preservation, and delivery of cell therapies. P/S 13.6.

ViaCell (VIAC) This Massachusetts company sells ViaCord, a product which is used to preserve baby's umbilical cord blood. They also research and other therapeutic uses of umbilical cord blood-derived and adult-derived stem cells. Negative earnings, P/S is 3.9.

Author does not own any of the above.

Sunday, February 18, 2007

Four Ways to Invest in Berkshire Hathaway if You Don't Have $108,000

Last week, I posted an article about the books on trading and investing like Warren Buffett, the founder of Berkshire Hathaway (BRK-A), the highest priced stock and one of the most successful companies during the last half century. But with the stock selling at over $108,000 per share, it is hard for the average investor to invest in the company. Fortunately, there are several alternative ways to invest in the stock.

The easiest way is by investing in the Class B shares of Berkshire Hathaway (BRK-B), which represent 1/30th of the value of the Class A shares and have 1/200th of the per-share voting rights. But even those shares are extremely high priced at over $3500 per share.

A second way to invest in the stock is by owning shares in the Sequoia Fund (SEQUX), a mutual fund with a large position in Berkshire Hathaway. Almost 30% of their portfolio is invested in the stock. Some of the other stocks in their portfolio include:
Progressive Corp. (PGR) 15.6% of the portfolio
Mohawk Industries (MHK) 7.3%
T J X Companies (TJX) 6.4%
Bed Bath & Beyond (BBBY) 5.7%
The minimum investment in Sequoia is $1,000.

A third way to invest is by investing in the Fairholme Fund (FAIRX) which has a little over 14% of their portfolio invested in Berkshire. Although the concentration is not as significant as Sequoia, it is the number one holding in the portfolio. Fairholme's other major holdings include:
Canadian Natural Resources (CNQ) 12.19% of the portfolio
Echostar Communications (DISH) 9.6%
Penn West Energy Trust (PWE) 6.7%
Mohawk Industries (MHK) 4.7% [surprisingly, this is also one of Sequoia's top five]
Minimum investment is $2500.

There are other funds which have around five percent of their portfolio in Berkshire, such as Legg Mason Partners Appreciation Fund (SHAPX) but the percentage isn't enough to be a close play on Berkshire.

The last way is to create a portfolio that emulates Berkshire's holdings of publicly traded stocks, however, this wouldn't cover Berkshire's holdings of non-public stocks. In addition, it would involve purchasing many different stocks, so you would be better off just buying the Class B shares. But if you just want to pick and choose the "best" of Berkshire's holdings, here is the list of stocks it owns:
American Express Co. (AXP)
American Standard Companies (ASD)
Ameriprise Financial, Inc. (AMP)
Anheuser-Busch Cos. (BUD)
Canadian National Railway Co. (CN)
The Coca-Cola Company (KO)
Comcast (CMCSA)
Comdisco (CDCO.OB)
ConocoPhillips (COP)
Costco Wholesale (COST)
Diageo PLC (DEO)
First Data Corporation (FDC)
Gannett (GCI)
General Electric (GE)
The Home Depot (HD)
H&R Block Inc. (HRB)
Iron Mountain (IRM)
Johnson & Johnson (JNJ)
Lexmark International (LXK)
Lowes Companies (LOW)
M&T Bank (MTB)
Moody’s Corporation (MCO)
Mueller Industries (MLI)
Nike (NKE)
OSI Restaurant Partners (OSI)
PetroChina (PTR)
Pier 1 Imports (PIR)
Procter & Gamble Co. (PG)
Sealed Air (SEE)
ServiceMaster (SVM)
Shaw Communications (SJR)
SunTrust Banks (STI)
Target Corp. (TGT)
Tyco International (TYC)
United Parcel Service (UPS)
USG (USG)
Wal-Mart Stores Inc. (WMT)
The Washington Post Company (WPO)
Wells Fargo (WFC)
Wesco Financial Corporation (WSC)

Author owns PWE, KO, COP, UPS, TYCO and calls on JNJ.

Learn about Hot Stocks

Friday, February 16, 2007

Canadian Broadcaster Criticised for Showing Drunken Boater Show on Kids Primetime

Global Television, a division of CanWest Global Communications Corp. (CWG) which trades on the New York Stock Exchange, presented a TV show at 10am on a Saturday morning which featured a man holding a beer driving a boat which contained a cooler filled with beer cans. The man used inappropriate language to tell the viewing children that they could live like him. The Canadian Broadcast Standards Council gave the station a formal reprimand. CWG was down 3 cents on Friday.

Starbucks Plans on Expanding Coffee Purhcases in Africa

Starbucks (SBUX) has stated that they are planning on doubling their purchases of coffee from East Africa. They are also putting up $1 million for microfinancing the coffee farmers. Six percent of the coffee purchased by Starbux came from Africa. However, Starbucks is involved in a trademark dispute with Ethiopia.

Warren Buffett Stock Trading Books

There have been a lot of books written about Warren Buffett. Some books general biographies, some are essay books, and some are just illustrations and pictures of Warren Buffett. However, if you are looking for books on Buffett's trading and investment techniques, and you type in "Warren Buffett trading" in Amazon, these are the first five books that turn up:

Trade Like Warren Buffett

How to Pick Stocks Like Warren Buffett: Profiting from the Bargain Hunting Strategies of the World's Greatest Value Investor

The Buffettology Workbook: Value Investing The Warren Buffett Way

J. K. Lasser's Pick Stocks Like Warren Buffett

The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

Thursday, February 15, 2007

Sales of Flowers and Greeting Cards Online almost Double before Valentines day

According to comscore.com, the online sales of greeting card companies and flower vendors were up 98% for the week before Valentine's Day. The top participants were American Greetings Corp. (AM), Hallmark [privately owned], RedEnvelope Inc. (REDE), 1-800-Flowers.com Inc. (FLWS), and Martha Stewart Living Omnimedia Inc. (MSO).

Author owns MSO.

The "Perfect" Investment"? Check out these 10 Characteristics

What investment has all ten of these characteristics?

1. Will never go down in value.

2. No minimum investment.

3. Guaranteed by the U.S Government.

4. No commission to buy.

5. Extremely liquid, more so than stocks, bonds, or even CD's.

6. Limited availability, creating scarcity, which even with constant demand can create a rising value.

7. Easy to transfer to relatives and heirs.

8. Easy to sell.

9. Makes a great gift.

10. Can be acquired at numerous locations.

Have you figured out what this investment is? It's the new $1 "gold" dollar coin that the U. S. Mint has just released. Every three months, a different president will be featured on the coin, starting with George Washington. After three months are up, the coins for that particular president will no longer be minted and the minting of the new presidential coin will be released [see characteristic number 6 above].

Author does not own any of these coins yet, but plans to.

Potential Revenue Source for Google

Back in October of 2006, Google Inc. (GOOG) paid $1.65 billion in stock for YouTube.com, a video sharing web site. However, if you look at YouTube's home page, you only see one add on the upper right. If you go to an individual video page, for example, the Evolution of Dance, the most viewed all time video, you won't see any ads [other than an internal ad referencing YouTube Groups]. If you go to Google Video, which I'm sure will be merged with YouTube, you won't see any ads on either the home page or the individual video pages [check out Spray Paint Art if you haven't already seen it; it's pretty amazing].

If Google started running their Google AdSense ads on these sites, the revenues could be enormous. For example, Evolution of Dance has had about 41,800,000 views, just fromm this one video alone. The YouTube.com site has had about 30,000,000 viewers visiting the site in January, 2007 according to ComScore Media matrix.

Author owns GOOG.

Wednesday, February 14, 2007

Fuel Cell Stocks Generating Interest

In previous articles, I've covered a lot of of alternative energy stocks, including solar energy stocks, wind energy stocks, ethanol stocks, flywheel stocks, a carbon emissions trading stock and geothermal stocks. Today, I'm covering fuel cell stocks.

A fuel cell is an electrochemical energy conversion device which produces electricity from external supplies of fuel and an oxidant. They can operate continuously, as long as the flow continues between the fuel and the oxidant. The most common type of fuel cell is the hydrogen fuel cell, which uses hydrogen as fuel and oxygen as oxidant. There are also alcohol fuel cells, hydrocarbon fuel cells, and several other types. Fuel cells are considered advantageous due to the fact that they are more energy efficient and cleaner than other types of fuel. The investment arena seems to be flooded with fuel cell stocks and stocks in related industries. Most of them are not generating any earnings, and many aren’t generating revenues. However there are a few that trade on the New York Stock Exchange and generate solid earnings and dividends. Here is the list of most of the major fuel cell players:

Air Products and Chemicals (APD) They market various types of gasses worldwide. The company developed and continues to operate a hydrogen production facility, a fuel cell power plant and a fueling station which dispenses hydrogen and hydrogen blended fuels to a fleet of light duty vehicles in Las Vegas. They also supply Honda Motor Company with high pressure gas and two hydrogen fuelers for their Fuel Cell Vehicle Program with the city of Los Angeles. The stock has a P/E of 22, and is one of the few fuel cell related stocks that pays a dividend, generating a yield of 1.8%.

Ecotality, Inc. (ETLY.OB) This Scottsdale, Arizona company develops an electric power cell technology for various types of transportation vehicles including cars, buses, trucks, and trains. No earnings, no yield, and a price sales ratio you don’t see every day of 136,767.

Alternate Energy Corporation (ARGY.OB) This company is involved in bulk production of hydrogen and saleable chemical by-products.

American Security Resources (ARSC) This Houston based company develops advanced hydrogen fuel cells.

Arotech Corporation (ARTX) This company develops, manufacture, and sells defense and security products. This company also develops primary and refuelable zinc-air fuel cell technology. Negative earnings but a P/S of .9.

Astris Energi. (ASRNF.OB) – The company develops fuel cells in the Czech Republic.

Avista Corporation (AVA) This Spokane, Washington company was founded in 1889. They generate and distribute energy throughout the United States and Canada. The company also sells its patented fuel cells. Their patent covers any type of fuel cell system that utilizes multiple fuel cell modules. It has a P/E of 15, a P/S of .8, and generates a relatively high yield of 2.3%.

Axion Power Intl Inc (AXPW.PK) The company produces lead-acid-carbon energy storage technologies and is developing prototype e3 Supercells, which is a low cost battery-supercapacitor hybrid that uses the same cases, materials, internal components and manufacturing equipment as conventional lead-acid batteries.

Ballard Power Systems (BLDP) The company designs, manufactures, and markets proton exchange membrane [PEM] fuel cells for power generation, automotive, and material products. The stock has negative earnings and a price sales ratio of 10.5.

Cabot Corporation (CBT) This is a is a specialty chemicals and performance materials company. They also develop and manufacture advanced fuel cell electrocatalysts for PEM and DMFC fuel cells. This is another dividend generator traded on the New York Stock Exchange that yields 1.5%. The P/E is 27 and the P/S is 1.2.

Distributed Energy (DESC) This company is involved in the production of products for the energy market. They make and sell Proton Exchange Membrane (PEM) industrial hydrogen generators [electrolyzers] and fuel cell products. Negative earnings, P/S of 2.7.

EarthFirst Technologies, (EFTI.OB) This company develops and markets technologies for the production of alternative fuel sources. Although many sources list this company as a fuel cell company, I could find no references to a fuel cell connection. On the company’s web site, when a search for “fuel cell” is entered, zero matches come up.

Ener1 Inc. (ENEIE.OB) The company develops and sells batteries, fuel cells, and nanotechnology-related manufacturing products. Negative earnings and a P/S of over 5,000.

Energy Conversion Devices (ENER) This Michigan company develops and sells products, and production processes for the alternative energy generation and energy storage markets. The company is working on a fuel system for powering vehicles powered solely by fuel cells. Negative earnings, PS of 11.

Enova Systems (ENA) This American Stock Exchange company based in Torrance, California develops and sells components for electric, hybrid-electric, fuel cell, and microturbine-powered vehicles. Negative earnings, P/S of 13.

Entegris (ENTG) This materials company provides advanced fuel cell materials, components, subassemblies and other services to fuel cell developers. The company just reported earnings of 46 cents per fully diluted share and sales for the fourth quarter up 15%.

Fuel Cell Energy (FCEL) This Connecticut company, founded in 1969, develops, manufactures, and markets fuel cell power plants for electric power generation. Negative earnings, P/S is 11.

Fuel Systems Solutions (FSYS) This company is involved in designing, manufacturing, marketing and supplying advanced products and systems to enable internal combustion engines to run on clean burning gaseous fuels such as natural gas and propane. I could not find a direct reference to fuel cells on their web site. P/E is 43 and P/S is 1.5.

Hoku Scientific (HOKU) This Hawaii based company provides products and services to the residential primary power, commercial back-up, and automotive hydrogen fuel cell markets. Price sales ratio is 15.

HydroGen Corporation (HYDG.OB) This company is involved in the design, manufacture, marketing, and distribution of fuel cell modules and energy systems using phosphoric acid fuel cells. P/S is 138.

Hydrogen Engine Center(HYEG.OB) This company is involved in the design, and manufacture of internal combustion engines for the industrial and power generation markets. Its engines are designed to run on alternative fuels, including hydrogen. Their website seems to imply that their business may be in competition to fuel cells. P/S is 411.

Hydrogen Power (HYDP.OB) This company develops and sells a proprietary hydrogen production process for use in commercial applications.

Hydrogenics Corporation (HYGS) This company is involved in the design, development, manufacture, and sale of proton-exchange membrane (PEM), fuel cell automated test stations, fuel cell power products, and hydrogen generation equipment. Negative earnings, P/S is 3.

Kemet Corporation (KEM) This company manufactures capacitors for electronics original equipment manufacturers, electronics manufacturing services providers, and electronics distributors. Possible connection to fuel cells. P/E 156, P/S is 1.

Magnetek Inc. (MAG) This New York Stock Exchange company makes and markets digital power electronic product systems and components along with power conditioners for commercial stationary fuel cells. Negative earnings, P/S is 2.

Manhattan Scientifics Inc. (MHTX.OB) This New York based company is involved in the production of micro fuel cell technology.

Mechanical Technology Incorporated (MKTY) This company is involved in the development of direct methanol fuel cell technology called Mobion, which generates electrical power using methanol as fuel. PS is 7.5.

Medis Technologies Ltd. (MDTL) This company is involved in the development, production, and selling of direct liquid fuel cell products for consumer and military markets. Negative earnings, P/S is 900.

Methanex (MEOH) This Vancouver based company is involved in the production, marketing, supply, and distribution of methanol. P/E of 6, P/S of 1.4, and generates a yield of 1.8%.

Millennium Cell Inc. (MCEL) This company develops hydrogen batteries comprised of a fuel cell and hydrogen storage technology which is used in portable electronic devices various markets. P/S of 233.

Neah Power Systems (NPWS.OB) This Bothell, Washington based company develops miniature fuel cells that are used as power sources in laptop computers, cell phones, personal digital assistants, and other portable electronic devices.

Pacific Fuel Cell (PFCE.OB) This Tustin, California based nanotechnology company is involved in the development and production of carbon nanomaterial-based membrane electrode assemblies for fuel cells for the portable and micro fuel cell market.

Plug Power (PLUG) This company is involved in the production of proton exchange membrane fuel cell and fuel processing technologies. P/S is 35.

Power Air (PWAC.OB) This company develops, makes, and sells fuel cell-based commercial products including the development and commercialization of zinc-air fuel cell [ZAFC] technology.

Praxair Inc (PX) This NYSE company is involved in the production and distribution of industrial gases around the world. Praxair provides its customers with hydrogen supply for fuel cells. P/E is 21, P/S is 2.5, and the yield is 1.9%.

Quantum Fuel Systems Technologies Worldwide (QTWW) This company produces powertrain engineering, system integration, and manufacturing of packaged fuel systems and specialty equipment for fuel cells, hybrids, alternative fuels, and hydrogen refueling. It also is involved in designing, engineering, and producing hybrid and fuel cell vehicles. Negative earnings, P/S is .6.

Syngas International (SYNI.OB) This company is involved in the development and production of hydrogen-enriched alternative fuels.

Teledyne Tech Systems (TDY) This company produces electronic components and instruments, including hydrogen gas generators and thermoelectric and fuel cell-based power sources that are used in power generation plants. P/E is 16.4, P/S is .9.

United Technologies (UTX) This company produces technology products and services to the building systems and aerospace industries. They also produce fuel cells for commercial, transportation, and space applications. P/E is 18, P/S is 1.4 and the yield is 1.6%.

UQM Technologies (UQM) This company produces developing electric power systems for battery electric, hybrid electric and fuel cell electric vehicles. P/S is 19.

ViaSpace (VSPC) This company develops space and defense technologies from NASA and the department of defense, including disposable fuel cartridges for manufacturers of direct methanol fuel cells. P/S is 240.

Zap (ZAAP.OB) This company is involved in development, acquisition, and marketing of electric vehicles and electric vehicle power systems, including a fuel cell vehicle. P/S is 3.9.

Author does not own any of the above at this time.

Tuesday, February 13, 2007

Top Performing Industry on Tuesday: Toy & Hobby Stores

The top performing industry on Tuesday, according to Yahoo Finance, was Toy & Hobby Stores. The industry composite was up 5.17%, versus the S&P 500 of up .76%. What is unusual about this industry is that it is made up of only two stocks, Build-A-Bear Workshop Inc. (BBW) and Levcor International Inc. (LEVC.OB).
Build-A-Bear is a St. Louis based company that has over 240 plush animal stores across the United States. It has a P/E ratio of 24 and a Price Sales ratio of 1.4. Levcor International makes and distributes buttons and other craft products to the home sewing and craft markets. The earnings are negative; it has a very low P/S of .09 but a negative book value per share.

Investing in Presidential Election Futures

Yes, it is possible to invest in the futures of the United States Presidential Election of 2008, and no, it is not gambling with some offshore casino website. You can do it through the Iowa Electronic Markets, which is run by the College of Business of the University of Iowa. Quotes are issued daily, price history is available along with graphs and a prospectus on their web site. Is it legal? Yes, they have received two No Action letters from the Commodities Futures Trading Commission. Who holds on to the money? The University of Iowa. Their minimum investment is $5 and maximum investment is $500. They also have a way to invest in the futures of the Federal Funds Target Rate. Sounds like an interesting futures market.

Monday, February 12, 2007

Red Flags, Green Flags Follow-up: Woulda, Coulda, Shoulda

Yesterday, I wrote an article about how dealing with publicly traded companies as a consumer can sometimes send up red flags [negatives] or green flags [positives], which can be an indicator of what may happen to the stock price. I described the green flags I saw over twenty years ago, relating to Franklin Resources (BEN), the management company of the Franklin mutual funds. The green flags I saw were such strong indicators, that I invested about $1500 during the early 1980’s in the stock; it was all I had available to invest at the time. At the time, the stock was trading at about $7 per share, or 21 cents on a split adjusted basis. The stock now trades above $120 per share.

I did make a very good return on my investment in a relatively short period of time. However, several months after buying the stock, I decided to invest in real estate by buying a rental house. I was enamored with the tax benefits and the leverage of real estate. And needed to sell Franklin along with a few other stocks in order to cover the closing costs. When I sold the Franklin stock, I did make a nice profit. However, if I hadn’t sold the stock, I would now have almost $900,000 in just that one stock.

Oh well, at least I had the pleasure of dealing with one broken window repair, one and a half evictions, two pump-outs of a septic tank, three sets of paint jobs, numerous calls to plumbers, scrambling to pay off a large balloon payment, and much, much more. I did sell the property a couple years ago at the top of the real estate market, but even then, the price I got for it wasn’t anywhere near the $900,000 I could have had from holding on to the Franklin stock.

The moral to the story is don’t just go into an investment for the tax benefits, and don’t go into an investment just for the leverage. Woulda, coulda, shoulda.

Speaking of Foreclosures: Zillow Releases Its Year End Report

Zillow.com, the free online home valuation web site covering houses across the United States, has released its latest quarterly report on real estate. The year over year value for homes declined by about half a percent, the first decline since 1997. Values were down 4.7% quarter over quarter.

The city with the highest appreciation: Lakeland-Winter Haven, FL up 25.88%

The city with the biggest drop in values: Panama City, FL down 11.84%

Zillow's press release has a lot more details.

Stock Market Stock Symbol Trivia = OO

Stock Market Stock Symbol Trivia

Question:

What stock has the stock symbol OO ?

Answer:

Oakley, Inc. which designs, manufactures, and sells sunglasses, prescription eyewear, and goggles.

Bonus Question:

Why did Oakley choose that symbol?

Bonus Answer:

The two O's next to each other is an emoticon for eyeglasses.

These stock symbols are known as Personalized Stock Symbols (TM), similar to personalized license plates. The symbol spells out a word, which is not a word in the company name and is not the initials of the company name. However, the word does describe the company's business. (Special thanks to InvestmentTrivia.com )

How Are Real Estate Foreclosures Doing?

Florida: up 13%

Alabama: up 544% over January of last year

North Carolina: down 26%

Tennessee: up 8.5% over December 2006

New York City: up 18%

U.S.: up 25% over January 2006

Pfizer Drug Viagra Available Without Prescription on Valentines Day

Three of the Boots pharmacies in London, owned by Alliance Boots (ABOYY.PK) which has ADR's that trade in the U.S., will allow men to buy the impotence drug Viagra, manufactured by Pfizer Inc. (PFE), without a doctor's prescription. This pilot program will start on Valentine's Day, February 14. The cost of the drug will be $97 for four pills.

Author owns PFE.

Red Flags & Green Flags: How Interactions with Publicly Traded Companies Can Make You Money [or Keep You From Losing Money]

Red flags and green flags refer to the wakeup calls an investor gets with regards to the negative or positive experience that is encountered when dealing with a publicly traded company as a customer. When you get three of these flags in a row, it can be a sign to buy or sell the company’s stock. Here are a couple of real life examples where these flags were raised.

A few months ago, Jim Cramer made a recommendation on his show regarding Coldwater Creek (CWTR). I looked into it and decided to buy some shares in it and paid between 28 and 29 per share on November 22. A week later, after the stock had drifted downward, a catalog from Coldwater Creek arrived in the mail. When I saw that catalog, I started thumbing through it and mentioned to my wife that I just bought shares in the company. My wife said to me “You won’t find anything for yourself in there. It’s all women’s clothing.” So I said, “You mean there’s no women’s section, men’s section, and children’s section like in the Land’s End and L.L. Bean catalogs?” And she said “No, just women’s clothes.” [Red flag number 1.] So I kept flipping through the catalog and said to my wife “Well maybe I can find a present for you in here,” and she replied “Maybe for your mother.” Uh oh. [Red flag number 2.] So I said “So what’s wrong with the clothes?” and she said “Just look at them. There’s no style to them. They look frumpy.” And I thought “I wonder if potential customers and investors all across the United States who are receiving this catalog are thinking the same thing.” [Red flag number 3.] The next day, on November 30, I sold out my position at 24.87, and the stock kept slipping downward. It dropped below $20 per share on January 23, and has stayed below 20 ever since. These three red flags saved me from losing another 22% on this stock.

By the way, I didn’t write this about Coldwater to slam Cramer. As a matter of fact, most of Cramer’s recommendations that I’ve acted upon have turned out well. [Thanks Jim for Level 3 (LVLT).] Now let’s get to some positive flags.

Many years ago, when I worked as a stockbroker/financial planner, I put a lot of my clients’ money into the Franklin Government Securities Fund and the Franklin California Tax Free Fund. The firm I was working for also put a ton of their clients’ money into Franklin funds. I decided to make a due diligence trip to Franklin Resources (BEN) in San Mateo to check out this investment management company. This was back in the early 1980’s, back before Franklin was traded on the New York Stock Exchange and was still an over-the-counter stock, before it had the stock symbol BEN, before they merged with Templeton, and before they had built their new headquarters building.

I arrived at the old building the company was still operating out of and met the woman who was the broker liaison. She offered to give me a tour of the place and told me to excuse all the noise and mess of the construction going on because they were expanding so much. [Green flag number 1.] We got upstairs to her office and she wasn’t kidding, Construction workers were literally knocking down walls into newly leased space and phone company workers were rolling phone cables down the hallways, adding to the half a dozen cables already in the hall. [Green flag number 2.] So we started on the tour, I saw a lot of worker crammed together in all their limited office space, but the most interesting thing I saw that the end of the tour was the mail room. I will never forget the rows and rows of card tables, and dozens of workers, temp workers I was told, opening envelopes of incoming orders. What was most amazing wasn’t the six inch high stacks and stacks of checks, but the stacks and stacks of cash! [Green, the color of money, flag number 3.] It looked like a drug dealer’s money counting den. I said to the broker liaison, “Cash?” and she said “Were not supposed to accept cash but we go ahead and accept it as a service to our clients.” Remember, this was way before the anti-terrorist and anti-drug money laundering laws.

At the time, I already knew that Franklin was a publicly traded company, but the stock was relatively unknown at that time in the investment world. The stock market had already closed for the day, but the next morning, I called a trader at the stock clearing firm that my firm cleared their stock trades through and placed a market order for about $1500 worth of stock, all I could afford at the time. The trader informed me that it was a thinly traded stock. I said, “That’s fine. Just buy the stock at the market.” The stock was trading for around $7 per share at the time, or 21 cents per share on a split adjusted basis. The stock now trades for over $120 per share, so the rest is history – almost. There is a sad follow-up to this story, which I will cover in an article tomorrow.

In the mean time, keep your eyes open for red flags and green flags.

Author does not own BEN [unfortunately] or CWTR at this time.

Sunday, February 11, 2007

Reasons Why September is the Worst Month for Investors

The The Stock Trader's Almanac 2007 , by Jeffrey Hirsch and Yale Hirsch, is a great book with a lot of useful stock market trends, indicators, and historical data of stock prices. It even includes a weekly calendar. They have analyzed the average month to month percentage change for the Standard & Poor’s 500 since 1950 and have found that the average performance for nine of the months were up, two of the months, February and August, were flat, and one was down substantially, the month of September.

So why is this? Why do investors dump their stocks in September, driving the stock market down? Here is a list of possible reasons.

1. Mutual funds want to dump their losing stocks before the end of the third quarter in order to free up funds for investing fourth quarter.
2. Hedge funds doing the same thing.
3. Mutual funds doing profit taking by end of third quarter (window dressing).
4. Hedge funds doing the same thing.
5. Investors sell stocks to pay for their summer vacation credit card bills.
6. Investors sell stocks to pay for their kids' fall college tuition.
7. The last day to file your tax return with extensions is October 15. Investors sell in September to have funds to pay their tax bill in October.
8. Investors selling in September due to fear of being in the market during October (the month of major crashes: 1929, 1987, 1989, & 1997).
9. Uncertainty over earnings of consumer goods companies for the third quarter due to so much vacationing during the summer.

Saturday, February 10, 2007

Super Bowl Advertisers Criticized for Insensitivity

The bashing of Super Bowl advertisers began last Friday. The American Foundation for Suicide Prevention complained about General Motor’s (GM) commercial being insensitive for showing a robot jumping off a bridge. Nationwide Financial Services (NFS) was criticized by the National Restaurant Association for its ad featuring Kevin Federline working as a fast-food employee. Apparently, criticism has no correlation with stock prices as GM was up 6.5% on Friday and NSF was down over 4% on Friday.

Author does not own either of the above.

Analysis of a Ten Bagger Stock

You may occasionally see ads for investment newsletters that say they can predict ten bagger stocks. A ten bagger is a stock which has a price that increases ten times its originally value, or increases by 1000%. There are plenty of stocks out there that have become ten baggers over long periods of time; but how about short periods of time, such as five years or less. Here is one that was better than a ten bagger in less than three years.

New River Pharmaceuticals Inc. (NRPH) closed at 54.71 on December 29, 2006. If you had bought the stock when it went public on August 9, 2004 at 7.36 [which on a split adjusted basis was 3.68], your return would have been 1387%. This is way more than a ten bagger, it’s a fourteen bagger and in only two and a half years!!!

How is it possible for a stock with no earnings, a negative book value per share, and an outrageously high price sales ratio of 64, to have performed so well? On top of that, the company’s Chairman/CEO/President was just granted a bonus of $924,000. The answer: It’s a biotech company, and if a biotech produces the right drug or drugs, the company’s stock will skyrocket.

New River has been working on developing a drug for the treatment of attention deficit hyperactivity disorder, an opioid derivative for the treatment of acute pain, a drug for hypothyroidism, and a drug for the treatment of chronic pain. Once their drugs receive FDA approval, their sales should take off. But can their sales and hopefully their resulting earnings keep this price trend up?

The average annualized return on this stock since it went public is about 190% per year. It’s hard to believe that this return can continue.

If you think this ten bagger is an aberration, here are a few more that did it in five years, January 2002 to December 2006.

Cognizant Technology Solutions Corp. (CTSH)

Zoltek Companies Inc. (ZOLT)

EZCORP Inc. (EZPW)

Smith Micro Software Inc. (SMSI)

GeoGlobal Resources Inc. (GGR) [This one is a 37 bagger]

Author does not own any of the above.

Thursday, February 08, 2007

Railroad Stocks are On Track

The railroad industry is an area that has been overlooked by many investors, maybe because they consider it "too 19th century". However, this group may have several investment opportunities as most of the railroads pay dividends and many have relatively low P/E ratios. So how do you analyze a railroad, besides looking at the usual statistics? First, you have to look at the items they transport. Is there a strong demand for the commodities that they haul? Is that demand expected to get stronger in the future? In addition, you have to look at the cost of fuel for their locomotives, and their ability to pass on that cost to their customers. Here is a list of the major rails, most of which are traded on the New York Stock Exchange.

Burlington Northern Santa Fe Corp. (BNI) This Texas based railroad serves North America by hauling motor vehicles, vehicle parts, food items, cotton, salt, rubber, construction products, building products, chemical products, plastic products, and petroleum products. P/E 15.5, P/S 1.9, yield 1.2%.

Canadian National Railway Company (CNI) This Montreal based railroad covers both the U.S. and Canada. They transport petroleum, chemicals, grain, fertilizers, coal, metals, forest products, and automotive products. P/E 13.7, P/S 3.5, yield 1.2%.

Canadian Pacific Railway Ltd. (CP) This Calgary based railroad serves the Midwestern and northeastern U.S. along with Canada. They transport grain, coal, sulphur, fertilizers, vehicles, automotive parts, and forest products. P/E 12.7, P/S 2.2, yield 1.2%.

CSX Corp. (CSX) The Florida based company operates in the eastern U.S. and hauls fertilizer, metals, forest products, food products, agricultural products, chemicals, coal, and iron. P/E is 13, P/S is 1.7, and the pay a 1.1% yield.

Florida East Coast Industries, Inc. (FLA) Owns a Florida based railroad and real estate. P/E 31, P/S 4.9, yield .4%.

Genesee & Wyoming Inc. (GWR) Owns railroads in the United States, Canada, Mexico, Australia, and Bolivia. Hauls coal, paper, lumber, petroleum products, metals, cement, gravel, chemicals,food products and auto parts. P/E 8.8, P/S 2.5, no dividend.

Guangshen Railway Co. Ltd. (GSH) This railroad transports freight and passengers between Guangzhou and Shenzhen in China. P/E 34, P/S 6.4, yield 2.4%.

Kansas City Southern (KSU) This Kansas City based company has routes in Missouri, Alabama, Louisiana, Mississippi, Texas and Mexico City. They transport chemicals, petroleum products, lumber, metals, agriculture, mineral products, and automotive products. P/E 44, P/S 1.5, no dividends.

Norfolk Southern Corp. (NSC) This Virginia based railroad serves both the United States and Canada. The products they haul include automotive products, chemical products, metals, agriculture products, consumer products, paper, clay, forest products and coal. P/E 13.7, P/S 2.1, yield 1.8%.

Providence & Worcester Railroad Co. (PWX) The Massachusetts based company is a regional freight railroad that serves Massachusetts, Rhode Island, Connecticut, and New York. They haul iron, steel, chemicals, lumber, scrap, resins, cement, coal, debris, and food. Price earnings ratio is fairly high at 52, the price sales is 2.8%. The pay a small yield of .9%.

RailAmerica Inc. (RRA) This Florida based short line railroad owner operates railroads in 26 states and three Canadian provinces. P/E 17, P/S 1.4, no dividend.

Union Pacific Corp. (UNP) This Omaha base company serves all of North America. They transport agricultural products, automotive parts, lumber, steel, paper, food, chemicals, coal, and cars. P/E 17, P/S 1.7, yield 1.4%.

Author does not own any of the above.

Wednesday, February 07, 2007

Are you a Good Stock Picker? Want to Earn a Million Dollars?

CNBC has recently announced their new Million Dollar Portfolio Challenge with a grand prize of $1,000,000, plus weekly prizes of $10,000. Starts March 5.

Cruising for Cruising Stocks

January through March is generally the busiest time of the year for reservations on cruise lines. Prospective vacationers are planning their spring and summer cruise vacations. Some investors think the cruise industry may be hurt by the new passport law, especially for operations in the Caribbean area. However, others think that more cruise travel will be opening up in the near future with Cuba. There are just a few opportunities to climb on board with cruise stocks. Hopefully they won't sink or experience choppiness, but will be smooth sailing for investors. Here they are:

Carnival Corp. (CCL)

Carnival is one of the largest cruise and vacation companies in the world. Their cruise lines which operate out of North America, the United Kingdom, Germany and Italy, include Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise Line and Windstar Cruises in North America; AIDA in Germany; Costa Cruises in southern Europe; P&O Cruises, Cunard Line, Ocean Village and Swan Hellenic in the United Kingdom; and P&O Cruises in Australia. They operate a fleet of 81 ships, and will be receiving another 20 ships between now and 2011. They are headquartered in Miami, Florida and London, England. P/E 18, P/S 3.5, yield 2.2%.

Carnival plc (CUK)

This is the ADR for the Carnival stock which trades on the London Exchange. An explanation is necessary. Carnival Corporation & Carnival plc operates under a dual listed company structure in which Carnival Corporation and Carnival plc operate as a single economic entity through contractual agreements between each of their own separate legal entities. Shareholders of both Carnival Corporation and Carnival plc have the same voting participation and economic interest but their shares are listed on different stock exchanges and are not fungible. [Is this as clear as dirty water?] Carnival Corporation common stock is traded on the New York Stock Exchange under the symbol CCL. Carnival plc is traded on the London Stock Exchange under the symbol CCL and as an ADS on the New York Stock Exchange under the symbol CUK. Carnival is the only company in the world to be included in both the S& P 500 index in the US and the FTSE 100 index in the UK. If you look at the graphs for the Corp. and the plc stocks, they seem to move together generally, however, the ADR has outperformed the Corporation stock by several percentage points. Is there an arbitrage opportunity here? Anyway, because of the difference in price, the statistics are somewhat different: P/E 19.7, P/S 3.7, yield 2%.

Royal Caribbean Cruises Ltd. (RCL)

This company owns Royal Caribbean International [19 cruise ships with over 44,000 berths] and Celebrity Cruises [9 cruise ships with over 15,000 berths]. They also own Pullmantur S.A., which has five ships in Europe and Latin America. The company plans on having six more ships by the end of 2010. They also offers land tour vacations in Alaska, Canada and Europe. They are headquartered in Miami, Florida. P/E 15.4, P/S 1.7, yield 1.4%.

Lehman ABS 8.875 Corporate Backed Trust Certificates, Series 2001-27 Trust for Royal Caribbean Cruises Ltd. (CWZ)

Here's an unusual investment. I wasn't sure if I should put this in the minibond category or the unusual trust category, or both [they are technically referred to as CORTS or corporate-backed trust securities]. This is a publicly traded trust created by Lehman Brothers (LEH). The Trust's assets consist solely of senior debentures issued by Royal Caribbean Cruises Ltd. They pay dividends of $1.109 per share twice a year every April and October, similar to a bond. But it is traded on the New York Stock Exchange with a par value of $25, similar to a stock. The current yield is 8.6%.

Star Cruises Ltd. (SSKZF.PK)

This company, in the speculative arena, which was founded in 1993 operates in the Asia-Pacific region. They have 18 ships with over 23,000 berths which leave from ports in Singapore, Port Klang (Malaysia), Hong Kong and Keelung. Their brands include Star Cruises, Norwegian Cruise Line, and Orient Lines. It is also a co-owner with Genting Berhad (GEBHY) of the Sentosa casino resort in Singapore.

Author does not own any of the above.

Tuesday, February 06, 2007

Carbon Emissions Trading Stock

In the past, I've posted articles about various types of alternative energy stocks, including solar energy stocks, wind energy stocks, ethanol stocks, flywheel stocks, and geothermal stocks. Now there is a stock that is a major player in carbon emissions trading called Climate Exchange Plc (CXCHF.PK). Carbon emissions trading is the trading of permits to emit carbon dioxide and other greenhouse gases. It is way of meeting obligations under the Kyoto Protocol to mitigate global warming. Climate Exchange Plc owns the Chicago Climate Exchange, Inc. and the European Climate Exchange, which provide futures contracts and options contracts of emissions. Goldman Sachs has taken a major position in this company.
Special thanks to TheStreet.com Daily Blog Watch and AlternativeEnergyStocks.com for pointing out this company.

Monday, February 05, 2007

Microsoft Fails Virus Test

According to an article at bbc.com, Microsoft's (MSFT) Windows Live OneCare, which is a virus detection program that was launched with Vista, failed independent tests and missed more viruses than any other of the tested programs. The Microsoft stock was down almost 2% on Monday.

Astronaut Arrested for Attempted Kidnapping while Wearing Diapers

Normally I don't write up articles that are unrelated to investing or business. However, this one was so bizarre that I decided to include it. Astronaut Capt. Lisa Nowak drove from Texas to Florida, wearing diapers, to confront a woman who was involved with another astronaut who Nowak was "somewhat" involved with. This story is very odd. Could being in outer space have affected her?

Biotech and Healthcare Stocks that pay Dividends

Biotech stocks seem to be where investors are looking for very substantial gains. Approval of a drug can send the stock skyrocketing. Unfortunately, for the more conservative investor, there are not many biotechs with earnings, and some don't even have revenues. If you are looking for dividends, you almost have to forget it, since there are only four that generate a yield.

However, if you are looking for dividend stocks in the health care sector [a growing sector due to the increasing age of the baby boomers and their parents], there are plenty of other related industries besides biotech. There are the major drug manufacturers, the generic drug manufacturers, diagnostic companies, healthcare plans, hospitals, medical appliances, medical instruments, medical laboratories, and several more. Here is a list of 73 stocks from the healthcare sector that pay a dividend, sorted by yield.

Pfizer Inc ( PFE ) 4.4%
Bristol Myers Squibb ( BMY ) 4.0%
Brookdale Senior ( BKD ) 3.8%
Merck Co Inc ( MRK ) 3.4%
Glaxosmithkline ( GSK ) 3.3%
Lilly Eli Co ( LLY ) 3.2%
Amer Shared Hospital ( AMS ) 2.9%
Psychemedics New ( PMD ) 2.7%
Astrazeneca Plc A ( AZN ) 2.5%
Biovail Corp ( BVF ) 2.4%
Johnson And Johnson ( JNJ ) 2.3%
Abbott Laboratories ( ABT ) 2.2%
Meridian Bioscience ( VIVO ) 2.2%
Wyeth ( WYE ) 2.1%
Hillenbrand Ind ( HB ) 2.0%
Arrow Intl Inc ( ARRO ) 2.0%
Mannatech Inc ( MTEX ) 2.0%
Mine Safety Appl ( MSA ) 1.9%
LCA-Vision Inc ( LCAV ) 1.8%
Sanofi-Aventis Sa ( SNY ) 1.7%
Altana Ag ADS ( AAA ) 1.7%
Valeant Pharma ( VRX ) 1.7%
Novartis Ag ADS ( NVS ) 1.6%
Bayer Aktienges ( BAY ) 1.6%
Aceto Cp ( ACET ) 1.6%
Polymedica Corp ( PLMD ) 1.5%
Mentor Corp ( MNT ) 1.4%
Becton Dickinson ( BDX ) 1.3%
Manor Care New ( HCR ) 1.3%
Natl Healthcare ( NHC ) 1.3%
Alcon Inc ( ACL ) 1.2%
Baxter Intl Inc ( BAX ) 1.2%
Health Mgmt Assoc A ( HMA ) 1.2%
Perkin Elmer Inc ( PKI ) 1.2%
Mylan Labs Inc ( MYL ) 1.1%
Fresenius Med Ads ( FMS ) 1.1%
West Pharma Svcs ( WST ) 1.1%
Datascope Cp ( DSCP ) 1.1%
Perrigo Company ( PRGO ) 1.0%
Reliv Intl Inc ( RELV ) 1.0%
Schering Plough ( SGP ) 0.9%
Luxottica Gp SPA ( LUX ) 0.9%
Medtronic Inc ( MDT ) 0.8%
Novo Nordisk A S ( NVO ) 0.8%
Teva Pharm Inds A ( TEVA ) 0.8%
Merck Serono S.A. ( SRA ) 0.8%
Quest Diagnostc ( DGX ) 0.8%
Steris Corp ( STE ) 0.8%
Caremark Rx Inc ( CMX ) 0.7%
Smith&Nephew Plc ( SNN ) 0.7%
Biomet Inc ( BMET ) 0.7%
Bard C R Inc ( BCR ) 0.7%
Alpharma Inc ( ALO ) 0.7%
Chemed Corp ( CHE ) 0.7%
Vital Signs Inc ( VITL ) 0.7%
Universal Hlth Sv ( UHS ) 0.6%
MDS Inc ( MDZ ) 0.6%
Option Care Inc ( OPTN ) 0.6%
Dentsply Intl Inc ( XRAY ) 0.5%
Dade Behring Hldg ( DADE ) 0.5%
Cambrex Cp ( CBM ) 0.5%
Young Innovations ( YDNT ) 0.5%
Stryker Cp ( SYK ) 0.4%
Pharm Prod Dev ( PPDI ) 0.4%
Allergan Inc ( AGN ) 0.3%
Shire Plc ADS ( SHPGY ) 0.3%
Dr. Reddy's Lab ( RDY ) 0.3%
Medicis Pharma Cp ( MRX ) 0.3%
Invacare Corp ( IVC ) 0.2%
Unitedhealth Group ( UNH ) 0.1%
Aetna Inc. New ( AET ) 0.1%
Cigna Cp ( CI ) 0.1%
Cooper Cos Inc ( COO ) 0.1%

Author owns PFE, BMY and BAY.

Hurricane & Stock Market Indicator

If you look at all the major hurricanes in U.S. history, based on the United States National Oceanic and Atmospheric Administration definition of "worst, strongest hurricanes", you will find that going back to 1935, every year following the major hurricanes, out of 23 occurrences, the Dow Jones Industrial Average was down only three times [two of those times were the dot com crash years of 2000 and 2001. Those dot coms do it every time to these indicators!]. 87% of the time, the Dow was either up or, in a couple instances, flat. Overall average of the years following each of these strongest hurricanes was 11%.

Is there a causation? Is there a correlation? Or just a coincidence. Some investors might say that the rebuilding from the hurricane damage helps to buoy the stock market. I'll let you decide.

Here are the major hurricanes, the year they occurred and DJIA return for the following year:

FLORIDA KEYS LABOR DAY 1935 [ 1935 ] 24%
NEW ENGLAND 1938 [ 1938 ] 1%
GREAT ATLANTIC 1944 [ 1944 ] 33%
CAROL AND EDNA 1954 HAZEL 1954 [ 1954 ] 15%
CONNIE AND DIANE 1955 [ 1955 ] 2%
AUDREY 1957 [ 1957 ] 32%
DONNA 1960 [ 1960 ] 8%
CAMILLE 1969 [ 1969 ] 17%
AGNES 1972 [ 1972 ] -14%
TROPICAL STORM CLAUDETTE 1979 [ 1979 ] 8%
ALICIA 1983 [ 1983 ] 5%
GILBERT 1988 [ 1988 ] 11%
HUGO 1989 [ 1989 ] 6%
ANDREW 1992 [ 1992 ] 20%
TROPICAL STORM ALBERTO 1994 [ 1994 ] 40%
OPAL 1995 [ 1995 ] 26%
MITCH 1998 [ 1998 ] 17%
FLOYD 1999 [ 1999 ] 0%
KEITH 2000 [ 2000 ] -9%
TROPICAL STORM ALLISON 2001 IRIS 2001 [ 2001 ] -19%
ISABEL 2003 [ 2003 ] 0%
CHARLEY 2004 FRANCES 2004 IVAN 2004 JEANNE 2004 [ 2004 ] 4%
DENNIS 2005 KATRINA 2005 RITA 2005 WILMA 2005 [ 2005 ] 16%

Sunday, February 04, 2007

Shrek Switching Sides

Shrek, the famous green ogre developed by DreamWorks Animation SKG Inc. (DWA), is going has been receiving a lot of criticism for promoting a sugary Shrek cereal made by General Mills (GIS). Now Shrek will be involved in a obesity prevention for children and families.

Book Publishing Stocks: It Pays to Read Up on Them

When I was going through the list of the top general investing books on Amazon (AMZN) that I wrote up in a previous article, I discovered that one publisher’s name kept popping up, John Wiley & Sons (JW-A) which trades on the New York Stock Exchange. Several of the books listed on the top ten, including The Only Three Questions That Count: Investing by Knowing What Others Don't, Get Rich With Options: Four Winning Strategies Straight from the Exchange Floor , and The Little Book That Beats the Market, were published by Wiley. And there are numerous others, not on the top ten, such as SuperCash: The New Hedge Fund Capitalism and Trade Like Warren Buffett , that were also published by Wiley.

After checking all the book publishing companies, I found that most of them paid dividends, and one had a yield of 3.1%. Here is the list of book publishing stocks, along with their price earnings ratio and yield.

Courier Corp. (CRRC) One of the largest publishers in the United States of educational, religious, and consumer books. P/E 17.8, yield 1.8%

John Wiley & Sons, Inc. (JW-A) This Hoboken, New Jersey company, founded in 1807, publishes print and electronic business, education, and technology books. P/E 20.5, yield 1.1%

McGraw-Hill Companies Inc. (MHP) Publishes education, financial, and business books and information services. Also owns Standard & Poor’s, Also owns BusinessWeek magazine; and J.D. Power and Associates, along with several other divisions. P/E 28, yield 1.1%.

Pearson plc (PSO) This London-based company publishes business and educational textbooks in the United States and Canada. It also publishes The Financial Times newspapers and The Economist magazine. P/E 22.1, yield 3.1%.

Peoples Educational Holdings Inc. (PEDH) Publishes supplementary educational materials for the K through 12 market. Negative earnings, no dividend.

Reader's Digest Association Inc. (RDA) Publishes books, magazines, and music worldwide. P/E 34, yield 2.4%.

Scholastic Corp. (SCHL) Publishes children’s and educational books worldwide. P/E 29.7, no dividend.

Thomson (TOC) Publishes legal, business, and educational books, textbooks, and information services. P/E 28.6, yield 2.1%.

January Barometer for NASDAQ? Not Necessarily

The January Barometer was discovered by Yale Hirsch, author of the The Stock Trader's Almanac which states that as January goes, so goes the rest of the year. This is supposed to be accurate over 90% of the time since 1950, based on the Standard & Poors 500 Index.

However, if you look at the trend for the NASDAQ since 1972, it is only accurate 60% of the time. Out of 35 years, 14 of the years had up January's and up markets; six of the years had down January's and down years. The other 15 years were mixed. The dot com years really threw off the trend. In 1999, January was down 8.7% with the return for the year ending up 57.2%. For the year 2000, January: up 19.2%, year: down 29.6%.

Thursday, February 01, 2007

There's No Business Like Show Business stocks

Yes, there's no business like show business stocks, but are there any that pay dividends? Apparently there are very few dividend paying pure plays and semi-pure plays in the motion picture production and theater industry. Here they are along with their yields:

Regal Entertainment Group (RGC) 5.4% Large theater circuit across the U.S.
Carmike Cinemas Inc. (CKEC) 3.2% Theater owner in 37 states
Time Warner Inc. (TWX) 1% Entertainment conglomerate
Walt Disney Co. (DIS) .9% Entertainment conglomerate

Author owns DIS.

Exxon Mobil Earned $1250 per Second Last Year

Most investors have heard the news by now that Exxon Mobil (XOM) generated the highest net earnings last year for any American company, earning $39.5 billion. Articles on Yahoo Finance reported the earnings per hour of $4.5 million. On the radio, it was reported that they made $75,000 per minute. Stockerblog is reporting that it works out to approximately $1250 per second. ConocoPhillips (COP) only earned a paltry $490 per second last year. Royal Dutch Shell plc (RDS-B) was a measly $167 per second.

The Superbowl Stock Market Indicator

One of the popular stock trends that investors look at each year is the Superbowl Stock Market Indicator, which basically says that if the winning team is from the old National Football League which is now the National Football Conference [NFC], then the stock market will be up for the year. However if the winner is from the old AFL, now the American Football Conference [AFC], the stock market will be down. Snopes.com has a great write-up on this indicator. Aren't the Bears and Colts originally from the NFL? So the market should be up no matter who wins.

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