FeedPosted Mar 18th 2010 1:30PM by Sheldon Liber (RSS feed)
Filed under: Major Movement, Good news, Chasing Value, Recession, Grubb and Ellis Co (GBE)
In about three weeks I will be reporting the results of my 2010 picks through the first quarter. One of those picks and the leader of the pack Grubb & Ellis (GBE), a real estate brokerage and investment company, reached a new 52 week high yesterday of $2.20, topping the previous high of $2.17 set last October.
At the time I initially wrote about the stock, in December, it was trading at $1.33 a share, the lowest priced stock I have ever included for consideration. The 65.41% gain, to date, will most assuredly help my annual batting average. Grubb & Ellis is besting the 2.93% YTD gain of the Standard & Poors 500 by more than 60%. Absent some unforeseen black swan, I expect it to finish the year higher still.
Continue reading Chasing Value: Grubb & Ellis Hits New High
Posted Mar 18th 2010 12:00PM by Sheldon Liber (RSS feed)
Filed under: International Markets, Rants and Raves, Politics, Currency
California has a huge deficit and will not be going to the International Monetary Fund (IMF) for financial assistance. This is true of a dozen other states as well.
The European Union, which was established to compete with the economic clout of the United States, is looking like the European Dis-Union (EDU) -- currently "dissing" on the state of Greece. This EDU is a far cry from the good 'ol USA, which has plenty of economic and social strife of its own, but even under the most stressful times has demonstrated it takes care of its own.
Continue reading EU Is Not the United States of Europe
Posted Mar 17th 2010 4:40PM by Sheldon Liber (RSS feed)
Filed under: Market Matters, KB HOME (KBH), Options, Chasing Value, Stocks to Buy, Housing
It's time to get serious about home builders again, and today I started building a position in KB Home (
KBH) using options. Since the collapse of the residential real estate market three years ago prognosticators have been debating when the home builders might be worthy of investing your precious coin of the realm.
As is to be expected in these volatile times most were either too optimistic or pessimistic and few got it right. Like many stocks the home builders appear to have bottomed last March. In the case of KB Home shares were available at $10. Today they have been trading between $17.64 and $18.00 per share, up 80%, although it has been a rocky road.
That is a very healthy return, but there is much more upside to come. How would you like to make 43% quick? Yeah me too!
Continue reading Chasing Value: 43% Gain to Build a Position in KB Homes
Posted Mar 16th 2010 12:00PM by Sheldon Liber (RSS feed)
Filed under: Rants and Raves, Exxon Mobil (XOM), Venezuela, Avon Products (AVP), Colgate-Palmolive (CL), Procter and Gamble (PG), Kimberly-Clark (KMB), CEMEX S.A.B. de C.V. (CX), Currency
It is mind boggling that Hugo Chavez, the authoritarian President of Venezuela is racing towards a mock socialist political system when the two largest socialist regimes in the world, China and Russia, have done the opposite. Even our long standing communist adversary (now trading partner) Vietnam entered the 21st Century on a capitalist influenced spring loaded economic boom.
BusinessWeek reports in its latest edition that the
Chavez government has been taking privately held supermarkets under government control:
Continue reading Hugo Chavez Racing Toward Economic Peril
Posted Mar 15th 2010 12:00PM by Sheldon Liber (RSS feed)
Filed under: International Markets, Management, Chasing Value, Stocks to Buy
Insurance companies are seeing more promise lately and one that showed up on my value screen was Willis Group Holdings (
WSH) -- headquartered in London but listed on the NYSE. For starters, it is paying a higher than average yield of 3.31%; has a low PEG ratio of 0.99; and has a high ROE of 21.76.
This company often deals in very high risk propositions. You, however, will not be taking one because Willis, as a leading global insurance broker, not underwriter, specializes in reducing risk for entities in such fields as aerospace, construction, energy, health care, marine, mergers and acquisitions, and niche areas like fine art, jewelry, armored cars, racehorse breeding, and sabotage.
Continue reading Chasing Value: Willis -- A Small Risk
Posted Mar 11th 2010 2:20PM by Sheldon Liber (RSS feed)
Filed under: Competitive Strategy, Citigroup Inc. (C), Options, Entrepreneurs
There has been little time to write lately because I have been wheeling and dealing in my investment world. However, I thought I would share one of the trades I did this week that seems like free money to me, and although the opportunity has faded a little I might do it again and you might want to examine this trade, too.
At the market open on Tuesday March 9, a good-til-canceled order filled -- selling to open Citigroup Inc. (
C) January 2012 'puts' at a strike price of $7.50 -- paying $4.05. This transaction is commonly called a "naked put". The return on investment is 59% over the remaining 22-month period.
This is nuts because my break even position is $3.45 -- 20 cents a share less than it was the time of the trade and 60 cents less than the $4.05 (ironic isn't it) Citigroup is trading at now, as I type away.
Continue reading World's Dumbest Market -- Low Risk, High Reward
Posted Mar 2nd 2010 3:00PM by Sheldon Liber (RSS feed)
Filed under: Major Movement, International Markets, Products and Services, Competitive Strategy, Next Big Thing, Johnson and Johnson (JNJ), Japan, Serious Money, Intuitive Surgical Inc (ISRG)
It was only a matter of time before Intuitive Surgical (
ISRG) surpassed it's previous all time high of $359.59 set on December 14, 2007. I have blogged many times about ISRG in my Chasing Value column. Today, I'm delighted that the stock is rising, but I think it is getting a bit rich and the value proposition has changed -- intra-day it hit $366.50.
Intuitive has a trailing P/E ratio of 61 and a projected P/E of 46. I commonly average the two for such volatile stocks which translates to 53.5. There are certain times when that might be alright, but with a PEG ratio (price-to-earnings-to-growth) of 2.05, this is not one of them. If you own it I am not suggesting selling it, but if you do not it might be wiser to put it on your watch list and wait for the market to calm down.
Continue reading Serious Money: Intuitive Surgical Hits New Highs
Posted Mar 1st 2010 5:40PM by Sheldon Liber (RSS feed)
Filed under: Management, Apple Inc (AAPL), Berkshire Hathaway (BRK.A), Market Matters, Goldman Sachs Group (GS), Wells Fargo (WFC), Chasing Value, S and P 500, U.S. Bancorp (USB), Stock Picks
Yes it can. Berkshire Hathaway Inc. (BRK.B) can outperform Apple Inc. (AAPL) in 2010. That was my thesis in December (see Buffett's Berkshire vs Jobs' Apple for 2010?) and I still believe all the Apple hype in the world will still succumb to a solid value proposition in the long run.
While Apple was reaching new all time highs Berkshire was treading water through 2009. However, after a monster run-up Apple is taking a breather.
Continue reading Chasing Value: Berkshire Eating Up Apple -- Can It Continue?
Posted Feb 9th 2010 5:20PM by Sheldon Liber (RSS feed)
Filed under: General Electric (GE), Eaton Corp (ETN), Bargain Stocks, Chasing Value, Emerson Electric (EMR), General Cable Corp. (BGC)
This morning one of my colleagues,
Joseph Lazzaro, who heavily uses technical analysis, posted an article titled
General Cable Corp.: Stopped-Out.
I have never used technical analysis to make investment decisions, but I have used charts for general long-term trends examining a stock from a historical perspective. I think in the case of General Cable Corp. (
BGC), it may prove untimely to bail out now based on just technical analysis.
Continue reading Chasing Value: General Cable -- Can Something Be Too Cheap?
Posted Feb 9th 2010 2:30PM by Sheldon Liber (RSS feed)
Filed under: Management, Hewlett-Packard (HPQ), Wal-Mart (WMT), JPMorgan Chase (JPM), AFLAC Inc (AFL), Archer-Daniels-Midland (ADM), Campbell Soup (CPB), Chevron Corp (CVX), Chubb Corp (CB), ConocoPhillips (COP), CVS Corp (CVS), Darden Restaurants (DRI), Goldman Sachs Group (GS), Verizon Communications (VZ), duPont(E.I.)deNemours (DD), Kimberly-Clark (KMB), Lockheed Martin (LMT), Hasbro Inc (HAS), Entrepreneurs, Serious Money, Stock Screen, Raytheon Company (RTN), Xcel Energy (XEL), EZCORP (EZPW), Travelers Companies Inc. (TRV)
While most investors are fretting the markets recent contraction, you can be quite confident that "my pal Warren" has a smile on his face, as does Peter Lynch, Ken Heebner, Bill Miller, Bruce Berkowitz, and any number of fellow value investors that know now may be a time of opportunity. That is because they have the experience and understanding to pounce when they have a chance to buy things cheap.
This is the fourth installment of my series to discover just that: cheap stocks. If you would like to get on board from the beginning then review the initial post which screened for stocks with lower than market average P/E ratios, see
Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios:
Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth. Then I moved on to the the P/S and P/CF metrics in
Serious Money: Cheapest Stocks Yet -- From 35 to 26, cutting nine stocks.
Continue reading Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Posted Feb 9th 2010 1:20PM by Sheldon Liber (RSS feed)
Filed under: Major Movement, Earnings Reports, Good news, Money and Finance Today, Hasbro Inc (HAS), Chasing Value, Stock Screen, Stock Picks
Yesterday Hasbro, Inc. (
HAS) r
eported 2009 fourth quarter and full-year results.
For the fourth quarter 2009, the Company reported net revenues of $1.38 billion, an increase of $144.1 million or 12%, compared to $1.23 billion a year ago. 2009 fourth quarter revenues grew 7% excluding a $55.4 million positive impact of foreign exchange. The Company reported net earnings for the quarter of $165.6 million or $1.09 per diluted share,
an increase of $72.0 million or 77%, compared to $93.6 million or $0.62 per diluted share in 2008.
The strong results in a bad year support my contention that today's stock market, even in these uncertain times, does have plenty of bargains.
Continue reading Chasing Value: Hasbro Earnings Makes My Point
Posted Feb 4th 2010 3:20PM by Sheldon Liber (RSS feed)
Filed under: Major Movement, Rants and Raves, General Motors (GM), Toyota Motor Corp. (TM), Market Matters, Headline News
All swans were thought to be white until someone happened to come across a black one. All Toyota's were thought to be well made until someone discovered, oh, say, maybe two million cars that might not be -- part of a cautionary vehicle recall.
If you are a shareholder of Toyota Motor Corp. (
TM) which past GM as the largest automobile manufacturer last year -- oddly, the same year it reported its first losses (along with everyone else) -- then you now have a first hand experience of the inherent problems or uselessness in trying to predict where trouble may arise.
Continue reading Toyota Shareholders Encounter the Black Swan
Posted Feb 3rd 2010 4:40PM by Sheldon Liber (RSS feed)
Filed under: International Markets, Other Issues, Products and Services, Launches, Rants and Raves, Competitive Strategy, Microsoft (MSFT), Apple Inc (AAPL), Exxon Mobil (XOM), Market Matters, Next Big Thing, Technology
Shortly after the introduction of Apple, Inc.'s (AAPL) long anticipated iPad tablet computer I was quite surprised to receive an email from one of our more astute readers boldly stating "Game, set and match. See you at $300"
My immediate reaction was that this overly zealous stock trader and Apple enthusiast had let all reason escape his cranium. For me it reinforced how irrational investors are and how little they understand numbers. Apple stock will not reach $300 this year. Continue reading Apple $300 -- Not This Year!
Posted Feb 3rd 2010 10:40AM by Sheldon Liber (RSS feed)
Filed under: eBay (EBAY), Pfizer (PFE), Wal-Mart (WMT), International Business Machines (IBM), Johnson and Johnson (JNJ), JPMorgan Chase (JPM), Abbott Laboratories (ABT), AFLAC Inc (AFL), Altria Group (MO), Archer-Daniels-Midland (ADM), AutoZone Inc (AZO), Bristol-Myers Squibb (BMY), Campbell Soup (CPB), Chevron Corp (CVX), Chubb Corp (CB), ConocoPhillips (COP), CVS Corp (CVS), Darden Restaurants (DRI), Goldman Sachs Group (GS), General Mills (GIS), Verizon Communications (VZ), duPont(E.I.)deNemours (DD), Kimberly-Clark (KMB), Merck and Co (MRK), Lockheed Martin (LMT), Hasbro Inc (HAS), Serious Money, Stock Screen, Raytheon Company (RTN), Xcel Energy (XEL), EZCORP (EZPW), Travelers Companies Inc. (TRV)
Is the market overpriced? Maybe it is cheap, or perhaps it is fairly valued. This is the third in a series examining the issue. Still, it has been my contention that it does not make any difference because no matter how the market is valued as a whole, there are plenty of cheap stocks out there to accommodate a large amount of capital allocation even this deep into a bull run.
If you would like to follow along from the beginning, the initial post screened stocks for lower than market average P/E ratios:
Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios:
Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth.
Continue reading Serious Money: Cheapest Stocks Yet -- From 35 to 26
Posted Feb 1st 2010 2:50PM by Sheldon Liber (RSS feed)
Filed under: Hewlett-Packard (HPQ), eBay (EBAY), Pfizer (PFE), Wal-Mart (WMT), International Business Machines (IBM), Johnson and Johnson (JNJ), JPMorgan Chase (JPM), Abbott Laboratories (ABT), AFLAC Inc (AFL), Altria Group (MO), Archer-Daniels-Midland (ADM), AutoZone Inc (AZO), Bristol-Myers Squibb (BMY), Campbell Soup (CPB), Chevron Corp (CVX), Chubb Corp (CB), ConocoPhillips (COP), CVS Corp (CVS), Darden Restaurants (DRI), Goldman Sachs Group (GS), General Mills (GIS), Verizon Communications (VZ), duPont(E.I.)deNemours (DD), Kimberly-Clark (KMB), Merck and Co (MRK), Lockheed Martin (LMT), Hasbro Inc (HAS), Serious Money, Stock Screen, Stocks to Buy, Raytheon Company (RTN), EZCORP (EZPW), Travelers Companies Inc. (TRV)
Let's try and reduce the gambling by examining the facts and ignoring what the bulls and bears are chatting up at the moment. We started the process by screening for lower than market average P/E ratios, see:
Serious Money: Market Looks Cheap to Me -- 35 Stocks.
Two more important criteria influence today's review: the yield, a favorite of
"my pal Warren"; and the price-to-earnings-to-growth (PEG) a focus of Peter Lynch, the retired fund manager extraordinaire of Fidelity's Magellan Fund.
Continue reading Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth
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