"Investing is most intelligent, when it is most business-like." - Ben Graham
Make money in stocks by piggybacking on stock pick ideas from investing gurus such as Warren Buffett, Jim Cramer, Carl Icahn, Joel Greenblatt, Mohnish Pabrai, etc. Mixed also with inspiration to keep you motivated.
Power of Compound Interest! Did you know $500 contributed yearly compounded at 25% for 27 yrs = over $1 million !
Great Stock Investors.
29% for 37 yrs. - George Soros
21% for 40 yrs. - Warren Buffett
29% for 18 yrs. - Eddie Lampert
29% for 18 yrs. - Peter Lynch
24% for 13 yrs. - Jim Cramer
15% for 20 yrs. - Benjamin Graham
This blog is devoted to finding wonderful businesses trading at discounted prices so you too can Retire Rich!
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Sunday, July 05, 2009
Cardinal Health, drug distributor company close to 52 week low
Cardinal Health(CAH) is approaching it's 52 week low, current selling at $29.
Factsheet:
-Cardinal forecast a fiscal 2009 profit of $2.20 to $2.25 per share excluding its clinical and medical products business, which will be spun off in the next few months under the name CareFusion Corp
-beat estimates consecutively for the past 10 quarters.
-It's never lost money in the past 10 yrs and Book value has only increased.
Boeing (BA) delivered 125 commercial aircraft in the second quarter. That's only one less than a year ago.
Sepracor (SEPR) early phase II studies of its depression treatment failed to meet the goals.
American International Group (AIG),the company did a for 20 reverse stock split.
Oshkosh Corp (OSK), the Department of Defense selected the company to supply 2244 all terrain vehicles worth a little over $1 billion and that order could reach 5000 ATVs.
General Mills (GIS), fourth quarter earnings excluding one- time items, $0.86 a share, $0.06 above the Street estimate and the company has an upbeat outlook.
Ball Corp (BLL) will acquire four Anheuser Busch InBev beverage containing plants, container plants, for $577 million.
Constellation Brands (STZ) first quarter earnings came in at $0.33 a share, a penny above the Street estimate.
Ingersol-Rand (IR)will be replaced by Quanta Services in the Standard & Poor's 500 Index because Ingersol is redomesticating to Ireland.
Abbott Labs (ABT), a federal jury ruled that the company's drug violates a Johnson & Johnson patent and the ruling calls for a $1.6 billion damage award.
Deere & Co (DE), a larger than expected 800 employees went for the company's buyout offer and the result will be a bigger than expected $100 million in fourth quarter pre-tax expenses for Deere & Co.
H&R Block (HRB) fourth quarter earnings came in at $2.09, same as last year, $0.04 better than expected and it happened despite a 3 percent drop in revenues. H&R Block will maintain its present dividend through 2010.
Apollo Group (APOL) third quarter earnings, $1.26, well above last year's $0.85. The Street was only looking for $1.12.
SLM Corp (SLM), the Department of Education released details of contracts for servicing student loans that had been recently awarded like one that SLM got. The terms sat well on Wall Street.
Once a wallstreet darling, Gamestop(GME) is getting close to it's 52 week low (currently selling at $21 with a p/e less than 9). It operates more than 6,207 stores under Gamestop and EB games. Gamestop is the king of the hill as far as trading used games but investors are being spooked by Best Buy getting into the used gaming market and lower gaming sales versus last year.
Best Buy is using in-store kiosks to handle the trade. Customers “insert their used games into a kiosk that will scan it for functionality, and immediately issue a voucher that is instantly redeemable for a Best Buy gift card" -Stock Article Link
Can Gamestop reign supreme? Netflix was able to do it with Blockbuster? Why not Gamestop....we'll have to wait and see.
Retired portfolio manager of the Winsor Fund, John Neff, posted an average compounded return of 13.7% from 1964 to 1995 (31 yrs). During that time the S&P posted 10.6% compounded average return. So beating it by 3.1% doesn't seem like much but in dollars in cents, $10,000 with John Neff would yield you $564,637 vs $232,974 with the S&P. That's more than double and commands respect!
In his book "John Neff on investing" it outlines his basic strategy for picking stocks.
Low price-earnings (p/e) ratio
Fundamental growth in excess of 7 percent
Yield protection
Superior relationship of total return to p/e paid
No cyclical exposure without compensating p/e multiple
Solid companies in growing fields
Strong fundamental case
I like his idea of total retun to p/e. Example, if company X's growth rate is 12% and dividend yield is 3.5%, total return is 15.5%. If the p/e is 6x, then the total return to p/e is 2.6 (15.5 divided by 6). John Neff was looking for at least 2 to 1.
I did it again. When you have some cash on the sidelines and a couple days off work, you make some foolish decisions. It's like being a compulsive gambler and you feel like you just gotta buy something. If you noticed on my recent buys, I took a new position in Foster Wheeler(FWLT). This was a Cramer fav even when the stock was at $160+. At $23, selling less than p/e 7, with good growth prospects in infrastucture, it's a good long term buy.
I also added more to Boeing(BA), Walmart(WMT), and ConocoPhilips(COP). Of course right when I put my chips down, the market tanks the next day. Currently down 161 points! It may reverse course but I'm making a new rule that I am only allowed to invest when majority of the stocks are down. It has to be a sea of red! Bleeding like crazy! Otherwise I am not allowed to buy. This will be my restriction and will help with my impatience.
Looking for cheap stocks that are out of favor? Here's a list which I used a screen using the following, p/e under 10, forward p/e under 20, PEG rational under 1.50, and Return on Equity above 10. Below are some stocks that made the list.
Foster Wheeler(FWLT) is a global engineering, construction, and project management contractor and power equipment supplier.
Raymond Milchovich, 58, led Foster Wheeler for the past seven years. He was previously chief executive of Kaiser Aluminum.
"Not only have we accomplished what many have described as a world-class turnaround, but we have transitioned Foster Wheeler into what has rapidly become a leading global engineering and construction contractor and power equipment supplier delivering technically advanced, reliable facilities and equipment," Milchovich said in a statement. "These seven years have been the most gratifying of my career."
Nov 9, 2007: Stock price was $152!
May 7, 2008, price was $65.
Sept 2008: Buyback talk with Raymond Milchovich. He was bullish even when the stock was way up.
Excellent article on how Raymond Milchovich lead Foster Wheeler into a turnaround story. -Stock Article Link
Factsheet
-Through Feb 09, it repurchased 12% of the outstanding since the annoucement of the $750 million share repurchased program back in Sept 08.(average price bought was $25.89 spent $264 million)
-Milchovich, who in August 2008 said he planned to step down in 2009, has signed a new, three-year employment agreement to ensure continuity in leadership, the company said. Milchovich earned $7 million in total compensation last year. It is unclear what his pay will be under the new agreement. -Stock Article Link
Here's a warning: Once you watch this 3 minute movie, it'll be hard to forget! I've probably watched it a hundred times but you know what...it still works. Whenever I need a little "nudge" to remind me about the difference between good and great, I'll watch it again.Just click on this link to watch. Click Here.
"NCR (NCR), which makes and services technology hardware and software largely for retail and financial companies, is one global tech company that some investors find attractive because of its valuation, free cash flow, and financial flexibility. Among NCR's products are ATMs and financial terminals, self-service retail kiosks, and bar-code scanners...company has been the global market-share leader in self-service ATMs for 23 consecutive years, remains No. 1 in North America, and has retained its lead in such key worldwide markets as China. Strong demand for ATMs in emerging markets has helped its global sales growth."-Stock Article Link
NCR Corporation ranks number one worldwide in the self-checkout market, according to Retail Banking Research
“Two out of three self-checkouts shipped in the last five years are from NCR,” said Mike Webster, NCR vice president and general manager for Retail and Hospitality.
My Take: ATMs and self check kiosk sound so exciting but when you look at the numbers, there has been no revenue or earnings growth since 1999. It's never lost money for the past 10 years but even book value has eroded from $11 to $2.78. In 2007, the stock hit a high of $57.50 but growth never materialized. People buying this stock is based more on hope and hype that surrounds its technology.
S&P Estimates are $0.65 for 2009 and $0.95 for 2010.
Your average small time investor since 1999 with one goal in mind, retire rich. I like to buy best of breed companies and hold for the long term. Patience is the key to investing but greed sometimes gets the best of me. Diversification is the only free lunch. And never buy all at once. Big fan of Warren Buffett, Eddie Lampert, and Jim Cramer.
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