Stock Watch — 04/27/2007

The Dow broke the 13,000 mark today. Yay! Anyway. Moving right along. For the first time in my life, I’m going to sound a little bearish. But I’m really optistic about the market and the potential to make money in 2007. Certainly 13,000 is a nice new tier, but it’s no reason to get excited. Some analysts are predicting 14,000 to 15,000 before the year end. Seriously? What about focusing on the dollar and maybe on why gasoline is so high this early in the year. It’s not even summer yet. Give us a chance, oil guys. I haven’t cashed in my stocks yet.

The Derrich.com Portfolio is chuggin’ right along. As of the close on Thursday, April 26th, the portfolio is up 8.06% (before any sales) versus 10.47% on Friday, April 13th. This is in large part due to Sify Ltd (NASDAQ: SIFY) reporting a Q4 loss (period ending March 31, 2007) on Monday. Yahoo! (NASDAQ: YHOO) got hammered after its earnings announcement and is down to a 6.03% gain versus a 16.90% gain as of April 13th. Jones Soda (NASDAQ: JSDA) shareholders have likely taken profits on this stock as it has been up over 120% this year. Since it was added to the Derrich.com portfolio, it has been up as high as 107.50%; it is currently up 77.35%. And based on my “don’t be greedy” rule, we’re letting this one go.

Sify, Ltd.
Shares fell nearly 8% on Monday following the company’s earnings announcement. For the full fiscal year, Sify Ltd earned $2.3 million, or 5 cents per share, versus a loss of $3.5 million, or 10 cents per share, in 2005; and revenues rose to $128 million from $108.7 million, or 17.9%. According to a company press release, Mr. Pijush K Das, Chief Financial Officer, Sify Limited, said,

We have taken some bold financial decisions, particularly with regard to doubtful debts, in the interest of our financial health going forwards. We are also reworking our billing and collection systems to ensure that these are minimized in future.

One thing remains. Sify is still the premiere broadband provider and Internet portal in India. Don’t write this one off yet. They’re making money now. And priced at $8.34/share (as of April 26), it makes for a great buy.

Big News Equal Big Gains. Don’t Let Euphoria Buy Your Stocks
Is it a good idea to go grocery shopping on an empty stomach? Probably not. I don’t know about you, but I end up buying more than I need…or would have if everything looked so delicious. With all of these excellent earnings announcements, stock prices are skyrocketing to new highs. Sure. Let the news bring your focus to these companies, but don’t buy without doing your due diligence. Thursday brought a couple of well-known examples of what I’m referring to.

Microsoft (NASDAQ: MSFT) revenues were up 65% on robust sales of Windows Vista. Cool. But what’s next for Microsoft? What does the company have left to follow up with another knock out quarter? The XBox remains unprofitable. The Zune has been a disaster so far, but promises to be a great future eBay collectors item like Beta Max.

Ford Motor Company also (NYSE: F) on “stronger than expected” results as stated by Ford President and Chief Executive Officer, Alan Mulally.

Our first quarter results came in somewhat stronger than expected, but there are many uncertainties going forward. We remain focused on improving our quality, productivity and business performance.”

First-quarter highlights included strong performance of new U.S. products including Ford Edge, Lincoln MKX, Ford F-Series Super Duty, Ford Escape and Mercury Mariner. European sales were up $154 million, Premier Auto Group revenues were up $250 million and the company cut operating costs by $500 million. Ford is cutting back on fleet sales, which will translate into a loss in market share. And no new products are planned sooner than 2008. So what’s next? Simple. Focus on productivity and cost reduction in the near term. Mulally also says that 70% of its product will be refreshed by 2008, and 100% will be refreshed by 2010. This will be a good one to watch…perhaps a good one to add to the Derrich.com portfolio. I still need another quarter or two of progress. Stay tuned.

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