Archive for the 'Stock Watch' Category

Stock Watch — 08/01/2007

Ok. So, it has been a couple of months since I’ve posted my thoughts on the stock market. For those of you that have been following the stock market closely, there have been a number of opportunities to buy and many shifts in focus with regard to industry. Technology stocks are back. Great. I’m glad I started my IRA in a Technology-specific fund right before the sector’s steep decline. Lesson learned. I’m ready to play again; more on that later.

The chart below is the Derrich.com portfolio as I left it since the last Stock Watch on May 21, 2007. As you can tell alot has happened since then.

Symbol	Last Trade*	Shares	Price Paid	Gain (thru 05/31)	Gain (thru 08/01)
AGII	$27.80	100	$33.12	0.03%	16.06%
COH	$47.41	100	$51.40	-0.08%	-7.76%
DEO	$81.83	100	$78.37	8.96%	4.41%
DOW	$44.16	100	$40.02	13.39%	10.34%
FMS	$47.56	100	$50.01	-1.84%	-4.90%
GPX	$10.73	100	$9.38	13.65%	14.39%
KCI	$62.06	100	$46.90	6.99%	32.32%
MOT	$16.69	100	$18.16	0.17%	-8.09%
Q	$8.40	100	$8.50	21.06%	-1.18%
SGU	$4.04	100	$3.91	22.76%	3.32%
SIFY	$7.45	100	$8.41	1.66%	-11.41%
SIX	$3.25	100	$5.97	3.09%	-45.56%
YHOO	$23.25	100	$26.87	6.81%	-13.47%

With so many changes in the prices of the stocks above, we’ll get rid of a few and add others in their place. Out with MOT, SIX, SIFY, and FMS. In come the following.

Symbol	Last Trade*	Shares	52-Wk High
SUNW	$5.10	100	$6.78
HPQ	$46.73	100	$49.09
UA	$64.13	100	$66.07

*Last Trade as of market close on 08/01/2007. Past performance does not guarantee future results.

Moral of this story? Don’t leave your portfolio unattended. This is why many people opt to use a stock broker or financial advisor. If you can’t commit to the time necessary to do our due diligence, get some help from an expert. For me personally, opening Retox Bar in addition to my “day job” and my blogging has caused me to neglect the Stock Watch…to do the necessary research to make a worthwhile analysis.

Sun On The Horizon
Sun Microsystems (NASDAQ: SUNW) was one of the dogs of the Technology sector since the stock peaked back in September 1, 2000 when it closed at $128.63. Now at just over $5 per share, it is being hailed by some as a steal. Sun has reported 3 straight quarters of profit and a stronger Balance Sheet despite an increase in long-term debt. And Sun plans to use $3 billion of its nearly $6 billion in cash to repurchase stock over the next few years. Perhaps we’ll find out more on Sept 5th in New York when the company holds its financial analyst meeting. As Jim Cramer so lucidly explains in the following video, Sun has accomplished its new found “green” by being a better manager of its operating costs…because it sure isn’t a significant increase in revenues. And don’t just pay attention to Erin Burnett. Listen to what Sun Microsystems CEO, Jonathan Schwartz, has to say about why his company is a good candidate for your portfolio. Think…international exposure.

Gotta love the Jim Cramer strongarm interrogation to get the answers when you need em. I’ve always wondered why he doesn’t “push # on your keypad to ask a question” during the call.

Despite uncertainties with regard to what Sun will do with its cash, and whether or not the company will grow its revenues more considerably, I’m putting all my chips on Sun. If you want to do your own research, check out this list of tech stock sectors for recent performance. You can drill down into each specific sector for a list of stocks. As always, I’m open to your picks as well, and will consider including those in future analyses.

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Yahoo! CEO Terry Semel Steps Down, Jerry Yang! Steps Up

After months of criticism regarding the ongoing battle with Google for online ad supremacy, Yahoo! Inc. CEO Terry Semel steps down taking a back seat to Yahoo! (Yet Another Hierarchical Officious Oracle) co-founder Jerry Yang. As John Shinal of MarketWatch explains in the following video, technology will be the focus with Jerry Yang at the helm. Well…it might be.

Read the rest of this entry »

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Stock Watch — 05/31/2007

As I sit back and watch Qwest Communications International Inc. (NYSE: Q) and Star Gas Partners (NYSE: SGU) surpass my “greed meter” at 21.06% and 22.76% returns, respectively, I can’t help but notice the few stocks that remain flat. With the first day of summer approaching (June 21st), we may take advantage of some last minute spring cleaning. For now, each of these stocks looks good enough to hold on to through the 2nd quarter. The chart below shows gains as of today’s close versus those of the last Stock Watch report.

Symbol	Last Trade*	Shares	Price Paid	Gain (thru 05/21)	Gain (thru 05/31)
AGII	$33.13	100	$33.12	2.36%	0.03%
COH	$51.36	100	$51.40	-5.49%	-0.08%
DEO	$85.39	100	$78.37	7.23%	8.96%
DOW	$45.38	100	$40.02	14.74%	13.39%
FMS	$49.09	100	$50.01	-1.74%	-1.84%
GPX	$10.66	100	$9.38	8.21%	13.65%
KCI	$50.18	100	$46.90	4.84%	6.99%
MOT	$18.19	100	$18.16	4.07%	0.17%
Q	$10.29	100	$8.50	17.76%	21.06%
SGU	$4.80	100	$3.91	20.20%	22.76%
SIFY	$8.55	100	$8.41	0.36%	1.66%
SIX	$6.19	100	$5.97	2.01%	3.09%
YHOO	$28.70	100	$26.87	9.23%	6.81%

*Price as of market close on 05/31/2007. Past performance does not guarantee future results.

A Qwest For Success
Nevermind that Qwest Communications is up 21.06%, it still has room to go higher. Today it announced that it was one of five telecoms to win a piece of a government contract worth up to $20 billion just weeks after it was one of only 3 telecoms awarded the largest such contract for $48 billion. If the U.S. General Services Administration (GSA) has faith in this company to deliver its services effectively, then so should you. The company continues to improve the strength of its balance sheet, and it is now making money on the bottom line…for the fifth straight quarter to be exact. Some analysts also believe Qwest is a very strong candidate to be acquired.

Fresenius Remains Strong and Healthy
Fresenius Medical Care (NYSE: FMS) reported its 1st quarter 2007 financial results earlier this month. Keep in mind that the operations of Renal Care Group are included in the Company’s consolidated statements of income and cash flows from April 1, 2006. However, Net Income increased by $160 million, or 38%, and North American revenue increased by 37% to $1,637 million, $1,483 million of which came from Dialysis Services. The company had planned a May 15th announcement of a 1:3 stock split…and it was approved. In addition, Fresenius shareholders unanimously approved a 15% increase in dividends, the 14th consecutive increase. At this point, you may consider waiting until the split occurs to get into this one. The split should take place sometime during the 3rd quarter.

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Stock Watch — 05/21/2007

The list of stocks to watch that I recommended last week are all up nicely. As you can tell from the chart below, a couple of other stocks have done well since I first mentioned them including Qwest Communications International (NYSE: Q) and Star Gas Partners (NYSE: SGU). Star Gas Partners is encroaching on my “greed meter” with a 20.20% return since March 7. Also mentioned March 7, Sify Ltd. (NASDAQ: SIFY) has remained somewhat flat since, but is still one of those stocks I like alot. So, let’s keep it around. It’s only been a couple of months anyhow.

Symbol	Last Trade*	Shares	Price Paid	Gain	Dividend (Y or N)? Yield (%)
AGII	$33.90	100	$33.12	2.36%	N
COH	$48.58	100	$51.40	-5.49%	N
DEO	$84.04	100	$78.37	7.23%	Y (2.30%)
DOW	$45.92	100	$40.02	14.74%	Y (3.60%)
FMS	$49.14	100	$50.01	-1.74%	N
GPX	$10.15	100	$9.38	8.21%	N
KCI	$49.17	100	$46.90	4.84%	N
MOT	$18.90	100	$18.16	4.07%	Y (1.10%)
Q	$10.01	100	$8.50	17.76%	N
SGU	$4.70	100	$3.91	20.20%	N
SIFY	$8.44	100	$8.41	0.36%	N
SIX	$6.09	100	$5.97	2.01%	N
YHOO	$29.35	100	$26.87	9.23%	N

*Price as of market close on 05/21/2007. Past performance does not guarantee future results.

Educate Yourself
I can’t stress enough the importance of doing due diligence when taking investing advice. Even if it’s from a Certified Financial Planner (CFP), a Chartered Financial Analyst (CFA), or some other licensed professional (with remarkable investing acumen like me ), doing your own research will help you understand how the company works. Who does the company sell to and why? How do they sell? How do they produce and what materials/resources do they use? You’ll gain a new understanding of its processes. Beyond that, you should get familiar with numbers like margins, returns on assets, and how to evaluate a company’s capital structure.

On the education note, I read a post over at DividendMoney.com last week. Tyler McKinna used an interesting approach to help ensure you make money in stocks. In addition to due diligence, #5 on the list discusses using stop loss orders. Check it out if you have a sec.

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Cut Your Stock Losses With Stop-Loss Orders

One of your priorities when trading in the stock market should be to avoid being greedy. It’s tough, and takes alot of discipline. I practice this particularly when a stock is speculative. Rather than sit and constantly watch the market every hour on the hour, I use stop-loss orders.

According to Investopedia.com, a Stop-Loss Order is an order placed with a broker to sell a security when it reaches a certain price…designed to limit an investor’s loss on a security position. A stop-loss order is also referred to as a “stop-market order”. This is because when the stock hits the price you’ve previously set, your stop-loss actually becomes a market order. The stock is sold at the best market price available.

I don’t like to lose more than 10% on any stock purchase I make. To use an example, the Derrich.com welcomed Coach (NYSE: COH) at $51.40/share. As of yesterday’s close (05/15), the stock fell 2.66% to $46.10/share. That’s a loss of 10.31% since we added it to the portfolio. A stop-loss order would have sold COH at or around $46.26/share ($51.40 - $5.14 = $46.26).

Put Me In, Coach!
Despite being down yesterday, Coach is back up about 1.5% today. In my non-financial advisor, stock market aficionado opinion, now is the time to get into the stock if you haven’t already. In a real-life situation, I would not have placed a stop-loss on Coach simply because I like the long-term outlook for the stock. I certainly have my limits, but I’m pretty confident that women all over the country are still eyeing that new Coach bag in the latest catalog.

UPDATE: Coach closed the day (05/16) up $1.36, or 2.95% recovering its previous day’s loss.

Learn and understand more about the stock market at Stock Trading 101.

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Stocks To Watch

Last week, I mentioned that I had been watching several stocks to add to the Derrich.com portfolio. Three stick out in my mind as potential winners.

Motorola
Lately Motorola (NYSE: MOT) has been the center of attention on most analysts’ minds…or so it seems. Every other article discusses Carl Icahn’s continuing struggle to obtain a seat at the table (i.e. Motorola’s board); or how improvements in technological infrastructure mean the purchase of Motorola network equipment and software. Last week, Motorola CEO Ed Zander announced plans to unveil its iPhone competitor at the Software 2000 conference in Santa Clara, California. I suppose we’ll have to wait for the unveiling, but don’t wait to hop on board the Motorola train. A bit speculative especially given the current farrago of expectations, forecasts, and obstacles…but don’t forget the dividend yield of 1.10% either.

For the next two, I didn’t have to look too far. Both are based right here in San Antonio and are solid companies with solid management…and solid business models.

Argonaut
Argonaut Group, Inc. (Nasdaq: AGII) underwrite specialty commercial insurance in the property and casualty insurance markets through three segments: Excess and Surplus Lines, Select Markets, and Public Entity. Basically, the company provides insurance to entities that have an otherwise difficult time obtaining policies. It has proven to be a solid niche.

Last Monday (May 7), Argonaut reported that it grew first-quarter earnings by 22% on record first-quarter revenue.

Argonaut’s combined ratio, or rate of losses on policies, for the first quarter of 2007 was 94.2 percent, compared to 95.2 percent in the prior year, meaning Argonaut is paying a lower percentage of its premiums out in claims.

Argonaut also expanded and diversified its reinsurance segment with the announcement that it would merge with Bermuda-based property reinsurer, PXRE Group Ltd. to form the Argo Group. Reinsurance is the insurance companies that insurance companies use to spread out their own risks as a hedge against catastrophic loss. What does that potentially mean for Argonaut? Think Berkshire Hathaway…or Warren Buffet.

Kinetic Concepts
Do great minds think alike or what? I was watching Mad Money on Friday, and Jim Cramer mentions Kinetic Concepts as a speculative buy.

KCI (NYSE: KCI) engages in the design, manufacture, marketing, and service of wound care and therapeutic products. According to a MM recap on TheStreet.com, [Cramer] considers the stock speculative because “it’s not a pastiche. It doesn’t have a variety of product but instead is only levered to the wound-care business.” On Friday, KCI ended the day down on news that a new competitor has strengthened itself in the wound care game. The fear is that Smith & Nephew PLC, said competitor, would have no problems improving its market share…even doubling according to Cowen & Co. analyst Dhulsini de Zoysa. Sorry, Dhulsini. But if it’s good enough for Cramer, it’s good enough for Derrich.com.

Good luck, and make some money! And don’t forget to sharpen your stock trading knowledge at Stock Trading 101.

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Stock Watch — 05/07/2007

The running of the bulls doesn’t normally take place until July…in Spain. The United States held its own version on Wall Street last week. Of the last six sessions, the the Dow recorded five record highs (4 in a row after today).

MSNYahoo!
In a move that would give them a 25% share in the online ad market, the Yahoo!/Microsoft merger was put to rest again. The 20+% spike in its price would have been reason enough for me to sell my shares of Yahoo! (NASDAQ: YHOO). We’ll hold on to it in the Derrich.com Portfolio for now. Look for a decrease in today’s price. If I’m right, see it as another buy opportunity, especially below $30/share, for the stock despite what Chad Brand of the Peridot Capitalist believes the two have little to lose by combining forces.

Symbol	Last Trade	Shares	Price Paid	Gain
COH	$49.14	100	$51.40	-4.40%
DEO	$85.04	100	$78.37	8.51%
DOW	$44.92	100	$40.02	12.24%
FMS	$50.78	100	$50.01	1.54%
GPX	$9.67	100	$9.38	3.20%
Q	$9.42	100	$8.50	10.82%
SGU	$4.01	100	$3.91	2.56%
SIFY	$8.37	100	$8.41	-0.05%
SIX	$6.01	100	$5.97	0.07%
YHOO	$30.98	100	$26.87	15.30%

Past performance does not guarantee future results.

Media Data For Sale
The announcement News Corp (i.e. Rupurt Murdoch) to bid $5 billion for Dow Jones earlier this week sparked a huge jump in Dow Jones stock while shares of News Corp fell. Reuters is being courted by Thomson Corporation suggesting that it wants to go head to head with Bloomberg in the lucrative market of delivering real-time financial data and news to customers like investment banks.

Derrich.com Portfolio
I’ve been touting several new stocks for the Derrich.com Portfolio. I’ll GEt back to you with my choice(s) later this week. And don’t forget what I said last week about buying stocks on euphoria. Yes, it could make you money…but you can also lose big, especially if you don’t track the market daily or more frequently. With all of the merger and acquisition talk, it is easy to get caught up in the speculative game. Remain focused, my friends.

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• Milk Was A Bad Choice
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