January 31, 2008

Form Factor

Form Factor (FORM) is a MF Hidden Gem pick. They were first discovered in this article.

Ameristar Casinos

Ameristar Casinos (ASCA) is a MF Hidden Gems pick. They are trading near their 52 week low. They were initially discovered in this article.

January 30, 2008

The VMware Rout May Not Be Over

Business Week online has a piece on why VMware's stock may continue to suffer:

"With a stock priced for perfection, it is in for a rough ride."

The full article can be found here.

About This Site

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However, when writing about stocks that I own, I will disclose so.

January 29, 2008

Zacks Holds BWLD

Zacks has issued a hold on Buffalo Wild Wings, citing not necessarily the stock, but the restaurant industry.

"With about 18 million shares outstanding and a float of about 15 million shares, the stock is very illiquid, in our view. Moreover, we would recommend caution in buying restaurant growth stocks while the industry faces significant macro headwinds (consumer spending pressures & rising food and labor costs) with murky visibility to recovery. Therefore, we believe the stock is fairly valued at this juncture. We rate the shares as Hold with a price target of $23."

The full article is here.

Zacks Hold Cabelas

Zacks has issued a hold on Cabellas.

"Cabela's has been unable to escape the weak consumer spending environment. As a result, the company is offering more discounts in order to drive store traffic and sales. This is hurting Cabela's profit margins, and we are reducing our earnings estimates to reflect lower margins in the next few quarters."

The full article is here.

Time to Buy VmWare?

NotableCalls feels now may be the time to buy VMware (NYSE:VMW).

Read more here.

The StockMasters likes VmWare, but not until it gets into the $50s. Read more here.

The Fool has an article here telling us to get in on the discount before it's too late:

"Let me reiterate: Here's your buy-in discount. Enjoy it while you can. It took 10 weeks for VMware's stock to go from a 52-week low of $51.50 per share to the high-water mark at $125.25. It can happen again, so don't get caught flat-footed."

January 28, 2008

Buying HOG

Todd Sullivan has bought shares of HOG.

"The stock was down after the news in a flat market. Trading at near 5 year lows and yielding over 3%, there is not much more downside to shares from here.

Time to buy for those who have been waiting. Now, the market has been trading in some wild swings lately and looks on Friday morning to be approaching its first winning week this year so expect a wild ride (inference intended). That being said, we have been waiting since shares approached $70 to buy Harley and the time is now."

The full entry is here.

January 24, 2008


This company is a MF Hidden Gem. Here is a write-up:

After reporting simply superb earnings yesterday (sales up 17%, profits nearly triple their year-ago levels), shares of Motley Fool Hidden Gems recommendation II-VI (Nasdaq: IIVI) surged nearly 9%. One day later, the stock has already given back 2% of those gains. Why?

Why indeed?
Let me put this as clearly as I can: II-VI is a buy. This is a stock you want to own, and today's sell-off is a gift. Take advantage of it.

Now that I've said that, let me explain why you must own II-VI. It's not because the company tripled its profits -- on the contrary, that surge was basically a one-shot deal caused by the firm booking a $0.52-per-share gain on the sale of its interest in Canadian 5NPlus, Inc.

Nor do you want to buy II-VI because it beat estimates both with and without that one-time gain. Skeptics who believed the firm would earn only $0.34 per share yesterday were no doubt chagrined to learn that II-VI earned $0.36 instead. They can take some comfort, however, in the fact that II-VI missed the Street's revenue target, falling about $2.9 million short of the projected $77.2 million in sales.

But not for long
No, the real reason you need to own II-VI is that as good as yesterday's news was, tomorrow's will be even better. You see, II-VI may have come up short on sales last quarter, but going forward, those sales will accelerate. How do I know this? According to the press release, new orders -- booked by customers that include Boeing (NYSE: BA) and Northrop (NYSE: NOC), Raytheon (NYSE: RTN) and General Dynamics (NYSE: GD), Caterpillar (NYSE: CAT), and fellow Hidden Gems pick Rofin-Sinar (Nasdaq: RSTI) -- are up 27% versus this time last year.

17% sales growth last quarter -- plus 27% growth in new orders waiting to be filled -- tells me that this firm is accelerating its pace of sales. That suggests that analysts are being overly conservative in predicting just 18% profits growth this year and 22% for next year. When they're forced to raise their estimates, I expect we'll see the share price rise in tandem.

January 23, 2008

ABX Holding

Some notes from the Fool. It is a MF Hidden Gems Paydirt Pick:

And last, but certainly not least, is air cargo transporter ABX Air. The Wilmington, Ohio, airliner, created from the merger of Airborne Express and DHL, is one of the fastest-growing companies in the industry.

The reduction of truck-line haul-management services ABX Air provides to its largest customer, DHL, has affected earnings recently. However, many in CAPS land, including member humvee5000, see the company's stock price, fundamentals, and future outlook as a nice opportunity:

Low P/E with good future earnings growth. Fourth quarter should be very good. Cash flow is great. My expectations are that we should see 30% to 50% gain in PPS [price per share] as the negatives of this year fade and the dollars continue to roll in.

Overnight package delivery has helped catapult carriers like FedEx (NYSE: FDX) and United Parcel Service (NYSE: UPS) into the stratosphere, yet the third-largest carrier, DHL, has had a tough going here in the U.S., losing $900 million last year. While some analysts contend that DHL, which is a subsidiary of Germany's Deutsche Post, may end up selling off its domestic business, the company has said that it's commited to keeping itself in the U.S. market.

Despite DHL's assurances, such speculation weighs on the operations of ABX Holdings, which derives nearly all of its business from DHL and operates the shipper's main air hub and package sorting center in Ohio. A dispute over reimbursement for expenses has the two in front of an arbitrator right now, and the uncertainty over which way the quarrel will be resolved has also been holding ABX back. Yet the two companies remain committed to each other -- DHL recently expanded their relationship, despite the expense dispute -- so there doesn't appear to be a divorce in the works anytime soon. In fact, the potential for a merger of the two firms persists.

Those points lead CAPS All-Stars like humvee5000 to see ABX Holdings as offering potential for easy gains.

I seldom am so bullish -- somewhere in the next 2 months - and it could be tomorrow -- this will be bought out by DHL backed company. Tiff between DHL and ABXA caused the stock to drop to 4. Dhl was mad that ABXA did not accept the 7.75 takeover bid when MS said it was worth 9 to 10. Now the stock is at 5. Will be a 50% gain easy! Downside is only what DHL can do as the largest customer to pressure ABXA into selling. and we're only half way there so give it some more patience, before you call out the green.


A write up on ICO from Zack's:

Ico, a Zack's #1 Rank (Strong Buy), produces custom polymer powders for rotational molding and other polymer segments, including textiles, metal coatings and masterbatch. The powders are used to manufacture household items, such as toys, and household furniture; automobile parts; agricultural products, such as fertilizer and water tanks; paints; and metal and fabric coatings. The WEDCO services division also include blending, packaging, distribution, warehousing, and procurement.

The company's customers include major chemical companies, affiliates of major oil exploration and production companies, and manufacturers of plastic products.

Headquartered in Houston, Texas, ICOC is global in reach, with 19 locations in 10 countries, including France, the United Kingdom, Italy, Holland and Brazil. ICOC also has five operating facilities in the United States. Global operations and a weak currency are impacting the company's bottom line in a positive way. On Dec 6, 2007, the company reported that strong earnings and a weaker US dollar increased stockholders' equity by $6.7 million during the quarter to $91 million.

The company is operating at full throttle. "We just completed another record-setting quarter," stated the company's President and CEO, Mr. A. John Knapp, Jr.,"driven by broad based profitability improvements as fourth quarter operating income for all of our business segments improved year-over-year. While we will see usual seasonal weakness in our next fiscal quarter, we expect that we will continue to see very satisfactory year-over-year revenue and diluted earnings per share growth in the quarter ended Dec 31, 2007."

Fourth-quarter revenues were up 42% from the prior year to a record $123.6 million. The company also reported a record quarterly operating income, up 75% year-over-year. The company has surprised on earnings by a large margin the last three quarters in a row, averaging three cents, or 20.24%, higher than estimates.

The lone brokerage analyst covering the company apparently doesn't want to be surprised again, as the estimate for first quarter 2008 earnings went up by three cents from 15 cents to 18 cents in the last 60 days. The estimate on second quarter was also raised by two cents from 22 cents to 24 cents at the same time.

The recent market downturn has resulted in a sell-off in the stock that isn't justified. Ico has a P/E of 11.02 and a P/B of 2.83 making it an attractive value play in its sector. With continued earnings growth and a strong business model, Ico is a bargain.

January 18, 2008

Buffalo Wild Winds

The Fool has a write-up on their pick of Buffalo Wild Wings as one of the best stocks for 2008 here. The company is trading close to its 52 week low.

January 17, 2008

Contact Us

American Capital Strategies

The Fool has noticed that one of their recommended stocks is cheap and has a lot of insider buys going on right now: The article is here

Seeking Alpha has a write up on the company here where they try to determine the fair price of the company.

January 16, 2008

Yamana Gold

The Fool has a nice article on this company here.

It has been nominated for one of the best stocks in 2008 and has reported that it is going to increase production 120% by 2012.

On Immersion

It is a MF Rule Breakers pick:

Immersion is a recent addition to the Rule Breakers family, and it does behind-the-scenes development in many of tomorrow's most exciting products. The company is a leader in "haptics" and develops technologies that allow people to feel their surroundings better while operating mechanical objects. Think about a video game controller that can physically simulate a heartbeat in your hand or a violent car crash. In the medical field, Immersion's technology allows doctors to refine their surgical skills in a risk-free environment. This intriguing pick is at the forefront of its industry -- where, no doubt, many other companies will seek its skills in the near future. Just ask Logitech (Nasdaq: LOGI), Microsoft, or Sony -- these companies have already done business with the firm.

January 8, 2008

Landec: A Hidden Gem

Landec is a MF Hidden Gem. Seeking Alpha also had this to say:

I've been watching this one for awhile, and it has pulled back in price slightly (but still above the 50-Day MA) which has had the added benefit of dropping the PEG below 0.50. I like the sector "Synthetics" over the next 12-18 months as well.

Landec is operating in a niche market that serves the agricultural industry. Basically, they sell temperature-activated polymer products that help regulate food freshness at the grocers. They also use their products to provide farmers with specialty seed coatings to provide for better crop yields.

The agricultural sector was very hot in 2007, and I see that trend continuing for at least 2-3 more years. I actually expect this to be a hot sector for 8-12 years, but I don't see owning the stock that long, so let's stick with 2-3 years. As the rest of the "undeveloped" world rapidly catches up to the developed world, quality and quantity of food being consumed is increasing. If you are not already latched onto this investment theme, it is not too late. It will continue for some time. Landec has moved to a fundamental price point that is screaming BUY ME right now.

  • Market Cap is just $334 Million. A level that allows for lots of movement going forward.
  • PEG Ratio stands at 0.43. By far, my favorite fundamental measure for long term (year or more) investing.
  • Currently 6.5% above its 50-day moving average. I use this to define an uptrend, as well as filter out stocks that "fall" to a low PEG.
  • Quarterly sales growth estimated at 11%
  • Positive ROE and ROA (A must for any long term buy). - 24% of the stock is held by insiders (vested interest in success).
  • Total debt to equity is less than 1% (a very healthy balance sheet)


This was mentioned on Barron's 12 Stocks that Could Bounce article:

at 1.4x book value and 8x 2008 profits, shares are at historical lows. Shares ($55) could hit $75.

The entire article is here

January 7, 2008

A Set for Life Dividend Stock?

From the Fool:

Why should you listen when Charles Mangum talks? Because this 42-year-old's Fidelity Dividend Growth (FDGFX) fund has beaten 80% of its peers over the past decade.

Like you and me, Mangum is in pursuit of the ultimate dividend stock -- the stock that will leave investors set for life. And having trailed his competition in recent years, Mangum is hungry -- and looking for a promising stock that the market's turned its back on.

The three best S&P stocks of the past half-century
Is that ultimate stock out there? Wharton professor Jeremy Siegel's research says it is. In analyzing the top 20 S&P 500 stocks of the past half-century, Siegel found a solid dividend payout to be a universal trait among the best performers. In that spirit, I'll give you three dividend stocks worth checking out for your own portfolio, but first, I'd like to share Professor Siegel's top three stocks with you.

Third on Siegel's list was Bristol-Myers Squibb (NYSE: BMY), with average annual returns of 16.4%. For perspective, $1,000 invested here at the beginning of Siegel's study would be worth more than $1.2 million today.

Second was Abbott Labs (NYSE: ABT), with a 16.5% average annual return.

First place? The stock we love to hate: Altria (NYSE: MO). Over nearly 50 years, this beleaguered company averaged a 19.8% yearly return. Those extra few points add up -- to a whopping $4.6 million from an original $1,000 investment!

I still hate Altria, but I can't help but love its math -- and aggressively seek the same kind of returns for my subscribers.

Where can you find a dividend stock that will set you for life?
Remember, Mangum is seeking the same thing. So I perked up when I heard that Bank of America (NYSE: BAC) is one of his favorite stocks right now. Why? Bank of America is a current Income Investor recommendation.

Here are some of the reasons why BofA is beloved of newsletter and fund alike:

  1. Bank of America isn't a Wall Street darling right now. That helps because we don't want hyped, overvalued stocks.
  2. The company absolutely dominates U.S. retail banking. Having a gorilla on your side in a bar fight never hurts.
  3. Bank of America is paying a dividend of more than 6%! You're getting more than half the market's historical average annual return just standing still.
  4. The guys and gals from Charlotte (that's BofA) have a solid balance sheet. They sold off their subprime business a while back (whew!), and credit appears under control.

The qualities that BoA displays are some of the very things I look for when finding stocks for Income Investor. I'd like to share them with you in their more general forms:

Attractive price: Saving money isn't just for the grocery store. Paying too much for a stock is a mistake that could take years to erase. Buy a good company at a good price.

Dominant market position with a competitive advantage: Why buy the rest when you can buy the best? In good times, industry leaders outdo the industry laggards. And in bad times? They buy them up -- or take their market share.

A stable, growing dividend: Want to wind up cash-poor in retirement? If not, buy a company with a dividend that will last -- and grow.

A quality balance sheet: This should come with the territory for dividend stocks, but sadly, it doesn't always. Don't buy companies carrying more debt than they can handle.

A Cheap HOG

From Value Plays:

Harley shares have fallen almost 50% since their December 2006 all-time highs. As a matter of fact, one has to go back to the summer of 2003 to find shares trading at these levels. Currently this 2003 share price level comes with the advantage of the company earning 57% more per share now than it did then. That being said, my guess is that we may be able to pick them up at 2000 levels ($36) or dare I say it, 1998 (below $36)!?! Although to be honest I do not think I could resist starting to pick them up if they go below $40. They would just be so painfully cheap at those levels.

On January 25th, Harley announces Q4 earnings and when you consider they idled 5,400 workers in November due to sluggish sales, and credit markets have continued to tighten, one cannot expect results to be good. In fact, I would be very surprised if they did not just purely disappoint. I would expect their credit portfolio to be suffering a substantial rise in credit defaults. It is through no fault of management, the environment they are operating in now just is not conducive to people buying their bikes, especially the most expensive higher margin ones.

Now, that also means that when this environment clears up, and it eventually will, there will be plenty of pent up demand for the bikes. One good thing about a Harley, there is NO substitute and the desire to upgrade never goes away, if anything it gets stronger.

Another positive is that 8% share repurchase plan they enacted which will not require debt to finalize. Add the now near 3% yield (and growing) on shares and I hope you are getting the picture.

Harley has everything you want in an investment. It is a wide-moat business, produces plenty of cash, has conservative management, beyond loyal customers (ever see anyone with a Coke (KO), Starbucks (SBUX) or Google (GOOG) tatoo?) , now a nice dividend and plenty of growth ahead (think China and Latin America).

All we are waiting for now is price we can drool over....

January 4, 2008

Keep an Eye on Buffalo Wild Wings

This MF Hidden Gem is approaching a 52 week low.

January 2, 2008

GigaMedia Update

From the Fool:

An uptight Congress has "protected" U.S. citizens from online gambling by outlawing it, but the rest of the world is under no such delusions. Few firms abroad are flourishing more in this market than Taiwanese gaming operator GigaMedia (Nasdaq: GIGM), which runs a host of online entertainment software and services.

Gaming revenue doubled in the third quarter, driven by a 72% rise in poker and casino software. The Motley Fool Global Gains recommendation also saw its online mahjong game site continue to establish itself firmly as the leader in terms of revenue. Add in an exclusive agreement with Electronic Arts (Nasdaq: ERTS) to provide a basketball platform, and you have the makings of a prime-time run-up in the stock.

CAPS' take
Nearly 1,500 professional and novice investors at Motley Fool CAPS have weighed in on GigaMedia, with 98% overwhelmingly believing that the company will outperform the market. Fully one-third of those bullish investors are considered All-Stars, top-rated players who consistently outperform their peers, and they are nearly unanimous in their support of the online gaming provider.

Top-rated All-Star TMFBreakerJava, with a 99.30 player rating, notes that although China stocks have been dealt a setback recently, GigaMedia's various successful and profitable platforms position the company to outperform.

On line gaming in China. Mah Jongg for the newly prosperous of Asia. This Taiwan based company has changed from a sleepy ISP to a cash generating powerhouse. Gaming sites benefit from network effects and GIGM is the place to go for on-line Mah Jongg and other games in China.

With the China sector knocked back some lately, this should be a good entry point to a rapidly growing company with a huge potential market.

My take
Mahjong is simply ingrained in Chinese culture, much like poker, dominoes, and bocce ball are in others. Basketball also happens to be one of the top sports right now in Taiwan, and just in time for the Beijing Olympics, you have GigaMedia set to capitalize on it.

Being based in Taiwan, and focusing on the demands of its Asian audience, has allowed GigaMedia to avoid the fractures that have hurt other poker sites like CryptoLogic (Nasdaq: CRYP) and Optimal Group (Nasdaq: OPMR).

At just 21 times next year's earnings, and with a stock that is 27% off its 52-week high -- it's been trading sideways for the better part of two months now -- I'd wager there are better-than-average odds for GigaMedia to turn in yet another stellar performance this year.

Price Upped on ISIS

From Zacks:

"We believe that anti-sense technology represents an exciting and potentially revolutionary platform for developing therapeutic candidates to treat a wide range of diseases. In our view, anti-sense, as a platform, is today where biologics were 10 years ago. The company’s leading candidates are ISIS-301012 for high cholesterol and ISIS-113715 for diabetes, along with several partnered programs for oncology, inflammatory disease, asthma, and viral infections. Our financial model forecasts profitability in 2010.

"We are big fans of anti-sense technology and believe that the number of potential therapeutic applications is enormous. Anti-sense drugs may have significant potential to treat a number of diseases where small molecule and biologic compounds have failed.

"Although still early stage, anti-sense technology as a platform for developing drugs reminds us greatly of the promise of biologic drugs over a decade ago. Potential mechanisms such as siRNA, RNAi, alternate splicing, and micro RNA have the potential to change how we treat diseases in the years to come.

"Thanks to collaborations with some of the big names in the pharma sector, Isis has put itself in a constant position to receive developmental milestone. This is evident by the $26.5 million from Alnylam (ALNY) and the $50 million from J&J (JNJ) just in the past few months. We believe that Isis has plenty of cash to fund operations for the next several years.

"We are keeping our Buy rating on Isis Pharmaceuticals and raising our target to $20. Our price target is derived by discounting our 2011 EPS of $1.76 back to present day at 20% using a 25x multiple."

Mens Warehouse

From the Fool:

I admire the company because it knows customer service and knows how to sell. It's nearly impossible to walk out with just a suit or sport coat. From ties to slacks to outerwear to socks, these people know how to get men to pony up for the full assortment.

The company appears to have hit a wall this year with the acquisition of After-Hours Formal Wear, but it looks to me like a temporary setback. Tuxedo rental is a solid fit with the company's core business, and it's a retail niche that's comprised of small local or regional players -- ripe pickings for a niche-dominant player. At a P/E of less than 10, this stock appears to have a lot more upside than downside.

College Analysts has a write up on them here