I don't know what to say- my tears are staining the keyboard as I type- Barrons has shrank itself to the size of a tabloid. Last week's edition got tossed in the trash, I thought it was a gossip rag my wife had brought home- this is serious! Please Mr. editor don't even try and tell us how great the new format is; how much easier to hold now; how your strategy sessions came upon this new size... IT SUCKS! The typeface remains enlarged as the stories are shrunk to a level where a man in his 40's has trouble reading it. The print is blurry. This was an effort to save money nothing else, and by the sheer stupidness of it- surly sales will fall. Why not have made it thinner and longer and folded it over? It's the roundtable edition! That time when 12 white people are interviewed about the stock market- always worth a look but usually the ideas are so far fetched and the prices quoted in Thai Botts etc that it often useless. Lets take the issue from the beginning: Boy Alan Ableson's column is even more dour than usual and for once it's written really poorly. Upon close examination we see this one was penned by Randall W. Forsyth! Is Alan on vacation or " downsized " with the rest of the paper... my subscription is up mr Dow Jones you had better not of pushed dear Alan out the door! The problem with highlighting the DOW's 24th close at record highs is of course self explanatory... everything is new when blasting off into space; eventually you have to stop counting the stars and just enjoy the ride. Mr Forsyth notes in choppy sentences that investors Intelligence is 55.4% bullish and 20.7% bearish- seems reasonable to me, however, news from charles schwab is that they are seeing the lowest level of put buying to call buying since last november. Also big board margin debt is near it's 2000 peak that's not good- I've been coasting along without margin- other investors are getting the most bang for their buck. Next a small bit on the 6% drop in oil, in fact- the front contract for oil is off a whopping 31% since last July and Mr. Forsyryth makes the point I've been asking: why oh why is it NOT showing up at the pumps? Streetwise column is a dud it has one interesting fact that last year nearly 90% of all inflows to stock funds went into overseas funds! I'm left to debate weather that's really possible with another cup of coffee. Now we run across our first idea Staples. at 17 X earnings it's got the possibility of seeing it's share price appreciate 14% just be getting back to it's normalized PE. 12% growth rate at older stores overall rate close to 15% this is worth a further look. Next up Xerox this company is in transition phase their black and white printers are declining in sales and a shift away from light lense technology is trouble too. I'm a little negative on the story but there is a weird ending to the piece- that based on options activity last week a rumor was going around that even worse shape Eastman Kodak was going to make a bid for the company... Barrons seems to think staples can go up 25% from here that's a healthy bullish call so we will keep it in the maybe file for now. Ok into the roundtable and first thing we notice is that in the first picture Mark Faber is gesticulating wildly and then we turn the page and there he is again on the bottom holding his hand up as if to say Jesus Christ you guys are idiots! Had Mark had a drink or two I wonder... As mentioned before there is NO ethnic diversity on this roundtable, the closest we get is a very tan Art Samberg. And as for the women Abby Joseph as usual is there- love her but please! Poor Meryl Witmer has been brought in for the recent roundtables, she's easier on the eyes but I've gone into several of her picks with no results. The exception being CHAP steel. Lots of housing bubble talk, due for a correction talk, this year won't be as good as last year etc.. One uncomfortable fact is brought up that despite being up 14% the US market in euro terms was only up 5%. Lets take a moment and just let that sink in. Art Samburg is cool. I know of his family up in Westchester and have had some minor dealings with his fund in the past, got to respect this man. His pick -Monsanto again. Had that one last roundtable as well. Although common sense would say that since the push to ethanol has died with lower oil this wouldn't be the best pick, we'll see. He also likes RIO a stock I sold off stupidly @$22 now $27 but I think now dead even with Inco. He also takes a half hearted buy swipe at the for profit college sector: Apollo being his top pick. Also Art makes a great point about Brazil that they never had mortgages before! Now the high end building is on a roll with mortgages he highlights two homebuilders there that trade on the Bovespa. Gafisa & Brascan. Interestingly, Art notes that Sam Zell owns 24% of Gafista. In general, when real estate is involved, just do what Sam Zell does and like him- you will come out well ahead. Lastly Art says he like Baidu.com! Yes at 64 X earnings! Go Art! I like Scott Black from Delphi Management alot always have> of course he is going with two energy names just as I have been forced to liquidate mine this week! Apache which I like, and Bronco Drilling, a land driller with pretty impressive financials. $13 book value 22% return on equity, 52 land rigs, debt free- rigs are getting $19,000 a day up from $16,000. They will make $84 million or $3.35a share on 25 million shares for a PE of... 4? Wow. Stock is slightly below it's IPO price! Scott also likes Home Solutions of America (HSOA), boring Altra Holdings (AIMC) and Arrow Electronics (ARW). Home solutions I'm not to crazy about they do better with lots of disaster cleanups and fewer people will be putting big bucks into their homes this year... they also do mold cleanup. Arrow is a good company with two new purchases under it's belt which will add to earnings: InTechnology could add 4 cents to earnings and Key Link systems brings with it $1.6 billion in revenue and 18 to 22 cents in earnings. If nothing else this is a name you will want to use at earnings time! Out of the roundtable for now, next week the rest of the panel chirp in. Barrons winds down with a bull piece on Yellow trucking saying the stock now depressed at $40 could get to $60. I don't like truckers in the face of what could be a drastically slowing economy one would have to think their pricing will come down... A quick scan of the rest of our little paper. A graph of EMC pops out. I like what i see there. Seattle Genetics a stock I owned at $5 had a nice pop which I sold into due to a deal with Genentech. Worth a revisit? Maybe, Bill Gates used to be a big holder of the shares, will have to revisit my research on SGEN. Boston scientific continues a nice little run from where we highlighted it @ $15 a couple issues ago Now up into the $18 zone I think it's sell time. Another winner brought to you by stoney inc. Here's Bronco again (Barrons hint) in the Research reports Section. Raymond james with a $22 target- raising estimates on an acquisition Of Eagle well Service. In insider buys I see one buyer for KEYW Essex Corp, they are a cool cellular phone intercept company with defense dept overtones, will take a look under the hood here- 28,500 shares is a good step up from an insider. Lastly the striking price has a piece about predicting profits due to tracking high-volitility options. Stocks that traders think are ripe for big moves. A couple names there Netflix their options imply a one day earnings powered move Up or down of 20%! Boy you need a good crystal ball to make a move here but lately the stock has been in favor. the other name that jumps out is STLD a stock I handled poorly in my account selling just before the stock split. This is set to move 16% one way or another (my guess is down) Sandisk is on the list- that's easy it always sells off at earnings, as well as Silicon labs, Corning, St Jude Med and WR Grace. Grace I like and think that implied volatility of 12% could be resolved to the upside. OK lets take a recap of our ideas pulled from this issue: Staples // Xerox // Monsanto, Gafisa, Baidu // Bronco Drilling // Arrow Electronics // KEYW // SGEN // NFLX // EMC //WR Grace... You Know what? That's a sweet list of ideas to research!
"Lots of housing bubble talk, due for a correction talk, this year won't be as good as last year etc.. One uncomfortable fact is brought up that despite being up 14% the US market in euro terms was only up 5%. Lets take a moment and just let that sink in." I think the SP was only up 0.2% in euro in 06 I always enjoy your writing SI, thanks for posting.
I think I will write to them and say ... how come every year its the same old group of people in the "round table" ok ... they do add a new name once in a while but I think they should tell the people who they invite that if their "picks" for the year do the worst of the group that they will not be invited back next year ... anyway ... its all entertainment ... and good publicity for the "roundtable" and sells Barrons
Back from taking my almost three year old to " Happy Feet " His first movie ever! Boy no one mentioned the giant sea lion attack to me! Man I was scared s*less! & that volume! Poor kid... On the research front one thing stands out> the Brazilian economy is just right for real estate. A big Brazilian real-estate developer Tecnisa SA is planning an initial public offering of shares on the Brazilian Stock Exchange, or Bovespa Brazilian real-estate industry players in general seem optimistic about growth prospects for the Brazilian industry. Inflation is under control and the Brazilian Central Bank continues to reduce the benchmark Selic interest rate. Lower rates should spur sales of houses and apartments. Currently, the Selic rate stands at 14.25%, after the central bank reduced it for the 10th consecutive time at its meeting last week. In less than one year, Gafisa SA, Cyrela Brazil Realty SA, Rossi Residencial SA, Company SA and Abyara Planejamento Imobilario SA raised money from primary and secondary share offerings. Earlier this year, Klabin Segall and Brascan Residential - other local real-estate firms - also registered IPO intentions with the CVM. Boy 14.25% and they're happy! What are we bitching about over here? Anyway those two sneaky Brazilian building plays Gafista & Brascan look like good investing ideas for 07-but you will have to buy them local and thus use a broker I think. Staples> boy the first thing that stands out is- it's quite an interesting chart. It's been at $26 since October basically consolidating a move from $22. In retrospect $22 was a steal and it became a double bottom. The longer you pull out the chart the more interesting the story becomes. The question is do you wait for a pullback and pull it in @ $24? One I forgot to highlight was APOLO and that too has a very interesting chart. Talk about a gap to fill! This one is prime candidate material. Can't get excited about MON or Xerox . Likewise Grace it looks tired to me. Netflix may suffer a bit due to Blockbusters aggressive push in their space. Blockbuster is up to 2 million subscribers. Netflix is in a transition phase to eventually being a digital download- to- own site and that's going to be huge. Until they get their though, it's apt to be a rocky trip... One company that pops up as you research Netflix is Sonic Solutions SNIC they appear to have the magic solution tech wise to make download- to -own a success. KEYW had quite a bit more buying than Barrons had detected, they were buying the stock after a move up from $22 - up in the $23.60 zone VERY BULLISH! but wait! They got bought themselves! Essex Shareholders Approve Sale to Northrop Grumman holders of Essex common stock will receive $24.00 in cash for each share of common stock they own at the closing of the transaction. Oh my call the SCC! All that buying 2 DAYS BEFORE! outrageous... Except they only made 50 cents! What are we left with? APOL & SPLS being technical charts of interest. I'll play with the big boy tools on Monday with those names and look for signs of accumulation. These feel like the two best ideas in this issue but we're also going to follow SNIC which popped up in and around Netflix research- that looks like a cute chart as well. And I'll place some calls about buying Gafista or Brascan, I've bought in France and Germany why not Brazil....
I haven't read mine yet. Let me guess... is Abby still bullish? Didn't she blame it on her anal-ysts for her very wrong pick last year?
Dropped that useless rag about 10 years ago. They 'downsized" the Wall Street Journal also, 2 1/2 inches in width. Thats ok, my subsrription for the print edition expires on the 23rd of this month. No more. It is like a comic book.
What do you expect from paper trading journalists? They are even wasting space to review electronic gadgets now.
What can we turn to? business Week is not bad I like the economic bit they have near the front of the mag. Smartmoney is foolish and lies about their performance... Is it back to IBD?....
http://transport.seekingalpha.com/article/24144 The following article appeared on Barrons Online. Im very confident about the trucking sector. Its the one sector that did not participate in the 6 month rally and trades at a single digit p/e. Actually, the trucking sector has been weak since the early part of 2005. These trucking stocks have proven to do well during economic downturns. I believe that the trucking sector tracks the economy exactly. This makes sense because trucks are the most appropriate transport to take consumer items to circuit city or construction materials to a worksite or cars to a dealership. People only hire a truck when they have something that needs to be moved. Bottomline, if no trucks are being hired then goods are not being moved for some reason. You buy these trucking stocks when the economy appears to be at the lowest. http://stockcharts.com/h-sc/ui?s=YRCW&p=D&b=7&g=0&id=p29096207288 YRCW closed at 39 dollars, just above the 50 day EMA. Im wondering if this price point will become the new floor or will it now trade in a defined channel between 39 and 36. I would be a buyer of the stock at the 36 dollar price point and then set a sell order at the 50 day ema. Rinse and repeat until the stock proves to me that it can keep above that 50 day ema. The stock is still in a cyclical downtrend that started in March of 2005. You can draw a straightline from the top at 64.47 all the way to today's closing price. The next earnings call is on Feb 1st and you know that they will disappoint based upon the earnings warning. This might be an ideal time to get in if there is a waterfall selloff on a nice swing trade through the channel.