Thank you Wink! Good day everyone, it is Saturday Dec 8th and this of course is the infamous Barron's Game. For those of you uninitiated, the Barrons Game is when you read Barrons through the eyes of the stonedinvestor and together we pick one idea to make money off of hopefully in a week! In our last game we provided you all with an incredible near 80% return!!!! IStar SFI went from $1.10 to $1.90 although we sold out at closer to $1.55... still a mighty gain and TWO THOUSAND dollars was returned to EVERYONE who played the Barrons game- not a bad return for a (Yikes) $5 paper! This week, we hope to do the same or better and away we go. In the week ahead preview mention is made of a female condom! On Thursday the FDA panel reviews a company called Female Health Co... are they even public? Why yes it is! The Female Health Company Reports Record Results for Fiscal Year 2008, at High End of Guidance NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS RISES 215% TO $4.8 MILLION ($0.18 PER DILUTED SHARE) Highlights: Fourth Quarter - - Net revenue up 52% to $7.8 million - Net income attributable to common stockholders increases 108% to $2.3 million - Gross profit margin widens to 44.8% of net revenues vs. 39.3% of net revenues in prior-year period - Operating income exceeds $1 million for first quarter in Company's history FY2008 - - Unit sales up 34% to 34.7 million female condoms - Net revenue increases 33% to $25.6 million - Operating income rises 252% to $3.2 million - Net income attributable to common stockholders up 215% to $4.8 million The Female Health Company Reports Record Results for Fiscal Year 2008, at High End of Guidance Gross profit increased 73% to $3.5 million, or 44.8% of net revenues, in the most recent quarter, compared with $2.0 million, or 39.3% of net revenues, in the fourth quarter of FY2007. Operating income increased 206% to $1.2 million in the three months ended September 30, 2008, compared with $0.4 million in the corresponding period of the previous fiscal year. This was the first quarter in which the Company reported operating income in excess of $1 million. The Company expects significant quarter-to-quarter variations in its operating results, due to the timing of large order receipts, production scheduling, and shipping of products. For the year ended September 30, 2008, net revenues increased 33% to $25.6 million, compared with $19.3 million in FY2007. Gross profit increased 50% to $10.7 million, Operating income rose to $3.2 million, a 252% improvement from $0.9 million in FY2007. In FY2008, the Company sold 34.7 million female condoms, an increase of 34% over the 25.9 million units sold in FY2007. The Company's pretax earnings guidance for FY2008 was an increase of 200% to 250% over pretax earnings for FY2007 The Company currently has no outstanding debt and $1.5 million in unused credit lines.Through September 30, 2008, the Company has purchased 841,000 shares for $2.1 million (an average price of $2.54 per share). FY2009 Earnings Guidance: The Company expects unit sales to increase 20% to 25% and pretax earnings exclusive of currency gains or losses to increases 50% to 60% in FY2009. Holy cow folks we are two pages in and I think I've spotted the BIG winner for the week... I'm tempted to stop right here. They have big earnings so I'm assuming that they are already selling the condoms in Europe and elsewhere... where is the danger here I wonder for the FDA this seems like a layup and a great play. Note that the company has bought back shares... Hummm. Now I'm getting confused they do sell in the US why the FDA review now? The Female Health Company ("FHC" or the "Company"), based in Chicago, IL, manufactures, markets and sells the female condom (FC), the only product approved by the U.S. Food and Drug Administration (FDA) under a woman's control which provides dual protection against unintended pregnancy and sexually transmitted diseases ("STDs"), including HIV/AIDS. The Female Health Company is publically traded on AMEX under FHC FC Female Condom® is the first and only female-initiated barrier method that is safe and effective if used correctly and consistently, has high acceptablility among both men and women in many countries, and provides dual protection against the transmission of sexually transmitted infections, including HIV/AIDS, and unintended pregnancy. The product is currently sold or available through various channels in 108 countries. It is commercially marketed directly to consumers in 10 countries by various country specific partners, including in the United States, the United Kingdom, Canada and France. Currently, public sector female condom programs in various stages are ongoing in over 90 countries..... Boy I find this one most interesting, especially since I am of an age of rather free sex and have never used a condom! And I would much prefer any potential tryst or fantasy gal to be the one wearing the latex... let's move on... There is of course the Big 3 being talked about, Ford is mentioned as perhaps being at a good entry point @ $2.60 Honda too is mentioned as an even better bargain. Goldman Sach's is mini profiled Barrons was a big booster at $161 and $180 now apparently they like it at $70. Don't know how I feel about this. Last week when the stk dipped below it's IPO price was probably the time to buy, I thought about it but personally I can't justify rewarding these fools with any of my money as they have been front and center to everything bad going on. Moving on. Interesting article on Leucadia LUK. This is a collection of assets including Jeffries, the broker, an big Australion iron ore mine and the Hard Rock Hotel and other... entities like AmeriCredit.... run by formally smart guys, it's being likened to a mini Berkshire... The main article is on the US bourses which is a fancy word for exchanges like the NYSE Euronext & ICE etc... This is an interesting article and the arguments hold some merit CME & ICE hold the fattest profit margins, ICE is 2.5 book and CME 0.6, I would lean towards CME which is expected to earn $17.68 next year after $16.61 this year. CME also has less debt than the others and the stock is down 74%- this is a strong idea. ICE is moving faster into devloping a market for CDS Credit Deafault Swaps, merging with a BAC unit but CME is in the game, partnering with Citidel... I'm sure a bunch of you Elite Traders know more about these exchanges than me or Barrons... if you favor NYX, NDAQ or ICE please drop a note asap... I'm leaning towards CME. In the Mutual Funds section a small cap investor Nick Galluccio is profiled from Teton Advisors. I don't know much about him but he has an impressive resume. Some of the stocks he likes- ATMI & Keithley both test measurement plays, Keithly I've owned before. FORM FACTOR another old stoney pick, and a very good company, they enjoy 50% share of wafer-probe cards for testing semiconductors. Zoran, another name i have owned (and took a bath in) In recent buys Nick has made some retail buys J Crew and Saks; I'm ticked off at Saks i was going to buy it the other day when that famous rich guy bought more of the shares- They have since exploded upwards. two other companies he highlighted as ones to emerge from this downcycle are Molex MOLX and PTEC!!!! Oh no here is where the stoned one gets into trouble. I lost 50% in PTEC and loved it all the way down. This is a good company but it's tech and it's small and it's tough to get investor love out of the name. Phoenix Tech is the largest supplier of basic operating-system software for PC's, that " could " earn 60 centsin 09' vs 25 cents in the last 12 months. Next up a very snootry lookingf Barry Ritholtz is profiled. he's a bear who looks oh so happy with himself. he's turning slightly bullish with bets on AVAV a very good military play of drones (unmanned terrorist killers) and the general market. He has a couple others on his watch list, nothing too interesting, LMNX & Stanley Works and mentions Berkshire hathaway as a stk he has never owned but if it got cheap enough he would. What is cheap enough? $85,000 to $95,000 vs the current 98K... I guess we are talking being able to afford 13 shares! Highly profitable packaging companies are profiled as recession type stks. Ball, Crown Hldgs, owens-Illinois and Silgan Hldgs. i don't have a good feel for any of these names, I like Pactiv PTV in the same group but they have high pension liabilities.... Siligan I don't know but Wackyovia thinks this $43 stock can become a $65 stk so we will throw it into review. On to market Week. Some basic chatter about MET life as it relates to Hartford, etc.. Got to give Barrons some credit here they have been huge backers of MET on the way down and the way back up and they have been right on. Ok on to Insider Buying and woa! We have a group buy at ZALES. ZLC- 8 DIFFERENT BUYERS & top dollar value on the list! Very interesting Bruker BRKR has one buyer of 300,000 shares- they do test measurement too so let's keep them on the list and General Cable has two buyers BGC, another good company. In 13D filings we see a familiar friend- Zale again! Former Securities & Exchange Commission Chairman Richard C Breeden raised his stake to 28.5%!!!!!!, over 9 million shares.... geez, he's rich! he just bought ONE MILLION at $6.29 each on Nov 26! Well that's it ladies & gents. Lets review our 11 main possibilities: Female health Co FHC Honda Leucadia CME FORM PTEC AVAV Silgan Hldgs & Pactiv ZALE. BRKR BGC As always please do Due Diligence and post your thoughts here. We will make a group decision and move on from there. And now back to our regularly scheduled programming! ~ stoney
The early leader of course is Zale. I have learned we have a new CEO with no jewelry backround trimming the fat and to me it looks like getting ready to sell this very old company. With HEAVY insider buying at it's LOWS... this is attracting me. Read This - New Zale Corp. CEO Neal Goldberg plans to revive the struggling jewelry chain by offering new merchandise such as Zale's branded "Celebration" diamonds, pictured. Irving, Texas--Jewelry retailing experience is conspicuously absent from the resume of Zale Corp. Chief Executive Officer Neal Goldberg. Yet the retail veteran, who was appointed last December after executive stints at Macy's, Victoria's Secret and Gap, hasn't let his outsider status stand in the way of making big changes at the struggling jewelry chain. Goldberg succeeds Betsy Burton, who was promoted internally to the CEO post in February 2006. Since taking over, Goldberg has shuttered a net total of 50 stores and kiosks, completely overhauled 135 more, cut ties with two-thirds of the company's vendors and restructured the corporate management team. His strategy: to reinforce Zale's position as a value retailer and return to basics. "We really believe we're about value," he said in a recent interview with National Jeweler. "That's who we are." Goldberg says critics have assailed him as "totally nuts," arguing that his bold moves have been too much, too quickly for an 84-year-old chain that operates more stores than any other jewelry chain in North America. But the latest financials suggest Goldberg's fresh take might be working so far. For the fourth quarter ended July 31, the company experienced a 6.1 percent increase in same-store sales and revenues, significant gains given the economy. The retail rally lost some steam last week, however, when Zale Corp. announced that its same-store sales declined 3.7 percent in the first quarter of 2009 amid souring U.S. economic conditions. Revenues for the first quarter totaled $364 million, compared with $377 million in the prior period, a decline of 3.5 percent. In deciding what changes to implement at Zale, Goldberg spent his first year away from the company's Irving, Texas, headquarters, visiting hundreds of stores to better understand the strengths and weaknesses of its current business model. One of his observations: Jewelry stores tend to display too much merchandise, sending an unclear message to shoppers. Goldberg's yearlong cross-country travels also prompted him to conclude that Zale competed too hard on price while its merchandise mix floated in a "sea of sameness." "The only thing that made a difference was the price, and you can't win on that," Goldberg says. So he began sourcing new merchandise, keeping in mind that Zale's customers turn to the stores for diamonds, and they're looking for certain price points. He also reduced the company's vendor base by two-thirds to improve efficiency in what was a big move for the 2,135-store retailer. "That's huge," Goldberg says. "One of the things we want to do is become more important to fewer people." A trip to one of Zale's 135 "pacesetter" stores--a sort of proving ground for change at Zales, where all the proposed changes have been implemented--is visual proof of Goldberg's philosophy. The store--whose location Zale wanted to keep under wraps--still has its fair share of circle and Journey diamond jewelry, and customers popping into Zale with plans of popping the question will find a wide selection of diamonds. The entire back row of display cases is dedicated to bridal, including Zale's new, branded "Celebration" diamonds. Under the company's logo on the wall is a new Zale tagline: "America's Diamond Store Since 1924." "If people want to buy a diamond from you, they have to trust you, and those years of experience convey a sense of trust," Goldberg says. "We were always about diamonds. We'll always be about diamonds." Mixed in among the diamond mainstays are pieces that are a definite departure from tradition. A line of edgy timepieces inspired by the works of tattoo artist Ed Hardy have their own display cases, and across the aisle, more cases contain fashion jewelry from Heather Benjamin, Venetian Glass and Samuel B. In Goldberg's mind, the fashion stock needs to be both "narrow and shallow," made up of quick-turners that comprise a small percentage of overall stock. "Fashion is important," he says, "but important in the right amount." For what is sure to be a challenging Christmas season, Zale has high hopes that its fresh outlook on merchandise, coupled with an emotional new advertising campaign called "Love Rocks," will rally business. Zale's "Mom Rocks" commercials, which aired before Mother's Day, provided the public a sneak preview of the campaign. As of early fall, Goldberg was tight-lipped about Zale's holiday marketing plans, saying only that the ads would appear in "many places" outside of normal broadcast television stations. "It's not how much you spend in a category," he says. "It's about how efficient that spend is. There's some things up our sleeve that we've tested and some things we haven't tested that we're very excited about." Either way, Goldberg expects the spots to have a big impact. "I think people will have tears in their eyes," he says. Asked about Goldberg's strategy, Paco Underhill, CEO of market research and consulting company Envirosell, says he agrees that too much merchandise overwhelms shoppers and says he advises modern retailers to make "less is more" their mottos. As for Goldberg's lack of jewelry experience, he says jewelry is one industry that can really use an outsider's intervention. "One of the things to realize is it isn't Zale competing with [other jewelry stores]," he says. "It's Zale competing with everyone else in the shopping concourse for the consumers' discretionary dollar." Hummm. Low end is the place to be too.....~ stoney
The early thought process is near every Insider reporting rag is running with the ZALE news and posted after hours Friday. This is going to pop but then probably settle right back. Could the better move be Female Health! Lets take a look at that name. Especially so because the chart is of interest as well. After spending more than 12 years and investing over $100 million to develop and commercialize its patented, FDA-approved FC Female Condom⢠and more recently, its lower-cost second-generation FC2 female condom, the Company stands at the threshold of realizing the substantial potential of its products as key weapons in the global battle against HIV/AIDS. Folks this turns out not to be about me. And any fantasy my wife may have promised me at 40 and then reneged on... this is a HIGHER minded investment and fits within our good guy lets save the world them which of course never works. This is really an African story. The female condom has proven highly effective in sub-Saharan Africa, Brazil and many other countries in protecting women against sexually-transmitted diseases (âSTDsâ), including HIV/AIDS. With the support for HIV/AIDS prevention programs by the World Health Organization, the United Nations and other high-profile public health agencies, female condoms are currently available in over 100 countries throughout the world. Manufacturing and distribution of the female condom is now underway in India, a nation of over one billion people with a rapidly worsening AIDS crisis has the potential to become FHCâs largest single market within the next few years! Stock was $2.55 in May/ June period & an awful lot of bad has happened to the market since then- stock is now near $3.... 38% insider owned but 10% INSTITUTION that's not bad for an unheard uncovered stock. Rodmen & Renshaw may cover I'll work that angle Monday. There are currently only two products that prevent the transmission of HIV/AIDS through sexual intercourse â the male condom and the female condom. Worldwide, 6 to 9 billion male condoms are distributed by global public sector health organizations each year. In the year ended 9/30/07, less than 26 million female condoms were distributed globally by public health organizations, in part due to the higher cost of the female condom relative to male condoms. We obviously need more female condoms. Demand for the female condom should increase dramatically as average unit prices decline with the availability of the second-generation FC2 female condom, (THIS IS I IMAGINE WHAT IS BEFORE THE FDA AND WITH FC1 ALREADY A BIG HIT... WHAT IS THE DANGER HERE! THE PRESS WILL LOVE IT AND COVER IT, THE FC2 WILL GET THE GREEN LIGHT AND WE WILL ALL GET $4.00.... Growth in female condom sales to accelerate as FHC targets new markets in more populous countries. How tight are their patents could a J&J do their own? I don't know this is a one week investment. Distribution of female condoms is now underway in India, a nation of about 1 billion people with a rapidly worsening AIDS crisis. Could China follow? Do they have an AIDS problem in China? If The Female Health Company can capture just 3% of the 6-9 billion-unit global public sector condom market, which with wider female usuage is a REAL possibility unit sales could increase more than 600%. That would equal somewhere in the neighborhood of $70 mln rev and 60 cents per share! Given the proprietary nature of its flagship product (the Companyâs manufacturing processes and the FC1 are patented; the FC2 is patent-pending) and the significant regulatory and other competitive barriers to entry in the female condom market,one would think The Female Health Company will at some point have to become an attractive acquisition candidate! And therein lays the buy and hold argument. Last year hedge Fund Red Oak bought in we will want to check monday that they are still in. They should be they are slightly up. They bought at $2.27 per share.months.~ stoney
ZALE will bankrupt along with other jewelry stores. This business is doomed with recession and potential boom in gold price.
Spare me, why would Former Securities & Exchange Commission Chairman Richard C Breeden raise his stake to 28.5%!!!!!! He's very well respected.~ si
I owned AVAV a ways back before 1 in 10 mortgage owners were under water and not far from where it is now. So relative strength wise and if you worked somewhere and had 100% of their stock, Aeroenvironment has been a very good place to be. And it wiol continuie to be so. Recent earningfs were strong. Shares of AeroVironment Inc. rose Thursday after the maker of unmanned aircraft systems reported strong fiscal second-quarter profit and reaffirmed its full-year outlook. The Monrovia, Calif.-based company's stock gained $1.31, or 4.2 percent, to reach $32.22 in afternoon trading. The stock has traded between $18.44 and $38.70 over the last 52 weeks. $6 off it's HIGH. Late last Wednesday, the company said earnings for its quarter ended Nov. 1 rose 75 percent to $9.1 million, or 41 cents per share, from $5.2 million, or 24 cents per share, during the same period a year prior. Revenue rose 23 percent to $65.8 million from $53.7 million. Analysts polled by Thomson Reuters expected, on average, profit of 27 cents per share on revenue of $63.9 million. That's a nice big beat. both on rev and eps.... AeroVironment said underlying demand for unmanned aircraft systems drove procurement, service, and research and development revenue. Also, improvement at its efficient energy systems unit helped drive profit. Looking ahead, the company reaffirmed its forecast for revenue growth between 20 percent and 25 percent in 2009. Based on fiscal 2008 revenue of $215.7 million, the guidance implies fiscal 2009 revenue between $258.9 million and $269.7 million. Analysts expect 2009 revenue of $267.3 million. Jefferies & Co. analyst Howard Rubel reaffirmed a "Hold" rating on the company, saying the results show AeroVironment is "uniquely" positioned for growth within the unmanned aircraft systems and energy conservation markets. "We continue to believe that AeroVironment's innovative solutions coincide very nicely with emerging market needs," Rubel said, in a note to investors. "Market demand for energy efficient products and relatively lower-cost unmanned aircraft systems that provide intelligence, reconnaissance, and surveillance data to the military should remain strong." The stock value moved past his new price target of $32 during the trading session. Meanwhile, Stifel Nicolaus & Co. analyst Troy Lahr also reaffirmed a "Hold" rating. "Margins at efficient energy systems remained well above expectations for the second straight quarter despite management stating that margins in the 50 percent range were unsustainable," Lahr said, in a note to investors. Elsewhere, Goldman Sachs analyst Richard Safran reaffirmed a "Neutral" rating. Hummmmm. they couldn't get one upgrade out of that... Iraq pull out might color this, let's keep looking.... ~ stoney
recent analyst chatter in the pckaging of course slam our two stocks but it does mention a third that was in Barron's Ball! And I've made great money with that name in the past, let's review- December 2, 2008 7:31 AM EST KeyBanc reiterates a Buy rating on Ball Corporation (NYSE: BLL), Crown Holdings (NYSE: CCK), Greif (NYSE: GEF), Myers (NYSE: MYE), Owens-Illinois (NYSE: OI) and Sonoco (NYSE: SON). Additionally, KeyBanc downgrades Pactiv (NYSE: PTV) and Silgan (NASDAQ: SLGN) from Buy to Hold. KeyBanc analyst says, "As has occurred during and following past recessions, packaging stocks are out-performing the broader market by a wide margin, a trend we expect to continue in 2009. As a result we have a strong overweight bias to the group. However, to differentiate relative opportunity across the companies in our coverage universe, we have evaluated free cash flow (FCF) yields on our 2009 estimates, where we view a 10% yield as attractive and a 15% yield as a strong buying signal. Additionally, given that there is a high degree of uncertainty surrounding the 2009 economic climate, we created "base case" estimates for each company under coverage in our October report "Expect Relative Out- Performance Over Next 12 Months".
Ball Corporation (NYSE: BLL) is a manufacturer of metal and plastic packaging, primarily for beverages and foods. It also supplies aerospace and other technologies and services to government and commercial customers. Ball Corporation reported 3Q08 EPS of $1.13, up 3.7% year-over-year (y-o-y) due to higher operating earnings in all businesses except plastics, lower administrative and interest expenses, and share repurchases. In the near-term, Ballâs earnings should be supported by higher y-o-y selling prices and cost containment efforts.
- Ball Corp. is on track to generate significant cash flow next year, and the beverage packaging maker's stock should outperform its peer group as well, an analyst said Tuesday. Free cash flow is a key financial metric that gauges a company's ability to generate cash after spending money needed to maintain or expand assets. KeyBanc analyst Christopher D. Manuel estimates that the Broomfield, Colo.-based company's free cash flow next year will be $450 million, well above the company's projections of $275 million to $300 million. The analyst said 2009 free cash flow for Ball, which makes aluminum and steel cans for soft drinks, beer, meat, soup and pet food, should benefit from lower capital expenditures and the elimination of a $70 million legal payment. Strong free cash flow forms a key part of Manuel's "Buy" rating and $46 price target. The analyst also said next year is shaping up for solid earnings growth for Ball, with benefits from cost-cutting and share repurchases more than offsetting volume weakness. In morning trading, the stock rose 55 cents to $33.02. In the last 52 weeks the stock has ranged from $27.37 to $56.20.
The research is narrowing down and we include the obvious powerhouses now... LUK & CME.... We Pretty much have six options to play the game Wink! Now we ask the folks at home to play along. Where should we place our bet?~ stoney CME LUK AVAV BLL ZALE FHC