Almost Family, Inc. (AFAM)
Almost Family, Inc. and its subsidiaries provide home health nursing services. It operates through two segments Visiting Nurse and Personal Care. The Visiting Nurse segment provides medical services in patients' homes. The Personal Care segment provides personal care services in patients' homes. The company has service locations in Kentucky, Florida, Maryland, Ohio, Connecticut, Massachusetts, Alabama, and Indiana. Almost Family was formerly known as Caretenders HealthCorp and changed its name to Almost Family, Inc. in 2000. The company was incorporated in 1985 and is based in Louisville, Kentucky.
The few things I like about this one is the low P/E, and honestly, it's has the lowest out of all it's direct competitors. Through on top of that it has a Qtrly Rev Growth (yoy) of 13.80% and still going!
The only thing that we can not figure out is that. Someone is behind all this, because for all the numbers and key stats. I mean it's a great story, good solid numbers, but is just stuck. We just can not understand why this one has not taken off yet. Though, we feel that it could somewhere down the road. AFAM might be one to watch!
Wednesday, November 08, 2006
Friday, November 03, 2006
Stock Market Guarantee
Stock Market Guarantee
Helium is up.
Feathers were down.
Paper was stationary.
Fluorescent tubing was dimmed in light trading.
Knives were up sharply.
Cows steered into a bull market.
Pencils lost a few points.
Hiking equipment was trailing.
Elevators rose, while escalators continued their slow decline.
Weights were up in heavy trading.
Light switches were off.
Mining equipment hit rock bottom.
Diapers remained unchanged.
Shipping lines stayed at an even keel.
The market for raisins dried up.
Coca-Cola fizzled.
Caterpillar stock inched up a bit.
Sun peaked at midday.
Balloon prices were inflated.
Scott Tissue touched a new bottom.
And batteries exploded in an attempt to recharge the market.
Helium is up.
Feathers were down.
Paper was stationary.
Fluorescent tubing was dimmed in light trading.
Knives were up sharply.
Cows steered into a bull market.
Pencils lost a few points.
Hiking equipment was trailing.
Elevators rose, while escalators continued their slow decline.
Weights were up in heavy trading.
Light switches were off.
Mining equipment hit rock bottom.
Diapers remained unchanged.
Shipping lines stayed at an even keel.
The market for raisins dried up.
Coca-Cola fizzled.
Caterpillar stock inched up a bit.
Sun peaked at midday.
Balloon prices were inflated.
Scott Tissue touched a new bottom.
And batteries exploded in an attempt to recharge the market.
Wednesday, November 01, 2006
Value of Time - this will help you value life, time, friends, family and etc! What's it really worth to you?
Value of Time - this will help you value not stocks or money but may it help you think about life, time, friends, family and etc! What's it really worth to you?
Imagine there is a bank that credits your account each morning with $86,400.
It carries over no balance from day to day.
Every evening deletes whatever part of the balance you failed to use
during the day.
What would you do? Draw out every cent, of course!
Each of us has such a bank. Its name is TIME.
Every morning, it credits you with 86,400 seconds.
Every night it writes off, as lost, whatever of this you have failed
to invest to good purpose.
It carries over no balance.
It allows no overdraft.
Each day it opens a new account for you.
Each night it burns the remains of the day.
If you fail to use the day's deposits, the loss is yours.
There is no going back. There is no drawing against the "tomorrow".
You must live in the present on today's deposits.
Invest it so as to get from it the utmost in health, happiness and success!
The clock is running. Make the most of today.
To realize the value of ONE YEAR, ask a student who failed a grade.
To realize the value of ONE MONTH, ask a mother who gave birth to a
pre-mature baby.
To realize the value of ONE WEEK, ask the editor of a weekly newspaper.
To realize the value of ONE DAY, ask a daily wage laborer with kids to feed.
To realize the value of ONE HOUR, ask the lovers who are waiting to meet.
To realize the value of ONE MINUTE, ask a person who missed the train.
To realize the value of ONE SECOND, ask a person who just avoided an accident.
To realize the value of ONE MILLI-SECOND, ask the person who won a
silver medal in the Olympics.
Treasure every moment that you have! And treasure it more because you
shared it with someone special, special enough to spend your time.
And remember that time waits for no one.
Yesterday is history.
Tomorrow a mystery.
Today is a gift.
That's why it's called the present!
Imagine there is a bank that credits your account each morning with $86,400.
It carries over no balance from day to day.
Every evening deletes whatever part of the balance you failed to use
during the day.
What would you do? Draw out every cent, of course!
Each of us has such a bank. Its name is TIME.
Every morning, it credits you with 86,400 seconds.
Every night it writes off, as lost, whatever of this you have failed
to invest to good purpose.
It carries over no balance.
It allows no overdraft.
Each day it opens a new account for you.
Each night it burns the remains of the day.
If you fail to use the day's deposits, the loss is yours.
There is no going back. There is no drawing against the "tomorrow".
You must live in the present on today's deposits.
Invest it so as to get from it the utmost in health, happiness and success!
The clock is running. Make the most of today.
To realize the value of ONE YEAR, ask a student who failed a grade.
To realize the value of ONE MONTH, ask a mother who gave birth to a
pre-mature baby.
To realize the value of ONE WEEK, ask the editor of a weekly newspaper.
To realize the value of ONE DAY, ask a daily wage laborer with kids to feed.
To realize the value of ONE HOUR, ask the lovers who are waiting to meet.
To realize the value of ONE MINUTE, ask a person who missed the train.
To realize the value of ONE SECOND, ask a person who just avoided an accident.
To realize the value of ONE MILLI-SECOND, ask the person who won a
silver medal in the Olympics.
Treasure every moment that you have! And treasure it more because you
shared it with someone special, special enough to spend your time.
And remember that time waits for no one.
Yesterday is history.
Tomorrow a mystery.
Today is a gift.
That's why it's called the present!
Friday, October 27, 2006
How much do I initially have to invest?
How much do I initially have to invest? How much can I afford to consistently add later?
Einstein described compounding as “The Eighth Wonder of the World” and for good reason. Being able to earn interest on your interest allows investments to increase exponentially faster than with simple interest. A one-time investment of $5000 earning 10% interest compounds to a total of over $54,000 after 25 years. Using simple interest, it would take over 95 years to reach the same amount. Naturally, the larger your initial investment and the more you can afford to add later on, the more you can expect to gain in returns.
Am I carrying any high-interest debt, such as on a credit card?
Before saving for future events, you should consider your present finances. Paying off any high-interest loans function as an “automatic” return. Writing a check to Visa to pay down your debt may not feel as satisfying as starting a nest egg, but by eliminating those 22% interest payments, you have effectively “made” a 22% return. Although you need not completely eliminate your debts, getting such payments into a reasonable area should be a more pressing priority.
This fiscal reckoning is also a good time to examine budgeting and expenditures. Look for unneeded or overpriced purchases, and consider the feasibility of paring them down and saving the extra money. Unused gym memberships, that $5 whipped mocha-hazelnut cappuccino, and extra cable channels all add up. The true cost of these and all other purchases involves understanding the “time value of money”, but for now it should suffice to say that $5 added to the previously mentioned investment account compounding 10% for 25 years turns into $54.17.
What is my risk tolerance? What is my investing style?
This question leads us to selecting individual investments. Consider your investment timetable for when you’ll need the money, recognizing that more conservative selections should be made the shorter the window. Everyone’s risk tolerance is different; while one person may feel comfortable with small-cap biotechs another may need a blue chip to feel equally sound.
Analyzing the risk to reward ratio here is a good first step. The more risk you take on, the more you should expect to get in return if your investment pays off. The inverse is also true: the more stable an investment, the less return one should expect. Government-backed I Bonds pay over 6%, but involve tying up money for years in order to fully benefit from them. While this gives you one target, the average return of the broader market indices is about 11% per year. There are two primary schools of thought about investing: growth and value.
Growth
Growth investing is a higher-risk strategy which focuses on finding smaller companies poised to rapidly grow earnings. Stocks here tend to be micro-caps or small-caps, and the occasional mid-cap (under $10 billion). In their younger lives, many of the well-established companies of today found themselves considered here (Think of Apple Computers (AAPL) or Starbucks (SBUX)). Growth companies can be found in many different sectors, although such companies often have similar traits. A growth company usually has a unique product or service to offer which can fundamentally change how business is done. When found early enough in their growth cycles, these companies have the potential to return enormous profits to investors.
Value
Value plays usually are found in larger companies, although the strategies used to find them can be applied to smaller corporations as well. Looking for value stocks is similar to looking for values in a store: find a good product at a price below what you would normally expect to pay. These bargains are often found in the form of companies which have been unfairly beaten down through overselling. Finding value stocks usually involves using a discounted cash flow model (DCF) to find a company’s intrinsic value. This is the form of investing advocated by Benjamin Graham, and popularized by Warren Buffett.
GARP
GARP, or Growth At Reasonable Price, is a combination of the above forms. As the name implies, the focus is finding growing companies trading at reasonable prices. Quick measures of this include the PEG ratio (Price to Earnings to Growth) and Forward P/E. Although not a specific style, GARP is utilized by many investors because of its flexibility. The average, diversified portfolio will have many GARP-type stocks in it.
Getting Started: Learning the Market and Selecting Stocks
If you were going to spend several thousand dollars on a refrigerator or television, you would thoroughly research the market for those goods to find the product which best suited your needs. Investing is no different. Before buying into a company, you should be well-acquainted enough with it to give a short presentation. Knowing the basics of how a company operates, what it sells, how it makes money, how much money it makes, and what kind of growth the company is expected to experience are all crucial questions that any investor should be able to answer. Developing a better understanding of the stock market is a long, but hopefully rewarding, process.
Immediately investing in stocks with real money, however, is equivalent to taking a test without being introduced to the material. Formerly called “paper trading”, beginning investors would normally spend several months tracking their stock picks without having real money on them. Thanks to technology, you can now find sites that automate (for free) the process of tracking price changes for you on the internet. Simulated investing is a risk-free way of beginning to understand market fluctuations and the forces driving them.
Examining these trends will payoff in the future, as an increased understanding of the stock market can only help you on your path to building wealth. Once you become comfortable picking your own stocks, you can still continue to “paper trade” online, as it offers the opportunity to explore and experiment with other investing styles. Gordon Gekko, the famed villain in Wall Street played by Michael Douglas, said “Information is the most valuable commodity I know of”. Ignoring for a moment that the movie ended with indictments for insider trading, the statement is true: you will not regret being an informed and intelligent investor. The market is constantly changing, but by learning the ropes of investing you too can pull off a “One Up on Wall Street”.
Einstein described compounding as “The Eighth Wonder of the World” and for good reason. Being able to earn interest on your interest allows investments to increase exponentially faster than with simple interest. A one-time investment of $5000 earning 10% interest compounds to a total of over $54,000 after 25 years. Using simple interest, it would take over 95 years to reach the same amount. Naturally, the larger your initial investment and the more you can afford to add later on, the more you can expect to gain in returns.
Am I carrying any high-interest debt, such as on a credit card?
Before saving for future events, you should consider your present finances. Paying off any high-interest loans function as an “automatic” return. Writing a check to Visa to pay down your debt may not feel as satisfying as starting a nest egg, but by eliminating those 22% interest payments, you have effectively “made” a 22% return. Although you need not completely eliminate your debts, getting such payments into a reasonable area should be a more pressing priority.
This fiscal reckoning is also a good time to examine budgeting and expenditures. Look for unneeded or overpriced purchases, and consider the feasibility of paring them down and saving the extra money. Unused gym memberships, that $5 whipped mocha-hazelnut cappuccino, and extra cable channels all add up. The true cost of these and all other purchases involves understanding the “time value of money”, but for now it should suffice to say that $5 added to the previously mentioned investment account compounding 10% for 25 years turns into $54.17.
What is my risk tolerance? What is my investing style?
This question leads us to selecting individual investments. Consider your investment timetable for when you’ll need the money, recognizing that more conservative selections should be made the shorter the window. Everyone’s risk tolerance is different; while one person may feel comfortable with small-cap biotechs another may need a blue chip to feel equally sound.
Analyzing the risk to reward ratio here is a good first step. The more risk you take on, the more you should expect to get in return if your investment pays off. The inverse is also true: the more stable an investment, the less return one should expect. Government-backed I Bonds pay over 6%, but involve tying up money for years in order to fully benefit from them. While this gives you one target, the average return of the broader market indices is about 11% per year. There are two primary schools of thought about investing: growth and value.
Growth
Growth investing is a higher-risk strategy which focuses on finding smaller companies poised to rapidly grow earnings. Stocks here tend to be micro-caps or small-caps, and the occasional mid-cap (under $10 billion). In their younger lives, many of the well-established companies of today found themselves considered here (Think of Apple Computers (AAPL) or Starbucks (SBUX)). Growth companies can be found in many different sectors, although such companies often have similar traits. A growth company usually has a unique product or service to offer which can fundamentally change how business is done. When found early enough in their growth cycles, these companies have the potential to return enormous profits to investors.
Value
Value plays usually are found in larger companies, although the strategies used to find them can be applied to smaller corporations as well. Looking for value stocks is similar to looking for values in a store: find a good product at a price below what you would normally expect to pay. These bargains are often found in the form of companies which have been unfairly beaten down through overselling. Finding value stocks usually involves using a discounted cash flow model (DCF) to find a company’s intrinsic value. This is the form of investing advocated by Benjamin Graham, and popularized by Warren Buffett.
GARP
GARP, or Growth At Reasonable Price, is a combination of the above forms. As the name implies, the focus is finding growing companies trading at reasonable prices. Quick measures of this include the PEG ratio (Price to Earnings to Growth) and Forward P/E. Although not a specific style, GARP is utilized by many investors because of its flexibility. The average, diversified portfolio will have many GARP-type stocks in it.
Getting Started: Learning the Market and Selecting Stocks
If you were going to spend several thousand dollars on a refrigerator or television, you would thoroughly research the market for those goods to find the product which best suited your needs. Investing is no different. Before buying into a company, you should be well-acquainted enough with it to give a short presentation. Knowing the basics of how a company operates, what it sells, how it makes money, how much money it makes, and what kind of growth the company is expected to experience are all crucial questions that any investor should be able to answer. Developing a better understanding of the stock market is a long, but hopefully rewarding, process.
Immediately investing in stocks with real money, however, is equivalent to taking a test without being introduced to the material. Formerly called “paper trading”, beginning investors would normally spend several months tracking their stock picks without having real money on them. Thanks to technology, you can now find sites that automate (for free) the process of tracking price changes for you on the internet. Simulated investing is a risk-free way of beginning to understand market fluctuations and the forces driving them.
Examining these trends will payoff in the future, as an increased understanding of the stock market can only help you on your path to building wealth. Once you become comfortable picking your own stocks, you can still continue to “paper trade” online, as it offers the opportunity to explore and experiment with other investing styles. Gordon Gekko, the famed villain in Wall Street played by Michael Douglas, said “Information is the most valuable commodity I know of”. Ignoring for a moment that the movie ended with indictments for insider trading, the statement is true: you will not regret being an informed and intelligent investor. The market is constantly changing, but by learning the ropes of investing you too can pull off a “One Up on Wall Street”.
Tuesday, October 24, 2006
10 things the new kid on wall street needs to know
10 so you want to play the stocks kid! Well, gather around and let us share 10 things that we have learned to stick this game out for the long haul.
Being a new kid on the block of investing is a lot like being a small fish in a big pond. The new adventure of a big pond can be scary, adventure, and fun. Some keys for the new kid on wall street would be:
1) Learn to make your own decisions.
Everyone will give you advice. Most of it is worthless. You need to make your own investment decisions. It’s your money, and believe me, no one cares if you lose it. In fact, many are rooting for you to, because they want to make money off you.
2) Never blindly trust information.
You need to independently confirm every thing you hear about a stock or a company. Through good solid research yourself. People will lie, because they stand to make a ton of money from stock sales. They’ll gladly mis-represent information, so insist on looking at the real thing, real facts, and real research.
3) Do the work and understand what you’re buying.
Stock investing a fairly complex topic. It could take you many months or even years to master the basics. Mastering the basics is what you need to be concerned with. If you really thing there’s a fast buck coming your way, you need to wise up. One key that we always want to state is always investing thinking long term. Not to many people win short term though it can be done it's done by the experts!
4) Develop a trading style or system.
Don't just make up a system, but research systems, so what others do and continue to do. But, then make some small changes and make your own unique system. Don’t always base all your ideas from other famous people’s systems. In every system has it's strengths and weakness. There is no peferct system to get rich fast. A key is to come up with your own personalized investing methods and systems that work for you, your budget, your personality.
5) Ignore “HOT STOCK TIPS”.
Most hot stock tips are SCAMS!! If they were as hot as Shakira, then they would be implemented by the person who has them. The only information about investing that’s released to the masses is outdated.
6) Most people who recommend stocks do so because they have a financial inducement.
Really, just be real with yourself. Don't be so silly to really think that recommendations are just that. In the real investing world rarely are these stock or investing recommendations are not done free. Please not that most of the time the recommendations come after many, the inside guys, etc have already purchased at a lower price then what you would be getting in at.
7) Concentrate investing with a focus.
Don't go read and learn everything you can about every company or stock. You would be better off starting with a trend, or familiar with a few stocks and really research them down to the penny. Again, ALWAYS stick to your guns aka your investing plan, your investing style, and your investing strategy!
8) You need to put big money to see big profits.
Don't go quitting your day job on $5k of capital. It’s not that much money,
BUDDY! You would need a big bankroll to make decent money. This is true, but don't get the wrong idea as well. It's okay to start of with only $5k in starting a good solid investment focus. Balance is a the key, don't go to one extreme of not investing or the other extreme of quitting your day job to become a day trader on $5k of capital.
9) Don’t over due it on the diversifying or put away too much money into too many stocks.
If you do, you can expect to have a hard time getting good solid returns. If you start with a small amount of cash, you need to concentrate in one stock or few stocks to have the best result. Wait until you get some experience, some research, and before you go jumping into the deep end of the stock market.
10) Use stop losses.
Don’t ever lose more than we suggest 8% others might say 10% on any trade. If you use a stop-loss, you can guarantee that your downside is never less than 8% to 10%. This could save you in the event of a free fall. Also, a major key in this to, is to be discipline enough to keep putting in those stop losses even when the stock goes up. So say if your stock has gone up 15% well put a stop loss of a new 8% based on the 15% gain! This is discipline, but that's what it take in investing and in life!
Being a new kid on the block of investing is a lot like being a small fish in a big pond. The new adventure of a big pond can be scary, adventure, and fun. Some keys for the new kid on wall street would be:
1) Learn to make your own decisions.
Everyone will give you advice. Most of it is worthless. You need to make your own investment decisions. It’s your money, and believe me, no one cares if you lose it. In fact, many are rooting for you to, because they want to make money off you.
2) Never blindly trust information.
You need to independently confirm every thing you hear about a stock or a company. Through good solid research yourself. People will lie, because they stand to make a ton of money from stock sales. They’ll gladly mis-represent information, so insist on looking at the real thing, real facts, and real research.
3) Do the work and understand what you’re buying.
Stock investing a fairly complex topic. It could take you many months or even years to master the basics. Mastering the basics is what you need to be concerned with. If you really thing there’s a fast buck coming your way, you need to wise up. One key that we always want to state is always investing thinking long term. Not to many people win short term though it can be done it's done by the experts!
4) Develop a trading style or system.
Don't just make up a system, but research systems, so what others do and continue to do. But, then make some small changes and make your own unique system. Don’t always base all your ideas from other famous people’s systems. In every system has it's strengths and weakness. There is no peferct system to get rich fast. A key is to come up with your own personalized investing methods and systems that work for you, your budget, your personality.
5) Ignore “HOT STOCK TIPS”.
Most hot stock tips are SCAMS!! If they were as hot as Shakira, then they would be implemented by the person who has them. The only information about investing that’s released to the masses is outdated.
6) Most people who recommend stocks do so because they have a financial inducement.
Really, just be real with yourself. Don't be so silly to really think that recommendations are just that. In the real investing world rarely are these stock or investing recommendations are not done free. Please not that most of the time the recommendations come after many, the inside guys, etc have already purchased at a lower price then what you would be getting in at.
7) Concentrate investing with a focus.
Don't go read and learn everything you can about every company or stock. You would be better off starting with a trend, or familiar with a few stocks and really research them down to the penny. Again, ALWAYS stick to your guns aka your investing plan, your investing style, and your investing strategy!
8) You need to put big money to see big profits.
Don't go quitting your day job on $5k of capital. It’s not that much money,
BUDDY! You would need a big bankroll to make decent money. This is true, but don't get the wrong idea as well. It's okay to start of with only $5k in starting a good solid investment focus. Balance is a the key, don't go to one extreme of not investing or the other extreme of quitting your day job to become a day trader on $5k of capital.
9) Don’t over due it on the diversifying or put away too much money into too many stocks.
If you do, you can expect to have a hard time getting good solid returns. If you start with a small amount of cash, you need to concentrate in one stock or few stocks to have the best result. Wait until you get some experience, some research, and before you go jumping into the deep end of the stock market.
10) Use stop losses.
Don’t ever lose more than we suggest 8% others might say 10% on any trade. If you use a stop-loss, you can guarantee that your downside is never less than 8% to 10%. This could save you in the event of a free fall. Also, a major key in this to, is to be discipline enough to keep putting in those stop losses even when the stock goes up. So say if your stock has gone up 15% well put a stop loss of a new 8% based on the 15% gain! This is discipline, but that's what it take in investing and in life!
Friday, October 20, 2006
Headwaters (HW)
Adding value to energy… and possibly your portfolio.
By eInvesting.com
Value investing involves finding a discrepancy between the price of a security and the value of the underlying company. Some people criticize value investing as boring or too prone to overlooking growth opportunities. But what happens if a solid, cash producing business was integrated with a research group intent on finding synergies to generate additional earnings from current operations, and also on finding important new breakthroughs to fuel growth further down in the company’s life?
That company would be Headwaters (ticker: HW), which has three distinct operating divisions - construction materials, coal, and alternative energy. Before I get into valuation, here is an overview of Headwaters’ various segments.
The materials unit currently makes up a majority of earnings and revenues, and involvement in that industry was management's decision to diversify the more risky and cyclical energy operations which offer most of the growth potential. While revenues have undoubtedly been raised by the housing construction boom, only about one-third of Headwaters sales in the area are for new housing construction, so any decrease in revenues and earnings because of fewer housing starts should be minimal. Wisely, there are already some synergies within the company because Headwaters converts used coal into concrete additives and synthetic stone. The use of fly ash-based concrete reduces atmospheric pollution, and as such is endorsed by the federal government and all fifty states for government contracts. Fly ash is also finding its way into mortars and stuccos, which Headwaters sells. Over the last few years, Headwaters has been making capital expenditures to expand its distribution network and establish itself in the field of building supplies. The conservative scenario is for Headwaters to keep capital expenditures in-line with revenues and earnings, so no marginal decrease in free cash flow rates should occur from the Materials division. Look for solid earnings and consistent growth.
The coal division is involved in coal combustion and by-product utilization (see above). Headwaters makes using coal inherently more efficient, and then also finds ways to add value to the byproducts after it has been used to produce energy. Coal remains a cheap, easy way to generate power and with the volatile and increasingly expensive, coal will become even more important in generating energy, both in America and around the globe. There are over 150 proposed coal-fired plants in the U.S. (not to mention hundreds more in other parts of the world), and environmental groups, while usually unable to stop construction, can at least get laws applied to make the coal “cleaner”. Headwaters is perfectly positioned for such a trend, offering both emissions control should coal be burned and is developing coal-to-liquids technology to allow for the creation of synthetic crude oil or natural gas from coal.
Considering that approximately 95% of America’s energy production capacity comes from coal, an amount significantly greater than can be found in the oil reserves of the Middle East, the uses for coal, and coal-to-liquids technology, seem abundant.
The final and most dynamic division is the Technology and Innovation unit, which does research in the alternative energy and heavy-oil areas. For everything you hear about the Canadian oil sands, regular refiners have enough problems handling and grade worse than light, sweet crude. As the remaining supplies of light, sweet crude are extracted, eventually more inferior grades will need to be refined… all the way to tar sands, which is proving the most difficult to handle. Headwaters’ (HC)3 Hydrocracking technology allows for heavy oil to be upgraded to more easily refined grades. Additionally, Hydrocracking can be used on low quality distillates remaining after the initial refining to turn them into higher-value petroleum products. A quick value-added calculation shows that it could easily be a multi-billion dollar addition to the economy, and if Headwaters' maintains its standard operating margin of 11% on it (not to say that it couldn't be higher, but I'm being conservative) it could double earnings just from capturing the upgrading market. If HC3 gained wider use as light oil blends decline and refiners increasingly switch to heavy oil, that could add even more to the bottom line. The high-side estimate for "upgrading" profits is about $600 million. Such a number does not include any profits to be made from applying Hydrocracking technology to the Canadian Tar Sands, as for now that is still too speculative to count on as a potential future revenue.
Headwaters is also involved in nanotechnology and fuel cell research, with numerous potential applications. Their proprietary NxCat nanotechnology is claimed to be the most efficient nanoagent created, outperforming today’s standard catalysts. More uses are being tested involving hydrogen peroxide production, LED displays, and carbon nanotubes. These potential breakthrough, while difficult to value directly, should be treated like having a free call option on an exciting and potentially lucrative future investment.
Current financial status and valuation: Headwaters has had a rough several months, with the rise in oil prices leading to a phasing out of tax credits benefiting some of Headwaters synthetic fuel catalysts. Headwaters has gone from $40 to near $20 back to $25 in the last few months as analysts have cut short term earnings estimates. Having become interested in this stock the first time it traded down through $25, I will admit to becoming bullish too soon and trying to “catch the falling knife”. The stock has begun to swing back up on some positive news, and buying now will mean that, although you missed the first 20% of the move, there could still be plenty of profit ahead.
For a company capitalized at just over $1 billion to have a trailing twelve month free cash flow of $150 million is amazing. HW does have about $500 million in debt, but I'm not too concerned about that because of the large cash flows which can be used to pay that down. They have cut total outstanding debt by 30% since the end of 2004, and the SEC filings say that Headwaters is prohibited from paying a dividend until it has no outstanding long-term liabilities. As long as Headwaters continues to pull in so much cash, their debt position should be no problem. Taking into all the above factors, if the company can eke out a moderate growth in the high single digit range over the next few years, a conservative exit multiple off that free cash flow makes HW undervalued by 35% - or about $35 per share. When you think of the huge potential gains down the road from the many growth areas the company has, its easy to see how this could be a $40 or even $50 stock sometime in the next year or two.
eInvesting.com is a free stock market simulator and forum. The author has no financial position in any stocks mentioned.
By eInvesting.com
Value investing involves finding a discrepancy between the price of a security and the value of the underlying company. Some people criticize value investing as boring or too prone to overlooking growth opportunities. But what happens if a solid, cash producing business was integrated with a research group intent on finding synergies to generate additional earnings from current operations, and also on finding important new breakthroughs to fuel growth further down in the company’s life?
That company would be Headwaters (ticker: HW), which has three distinct operating divisions - construction materials, coal, and alternative energy. Before I get into valuation, here is an overview of Headwaters’ various segments.
The materials unit currently makes up a majority of earnings and revenues, and involvement in that industry was management's decision to diversify the more risky and cyclical energy operations which offer most of the growth potential. While revenues have undoubtedly been raised by the housing construction boom, only about one-third of Headwaters sales in the area are for new housing construction, so any decrease in revenues and earnings because of fewer housing starts should be minimal. Wisely, there are already some synergies within the company because Headwaters converts used coal into concrete additives and synthetic stone. The use of fly ash-based concrete reduces atmospheric pollution, and as such is endorsed by the federal government and all fifty states for government contracts. Fly ash is also finding its way into mortars and stuccos, which Headwaters sells. Over the last few years, Headwaters has been making capital expenditures to expand its distribution network and establish itself in the field of building supplies. The conservative scenario is for Headwaters to keep capital expenditures in-line with revenues and earnings, so no marginal decrease in free cash flow rates should occur from the Materials division. Look for solid earnings and consistent growth.
The coal division is involved in coal combustion and by-product utilization (see above). Headwaters makes using coal inherently more efficient, and then also finds ways to add value to the byproducts after it has been used to produce energy. Coal remains a cheap, easy way to generate power and with the volatile and increasingly expensive, coal will become even more important in generating energy, both in America and around the globe. There are over 150 proposed coal-fired plants in the U.S. (not to mention hundreds more in other parts of the world), and environmental groups, while usually unable to stop construction, can at least get laws applied to make the coal “cleaner”. Headwaters is perfectly positioned for such a trend, offering both emissions control should coal be burned and is developing coal-to-liquids technology to allow for the creation of synthetic crude oil or natural gas from coal.
Considering that approximately 95% of America’s energy production capacity comes from coal, an amount significantly greater than can be found in the oil reserves of the Middle East, the uses for coal, and coal-to-liquids technology, seem abundant.
The final and most dynamic division is the Technology and Innovation unit, which does research in the alternative energy and heavy-oil areas. For everything you hear about the Canadian oil sands, regular refiners have enough problems handling and grade worse than light, sweet crude. As the remaining supplies of light, sweet crude are extracted, eventually more inferior grades will need to be refined… all the way to tar sands, which is proving the most difficult to handle. Headwaters’ (HC)3 Hydrocracking technology allows for heavy oil to be upgraded to more easily refined grades. Additionally, Hydrocracking can be used on low quality distillates remaining after the initial refining to turn them into higher-value petroleum products. A quick value-added calculation shows that it could easily be a multi-billion dollar addition to the economy, and if Headwaters' maintains its standard operating margin of 11% on it (not to say that it couldn't be higher, but I'm being conservative) it could double earnings just from capturing the upgrading market. If HC3 gained wider use as light oil blends decline and refiners increasingly switch to heavy oil, that could add even more to the bottom line. The high-side estimate for "upgrading" profits is about $600 million. Such a number does not include any profits to be made from applying Hydrocracking technology to the Canadian Tar Sands, as for now that is still too speculative to count on as a potential future revenue.
Headwaters is also involved in nanotechnology and fuel cell research, with numerous potential applications. Their proprietary NxCat nanotechnology is claimed to be the most efficient nanoagent created, outperforming today’s standard catalysts. More uses are being tested involving hydrogen peroxide production, LED displays, and carbon nanotubes. These potential breakthrough, while difficult to value directly, should be treated like having a free call option on an exciting and potentially lucrative future investment.
Current financial status and valuation: Headwaters has had a rough several months, with the rise in oil prices leading to a phasing out of tax credits benefiting some of Headwaters synthetic fuel catalysts. Headwaters has gone from $40 to near $20 back to $25 in the last few months as analysts have cut short term earnings estimates. Having become interested in this stock the first time it traded down through $25, I will admit to becoming bullish too soon and trying to “catch the falling knife”. The stock has begun to swing back up on some positive news, and buying now will mean that, although you missed the first 20% of the move, there could still be plenty of profit ahead.
For a company capitalized at just over $1 billion to have a trailing twelve month free cash flow of $150 million is amazing. HW does have about $500 million in debt, but I'm not too concerned about that because of the large cash flows which can be used to pay that down. They have cut total outstanding debt by 30% since the end of 2004, and the SEC filings say that Headwaters is prohibited from paying a dividend until it has no outstanding long-term liabilities. As long as Headwaters continues to pull in so much cash, their debt position should be no problem. Taking into all the above factors, if the company can eke out a moderate growth in the high single digit range over the next few years, a conservative exit multiple off that free cash flow makes HW undervalued by 35% - or about $35 per share. When you think of the huge potential gains down the road from the many growth areas the company has, its easy to see how this could be a $40 or even $50 stock sometime in the next year or two.
eInvesting.com is a free stock market simulator and forum. The author has no financial position in any stocks mentioned.
Thursday, October 19, 2006
Escala Group Inc. (ESCL)
Escala Group Inc. (ESCL)
ABOUT ESCALA GROUP
Escala Group is a global federation of leading companies in the collectibles market with operations in North America, Europe and Asia as well as on the Internet. The company operates through a number of subsidiaries that specialize in various sectors of the collectibles markets, and is comprised of three business areas: auctions, merchant/dealer operations and trading.
Escala Group's North American operations include Greg Manning Auctions division, Ivy & Manning Philatelic Auctions, Greg Manning Galleries, Greg Martin Auctions, Spectrum Numismatics, Teletrade, Nutmeg Stamp Sales, Superior Sports Auctions, Bowers and Merena Auctions, and Kingswood Coin Auctions, and H.R. Harmer. In Europe, the leading auction houses affiliated with the network are Auctentia Subastas (Afinsa Auctions) of Madrid, Spain, Corinphila Auktionen of Zurich, Switzerland, and the Koehler group of auction companies of Berlin and Wiesbaden, Germany. In Asia, Escala's auctions operations are conducted through John Bull Stamp Auctions, Ltd, the oldest philatelic auction house in Hong Kong.
The trading activities of Escala Group are conducted through A-Mark Precious Metals, one of the largest private sellers of bullion coins and bullion gold, silver and platinum to the wholesale marketplace.
ABOUT ESCALA GROUP
Escala Group is a global federation of leading companies in the collectibles market with operations in North America, Europe and Asia as well as on the Internet. The company operates through a number of subsidiaries that specialize in various sectors of the collectibles markets, and is comprised of three business areas: auctions, merchant/dealer operations and trading.
Escala Group's North American operations include Greg Manning Auctions division, Ivy & Manning Philatelic Auctions, Greg Manning Galleries, Greg Martin Auctions, Spectrum Numismatics, Teletrade, Nutmeg Stamp Sales, Superior Sports Auctions, Bowers and Merena Auctions, and Kingswood Coin Auctions, and H.R. Harmer. In Europe, the leading auction houses affiliated with the network are Auctentia Subastas (Afinsa Auctions) of Madrid, Spain, Corinphila Auktionen of Zurich, Switzerland, and the Koehler group of auction companies of Berlin and Wiesbaden, Germany. In Asia, Escala's auctions operations are conducted through John Bull Stamp Auctions, Ltd, the oldest philatelic auction house in Hong Kong.
The trading activities of Escala Group are conducted through A-Mark Precious Metals, one of the largest private sellers of bullion coins and bullion gold, silver and platinum to the wholesale marketplace.
Tuesday, October 17, 2006
Angeion Corp. (ANGN)
Angeion looks to be a buy for us here at 'Stocks Online'
These charts look good to me ANGN charts, but what do I know!
Also, it has some really good chart on stock charts check it out here!
One good thing that I really enjoyed and stuck out was the earning went from a loss of $(1.86)/share in 2001 down to a loss of $(.25)/share in 2005. The Angeion (ANGN) has turned around a profit with $.41/share reported. The Angeion (ANGN) has kept its 4 million shares outstanding stable from 2001 to present reports.
One thing that is a must for a lot of fundamentals is the free cash flow! Which with ANGN has been negative at $(1) million in 2003-2005, turned positive with $2 million reported as of recently. So that's a pretty impressive turnout that is turning a lot of head including ours here at stocks online! Also, with a $2.5 million in cash and $11.9 million in other current assets.
Seems to be an interesting look or at least one to be checking out and keeping an eye on it. Espcially after Angeion (ANGN) shares soared 80% on Monday after the tiny medical diagnostic systems maker swung to a fiscal third-quarter profit.
These charts look good to me ANGN charts, but what do I know!
Also, it has some really good chart on stock charts check it out here!
One good thing that I really enjoyed and stuck out was the earning went from a loss of $(1.86)/share in 2001 down to a loss of $(.25)/share in 2005. The Angeion (ANGN) has turned around a profit with $.41/share reported. The Angeion (ANGN) has kept its 4 million shares outstanding stable from 2001 to present reports.
One thing that is a must for a lot of fundamentals is the free cash flow! Which with ANGN has been negative at $(1) million in 2003-2005, turned positive with $2 million reported as of recently. So that's a pretty impressive turnout that is turning a lot of head including ours here at stocks online! Also, with a $2.5 million in cash and $11.9 million in other current assets.
Seems to be an interesting look or at least one to be checking out and keeping an eye on it. Espcially after Angeion (ANGN) shares soared 80% on Monday after the tiny medical diagnostic systems maker swung to a fiscal third-quarter profit.
Wednesday, October 11, 2006
Technical vs. Fundamental Analysis
Technical vs. Fundamental Analysis
By Thomas Stone of statisticaltrading.com
The debate rages on. Which is better, technical analysis or fundamental analysis?
The question seems simple but it is deceptive. Underneath the question is an unspoken assumption about time horizons. Is the questioner an investor or a trader?
An investor is becoming part of something. The investor makes his choices based on a belief in the future. He desires to help make something successful. If he believes that apples will be in great demand next year he may invest in an orchard to grow apples for sale next year. During the year, while his apples are growing, he may ignore the day-to-day price changes of apples because his focus is on next year.
The trader doesn’t care to be part of anything other than the enterprise of making money. If he thinks orchards will increase in price next week, he’ll buy an orchard. He doesn’t care about orchards or apples. He’d buy a worm farm today if he thought he could turn a dime on it next week. He is very concerned about day-to-day price fluctuations since it is the past behavior of prices that make him expect the price to go up next week.
If the belief in the future value of apples is shaken then some of the orchard investors may decide that running an orchard isn’t the best choice. They abandon the business. Other investors see the cost of orchards dropping and, at some price point, believe that the now lower cost of orchards justifies the apple business given the reduced future price of apples. They start buying orchards.
This doesn’t happen all at once. Not everyone agrees with the amount that the price of apples will drop by. Because of this, different people see different price points as being good times to get back into the apple business.
The investor uses fundamental analysis to make his decisions, but what is the trader doing?
The trader is watching the patterns in the price of orchards and how frequently orchards are changing ownership as the prices go up or down. Eventually the pattern looks like a pattern that he has seen many times before and it usually occurs when prices have finished dropping and they are about to start escalating. Based on this, he decides to buy an orchard. He will hold that orchard until he thinks that he sees a pattern that suggests that the price of orchards will stop going up. He then sells the orchard. He has used technical analysis.
The trader’s technical analysis would be worthless without investors doing their fundamental analysis. Without the investors, there would be no patterns to watch for. It is the investors making their decisions based on fundamental analysis that creates the pricing patterns that the technical trader watches. The pricing pattern that indicates a bottoming in prices occurs when the price falls far enough to start attracting a large number of investors.
In the end, neither is better. Both technical and fundamental analysis help to create an efficient marketplace that can deliver goods to the consumer.
I refer to users of technical analysis as traders and users of fundamental analysis as investors. Their time horizons usually differ. Traders look to get in and out of a trade in hours, days, weeks, and sometimes months. Investors usually get in for months to years.
If you have a strong belief that something is going to happen and you are in the minority then you have an excellent opportunity to make a lot of money by investing in companies that stand to profit from that eventuality. Those profits won’t materialize until you are no longer in the minority. As more and more people start to share your belief, the prices of those companies will rise and you can profit handsomely. While you are waiting for others to start sharing your beliefs, the prices of those companies may go up and down. As long as your belief isn’t swayed you may bear those price swings secure in the knowledge of what is to come. You are an investor. On the other hand, if you’re wrong…
An example may be a belief that there will be water shortages resulting from global warming. Believing this, you may decide to invest part of your money in companies that build desalinization plants. You believe that, over the next 10-15 years, these companies’ products will see soaring demand. Secure in the belief that this will occur, you will not be terribly concerned if the price of one of those companies drops 5 percent next month. You believe that it will recover and then some. You are basing your decision on fundamental analysis.
The above is fundamental analysis on a macro economic scale. Bringing fundamental analysis to bear on a company-by-company basis is much more difficult. Numerous data points need to be entered, many of which are not available as hard data but rely on assumptions made by the person performing the fundamental analysis. One type of fundamental analysis called Discounted Cash Flow (DCF) is currently very popular. It involves formulas that take operating profit, depreciation, amortization, goodwill, capital expenditures, cash taxes, changes in working capital, and weighted average cost of capital, to arrive at a valuation for a company (see http://www.investopedia.com/articles/03/011403.asp for more detail).
Just collecting the data needed to perform the analysis for a single company can be a daunting task. Performing this kind of analysis on a large number of companies on a regular basis quickly becomes a full time job.
The trader on the other hand can use computers to scan for likely candidates for the pricing patterns that he uses. Within minutes a computer can download data on thousands of stocks and have the computer bring up relatively short lists of stocks that are potential candidates for trades.
A trader may also use technical analysis on the market as a whole to move money back and forth between an index fund and a money market fund. One simple way to do this is by using the market breadth.
Market breadth is simply a measure of the difference between the number of advancing issues and the number of declining issues on an exchange such as the NYSE. If 1200 stocks go up in price and 500 go down in price then the breadth is +700. We can calculate this number every day and then look for trends by calculating moving averages of these numbers. A good way to get long term directional movements is to analysis how two different moving averages changes relative to each other. The name for that practice is called Moving Average Convergence Divergence or MACD. If we apply MACD to the breadth using a 19-day and a 39-day moving average then we get a well-known indicator called the McClellan Summation Index (MSI).
Figure 1: MSI courtesy of StockCharts.com
If we look at the SP-500 for the same time frame
Figure 2: SP-500 courtesy of Stockcharts.com
If you had bought and sold an index fund based on the MSI peaks and valleys then you would have made the following trades (numbers and dates approximated)
Purchase date Cost Sales Date Price Profit/(Loss)
Late April ‘05 $1140 Late July ‘05 $1240 8.5%
Late Oct ‘05 $1180 Late Jan ‘06 $1280 8.5%
Late June ‘06 $1240 Late Sept ‘06 $1335 7.5%
You would have been in the market for 9 out of the last 17 months. While in the market you would have realized a 24.5% return plus the money market interest earned during the other 8 months, lets say 2.5%. That works out to a 19% annualized return (27*(12/17)).
How do you know when the MSI is at a peak or a valley? I use the MACD of the MSI with the averages being 30-day and 50-day. This smoothes out the action of the MSI and clearly shows the overall direction that it is moving in.
Figure 3: MACD of MSI courtesy of Stockcharts.com
The black line on the graph is a 9-day moving average of the red line. The red line is the MACD. The histogram shows the difference between the red and black line. The buy signal is when the MSI falls below –300 and the black line crosses up over the red line as it did in late Apr ’05, early Nov ’05, and late June ’06. The sell signal is when the MSI rises above +500 and the black line falls under the red line as it did in late July ’05, early Feb ’06, and late Sept ’06.
This indicator is not perfect at picking tops and bottoms. It is good at warning when the breadth of the market is no longer supportive of the direction of the market. The market usually changes direction shortly after that occurs. In the spring of ’06, this indicator was falling while the market indexes were advancing for an unusually long time. This meant that the number of stocks participating in the market move was dropping off. Fewer and fewer stocks were trading above their 40-day moving averages each week even as the SP-500 moved upward.
There are numerous technical indicators in use and there are many good books that discuss these indicators in depth. One such book is “New Trading Systems and Methods” by Perry J Kaufman. There are also computer programs that can be purchased that have many of these indictors built in such as TC2005 from Worden Bros (www.worden.com). There are also websites that have many of these indicators built in and some on-line brokers have charting packages containing some of the indicators.
The extreme in technical analysis is called Mechanical Trading. In mechanical trading a computer has extensively tested a set of indicators over numerous sets of historical data to arrive at an “ideal” set of indicators which the computer uses to issue buy and sell recommendations completely without any human intervention. My website, www.statisticaltrading.com, allows people to subscribe to computer generated buy and sell recommendations. Our computers have honed sets of technical indicators that have over 83% success rates with average holding times of 5-6 weeks. All recommendations come in the evening for execution at the next morning’s open; there is no day trading support on the site. We also offer a market timing service and a dividend investing service.
By Thomas Stone of statisticaltrading.com
The debate rages on. Which is better, technical analysis or fundamental analysis?
The question seems simple but it is deceptive. Underneath the question is an unspoken assumption about time horizons. Is the questioner an investor or a trader?
An investor is becoming part of something. The investor makes his choices based on a belief in the future. He desires to help make something successful. If he believes that apples will be in great demand next year he may invest in an orchard to grow apples for sale next year. During the year, while his apples are growing, he may ignore the day-to-day price changes of apples because his focus is on next year.
The trader doesn’t care to be part of anything other than the enterprise of making money. If he thinks orchards will increase in price next week, he’ll buy an orchard. He doesn’t care about orchards or apples. He’d buy a worm farm today if he thought he could turn a dime on it next week. He is very concerned about day-to-day price fluctuations since it is the past behavior of prices that make him expect the price to go up next week.
If the belief in the future value of apples is shaken then some of the orchard investors may decide that running an orchard isn’t the best choice. They abandon the business. Other investors see the cost of orchards dropping and, at some price point, believe that the now lower cost of orchards justifies the apple business given the reduced future price of apples. They start buying orchards.
This doesn’t happen all at once. Not everyone agrees with the amount that the price of apples will drop by. Because of this, different people see different price points as being good times to get back into the apple business.
The investor uses fundamental analysis to make his decisions, but what is the trader doing?
The trader is watching the patterns in the price of orchards and how frequently orchards are changing ownership as the prices go up or down. Eventually the pattern looks like a pattern that he has seen many times before and it usually occurs when prices have finished dropping and they are about to start escalating. Based on this, he decides to buy an orchard. He will hold that orchard until he thinks that he sees a pattern that suggests that the price of orchards will stop going up. He then sells the orchard. He has used technical analysis.
The trader’s technical analysis would be worthless without investors doing their fundamental analysis. Without the investors, there would be no patterns to watch for. It is the investors making their decisions based on fundamental analysis that creates the pricing patterns that the technical trader watches. The pricing pattern that indicates a bottoming in prices occurs when the price falls far enough to start attracting a large number of investors.
In the end, neither is better. Both technical and fundamental analysis help to create an efficient marketplace that can deliver goods to the consumer.
I refer to users of technical analysis as traders and users of fundamental analysis as investors. Their time horizons usually differ. Traders look to get in and out of a trade in hours, days, weeks, and sometimes months. Investors usually get in for months to years.
If you have a strong belief that something is going to happen and you are in the minority then you have an excellent opportunity to make a lot of money by investing in companies that stand to profit from that eventuality. Those profits won’t materialize until you are no longer in the minority. As more and more people start to share your belief, the prices of those companies will rise and you can profit handsomely. While you are waiting for others to start sharing your beliefs, the prices of those companies may go up and down. As long as your belief isn’t swayed you may bear those price swings secure in the knowledge of what is to come. You are an investor. On the other hand, if you’re wrong…
An example may be a belief that there will be water shortages resulting from global warming. Believing this, you may decide to invest part of your money in companies that build desalinization plants. You believe that, over the next 10-15 years, these companies’ products will see soaring demand. Secure in the belief that this will occur, you will not be terribly concerned if the price of one of those companies drops 5 percent next month. You believe that it will recover and then some. You are basing your decision on fundamental analysis.
The above is fundamental analysis on a macro economic scale. Bringing fundamental analysis to bear on a company-by-company basis is much more difficult. Numerous data points need to be entered, many of which are not available as hard data but rely on assumptions made by the person performing the fundamental analysis. One type of fundamental analysis called Discounted Cash Flow (DCF) is currently very popular. It involves formulas that take operating profit, depreciation, amortization, goodwill, capital expenditures, cash taxes, changes in working capital, and weighted average cost of capital, to arrive at a valuation for a company (see http://www.investopedia.com/articles/03/011403.asp for more detail).
Just collecting the data needed to perform the analysis for a single company can be a daunting task. Performing this kind of analysis on a large number of companies on a regular basis quickly becomes a full time job.
The trader on the other hand can use computers to scan for likely candidates for the pricing patterns that he uses. Within minutes a computer can download data on thousands of stocks and have the computer bring up relatively short lists of stocks that are potential candidates for trades.
A trader may also use technical analysis on the market as a whole to move money back and forth between an index fund and a money market fund. One simple way to do this is by using the market breadth.
Market breadth is simply a measure of the difference between the number of advancing issues and the number of declining issues on an exchange such as the NYSE. If 1200 stocks go up in price and 500 go down in price then the breadth is +700. We can calculate this number every day and then look for trends by calculating moving averages of these numbers. A good way to get long term directional movements is to analysis how two different moving averages changes relative to each other. The name for that practice is called Moving Average Convergence Divergence or MACD. If we apply MACD to the breadth using a 19-day and a 39-day moving average then we get a well-known indicator called the McClellan Summation Index (MSI).
Figure 1: MSI courtesy of StockCharts.com
If we look at the SP-500 for the same time frame
Figure 2: SP-500 courtesy of Stockcharts.com
If you had bought and sold an index fund based on the MSI peaks and valleys then you would have made the following trades (numbers and dates approximated)
Purchase date Cost Sales Date Price Profit/(Loss)
Late April ‘05 $1140 Late July ‘05 $1240 8.5%
Late Oct ‘05 $1180 Late Jan ‘06 $1280 8.5%
Late June ‘06 $1240 Late Sept ‘06 $1335 7.5%
You would have been in the market for 9 out of the last 17 months. While in the market you would have realized a 24.5% return plus the money market interest earned during the other 8 months, lets say 2.5%. That works out to a 19% annualized return (27*(12/17)).
How do you know when the MSI is at a peak or a valley? I use the MACD of the MSI with the averages being 30-day and 50-day. This smoothes out the action of the MSI and clearly shows the overall direction that it is moving in.
Figure 3: MACD of MSI courtesy of Stockcharts.com
The black line on the graph is a 9-day moving average of the red line. The red line is the MACD. The histogram shows the difference between the red and black line. The buy signal is when the MSI falls below –300 and the black line crosses up over the red line as it did in late Apr ’05, early Nov ’05, and late June ’06. The sell signal is when the MSI rises above +500 and the black line falls under the red line as it did in late July ’05, early Feb ’06, and late Sept ’06.
This indicator is not perfect at picking tops and bottoms. It is good at warning when the breadth of the market is no longer supportive of the direction of the market. The market usually changes direction shortly after that occurs. In the spring of ’06, this indicator was falling while the market indexes were advancing for an unusually long time. This meant that the number of stocks participating in the market move was dropping off. Fewer and fewer stocks were trading above their 40-day moving averages each week even as the SP-500 moved upward.
There are numerous technical indicators in use and there are many good books that discuss these indicators in depth. One such book is “New Trading Systems and Methods” by Perry J Kaufman. There are also computer programs that can be purchased that have many of these indictors built in such as TC2005 from Worden Bros (www.worden.com). There are also websites that have many of these indicators built in and some on-line brokers have charting packages containing some of the indicators.
The extreme in technical analysis is called Mechanical Trading. In mechanical trading a computer has extensively tested a set of indicators over numerous sets of historical data to arrive at an “ideal” set of indicators which the computer uses to issue buy and sell recommendations completely without any human intervention. My website, www.statisticaltrading.com, allows people to subscribe to computer generated buy and sell recommendations. Our computers have honed sets of technical indicators that have over 83% success rates with average holding times of 5-6 weeks. All recommendations come in the evening for execution at the next morning’s open; there is no day trading support on the site. We also offer a market timing service and a dividend investing service.
Monday, October 09, 2006
Getting Started: Learning the Market and Selecting Stocks
Getting Started: Learning the Market and Selecting Stocks
If you were going to spend several thousand dollars on a refrigerator or television, you would thoroughly research the market for those goods to find the product which best suited your needs. Investing is no different. Before buying into a company, you should be well-acquainted enough with it to give a short presentation. Knowing the basics of how a company operates, what it sells, how it makes money, how much money it makes, and what kind of growth the company is expected to experience are all crucial questions that any investor should be able to answer. Developing a better understanding of the stock market is a long, but hopefully rewarding, process. Immediately investing in stocks with real money, however, is equivalent to taking a test without being introduced to the material. Formerly called “paper trading”, beginning investors would normally spend several months tracking their stock picks without having real money on them. Thanks to technology, you can now find sites that automate (for free) the process of tracking price changes for you on the internet. Simulated investing is a risk-free way of beginning to understand market fluctuations and the forces driving them. Examining these trends will payoff in the future, as an increased understanding of the stock market can only help you on your path to building wealth. Once you become comfortable picking your own stocks, you can still continue to “paper trade” online, as it offers the opportunity to explore and experiment with other investing styles. Gordon Gekko, the famed villain in Wall Street played by Michael Douglas, said “Information is the most valuable commodity I know of”. Ignoring for a moment that the movie ended with indictments for insider trading, the statement is true: you will not regret being an informed and intelligent investor. The market is constantly changing, but by learning the ropes of investing you too can pull off a “One Up on Wall Street”.
Especialy thanks from einvesting.com Don't start investing alone. Check out einvesting.com today!
If you were going to spend several thousand dollars on a refrigerator or television, you would thoroughly research the market for those goods to find the product which best suited your needs. Investing is no different. Before buying into a company, you should be well-acquainted enough with it to give a short presentation. Knowing the basics of how a company operates, what it sells, how it makes money, how much money it makes, and what kind of growth the company is expected to experience are all crucial questions that any investor should be able to answer. Developing a better understanding of the stock market is a long, but hopefully rewarding, process. Immediately investing in stocks with real money, however, is equivalent to taking a test without being introduced to the material. Formerly called “paper trading”, beginning investors would normally spend several months tracking their stock picks without having real money on them. Thanks to technology, you can now find sites that automate (for free) the process of tracking price changes for you on the internet. Simulated investing is a risk-free way of beginning to understand market fluctuations and the forces driving them. Examining these trends will payoff in the future, as an increased understanding of the stock market can only help you on your path to building wealth. Once you become comfortable picking your own stocks, you can still continue to “paper trade” online, as it offers the opportunity to explore and experiment with other investing styles. Gordon Gekko, the famed villain in Wall Street played by Michael Douglas, said “Information is the most valuable commodity I know of”. Ignoring for a moment that the movie ended with indictments for insider trading, the statement is true: you will not regret being an informed and intelligent investor. The market is constantly changing, but by learning the ropes of investing you too can pull off a “One Up on Wall Street”.
Especialy thanks from einvesting.com Don't start investing alone. Check out einvesting.com today!
Thursday, October 05, 2006
GARP
GARP
GARP, or Growth At Reasonable Price. As the name implies, the focus is finding growing companies trading at reasonable prices. Quick measures of this include the PEG ratio (Price to Earnings to Growth) and Forward P/E. Although not a specific style, GARP is utilized by many investors because of its flexibility. The average, diversified portfolio will have many GARP-type stocks in it.
GARP, or Growth At Reasonable Price. As the name implies, the focus is finding growing companies trading at reasonable prices. Quick measures of this include the PEG ratio (Price to Earnings to Growth) and Forward P/E. Although not a specific style, GARP is utilized by many investors because of its flexibility. The average, diversified portfolio will have many GARP-type stocks in it.
Wednesday, October 04, 2006
What is my risk tolerance and investing style
What is my risk tolerance? What is my investing style?
This question leads us to selecting individual investments. Consider your investment timetable for when you’ll need the money, recognizing that more conservative selections should be made the shorter the window. Everyone’s risk tolerance is different; while one person may feel comfortable with small-cap biotechs another may need a blue chip to feel equally sound.
Analyzing the risk to reward ratio here is a good first step. The more risk you take on, the more you should expect to get in return if your investment pays off. The inverse is also true: the more stable an investment, the less return one should expect. Government-backed I Bonds pay over 6%, but involve tying up money for years in order to fully benefit from them. While this gives you one target, the average return of the broader market indices is about 11% per year. There are two primary schools of thought about investing: growth and value.
Growth
Growth investing is a higher-risk strategy which focuses on finding smaller companies poised to rapidly grow earnings. Stocks here tend to be micro-caps or small-caps, and the occasional mid-cap (under $10 billion). In their younger lives, many of the well-established companies of today found themselves considered here (Think of Apple Computers (AAPL) or Starbucks (SBUX)). Growth companies can be found in many different sectors, although such companies often have similar traits. A growth company usually has a unique product or service to offer which can fundamentally change how business is done. When found early enough in their growth cycles, these companies have the potential to return enormous profits to investors.
Value
Value plays usually are found in larger companies, although the strategies used to find them can be applied to smaller corporations as well. Looking for value stocks is similar to looking for values in a store: find a good product at a price below what you would normally expect to pay. These bargains are often found in the form of companies which have been unfairly beaten down through overselling. Finding value stocks usually involves using a discounted cash flow model (DCF) to find a company’s intrinsic value. This is the form of investing advocated by Benjamin Graham, and popularized by Warren Buffett.
This question leads us to selecting individual investments. Consider your investment timetable for when you’ll need the money, recognizing that more conservative selections should be made the shorter the window. Everyone’s risk tolerance is different; while one person may feel comfortable with small-cap biotechs another may need a blue chip to feel equally sound.
Analyzing the risk to reward ratio here is a good first step. The more risk you take on, the more you should expect to get in return if your investment pays off. The inverse is also true: the more stable an investment, the less return one should expect. Government-backed I Bonds pay over 6%, but involve tying up money for years in order to fully benefit from them. While this gives you one target, the average return of the broader market indices is about 11% per year. There are two primary schools of thought about investing: growth and value.
Growth
Growth investing is a higher-risk strategy which focuses on finding smaller companies poised to rapidly grow earnings. Stocks here tend to be micro-caps or small-caps, and the occasional mid-cap (under $10 billion). In their younger lives, many of the well-established companies of today found themselves considered here (Think of Apple Computers (AAPL) or Starbucks (SBUX)). Growth companies can be found in many different sectors, although such companies often have similar traits. A growth company usually has a unique product or service to offer which can fundamentally change how business is done. When found early enough in their growth cycles, these companies have the potential to return enormous profits to investors.
Value
Value plays usually are found in larger companies, although the strategies used to find them can be applied to smaller corporations as well. Looking for value stocks is similar to looking for values in a store: find a good product at a price below what you would normally expect to pay. These bargains are often found in the form of companies which have been unfairly beaten down through overselling. Finding value stocks usually involves using a discounted cash flow model (DCF) to find a company’s intrinsic value. This is the form of investing advocated by Benjamin Graham, and popularized by Warren Buffett.
Questions to ask before investing
Questions to ask before investing
How much do I initially have to invest? How much can I afford to consistently add later?
Einstein described compounding as “The Eighth Wonder of the World” and for good reason. Being able to earn interest on your interest allows investments to increase exponentially faster than with simple interest. A one-time investment of $5000 earning 10% interest compounds to a total of over $54,000 after 25 years. Using simple interest, it would take over 95 years to reach the same amount. Naturally, the larger your initial investment and the more you can afford to add later on, the more you can expect to gain in returns.
Am I carrying any high-interest debt, such as on a credit card?
Before saving for future events, you should consider your present finances. Paying off any high-interest loans function as an “automatic” return. Writing a check to Visa to pay down your debt may not feel as satisfying as starting a nest egg, but by eliminating those 22% interest payments, you have effectively “made” a 22% return. Although you need not completely eliminate your debts, getting such payments into a reasonable area should be a more pressing priority.
This fiscal reckoning is also a good time to examine budgeting and expenditures. Look for unneeded or overpriced purchases, and consider the feasibility of paring them down and saving the extra money. Unused gym memberships, that $5 whipped mocha-hazelnut cappuccino, and extra cable channels all add up. The true cost of these and all other purchases involves understanding the “time value of money”, but for now it should suffice to say that $5 added to the previously mentioned investment account compounding 10% for 25 years turns into $54.17.
How much do I initially have to invest? How much can I afford to consistently add later?
Einstein described compounding as “The Eighth Wonder of the World” and for good reason. Being able to earn interest on your interest allows investments to increase exponentially faster than with simple interest. A one-time investment of $5000 earning 10% interest compounds to a total of over $54,000 after 25 years. Using simple interest, it would take over 95 years to reach the same amount. Naturally, the larger your initial investment and the more you can afford to add later on, the more you can expect to gain in returns.
Am I carrying any high-interest debt, such as on a credit card?
Before saving for future events, you should consider your present finances. Paying off any high-interest loans function as an “automatic” return. Writing a check to Visa to pay down your debt may not feel as satisfying as starting a nest egg, but by eliminating those 22% interest payments, you have effectively “made” a 22% return. Although you need not completely eliminate your debts, getting such payments into a reasonable area should be a more pressing priority.
This fiscal reckoning is also a good time to examine budgeting and expenditures. Look for unneeded or overpriced purchases, and consider the feasibility of paring them down and saving the extra money. Unused gym memberships, that $5 whipped mocha-hazelnut cappuccino, and extra cable channels all add up. The true cost of these and all other purchases involves understanding the “time value of money”, but for now it should suffice to say that $5 added to the previously mentioned investment account compounding 10% for 25 years turns into $54.17.
Technical vs. Fundamental Analysis
Technical vs. Fundamental Analysis
By Thomas Stone of statisticaltrading.com
The debate rages on. Which is better, technical analysis or fundamental analysis?
The question seems simple but it is deceptive. Underneath the question is an unspoken assumption about time horizons. Is the questioner an investor or a trader?
An investor is becoming part of something. The investor makes his choices based on a belief in the future. He desires to help make something successful. If he believes that apples will be in great demand next year he may invest in an orchard to grow apples for sale next year. During the year, while his apples are growing, he may ignore the day-to-day price changes of apples because his focus is on next year.
The trader doesn’t care to be part of anything other than the enterprise of making money. If he thinks orchards will increase in price next week, he’ll buy an orchard. He doesn’t care about orchards or apples. He’d buy a worm farm today if he thought he could turn a dime on it next week. He is very concerned about day-to-day price fluctuations since it is the past behavior of prices that make him expect the price to go up next week.
If the belief in the future value of apples is shaken then some of the orchard investors may decide that running an orchard isn’t the best choice. They abandon the business. Other investors see the cost of orchards dropping and, at some price point, believe that the now lower cost of orchards justifies the apple business given the reduced future price of apples. They start buying orchards.
This doesn’t happen all at once. Not everyone agrees with the amount that the price of apples will drop by. Because of this, different people see different price points as being good times to get back into the apple business.
The investor uses fundamental analysis to make his decisions, but what is the trader doing?
The trader is watching the patterns in the price of orchards and how frequently orchards are changing ownership as the prices go up or down. Eventually the pattern looks like a pattern that he has seen many times before and it usually occurs when prices have finished dropping and they are about to start escalating. Based on this, he decides to buy an orchard. He will hold that orchard until he thinks that he sees a pattern that suggests that the price of orchards will stop going up. He then sells the orchard. He has used technical analysis.
The trader’s technical analysis would be worthless without investors doing their fundamental analysis. Without the investors, there would be no patterns to watch for. It is the investors making their decisions based on fundamental analysis that creates the pricing patterns that the technical trader watches. The pricing pattern that indicates a bottoming in prices occurs when the price falls far enough to start attracting a large number of investors.
In the end, neither is better. Both technical and fundamental analysis help to create an efficient marketplace that can deliver goods to the consumer.
I refer to users of technical analysis as traders and users of fundamental analysis as investors. Their time horizons usually differ. Traders look to get in and out of a trade in hours, days, weeks, and sometimes months. Investors usually get in for months to years.
If you have a strong belief that something is going to happen and you are in the minority then you have an excellent opportunity to make a lot of money by investing in companies that stand to profit from that eventuality. Those profits won’t materialize until you are no longer in the minority. As more and more people start to share your belief, the prices of those companies will rise and you can profit handsomely. While you are waiting for others to start sharing your beliefs, the prices of those companies may go up and down. As long as your belief isn’t swayed you may bear those price swings secure in the knowledge of what is to come. You are an investor. On the other hand, if you’re wrong…
An example may be a belief that there will be water shortages resulting from global warming. Believing this, you may decide to invest part of your money in companies that build desalinization plants. You believe that, over the next 10-15 years, these companies’ products will see soaring demand. Secure in the belief that this will occur, you will not be terribly concerned if the price of one of those companies drops 5 percent next month. You believe that it will recover and then some. You are basing your decision on fundamental analysis.
The above is fundamental analysis on a macro economic scale. Bringing fundamental analysis to bear on a company-by-company basis is much more difficult. Numerous data points need to be entered, many of which are not available as hard data but rely on assumptions made by the person performing the fundamental analysis. One type of fundamental analysis called Discounted Cash Flow (DCF) is currently very popular. It involves formulas that take operating profit, depreciation, amortization, goodwill, capital expenditures, cash taxes, changes in working capital, and weighted average cost of capital, to arrive at a valuation for a company (see http://www.investopedia.com/articles/03/011403.asp for more detail).
Just collecting the data needed to perform the analysis for a single company can be a daunting task. Performing this kind of analysis on a large number of companies on a regular basis quickly becomes a full time job.
The trader on the other hand can use computers to scan for likely candidates for the pricing patterns that he uses. Within minutes a computer can download data on thousands of stocks and have the computer bring up relatively short lists of stocks that are potential candidates for trades.
A trader may also use technical analysis on the market as a whole to move money back and forth between an index fund and a money market fund. One simple way to do this is by using the market breadth.
Market breadth is simply a measure of the difference between the number of advancing issues and the number of declining issues on an exchange such as the NYSE. If 1200 stocks go up in price and 500 go down in price then the breadth is +700. We can calculate this number every day and then look for trends by calculating moving averages of these numbers. A good way to get long term directional movements is to analysis how two different moving averages changes relative to each other. The name for that practice is called Moving Average Convergence Divergence or MACD. If we apply MACD to the breadth using a 19-day and a 39-day moving average then we get a well-known indicator called the McClellan Summation Index (MSI).
Figure 1: MSI courtesy of StockCharts.com
If we look at the SP-500 for the same time frame
Figure 2: SP-500 courtesy of Stockcharts.com
If you had bought and sold an index fund based on the MSI peaks and valleys then you would have made the following trades (numbers and dates approximated)
Purchase date Cost Sales Date Price Profit/(Loss)
Late April ‘05 $1140 Late July ‘05 $1240 8.5%
Late Oct ‘05 $1180 Late Jan ‘06 $1280 8.5%
Late June ‘06 $1240 Late Sept ‘06 $1335 7.5%
You would have been in the market for 9 out of the last 17 months. While in the market you would have realized a 24.5% return plus the money market interest earned during the other 8 months, lets say 2.5%. That works out to a 19% annualized return (27*(12/17)).
How do you know when the MSI is at a peak or a valley? I use the MACD of the MSI with the averages being 30-day and 50-day. This smoothes out the action of the MSI and clearly shows the overall direction that it is moving in.
Figure 3: MACD of MSI courtesy of Stockcharts.com
The black line on the graph is a 9-day moving average of the red line. The red line is the MACD. The histogram shows the difference between the red and black line. The buy signal is when the MSI falls below –300 and the black line crosses up over the red line as it did in late Apr ’05, early Nov ’05, and late June ’06. The sell signal is when the MSI rises above +500 and the black line falls under the red line as it did in late July ’05, early Feb ’06, and late Sept ’06.
This indicator is not perfect at picking tops and bottoms. It is good at warning when the breadth of the market is no longer supportive of the direction of the market. The market usually changes direction shortly after that occurs. In the spring of ’06, this indicator was falling while the market indexes were advancing for an unusually long time. This meant that the number of stocks participating in the market move was dropping off. Fewer and fewer stocks were trading above their 40-day moving averages each week even as the SP-500 moved upward.
There are numerous technical indicators in use and there are many good books that discuss these indicators in depth. One such book is “New Trading Systems and Methods” by Perry J Kaufman. There are also computer programs that can be purchased that have many of these indictors built in such as TC2005 from Worden Bros (www.worden.com). There are also websites that have many of these indicators built in and some on-line brokers have charting packages containing some of the indicators.
The extreme in technical analysis is called Mechanical Trading. In mechanical trading a computer has extensively tested a set of indicators over numerous sets of historical data to arrive at an “ideal” set of indicators which the computer uses to issue buy and sell recommendations completely without any human intervention. My website, www.statisticaltrading.com, allows people to subscribe to computer generated buy and sell recommendations. Our computers have honed sets of technical indicators that have over 83% success rates with average holding times of 5-6 weeks. All recommendations come in the evening for execution at the next morning’s open; there is no day trading support on the site. We also offer a market timing service and a dividend investing service.
By Thomas Stone of statisticaltrading.com
The debate rages on. Which is better, technical analysis or fundamental analysis?
The question seems simple but it is deceptive. Underneath the question is an unspoken assumption about time horizons. Is the questioner an investor or a trader?
An investor is becoming part of something. The investor makes his choices based on a belief in the future. He desires to help make something successful. If he believes that apples will be in great demand next year he may invest in an orchard to grow apples for sale next year. During the year, while his apples are growing, he may ignore the day-to-day price changes of apples because his focus is on next year.
The trader doesn’t care to be part of anything other than the enterprise of making money. If he thinks orchards will increase in price next week, he’ll buy an orchard. He doesn’t care about orchards or apples. He’d buy a worm farm today if he thought he could turn a dime on it next week. He is very concerned about day-to-day price fluctuations since it is the past behavior of prices that make him expect the price to go up next week.
If the belief in the future value of apples is shaken then some of the orchard investors may decide that running an orchard isn’t the best choice. They abandon the business. Other investors see the cost of orchards dropping and, at some price point, believe that the now lower cost of orchards justifies the apple business given the reduced future price of apples. They start buying orchards.
This doesn’t happen all at once. Not everyone agrees with the amount that the price of apples will drop by. Because of this, different people see different price points as being good times to get back into the apple business.
The investor uses fundamental analysis to make his decisions, but what is the trader doing?
The trader is watching the patterns in the price of orchards and how frequently orchards are changing ownership as the prices go up or down. Eventually the pattern looks like a pattern that he has seen many times before and it usually occurs when prices have finished dropping and they are about to start escalating. Based on this, he decides to buy an orchard. He will hold that orchard until he thinks that he sees a pattern that suggests that the price of orchards will stop going up. He then sells the orchard. He has used technical analysis.
The trader’s technical analysis would be worthless without investors doing their fundamental analysis. Without the investors, there would be no patterns to watch for. It is the investors making their decisions based on fundamental analysis that creates the pricing patterns that the technical trader watches. The pricing pattern that indicates a bottoming in prices occurs when the price falls far enough to start attracting a large number of investors.
In the end, neither is better. Both technical and fundamental analysis help to create an efficient marketplace that can deliver goods to the consumer.
I refer to users of technical analysis as traders and users of fundamental analysis as investors. Their time horizons usually differ. Traders look to get in and out of a trade in hours, days, weeks, and sometimes months. Investors usually get in for months to years.
If you have a strong belief that something is going to happen and you are in the minority then you have an excellent opportunity to make a lot of money by investing in companies that stand to profit from that eventuality. Those profits won’t materialize until you are no longer in the minority. As more and more people start to share your belief, the prices of those companies will rise and you can profit handsomely. While you are waiting for others to start sharing your beliefs, the prices of those companies may go up and down. As long as your belief isn’t swayed you may bear those price swings secure in the knowledge of what is to come. You are an investor. On the other hand, if you’re wrong…
An example may be a belief that there will be water shortages resulting from global warming. Believing this, you may decide to invest part of your money in companies that build desalinization plants. You believe that, over the next 10-15 years, these companies’ products will see soaring demand. Secure in the belief that this will occur, you will not be terribly concerned if the price of one of those companies drops 5 percent next month. You believe that it will recover and then some. You are basing your decision on fundamental analysis.
The above is fundamental analysis on a macro economic scale. Bringing fundamental analysis to bear on a company-by-company basis is much more difficult. Numerous data points need to be entered, many of which are not available as hard data but rely on assumptions made by the person performing the fundamental analysis. One type of fundamental analysis called Discounted Cash Flow (DCF) is currently very popular. It involves formulas that take operating profit, depreciation, amortization, goodwill, capital expenditures, cash taxes, changes in working capital, and weighted average cost of capital, to arrive at a valuation for a company (see http://www.investopedia.com/articles/03/011403.asp for more detail).
Just collecting the data needed to perform the analysis for a single company can be a daunting task. Performing this kind of analysis on a large number of companies on a regular basis quickly becomes a full time job.
The trader on the other hand can use computers to scan for likely candidates for the pricing patterns that he uses. Within minutes a computer can download data on thousands of stocks and have the computer bring up relatively short lists of stocks that are potential candidates for trades.
A trader may also use technical analysis on the market as a whole to move money back and forth between an index fund and a money market fund. One simple way to do this is by using the market breadth.
Market breadth is simply a measure of the difference between the number of advancing issues and the number of declining issues on an exchange such as the NYSE. If 1200 stocks go up in price and 500 go down in price then the breadth is +700. We can calculate this number every day and then look for trends by calculating moving averages of these numbers. A good way to get long term directional movements is to analysis how two different moving averages changes relative to each other. The name for that practice is called Moving Average Convergence Divergence or MACD. If we apply MACD to the breadth using a 19-day and a 39-day moving average then we get a well-known indicator called the McClellan Summation Index (MSI).
Figure 1: MSI courtesy of StockCharts.com
If we look at the SP-500 for the same time frame
Figure 2: SP-500 courtesy of Stockcharts.com
If you had bought and sold an index fund based on the MSI peaks and valleys then you would have made the following trades (numbers and dates approximated)
Purchase date Cost Sales Date Price Profit/(Loss)
Late April ‘05 $1140 Late July ‘05 $1240 8.5%
Late Oct ‘05 $1180 Late Jan ‘06 $1280 8.5%
Late June ‘06 $1240 Late Sept ‘06 $1335 7.5%
You would have been in the market for 9 out of the last 17 months. While in the market you would have realized a 24.5% return plus the money market interest earned during the other 8 months, lets say 2.5%. That works out to a 19% annualized return (27*(12/17)).
How do you know when the MSI is at a peak or a valley? I use the MACD of the MSI with the averages being 30-day and 50-day. This smoothes out the action of the MSI and clearly shows the overall direction that it is moving in.
Figure 3: MACD of MSI courtesy of Stockcharts.com
The black line on the graph is a 9-day moving average of the red line. The red line is the MACD. The histogram shows the difference between the red and black line. The buy signal is when the MSI falls below –300 and the black line crosses up over the red line as it did in late Apr ’05, early Nov ’05, and late June ’06. The sell signal is when the MSI rises above +500 and the black line falls under the red line as it did in late July ’05, early Feb ’06, and late Sept ’06.
This indicator is not perfect at picking tops and bottoms. It is good at warning when the breadth of the market is no longer supportive of the direction of the market. The market usually changes direction shortly after that occurs. In the spring of ’06, this indicator was falling while the market indexes were advancing for an unusually long time. This meant that the number of stocks participating in the market move was dropping off. Fewer and fewer stocks were trading above their 40-day moving averages each week even as the SP-500 moved upward.
There are numerous technical indicators in use and there are many good books that discuss these indicators in depth. One such book is “New Trading Systems and Methods” by Perry J Kaufman. There are also computer programs that can be purchased that have many of these indictors built in such as TC2005 from Worden Bros (www.worden.com). There are also websites that have many of these indicators built in and some on-line brokers have charting packages containing some of the indicators.
The extreme in technical analysis is called Mechanical Trading. In mechanical trading a computer has extensively tested a set of indicators over numerous sets of historical data to arrive at an “ideal” set of indicators which the computer uses to issue buy and sell recommendations completely without any human intervention. My website, www.statisticaltrading.com, allows people to subscribe to computer generated buy and sell recommendations. Our computers have honed sets of technical indicators that have over 83% success rates with average holding times of 5-6 weeks. All recommendations come in the evening for execution at the next morning’s open; there is no day trading support on the site. We also offer a market timing service and a dividend investing service.
Monday, October 02, 2006
Before entering the world of investing
Before entering the world of investing, it is important to honestly analyze your present situation. Doing so will allow you to effectively manage your own money in a way which maximizes returns while limiting unwanted risk. Questions to consider include:
What is my investment goal? How much time do I have to attain this goal?
Methods of saving for a down payment on a house differ greatly from saving for retirement. The reason for this lies in the factoring of time. Over short periods of
a few years, individual companies and the stock market as a whole can experience dramatic fluctuations which in no way represent longer-term trends. Because of this possibility, a smaller percentage of your portfolio should be allocated into stocks as the time for cashing in your investments draws near. Conversely, the longer the time period you have to invest, the more aggressive your portfolio should seek higher returns.
What is my investment goal? How much time do I have to attain this goal?
Methods of saving for a down payment on a house differ greatly from saving for retirement. The reason for this lies in the factoring of time. Over short periods of
a few years, individual companies and the stock market as a whole can experience dramatic fluctuations which in no way represent longer-term trends. Because of this possibility, a smaller percentage of your portfolio should be allocated into stocks as the time for cashing in your investments draws near. Conversely, the longer the time period you have to invest, the more aggressive your portfolio should seek higher returns.
Friday, September 29, 2006
Jim Cramer Quotes, Mad Money quotes, business quotes
Jim Cramer Quotes, Mad Money quotes, business quotes
The speculative public is indulged in stocks that I have no confidence in. There's a stock that I am sure of right now, Iomega, that is the third-tier player in a very cyclical market, storage for personal computers.
The third-tier players, Iomega, IMP, historically in this era when PC sales are threatened if there's a lot of competition in storage, the third-tier players usually cease to exist in six to eight months.
The way the credit cards were made in the '80s to be a people's form of capitalism and be able to make it so that you could get a loan that you would have been denied previous, now that's the way stocks are.
Their managements are not as shrewd and Hewlett-Packard. They're not as good as a management of Intel. They haven't seen downturns like the management of Merck.
There are companies out there in our country who historically have not been able to beat the Germans and the Japanese, who now beat them routinely.
There are tons of people who are late to trends by nature and adopt a trend after it's no longer in fashion. They exist in mutual funds. They exist in clothes. They exist in cars. They exist in lifestyles.
There were speculators saying that the foreign stocks had the stock going down. They were all wrong. Those classes of assets were dangerous at the time and they became great bargains.
There's accountability in the mutual fund industry. And they've been tremendous engines of wealth for people and they're going to continue to be so.
There've been fortunes made in Merck. There have been fortunes made in Pfizer. There will be fortunes again made in Merck and Pfizer.
These will be fabulous investments and will make millions of more people rich.
They had too many country clubs, too many airplanes, whatever. And raiders came in and rationalized those and then the raiders got too greedy and the raiders blew off. Good riddance.
This issue has died down right now because the way the corporate killers were on the cover of Newsweek and everybody's been hushed about the lay-offs.
Those were the people who sold were people who had chased previously good performance in '93. Now we have seen those funds suffer massive redemptions, at times being down as much as 40-50 percent.
We are all wrong so often that it amazes me that we can have any conviction at all over the direction of things to come. But we must.
We typically hear numbers that there are 34 million households that are in stocks in some form. Well, I say that what's occurred is if you have a job in this country, you're in stocks.
Well, he's just the same guy who in other aspects of his life would be very late to a trend.
What I'm saying is that there are bargains right now, there are stocks right now that if you're shrewd enough, you will be able to buy them at the opening today and I you'll make money in a year from now.
When I speak of the term 'the stock market', I'm invariably speaking of good American companies that tended to be not that sharp in the '70s, got sharp in the '80s, and are now unbelievably good in the '90s.
You have a class of investors and you have a class of speculators. The speculators historically haven't been big enough to cause the investors to doubt the long-term vision of stock.
Jim Cramer Quotes, Mad Money quotes, business quotes
The speculative public is indulged in stocks that I have no confidence in. There's a stock that I am sure of right now, Iomega, that is the third-tier player in a very cyclical market, storage for personal computers.
The third-tier players, Iomega, IMP, historically in this era when PC sales are threatened if there's a lot of competition in storage, the third-tier players usually cease to exist in six to eight months.
The way the credit cards were made in the '80s to be a people's form of capitalism and be able to make it so that you could get a loan that you would have been denied previous, now that's the way stocks are.
Their managements are not as shrewd and Hewlett-Packard. They're not as good as a management of Intel. They haven't seen downturns like the management of Merck.
There are companies out there in our country who historically have not been able to beat the Germans and the Japanese, who now beat them routinely.
There are tons of people who are late to trends by nature and adopt a trend after it's no longer in fashion. They exist in mutual funds. They exist in clothes. They exist in cars. They exist in lifestyles.
There were speculators saying that the foreign stocks had the stock going down. They were all wrong. Those classes of assets were dangerous at the time and they became great bargains.
There's accountability in the mutual fund industry. And they've been tremendous engines of wealth for people and they're going to continue to be so.
There've been fortunes made in Merck. There have been fortunes made in Pfizer. There will be fortunes again made in Merck and Pfizer.
These will be fabulous investments and will make millions of more people rich.
They had too many country clubs, too many airplanes, whatever. And raiders came in and rationalized those and then the raiders got too greedy and the raiders blew off. Good riddance.
This issue has died down right now because the way the corporate killers were on the cover of Newsweek and everybody's been hushed about the lay-offs.
Those were the people who sold were people who had chased previously good performance in '93. Now we have seen those funds suffer massive redemptions, at times being down as much as 40-50 percent.
We are all wrong so often that it amazes me that we can have any conviction at all over the direction of things to come. But we must.
We typically hear numbers that there are 34 million households that are in stocks in some form. Well, I say that what's occurred is if you have a job in this country, you're in stocks.
Well, he's just the same guy who in other aspects of his life would be very late to a trend.
What I'm saying is that there are bargains right now, there are stocks right now that if you're shrewd enough, you will be able to buy them at the opening today and I you'll make money in a year from now.
When I speak of the term 'the stock market', I'm invariably speaking of good American companies that tended to be not that sharp in the '70s, got sharp in the '80s, and are now unbelievably good in the '90s.
You have a class of investors and you have a class of speculators. The speculators historically haven't been big enough to cause the investors to doubt the long-term vision of stock.
Jim Cramer Quotes, Mad Money quotes, business quotes
Monday, August 21, 2006
ETF trading like the pros
Sometime when investing, and especially with something such as an ETF fund which is very broad, low risk, and pretty safe investment. Sometimes thinking outside the box is a pro thing to do. Thinking of different markets or sects that you feel have strengths. Don't always fall for investing into a ETF with what seems hot right now such as the REIT's or energy. Think outside the box a little and look down the road and what will be hot from 3 to 6 months from now? Okay no one can really predict this, but you can be pretty safe with an EFT so stretch it a little bit!
Look into actual values and what is undervalued in today's market could be a steal down the road or long term. This would be a great steal to get into a EFT. This is what the pros do, they don't just wait there time at looking or analysting and identifying the true stock value and if it's a fair enough stock value to have to date.
We can not say enough about fundamental and stock analysts research and evaluation could save you not only a lot of money, but probably a lot of time in the long run. Look and research what the ETF's are trading, the history holds, and always check the growth rate.
Remember there are several companies out there for the ETF index fund. So that means competition, but competition can be healthy. So what is our point...our point is sometimes going with the other guy that is or could be offer the same ETF for a lower price then why not go for it! Sometimes the big guys can hurt you in the long run...becuase of them want to make money too. But, sometimes those big guys make money off you more then you could believe!
Always remember as well, that investing is long term. If your looking for a quick buck first you will not be getting them out of any ETF's. So research, check into a lot of different things, and pick the one that you think can make a good long term return and start trading smart like a pro!
Look into actual values and what is undervalued in today's market could be a steal down the road or long term. This would be a great steal to get into a EFT. This is what the pros do, they don't just wait there time at looking or analysting and identifying the true stock value and if it's a fair enough stock value to have to date.
We can not say enough about fundamental and stock analysts research and evaluation could save you not only a lot of money, but probably a lot of time in the long run. Look and research what the ETF's are trading, the history holds, and always check the growth rate.
Remember there are several companies out there for the ETF index fund. So that means competition, but competition can be healthy. So what is our point...our point is sometimes going with the other guy that is or could be offer the same ETF for a lower price then why not go for it! Sometimes the big guys can hurt you in the long run...becuase of them want to make money too. But, sometimes those big guys make money off you more then you could believe!
Always remember as well, that investing is long term. If your looking for a quick buck first you will not be getting them out of any ETF's. So research, check into a lot of different things, and pick the one that you think can make a good long term return and start trading smart like a pro!
Thursday, July 06, 2006
Global Warming and why we need more solar power and other alternative-energy stocks
Global Warming
Do you believe or buy into this one? Well, while you will honestly not be seeing and major effects immediately. Though we believe that this is happening and that it could have some long term effects with will hit home in time. Which time will only tell us.
Nature can be gruel. With global warming the world's glaciers are melting faster than ever before. This is increasing the water supply for the 40% of the worlds population that rely on glacial melt for their water supply. Then, the glaciers will be gone and with them, the water supply for over 2 billion people. But we won't have the energy required to build and run desalination (remove the excess salt and other minerals from water in order to obtain fresh water) plants to deliver potable water to that many people, because the world will not be able to increase energy production at will, it will have lacked that ability for many years.
Interested in some facts here check these interesting articles, and tell us what you think!
2005 Was The Warmest Year In A Century
Global Warming Surpassed Natural Cycles In Fueling 2005 Hurricane Season, NCAR Scientists Conclude
We had to throw this one in as well...The good, bad and ugly of world growth
This is why we need more solar power and other alternative-energy stocks seem to us to be more appealing and have a bright future just like Jim Cramer! Booyah! So check out one of past articles about solar power and other alternative-energy stocks.
Sun Kissed
Solar-power and other alternative-energy stocks suddenly appear to have a bright future. Even W. is warming up to them.
By James J. Cramer
Do you believe or buy into this one? Well, while you will honestly not be seeing and major effects immediately. Though we believe that this is happening and that it could have some long term effects with will hit home in time. Which time will only tell us.
Nature can be gruel. With global warming the world's glaciers are melting faster than ever before. This is increasing the water supply for the 40% of the worlds population that rely on glacial melt for their water supply. Then, the glaciers will be gone and with them, the water supply for over 2 billion people. But we won't have the energy required to build and run desalination (remove the excess salt and other minerals from water in order to obtain fresh water) plants to deliver potable water to that many people, because the world will not be able to increase energy production at will, it will have lacked that ability for many years.
Interested in some facts here check these interesting articles, and tell us what you think!
2005 Was The Warmest Year In A Century
Global Warming Surpassed Natural Cycles In Fueling 2005 Hurricane Season, NCAR Scientists Conclude
We had to throw this one in as well...The good, bad and ugly of world growth
This is why we need more solar power and other alternative-energy stocks seem to us to be more appealing and have a bright future just like Jim Cramer! Booyah! So check out one of past articles about solar power and other alternative-energy stocks.
Sun Kissed
Solar-power and other alternative-energy stocks suddenly appear to have a bright future. Even W. is warming up to them.
By James J. Cramer
Cramer, Jim Cramer, Cramer Mad Money!
Here is a new one for you and myself, but it's going on. We are calling it the Cramer report and that's right it's all about the Cramer report. Cramer report is very entertaining and he is drawing a great fan base or even close to a bandwagon that continue to turn into his Cramer TV Mad Money! Cramer with all his rants about business and investing during Mad Money, it's like ESPN hits the stock market so BOOYAH!
Though, Cramer, Mad Money, the street, Cramer's Blog all that is honestly is great. Cramer is a very smart man, and the fact of the matter is...Cramer is a genius! There is one thing that what we would like to talk about today. This would be what we are calling the cramer bandwagons. These are the average joe trader sitting on the couch yelling booyah right along with Cramer throughout the whole show. Some of these same people are traders that could take every little thing that Cramer says rather it's entertaining or serious they are taking it all in as stock information to the very last booyah Cramer says! But, the fact of the matter is they are not stopping there. They will then run to there computer and get on yahoo stock discussion boards, stock forums, and etc and will continue to repeat everything that Cramer stated rather it was a joke or not.
So, your probably asking yourself so what...everyone had there opinion which is fine and great and dandy! Even Cramer has his strong and funny opinions as well. Though, the fact of the matter is people on this Cramer bandwagon are taking his word and turning into gold or even better investing. Investing is not rocket science we know this, but it's not always that easy as well.
Though, here is a new Cramer bandwagon theory that seems to be sort of trend of and in of it's self. The Cramer bandwagon strategy is go buy the stock that Cramer picks, and it should be going up. Why, because Cramer has these bandwagon fans that will take everything that he has to say and will start discussing them and even buying into his stock suggestions!
Well, to conclude, keep tuning into Mad Money, reading Cramer's log, the cramer report, and etc. We know for sure we will. It's a great resource for new stock ideas, and his introductions to be loaded with great information. Though, remember to do your own homework, listen with one ear while read and research with two eyes, and then you will be the true booyah stock winner! And Remember...Picks that stick. Stocks that rock. Equities sans inequities. Money without the madness. Booyah!
Though, Cramer, Mad Money, the street, Cramer's Blog all that is honestly is great. Cramer is a very smart man, and the fact of the matter is...Cramer is a genius! There is one thing that what we would like to talk about today. This would be what we are calling the cramer bandwagons. These are the average joe trader sitting on the couch yelling booyah right along with Cramer throughout the whole show. Some of these same people are traders that could take every little thing that Cramer says rather it's entertaining or serious they are taking it all in as stock information to the very last booyah Cramer says! But, the fact of the matter is they are not stopping there. They will then run to there computer and get on yahoo stock discussion boards, stock forums, and etc and will continue to repeat everything that Cramer stated rather it was a joke or not.
So, your probably asking yourself so what...everyone had there opinion which is fine and great and dandy! Even Cramer has his strong and funny opinions as well. Though, the fact of the matter is people on this Cramer bandwagon are taking his word and turning into gold or even better investing. Investing is not rocket science we know this, but it's not always that easy as well.
Though, here is a new Cramer bandwagon theory that seems to be sort of trend of and in of it's self. The Cramer bandwagon strategy is go buy the stock that Cramer picks, and it should be going up. Why, because Cramer has these bandwagon fans that will take everything that he has to say and will start discussing them and even buying into his stock suggestions!
Well, to conclude, keep tuning into Mad Money, reading Cramer's log, the cramer report, and etc. We know for sure we will. It's a great resource for new stock ideas, and his introductions to be loaded with great information. Though, remember to do your own homework, listen with one ear while read and research with two eyes, and then you will be the true booyah stock winner! And Remember...Picks that stick. Stocks that rock. Equities sans inequities. Money without the madness. Booyah!
Wednesday, July 05, 2006
Have you ever wondered why some say buy and other say sell?
Have you ever wondered why some say buy and other say sell? Seriously why is it that some analysts recommend some stocks but not others? Let us do some research and work for you to help completely explaing this very great investing question. The simple, quick, and easy answer is intrinsic value of a company. Now, I know what your thinking what in the world is this intrinsic value of a company. Well let us break it down to an average trader joe. Though using the intrinsic value, analysts are able to predict what the target price for a stock should be. And your asking well who cares about the target price of a stock or what it should be. Well, if your investing money into a stock you should care!
The target price for a stock is found by taking the market cap (the price of the stock multiplied by the number of outstanding shares) and the intrinsic value and putting them into the following formula: -((market cap-intrinsic value)/intrinsic) x 100. This formula gives the percentage of whether the company is overvalued or undervalued. This percentage is then taken and multiplied by the current stock price to get the target price. For example, if a company is trading at $50 a share, and is undervalued by 15% to find the target price, you would use the following formula: 50 x 1.15=57.5 or Current Stock Price times percent difference + current stock price= target price.
The target price for a stock is found by taking the market cap (the price of the stock multiplied by the number of outstanding shares) and the intrinsic value and putting them into the following formula: -((market cap-intrinsic value)/intrinsic) x 100. This formula gives the percentage of whether the company is overvalued or undervalued. This percentage is then taken and multiplied by the current stock price to get the target price. For example, if a company is trading at $50 a share, and is undervalued by 15% to find the target price, you would use the following formula: 50 x 1.15=57.5 or Current Stock Price times percent difference + current stock price= target price.
Tuesday, June 27, 2006
EMC Corporation
Why EMC is looking good though it has hit a 52-week low. EMC Corporation and its subsidiaries engage in the development and delivery of information infrastructures worldwide. It operates in four segments: EMC Information Storage Products, EMC Multiplatform Software, EMC Services, and VMware.
Looking at the trend charts, trends of the market, and trends of the EMC's industry. Along with other factors such as a very strong position in the disk storage industry. Coming with up with statistics such as EMC holding 21.8% of external disk storage systems. Plus, the diversified fact of EMC makes it pretty appealing. With EMC corp. being in development and delivery in information worldwide.
The things that are really sticking out to us, are the 0. We know usually that 0 is not a good number but in this case it is. This 0 is the long term debt that EMC has. Put that long term debt of 0 on top of generating $1.3 billion in annual free cash flow. Now do you see why we are liking this one. So this is one of the reasons why we think that EMC can be strong in the upcoming months.
Though, we will be completely honest with you do we feel that EMC is at it's complete low. It's hard to say, but we feel that it will still be dropping some. But, be looking for this EMC to be on the raise once the whole market settles and EMC might just be leading the way.
Looking at the trend charts, trends of the market, and trends of the EMC's industry. Along with other factors such as a very strong position in the disk storage industry. Coming with up with statistics such as EMC holding 21.8% of external disk storage systems. Plus, the diversified fact of EMC makes it pretty appealing. With EMC corp. being in development and delivery in information worldwide.
The things that are really sticking out to us, are the 0. We know usually that 0 is not a good number but in this case it is. This 0 is the long term debt that EMC has. Put that long term debt of 0 on top of generating $1.3 billion in annual free cash flow. Now do you see why we are liking this one. So this is one of the reasons why we think that EMC can be strong in the upcoming months.
Though, we will be completely honest with you do we feel that EMC is at it's complete low. It's hard to say, but we feel that it will still be dropping some. But, be looking for this EMC to be on the raise once the whole market settles and EMC might just be leading the way.
Are you ready to be called an active investor?
So here are some common signs that you aren't ready to be an active investor:
...you can't look at the basic fundamentals such as key statistics, balance sheets, income statements, and cash flow statements.
...you think that risk in the stock market can be measured by price volatility.
...you don't understand the difference between a company's intrinsic value and its stock price.
*please note this is all subjective information, and many investors will define different values of different investing ideas. This can result in many different methodologies, but the facts is better know your stuff and do your own research!
...you can't look at the basic fundamentals such as key statistics, balance sheets, income statements, and cash flow statements.
...you think that risk in the stock market can be measured by price volatility.
...you don't understand the difference between a company's intrinsic value and its stock price.
*please note this is all subjective information, and many investors will define different values of different investing ideas. This can result in many different methodologies, but the facts is better know your stuff and do your own research!
Monday, June 26, 2006
ETF and growing in focus
Just Yesterday, Rydex Investments will unveil a set of six currency ETFs, called CurrencyShares: Australian Dollar Trust (FXA), British Pound Sterling Trust (FXB), Canadian Dollar Trust (FXC), Mexican Peso Trust (FXM), Swedish Krona Trust (FXS), and Swiss Franc Trust (FXF).
Other recent ETF that have recently just opened have been. Lately, ETFs are getting more complicated. Once known as an easy, low-cost way to achieve broad diversification, ETFs are becoming increasingly focused, allowing institutional investors and other experts to gain exposure to ever-narrower sectors (see BusinessWeek.com, 05/05/06, "ETFs: Sliced, Diced and Razor-Thin"). Fund companies have rolled out 45 new ETFs so far this year, according to Boston-based Financial Research Corp.
Just in the past few weeks more have been added as well, State Street Global Advisors will launch six new ETFs. The new portfolios are: SPDR Metals and Mining (XME), SPDR Retail (XRT), SPDR Pharmaceuticals (XPH), SPDR Oil & Gas Equipment & Services (XES), SPDR Oil & Gas Exploration & Drilling (XOP) and streetTRACKS KBW Regional Banking (KRE). Each will carry an expense ratio of 0.35%. "What we're providing is pure exposure to each one of these industries," says Greg Ehret, senior managing director at State Street.
Other recent ETF that have recently just opened have been. Lately, ETFs are getting more complicated. Once known as an easy, low-cost way to achieve broad diversification, ETFs are becoming increasingly focused, allowing institutional investors and other experts to gain exposure to ever-narrower sectors (see BusinessWeek.com, 05/05/06, "ETFs: Sliced, Diced and Razor-Thin"). Fund companies have rolled out 45 new ETFs so far this year, according to Boston-based Financial Research Corp.
Just in the past few weeks more have been added as well, State Street Global Advisors will launch six new ETFs. The new portfolios are: SPDR Metals and Mining (XME), SPDR Retail (XRT), SPDR Pharmaceuticals (XPH), SPDR Oil & Gas Equipment & Services (XES), SPDR Oil & Gas Exploration & Drilling (XOP) and streetTRACKS KBW Regional Banking (KRE). Each will carry an expense ratio of 0.35%. "What we're providing is pure exposure to each one of these industries," says Greg Ehret, senior managing director at State Street.
Segway close to IPO
Segway sets course for stock market
Although the electric, self-balancing Segway scooter never quite caught on with commuters the way its backers had predicted five years ago, the segway scooter gizmo has found a growing market and very popular niche which include golf courses, law-enforcement agencies (with more than 100 police departments worldwide), and even the government is using them as well.
The segway scooter niche market, and add the highly interest from Europeans struggling with gas prices much higher than in the U.S., and Europeans being more environmentaly friend has brought with them a new fresh life into the Segway.
And Segway Inc. President and Chief Executive James Norrod, hoping to parlay the growth into a payday for the original investors in the scooter, has made grooming the company for an initial public offering in the next few years a top priority. Norrod said he was brought in as CEO last year for just that purpose by Segway's principal investors, Credit Suisse Group and the venture capital firm Kleiner Perkins Caufield & Byers, best known for its early investment in Google Inc.
Gauging Segway's prospects in an IPO is difficult, since the company will not reveal its yearly revenue or whether it is profitable. Norrod will only say that "tens of thousands" of Segways have been sold around the world, and that the company's revenue has been growing by at least 50 percent over each of the last few years.
Other factors which is the same old story we are hearing with the whole high fuel prices playing a major role in the potential of big number customers, especially in Europe, and other places where gas can be twice as expensive as it is in the U.S.
The segway scooter international sales were only about 5 percent of the complete segway business about two years ago, the stats are showing that it could be as high was 40 percent by the end of this year. The international segway sales are coming mostly from law-enforcement customers and commuters struggling with high gas prices in Europe. The company also recently set up dealerships in Japan and China.
The segway company is stating that the segway ht (human transporter) gets the equivalent of about 450 miles per gallon, based on the amount of gas it would take to create the electricity needed to run it.
For police and security users, many of whom bought the device with grants from the
Homeland Security Department and other federal agencies, the fuel efficiency is only an added bonus.
The scooters, which travel as fast as 12.5 mph, also allow an officer on patrol to cover a much greater distance than on foot, and go indoors, onto elevators and other places bigger vehicles can't. Blair said the added efficiency allows a force to cut down on the number of patrol officers on each shift and recoup the Segway's cost in as quickly as a month.
In other applications, several bomb squads such as those in Ventura County, Calif., and Little Rock, Ark., are using Segways to transport officers in bombproof and hazardous-material suits that can weigh as much as 100 pounds. The Segway allows them to scoot in and out of a scene quickly, without having to waddle in on foot in the bulky suits. Segway marketing Vice President Klee Kleber said emergency workers responded to the London bombings last year on Segways, as traffic clogged the routes for larger vehicles.
The segway company is also selling its "smart motion" technology — the software and chips that allow a segway to balance on two wheels — to robotic developers at universities and in the military. The technology of the segway will also be used in a robotic toy made by WowWee Ltd., maker of the "Robosapien" toy robot, that is due out later this year.
Although the electric, self-balancing Segway scooter never quite caught on with commuters the way its backers had predicted five years ago, the segway scooter gizmo has found a growing market and very popular niche which include golf courses, law-enforcement agencies (with more than 100 police departments worldwide), and even the government is using them as well.
The segway scooter niche market, and add the highly interest from Europeans struggling with gas prices much higher than in the U.S., and Europeans being more environmentaly friend has brought with them a new fresh life into the Segway.
And Segway Inc. President and Chief Executive James Norrod, hoping to parlay the growth into a payday for the original investors in the scooter, has made grooming the company for an initial public offering in the next few years a top priority. Norrod said he was brought in as CEO last year for just that purpose by Segway's principal investors, Credit Suisse Group and the venture capital firm Kleiner Perkins Caufield & Byers, best known for its early investment in Google Inc.
Gauging Segway's prospects in an IPO is difficult, since the company will not reveal its yearly revenue or whether it is profitable. Norrod will only say that "tens of thousands" of Segways have been sold around the world, and that the company's revenue has been growing by at least 50 percent over each of the last few years.
Other factors which is the same old story we are hearing with the whole high fuel prices playing a major role in the potential of big number customers, especially in Europe, and other places where gas can be twice as expensive as it is in the U.S.
The segway scooter international sales were only about 5 percent of the complete segway business about two years ago, the stats are showing that it could be as high was 40 percent by the end of this year. The international segway sales are coming mostly from law-enforcement customers and commuters struggling with high gas prices in Europe. The company also recently set up dealerships in Japan and China.
The segway company is stating that the segway ht (human transporter) gets the equivalent of about 450 miles per gallon, based on the amount of gas it would take to create the electricity needed to run it.
For police and security users, many of whom bought the device with grants from the
Homeland Security Department and other federal agencies, the fuel efficiency is only an added bonus.
The scooters, which travel as fast as 12.5 mph, also allow an officer on patrol to cover a much greater distance than on foot, and go indoors, onto elevators and other places bigger vehicles can't. Blair said the added efficiency allows a force to cut down on the number of patrol officers on each shift and recoup the Segway's cost in as quickly as a month.
In other applications, several bomb squads such as those in Ventura County, Calif., and Little Rock, Ark., are using Segways to transport officers in bombproof and hazardous-material suits that can weigh as much as 100 pounds. The Segway allows them to scoot in and out of a scene quickly, without having to waddle in on foot in the bulky suits. Segway marketing Vice President Klee Kleber said emergency workers responded to the London bombings last year on Segways, as traffic clogged the routes for larger vehicles.
The segway company is also selling its "smart motion" technology — the software and chips that allow a segway to balance on two wheels — to robotic developers at universities and in the military. The technology of the segway will also be used in a robotic toy made by WowWee Ltd., maker of the "Robosapien" toy robot, that is due out later this year.
Wednesday, June 21, 2006
Other things to be looking for!
Other things to be looking for is a the accumulation/distribution rating which looks at the companies buying (accumulation) and the companies selling (distribution) of public stock. Also, look for major indexes to post information on the day. Then you search the leaders of the major index, which are shown daily of each industry group. Be on the look out and researching the stocks that are hitting a new high.
Just a thought!
Here is an idea. It's a work smarter not harder idea. Everyone and thier brother is talking about the market and where this and that is going. Try this one for once, instead of complaining and spending our time talking about where the market is going. Why not spend some time researching, and really doing your homework in stocks that are first staying steady in this type of market, and second some potential that could be future buying stocks when you think the market has hit it's low and ready for the upward swing. It's like preparing yourself for the future WOW...what an idea!
Again, be looking for those stocks that stand steady and strong in such a market as today. Search for some of the stocks that did not loss 50% or more, this might be the steady and strong stocks for the future. Just waiting for the market and smart investors to come on board before it starts taking off again just like the market will.
Be looking for the stocks that have a nice combination of strong growth, great earnings, sales growth would be a must, and top it off with a solid fundamentals and profit margin. I easy way to truly check out the company's strong earnings would be to checking out the company's earning per share rating. This EPS is rated and measured every company from a 1 (lower/worst) to 99 (highest/best).
Again, be looking for those stocks that stand steady and strong in such a market as today. Search for some of the stocks that did not loss 50% or more, this might be the steady and strong stocks for the future. Just waiting for the market and smart investors to come on board before it starts taking off again just like the market will.
Be looking for the stocks that have a nice combination of strong growth, great earnings, sales growth would be a must, and top it off with a solid fundamentals and profit margin. I easy way to truly check out the company's strong earnings would be to checking out the company's earning per share rating. This EPS is rated and measured every company from a 1 (lower/worst) to 99 (highest/best).
Monday, June 19, 2006
Debt free can be a life safer
Debt clouds the line that separates wants, desires, and needs. Needs are necessary purchases such as food, clothing, shelter, medical coverage, transportation, and others. Wants involve choices about quality of goods. Discount shopping versus specialty shopping, lobster versus chicken, or a new car versus a good used car, and so on. Desires are those things that can be purchased only after all other obligations are met and only if there are surplus funds available to purchase them. Debt allows desires to become wants and wants to become needs.
Debt encourages impulse buying and overspending. The chief financial officer of a national credit card company said that consumers spend on the average of 25 to 30 percent more when they charge than if they purchase with a check or cash and that a great majority of those extra purchases are the result of impulse buying. Unrestricted debt assumption and credit cards have allowed people to buy immediately beyond the means to repay, without sacrificing needs and necessities.
Debt stifles resourcefulness. In a society that lives by the premise of “I want, what I want, when I want it,” the need to be resourceful—mending clothing, resoling shoes, and changing oil—in order to save money is no longer relevant. It is more convenient to purchase new or to charge services simply by “putting it on plastic,” and then paying for it later, regardless of interest or finance charges.
Debt eliminates family financial planning. Rather than planning for the future and allowing for a margin of errors, overruns, and changes to dictate future financial development, debt eliminates the necessity for future planning because the course for the financial future of the family will have already been set: pay the debt that has been accumulated.
Debt teaches children that the world’s method of managing money is normal. Debt causes children to have a casual regard for using credit cards, obtaining loans and mortgages, and keeping vows to pay the bills. For this reason, we have children who have graduated from college by borrowing for education expenses and living to the limit of their credit cards. They have never considered paying cash for transportation or anything else and have begun adult life with so much debt that they have to work for years just to pay for the debt accumulated during their college years.
Debt encourages impulse buying and overspending. The chief financial officer of a national credit card company said that consumers spend on the average of 25 to 30 percent more when they charge than if they purchase with a check or cash and that a great majority of those extra purchases are the result of impulse buying. Unrestricted debt assumption and credit cards have allowed people to buy immediately beyond the means to repay, without sacrificing needs and necessities.
Debt stifles resourcefulness. In a society that lives by the premise of “I want, what I want, when I want it,” the need to be resourceful—mending clothing, resoling shoes, and changing oil—in order to save money is no longer relevant. It is more convenient to purchase new or to charge services simply by “putting it on plastic,” and then paying for it later, regardless of interest or finance charges.
Debt eliminates family financial planning. Rather than planning for the future and allowing for a margin of errors, overruns, and changes to dictate future financial development, debt eliminates the necessity for future planning because the course for the financial future of the family will have already been set: pay the debt that has been accumulated.
Debt teaches children that the world’s method of managing money is normal. Debt causes children to have a casual regard for using credit cards, obtaining loans and mortgages, and keeping vows to pay the bills. For this reason, we have children who have graduated from college by borrowing for education expenses and living to the limit of their credit cards. They have never considered paying cash for transportation or anything else and have begun adult life with so much debt that they have to work for years just to pay for the debt accumulated during their college years.
Why debt is so dangerous
Why debt is so dangerous
* Debt presumes on the future. When people commit themselves to payments over a period of time, they are presuming that there will be no pay reductions, no loss of job, and no unexpected expenses. That is an improbable assumption (see Proverbs 27:1).
* Debt lowers future standards of living. Money that is borrowed today must be repaid over time along with interest, which means that those things purchased with credit will cost more “tomorrow” than they did today. Therefore, the standard of living will have to be adjusted to compensate for the added expense.
* Debt focuses on façade decisions rather than real-life decisions. Debt encourages people to make decisions based on whether they can afford a monthly payment, rather than on whether they can afford the total cost (purchase price, operational expenses, and finance charges) of the item. Debt makes it too easy to say yes to low monthly payments while ignoring the real cost of items.
* Debt leaves people at the mercy of the power of compound interest. If consumers pay the minimum monthly payment on a $1,000 debt at 19.8 percent rate of interest and never charge anything else on that account, it will take eight (8) years to pay back the $1,000 and they will pay $2,023 for the privilege of charging $1,000. In some cases, items charged on nationally accepted bank credit cards can cost upwards to eight times the original purchase price of the item by the time the bill is paid off.
* Debt presumes on the future. When people commit themselves to payments over a period of time, they are presuming that there will be no pay reductions, no loss of job, and no unexpected expenses. That is an improbable assumption (see Proverbs 27:1).
* Debt lowers future standards of living. Money that is borrowed today must be repaid over time along with interest, which means that those things purchased with credit will cost more “tomorrow” than they did today. Therefore, the standard of living will have to be adjusted to compensate for the added expense.
* Debt focuses on façade decisions rather than real-life decisions. Debt encourages people to make decisions based on whether they can afford a monthly payment, rather than on whether they can afford the total cost (purchase price, operational expenses, and finance charges) of the item. Debt makes it too easy to say yes to low monthly payments while ignoring the real cost of items.
* Debt leaves people at the mercy of the power of compound interest. If consumers pay the minimum monthly payment on a $1,000 debt at 19.8 percent rate of interest and never charge anything else on that account, it will take eight (8) years to pay back the $1,000 and they will pay $2,023 for the privilege of charging $1,000. In some cases, items charged on nationally accepted bank credit cards can cost upwards to eight times the original purchase price of the item by the time the bill is paid off.
Thursday, June 15, 2006
Making ETFs work for you
Making ETFs work for you by investing in what you want. Take todays market for example, a lot of people are very hesitant an d don't know what to invest in. Well, this is where ETFs can really step into your portfolio, by a little extra protection since they are one diversified, two they are funds not just one individual stock, and thirdly you can really specialize in certain sectors and areas that may be volatile in individual stocks.
Here are some real ways that ETFs can be inserted into your portfolios and making them whatever you want:
Maybe your want something international, maybe try looking into iShares MSCI GERMANY (AMEX:EWG) or iShares TR FTSE INDX (NYSE:FXI)
Say you want income from Dividends, a great looking ETF for this is iShares Down Jones Select Dividend Index (DVY), and Vanguard's REIT VIPER (VNQ).
Maybe you want to protect yourself from inflation, maybe try iShares Goldman Sachs Natural Resources Index (IGE) and iShares Lehman TIPS Bond (TIP).
Along with these roles ETFs can also, play that filler in your portfolio. Let's just say you fell that you have just about everything that you wanted covered in your complete portfolio, but your have a lot of one area, but you just want to cover everything. Well, ETF could be a great play in this factor. So make the EFTs that filler for you to completely diversified to your likes. Even if you like investing in individual stocks, ETFs may be able to play a role in your portfolio. Say if you have a lot of the large cap stocks covered, why not fill that gap with a small cap ETF to fully fill that portfolio. Just one more way of making ETFs work for you!
Here are some real ways that ETFs can be inserted into your portfolios and making them whatever you want:
Maybe your want something international, maybe try looking into iShares MSCI GERMANY (AMEX:EWG) or iShares TR FTSE INDX (NYSE:FXI)
Say you want income from Dividends, a great looking ETF for this is iShares Down Jones Select Dividend Index (DVY), and Vanguard's REIT VIPER (VNQ).
Maybe you want to protect yourself from inflation, maybe try iShares Goldman Sachs Natural Resources Index (IGE) and iShares Lehman TIPS Bond (TIP).
Along with these roles ETFs can also, play that filler in your portfolio. Let's just say you fell that you have just about everything that you wanted covered in your complete portfolio, but your have a lot of one area, but you just want to cover everything. Well, ETF could be a great play in this factor. So make the EFTs that filler for you to completely diversified to your likes. Even if you like investing in individual stocks, ETFs may be able to play a role in your portfolio. Say if you have a lot of the large cap stocks covered, why not fill that gap with a small cap ETF to fully fill that portfolio. Just one more way of making ETFs work for you!
Make ETFs win for you
Make ETFs win for your portfolio. Here is the first one we would suggest in making ETF trading work for you and your portfolio. We suggest that you would target a well researched sector of that you know through your research that is going to be a winner and why not diversify with throwing in an ETF of your portfolio.
The good things about an ETF is that your getting what you want through customized but still a good mix of a sector of your choice. Along with this, we fell that ETFs are winners for all. It does not matter if your a still working, newly retired, or just about to retire. ETFs can still work for all of those people. The great things about ETFs still is that they target and play different investing styles. Still not convinced, check it out for your self at iShares website (http://www.ishares.com) this should help you in creating that customized mix we are talking about.
The good things about an ETF is that your getting what you want through customized but still a good mix of a sector of your choice. Along with this, we fell that ETFs are winners for all. It does not matter if your a still working, newly retired, or just about to retire. ETFs can still work for all of those people. The great things about ETFs still is that they target and play different investing styles. Still not convinced, check it out for your self at iShares website (http://www.ishares.com) this should help you in creating that customized mix we are talking about.
Make ETFs work for you
One more role ETFs can play is in the tax loss area. ETFs can help you do some fast, quick, easy moves to and a little easier on the taxes. Here is one example say you feel that Ebay is a strong solid stock with great long-term potential. Say your sitting currently on a loss as of right now, but you still really like the stock. So, this is what could do to make it look more attractive on paper. So, say you sell your stock at a loss just for the tax write-off, but in return you still really want the stock of Ebay. So you think or don't want to miss out on anything from Ebay, but remember the rule of the IRS 31 days "wash sale". This is where the role and great way of playing ETFs.
Here is the plan:
You currently own a bio tech at a loss, so you sell the stock for tax purpos only, turn around or even the same day you could purchase a bio ETF with that same stock that you were or had owned, wait 31 days...sell the ETF...buy back the stock.
Here is the plan:
You currently own a bio tech at a loss, so you sell the stock for tax purpos only, turn around or even the same day you could purchase a bio ETF with that same stock that you were or had owned, wait 31 days...sell the ETF...buy back the stock.
Tuesday, June 13, 2006
Stock Options can be the safe way to play
Sometimes some of the safest plays can be stock options. That's right, this could be a safe insurance to know for sure what your getting and your bidding on whatever price you think the stock will be in the future!
We personally like some stock options currently in some for the short and others for the long term.
Check and research some of the these stock options!
Parallel Petroleum Corporation (NasdaqNM:PLLL) engages in the acquisition, development, and exploitation of oil and natural gas reserves in Texas and New Mexico. It produces and sells oil and natural gas. The July calls on 20 are looking sort of interesting with high volume sort of pushing them as well. This would be a good one to be looking at.
Nokia (NYSE:NOK - News) had plenty of put buying relative to call buying. The July 20 puts is one that is striking to us. Maybe it's worth some of your own research to look into this one.
PORTALPLAYER INC (NasdaqNM:PLAY) this is one that a lot of looking at for the 10 calls for this month. It's interesting and will be interesting to see where or what this plays out (with no pun intended)!
Carnival (NYSE:CCL - News) also had plenty of put buying relative to call buying. The stock closed at 36.41 and the July 37 1/2 puts (CCL SU) closed at 1.90 - 2.00.
We personally like some stock options currently in some for the short and others for the long term.
Check and research some of the these stock options!
Parallel Petroleum Corporation (NasdaqNM:PLLL) engages in the acquisition, development, and exploitation of oil and natural gas reserves in Texas and New Mexico. It produces and sells oil and natural gas. The July calls on 20 are looking sort of interesting with high volume sort of pushing them as well. This would be a good one to be looking at.
Nokia (NYSE:NOK - News) had plenty of put buying relative to call buying. The July 20 puts is one that is striking to us. Maybe it's worth some of your own research to look into this one.
PORTALPLAYER INC (NasdaqNM:PLAY) this is one that a lot of looking at for the 10 calls for this month. It's interesting and will be interesting to see where or what this plays out (with no pun intended)!
Carnival (NYSE:CCL - News) also had plenty of put buying relative to call buying. The stock closed at 36.41 and the July 37 1/2 puts (CCL SU) closed at 1.90 - 2.00.
Why ETFs could be the way to go
ETF's look like the smart and safe way to go in rough markets. Why, because they are like traditional index funds, but only better while giving you the same diversiftication without the large broker fees and paying those taxes. Well, let's just stay it does not take a today's market to stir up the ETF being the next smartest, coolest thing to come along since, well the index funds! Just to paint the full picture for you. Check these numbers out...ETFs have exploded from 30 different ETFs with $34 billion in assests just six years ago, where as today there are over 200 ETF to pick from and a booming more then $300 Billion assests! If that's not telling you something, wake up and hear the wall street bell because it should be telling you something. ETF can be found in just about every sector, subsector, entertainment, gold, and even forex exchange such as the euro! So maybe some of you are convinced but maybe just convinced that ETF is a new hyped investment that a lot of people are jumping on the band wagon. Well, we are not here to debate that issue. Instead we would like to start a serious of how ETFs might be able to added in your portfolio, in return making your investing strategy that much strong in the long term that is.
Sunday, June 11, 2006
More signals and charts part two
Here are some tips, suggestions, and flags to be looking for in charts. We all know that signals and charts are very important to be looking at in research for stocks that you own or looking to buy. Rather it's a long term position or short term position there are times to be checking and seeing if it's time to let go and give into cash. Here are some things to be looking for in stocks that you should be letting go.
Volume is must to be looking, charting, and watching our for high volume selling. This is a quick yellow flag that shows people are selling the stock at high volume and mostly for a reason. Make sure you watching the trend lines of it's moving average, this is a must to keep your eye on these trend lines. Remember your out to make money not lose money. So lastly, be looking at your stocks high prices in the previous weeks to months and if you see stock getting above this it might be a good signal to take your gains and let go!
Remember the most important of all is to be doing your research, follow your rules, and enjoy trading.
Volume is must to be looking, charting, and watching our for high volume selling. This is a quick yellow flag that shows people are selling the stock at high volume and mostly for a reason. Make sure you watching the trend lines of it's moving average, this is a must to keep your eye on these trend lines. Remember your out to make money not lose money. So lastly, be looking at your stocks high prices in the previous weeks to months and if you see stock getting above this it might be a good signal to take your gains and let go!
Remember the most important of all is to be doing your research, follow your rules, and enjoy trading.
Signals and Charts
Signals and Charts to watching for.
Here are some tips, suggestions, and flags to be looking for in charts. We all know that signals and charts are very important to be looking at in research for stocks that you own or looking to buy. Rather it's a long term position or short term position there are times to be checking and seeing if it's time to let go and give into cash. Here are some things to be looking for in stocks that you should be letting go.
Always, always, always check out the volume of your of the stock. If the volume of the stock is low, but the stock is having new highs this is a good signal or at least a yellow flag to be looking and maybe looking to let go. Trends are to be followed, example if you have rode a stock for several months or maybe years and now it seems to be suddenly changing...well that change can be a fast downhill slide. Also, you need to be looking at the stock if it's closing at or close to the stocks low of the day, this could be a vulnerable time and a signal to sell. Lastly, if it's dropping and it's dropping fast don't keep telling yourself it's going to get better, because sooner then later it's going to get worse!
Here are some tips, suggestions, and flags to be looking for in charts. We all know that signals and charts are very important to be looking at in research for stocks that you own or looking to buy. Rather it's a long term position or short term position there are times to be checking and seeing if it's time to let go and give into cash. Here are some things to be looking for in stocks that you should be letting go.
Always, always, always check out the volume of your of the stock. If the volume of the stock is low, but the stock is having new highs this is a good signal or at least a yellow flag to be looking and maybe looking to let go. Trends are to be followed, example if you have rode a stock for several months or maybe years and now it seems to be suddenly changing...well that change can be a fast downhill slide. Also, you need to be looking at the stock if it's closing at or close to the stocks low of the day, this could be a vulnerable time and a signal to sell. Lastly, if it's dropping and it's dropping fast don't keep telling yourself it's going to get better, because sooner then later it's going to get worse!
Don't and Do for a market like this!
So the market is going who knows where. Well, I am sure some know where, and others have there thoughts. But, the most important is that you should know where your money is going and do your own hard nose research. With all that said and done with the market looking the way it is the past several weeks. Here are some small stocks tips to be looking for next and hopefully saving you a lot of money in the long term outlook of the stock market.
When the market is like it has been. Here are some major do's and don'ts!
Don't:
don't be afraid to cut your losses short!
don't let your emotions play!
don't be a pig and always want more!
Do:
do set stop losses
do set sell and lose rules
do follow disciplines rules
When the market is like it has been. Here are some major do's and don'ts!
Don't:
don't be afraid to cut your losses short!
don't let your emotions play!
don't be a pig and always want more!
Do:
do set stop losses
do set sell and lose rules
do follow disciplines rules
Monday, June 05, 2006
stay away stocks!
Here are two stocks that I think I would be staying pretty far away from as of right now!
Empire Resources Inc. (ERS)
Mannatech Inc. (MTEX)
Empire Resources Inc. (ERS)
Mannatech Inc. (MTEX)
Buffalo Wild Wings (BWLD)
Buffalo Wild Wings (BWLD)
Check out this top % gainer on the NASDAQ and a while ago seen this one Buffalo Wild Wings (BWLD). This might be worth taking a little more look and research into this one. I do love the place myself!
Buffalo Wild Wings is a new hot in more ways then one restaurant, and they may be opening soon to a city near you. This is one the best restaurants that I keep seeing and popping up everywhere.
"...engages in the ownership, operation, and franchising of restaurants in the United States. The company’s restaurants serve various food items, as well as domestic and imported beers, wines, and liquor. As of December 25, 2005, it operated 122 company-owned restaurants and 248 franchised restaurants."
BWLD announced 1st quarter 2006 results. Your going to have to check out the total revenue, which increased 26.5% to $64.3 million for the quarter ended March 26, 2006, from $50.8 million in the same quarter last year. Also look at these sales growth for the quarter was 7.7% at company-owned stores and 6.7% at franchised restaurants. Net earnings grew 43% to $3.52 million from $2.45 million during the same period last year. Earnings per diluted share also grew 43% to $.40/share from $.28/share in the same quarter in 2005. These were very strong results imho.
Still not completely convinced okay. Well, check out the what morningstar.com says by taking a look at the "5-Yr Restated" financials on BWLD, we can see the steady revenue growth from $74.6 million in 2001 to $171.0 million in 2004 and $209.7 million in 2005.
Reported earnings start in 2004 with $.84/share, increasing to $1.02/share in 2005. There has been a slight increas in shares from 8 million outstanding in 2004 to 9 million in the trailing twelve months.
Free cash flow has been a bit erratic with $7 million in 2003, a negative $(2) million in 2004,and $3 milllion in 2005.
The balance sheet looks solid with $52.4 milllion in cash, enough to pay off the combined $20.2 million in current liabilities and the $16.1 million in long-term liabilities combined. Calculating the current ratio, with $8.7 million in other current assets added to the cash gives us $61.1 million in total current assets, which, when balanced against the $20.2 million in current liabilities yields a current ratio of 3.02. Recall that ratios of 1.5 or higher are considered "healthy".
Reviewing the Yahoo "Key Statistics" on Buffalo Wild Wings, we find that this is a small-cap stock with a market capitalization of only $336.86 million.
The trailing p/e is a moderate 34.61; however, the forward p/e (fye 25-Dec-07) is more reasonable 22.29. With the rapid growth estimated (5 yr expected), we have a PEG on this stock of 1.02.
Referring to the Fidelity.com eresearch website, we can see that BWLD is in the "Restaurants" industrial group. By the Price/Sales ratio, BWLD is moderately priced with McDonald's (MCD) topping this list with a ratio of 2. This is followed by BWLD at 1.5, Applebee's (APPB) at 1.3, Darden (DRI) at 1, Brinker Intl (EAT) at 0.8, and OSI Restaurant Partners (OSI) at 0.8.
Comparing profitability numbers, by comparing the return on equity (ROE) figures, we find that BWLD is actually the least profitable with a ROE of 10.4%. Leading the list is Darden (DRI) at 26.2%, Applebee's (APPB) at 21.1%, Brinker (EAT) at 18.2%, McDonald's (MCD) at 16.9% and OSI Restaurant Partners (OSI) at 11.1%.
Finishing up the Yahoo statistics, we find that there are only 8.54 million shares outstanding with only 6.88 million of them that float. Of these shares, 1.32 million are out short, representing 17.90% of the float as of 4/10/06, or 11.1 trading days of volume (the short ratio). This is significant imho and may result in a 'squeeze' of the short-sellers if the company continues to report good news.
Check out this top % gainer on the NASDAQ and a while ago seen this one Buffalo Wild Wings (BWLD). This might be worth taking a little more look and research into this one. I do love the place myself!
Buffalo Wild Wings is a new hot in more ways then one restaurant, and they may be opening soon to a city near you. This is one the best restaurants that I keep seeing and popping up everywhere.
"...engages in the ownership, operation, and franchising of restaurants in the United States. The company’s restaurants serve various food items, as well as domestic and imported beers, wines, and liquor. As of December 25, 2005, it operated 122 company-owned restaurants and 248 franchised restaurants."
BWLD announced 1st quarter 2006 results. Your going to have to check out the total revenue, which increased 26.5% to $64.3 million for the quarter ended March 26, 2006, from $50.8 million in the same quarter last year. Also look at these sales growth for the quarter was 7.7% at company-owned stores and 6.7% at franchised restaurants. Net earnings grew 43% to $3.52 million from $2.45 million during the same period last year. Earnings per diluted share also grew 43% to $.40/share from $.28/share in the same quarter in 2005. These were very strong results imho.
Still not completely convinced okay. Well, check out the what morningstar.com says by taking a look at the "5-Yr Restated" financials on BWLD, we can see the steady revenue growth from $74.6 million in 2001 to $171.0 million in 2004 and $209.7 million in 2005.
Reported earnings start in 2004 with $.84/share, increasing to $1.02/share in 2005. There has been a slight increas in shares from 8 million outstanding in 2004 to 9 million in the trailing twelve months.
Free cash flow has been a bit erratic with $7 million in 2003, a negative $(2) million in 2004,and $3 milllion in 2005.
The balance sheet looks solid with $52.4 milllion in cash, enough to pay off the combined $20.2 million in current liabilities and the $16.1 million in long-term liabilities combined. Calculating the current ratio, with $8.7 million in other current assets added to the cash gives us $61.1 million in total current assets, which, when balanced against the $20.2 million in current liabilities yields a current ratio of 3.02. Recall that ratios of 1.5 or higher are considered "healthy".
Reviewing the Yahoo "Key Statistics" on Buffalo Wild Wings, we find that this is a small-cap stock with a market capitalization of only $336.86 million.
The trailing p/e is a moderate 34.61; however, the forward p/e (fye 25-Dec-07) is more reasonable 22.29. With the rapid growth estimated (5 yr expected), we have a PEG on this stock of 1.02.
Referring to the Fidelity.com eresearch website, we can see that BWLD is in the "Restaurants" industrial group. By the Price/Sales ratio, BWLD is moderately priced with McDonald's (MCD) topping this list with a ratio of 2. This is followed by BWLD at 1.5, Applebee's (APPB) at 1.3, Darden (DRI) at 1, Brinker Intl (EAT) at 0.8, and OSI Restaurant Partners (OSI) at 0.8.
Comparing profitability numbers, by comparing the return on equity (ROE) figures, we find that BWLD is actually the least profitable with a ROE of 10.4%. Leading the list is Darden (DRI) at 26.2%, Applebee's (APPB) at 21.1%, Brinker (EAT) at 18.2%, McDonald's (MCD) at 16.9% and OSI Restaurant Partners (OSI) at 11.1%.
Finishing up the Yahoo statistics, we find that there are only 8.54 million shares outstanding with only 6.88 million of them that float. Of these shares, 1.32 million are out short, representing 17.90% of the float as of 4/10/06, or 11.1 trading days of volume (the short ratio). This is significant imho and may result in a 'squeeze' of the short-sellers if the company continues to report good news.
Hansen Natural Corporation
(HANS) Hansen Natural Corporation, through its subsidiaries, engages in the development, marketing, sale, and distribution of beverages in the United States and Canada. It offers natural sodas, fruit juices, energy drinks and energy sports drinks, fruit juice smoothies sparkling lemonades and orangeades, noncarbonated ready-to-drink iced teas, seltzer waters, lemonades, juice cocktails, children's multivitamin juice drinks, and noncarbonated lightly flavored energy waters. The company also provides vitamin and mineral drink mixes in powdered form. It sells its products primarily under the brand names, including Hansen's’, ‘Blue Sky’, and ‘Junior Juice’ to retail and specialty chains, club stores, mass merchandisers, full service distributors, and health food distributors. Hansen Natural Corporation was founded in 1985 and is based in Corona, California.
Hi-Shear Technology Corp. (HSR) engages in the design and manufacture of pyrotechnic, mechanical, and electronic products for the aerospace industry primarily in the United States. Its products include cartridges, cutters, pin pullers, and separation nuts and bolts that are used in the functioning of satellites and the vehicles that launch them into space. In addition, the company designs and manufactures electronic fire systems that control and sequentially fire the pyrotechnic devices according to preprogrammed parameters. Its products are used in missiles, launch vehicles, weapon systems, fighter aircraft ejection seats, and other applications. The company’s customers primarily include military, satellite manufacturers, launch vehicle assemblers, the U.S. Government departments and agencies, and foreign space agencies. Hi-Shear Technology was founded in 1950 and is based in Torrance, California.
Basic Energy Services, Inc. (BAS) provides well site services to oil and gas drilling and producing companies in Texas, Louisiana, Oklahoma, New Mexico, and the Rocky Mountain States. It operates in four segments: Well Servicing, Fluid Services, Drilling and Completion Services, and Well Site Construction Services. The Well Servicing segment operates a fleet of 323 well servicing rigs and related equipment. It offers services, such as the installation and removal of downhole equipment, and elimination of obstructions in the well bore to facilitate the flow of oil and gas. The Fluid Services segment provides oilfield fluid supply, transportation, and storage services. It offers services, such as transportation of fluids used in drilling and workover operations; sale and transportation of fresh and brine water used in drilling and workover activities; rental of portable frac tanks and test tanks used to store fluids on well sites; and operation of nonhazardous wastewater disposal wells. This segment provides these services by utilizing a fleet of 475 fluid services trucks and related assets. The Drilling and Completion Services segment provides pressure pumping services, such as cementing, coiled tubing, and pressure testing; cased-hole wireline services; and underbalanced drilling in low pressure and fluid sensitive reservoirs. It offers these services through operating a fleet of 56 pressure pumping units, 25 air compressor packages, and 12 cased-hole wireline units. The Well Site Construction Services segment provides services for the construction and maintenance of oil and gas production infrastructure, such as preparing and maintaining access roads and well locations; installing small diameter gathering lines and pipelines; and constructing temporary foundations to support drilling rigs. It offers these services by utilizing a fleet of 200 operated power units. Basic Energy Services was founded in 1992 and is headquartered in Midland, Texas.
Glamis Gold Ltd. (GLG) engages in exploration, mine development, and the mining and extraction of precious metals in the United States, Honduras, Mexico, and Guatemala. It produces gold from El Sauzal Mine in Mexico, Marigold Mine in Nevada, San Martin Mine in Honduras. The company operates Rand Mine in California for gold; and Marlin Mine in Guatemala for gold and silver. It also holds a 100% interest in the Cerro Blanco Project in Guatemala; and a property located in Imperial County, California. As of December 31, 2005, the company’s proven and probable reserves include 102,428 thousand tones of gold and 32,257 thousand tones of silver. Glamis Gold, formerly known as Renniks Resources, Ltd., was incorporated in 1972 and is based in Reno, Nevada.
Hi-Shear Technology Corp. (HSR) engages in the design and manufacture of pyrotechnic, mechanical, and electronic products for the aerospace industry primarily in the United States. Its products include cartridges, cutters, pin pullers, and separation nuts and bolts that are used in the functioning of satellites and the vehicles that launch them into space. In addition, the company designs and manufactures electronic fire systems that control and sequentially fire the pyrotechnic devices according to preprogrammed parameters. Its products are used in missiles, launch vehicles, weapon systems, fighter aircraft ejection seats, and other applications. The company’s customers primarily include military, satellite manufacturers, launch vehicle assemblers, the U.S. Government departments and agencies, and foreign space agencies. Hi-Shear Technology was founded in 1950 and is based in Torrance, California.
Basic Energy Services, Inc. (BAS) provides well site services to oil and gas drilling and producing companies in Texas, Louisiana, Oklahoma, New Mexico, and the Rocky Mountain States. It operates in four segments: Well Servicing, Fluid Services, Drilling and Completion Services, and Well Site Construction Services. The Well Servicing segment operates a fleet of 323 well servicing rigs and related equipment. It offers services, such as the installation and removal of downhole equipment, and elimination of obstructions in the well bore to facilitate the flow of oil and gas. The Fluid Services segment provides oilfield fluid supply, transportation, and storage services. It offers services, such as transportation of fluids used in drilling and workover operations; sale and transportation of fresh and brine water used in drilling and workover activities; rental of portable frac tanks and test tanks used to store fluids on well sites; and operation of nonhazardous wastewater disposal wells. This segment provides these services by utilizing a fleet of 475 fluid services trucks and related assets. The Drilling and Completion Services segment provides pressure pumping services, such as cementing, coiled tubing, and pressure testing; cased-hole wireline services; and underbalanced drilling in low pressure and fluid sensitive reservoirs. It offers these services through operating a fleet of 56 pressure pumping units, 25 air compressor packages, and 12 cased-hole wireline units. The Well Site Construction Services segment provides services for the construction and maintenance of oil and gas production infrastructure, such as preparing and maintaining access roads and well locations; installing small diameter gathering lines and pipelines; and constructing temporary foundations to support drilling rigs. It offers these services by utilizing a fleet of 200 operated power units. Basic Energy Services was founded in 1992 and is headquartered in Midland, Texas.
Glamis Gold Ltd. (GLG) engages in exploration, mine development, and the mining and extraction of precious metals in the United States, Honduras, Mexico, and Guatemala. It produces gold from El Sauzal Mine in Mexico, Marigold Mine in Nevada, San Martin Mine in Honduras. The company operates Rand Mine in California for gold; and Marlin Mine in Guatemala for gold and silver. It also holds a 100% interest in the Cerro Blanco Project in Guatemala; and a property located in Imperial County, California. As of December 31, 2005, the company’s proven and probable reserves include 102,428 thousand tones of gold and 32,257 thousand tones of silver. Glamis Gold, formerly known as Renniks Resources, Ltd., was incorporated in 1972 and is based in Reno, Nevada.
SPIL
SPIL is moving very close to it's 200 day average. Institutional holding is up, buyers outnumber sellers about 2 to 1, and history tells us this is a good stock to hide in during June... when our market gets a bit weird.
Increase in earnings for this year is targeted at 50% plus. FY 06 earnings are estimated at .75 @ share which if you do some conservative math gives you at least $7.50 @ share and it's currently $6.27...and that's using my "chicken little" math... you can apply whatever PE feels good. Institutional holders include Fidelity Management and Barclays Global. Best of all, 8.8% of the stock is insider held. That means not only their reputations, but their billfolds are on the line. My kinda' set up Smile
Increase in earnings for this year is targeted at 50% plus. FY 06 earnings are estimated at .75 @ share which if you do some conservative math gives you at least $7.50 @ share and it's currently $6.27...and that's using my "chicken little" math... you can apply whatever PE feels good. Institutional holders include Fidelity Management and Barclays Global. Best of all, 8.8% of the stock is insider held. That means not only their reputations, but their billfolds are on the line. My kinda' set up Smile
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