Well, bye-bye to Champion for me. It looks like a new closing low today, and I said I would sell at the new low. So I stuck to it. Hope it gets ridiculously cheap. If not, well, I get the tax loss as a consolation - and I could use it. Thinking of buying Clayton to stay in the sector, but am willing to be patient.
Meanwhile, used the proceeds to buy Keane (KEA). It's one of those Y2K stocks that ran up furiously last year. It and Analysts International (ANLY) both made my screen last week. Managers of both companies give clear, specific reasons for their difficulty - loss of Y2K revenue AND delay of non-Y2K revenue. Keane's managers say that they expect to resume 25% top-line growth (and 25+% bottom-line growth) after the Y2K bump is passed. There's been some insider buying. ANLY has a lot more insider buying, and its managers too say that they will resume historical growth once Y2K is passed.
Interesting to me is that both of these companies have been creating shareholder value steadily for years, but only in the last couple did they become stars. Keane had more Y2K work than ANLY, and is five times larger. My thinking is Keane got a lot of contacts and leads out of its Y2K work, which can only help going forward. The ANLY situation is similar, but on a smaller scale. Keane has hit some economies of scale, with 30+% ROE and high ROA with good margins. I think you could bet on either horse. The stocks basically move together. ANLY pays a decent dividend. I went with the larger concern, whose managers own 20% of the stock already, mainly because I don't need the dividend. Valuations on both are remarkably similar.
BTW, Fair Isaac looks higher for some reason. Anyone find a reason?
Mike |
