Buys & Sells over last quarter
I lurk on this thread... this is an attempt to contribute.
Over the last quarter, I've invested mostly in three themes: retail, real estate, and consumer stocks. My dispositions are mixed.
RETAIL
BKS - Barnes and Noble. I bought around $16. The forward PE is under 10.
KM - Kmart. My average cost is about $5.50. The forward PE is under 6, the PSR is around .08, and I spend more money at Kmart than I do at Walmart because its stores are more accessible.
OMX - Officemax. My average cost is around $6. At $2.38, the PSR is about .05. I believe Grupo Carso owns a large stake at higher prices. This Mexican company bought me out of Compusa at $10.10 where I had a cost of $7.
PBY - Pep Boys. My average cost is around $6. At 4 3/8, the PSR is around .10. The do-it-yourself-auto-parts business has not impressed lately. However, I like its national auto service business. Earlier this year the company bought stock in a dutch auction in the teens.
SKO - Shopko. My cost is $7. At $6, its PSR is .05, P/B is .25. It's hard to get enthused about the business, but the numbers are compelling. Also, I believe its debt is still rated investment grade.
YUM - Tricon Global. My cost is $24. I bought it because I thought is was valued at 4 on a P/CF basis.
CONSUMER
DL - Dial. My cost is $11. $1 billion of market cap plus $500 million LTD for the maker of Dial, Purex, Renuzit.
PYX - Playtex. My cost is $10. $600 million of market cap and $900 million LTD for the maker of feminine care products and infant care products. Brands include PLAYTEX, BANANA BOAT sun care, PLAYTEX, WOOLITE, CHUBS, WET ONES, BINKY, MR. BUBBLE, BINACA, OGILVIE, DENTAX oral care products, DIAPER GENIE diaper pails, BABY MAGIC lotion.
SRV - Service Corp. I started buying this at $16. It's at $2 and change. I've managed to trade this so that I am even on it. This is the largest deathcare company I know of … it has $3.3 billion in LTD, $3 billion in sales, market cap of $600 million. The forward PE is around 4 but there is a risk of bankruptcy so take it with a grain of salt.
SVM - Servicemaster. The forward PE is around 12. The stock price is around a five year low. Yields around 4.4 percent.
REAL ESTATE
I generally buy and hold the large REITs. I don't have any particular strategy (so no commentary) outside of diversifying and trying to buy stock at a discount to previous prices. I've added modest amounts of REITs this year. This year has been good... the previous two years were educational. Over the past year, I made investment in the homebuilders on a price-to-book basis which worked out well... namely RYL - Ryland, PHM - Pulte, and ENGL - Engle Homes. I'm still holding with approximately 100% absolute gains.
OTHER
ALLR - Allaire Corp. I bought around $7. This company "...develops, markets and supports Internet software products for companies building their businesses on the Web....". Allaire products are ColdFusion, JRun, Homesite and Spectra. Look here for more information: biz.yahoo.com . The things that interest me about this company are: (a) 2x trailing Sales, (b) just reported YOY sales gain of 100%, (c) cash per share around $4.60 with de minimus LTD, (d) large short position, and (e) the market cap is under $200 million. I've spent about 1 hour researching this so caveat emptor. Obviously, the market thinks their product future is iffy.
CCK - Crown, Cork and Seal. My average cost is around $19 so I've lost a lot of principal. The forward PE is under 10 with a PSR of about .15, but there's a large amount of debt and the company has been sputtering the last couple quarters.
CCR - Countrywide Credit. I added at $31 to a lower-cost position. The forward PE is around 10. P/B is around 1.3. My investment thesis is the market is not properly valuing the company's core origination competency, nor the recurring nature of the mortgage servicing business, nor the opportunities stemming from a large number of customer relationships.
PX - Praxair. I added around $31 to a higher cost position. The forward PE is around 10. My investment thesis here is that the chemical companies will earn high rates of return where distribution capabilities can't be separated from production and where a global footprint is required.
TSG - Sabre Group. I bought around $24. My investment thesis is that around 1.5X sales and a forward PE of around 13 is that the market doesn't properly value the complexity "moat" that the travel reservation business represents.
WCOM - Worldcom. I bought at $25. I have almost no investment in tech so this is an effort to gain some. I'm buying on faith because I don't understand the business. The forward PE is around 10 and I'm hoping that the company has some durable position in its internet business to offset the economics of the long-distance business.
Dispositions:
AVP - Avon Products. Sold at $44 bought at $26 with a holding period of 9 months making 98% annualized.
BPP - Burnham Pacific. I made a little money on this only because I offset large long-term losses with short-term trading.
Insurance ... sold XL at $65, bought at $54, held 12 months, about 18% annualized ... sold ACL at $33, bought at $26, held 18 months, about 16% annualized. I'm still holding UNUM, Allstate, MONY, and Safeco with annualized gains around 40%.
PETC - Petco. Bought out at $22 with a two year holding period. Average cost was $8 making about 60% annualized.
RHI - Robert Half. Sold at $34, cost was around $13 with a 14 month holding period making about 125% annualized.
THC - Tenet Healthcare. Sold at $27, cost was around $19 with a 17 month holding period making for 28% annualized.
USG - tax loss selling of $45 stock at $17 with a two year holding period making for an absolute loss of 60%. I'm still long and looking to go longer. I've been hurt badly by the asbestos litigation on ACK, OI, and USG but am still long.
XRAY - Dentsply Int'l. Sold at $34, bought at $21, held 22 months making 29% annualized.
The market humbles me with 50% haircuts on a regular basis so please rely on your own research. |
