Recent activity.
I started a position in Planetout at under $7. This is a $125 million company that has recently started being profitable. They claim unmatched reach to the gay/lesbian etc. population both in the US and abroad (interestingly, paid subscribers are only 4% of overall users). They also claim that they have unusually sticky websites based on how much time users spend there. They still have a lot of cash from their IPO. The 180 day period expired in April so insiders are now able to sell. EV/Sales is a little over 3. I put no faith in the earnings estimates for Planetout, but I will be quite happy if they make the 61c in 2006. Part of my investment thesis is their is some GLBT stigma here that could benefit those that prefer to weigh their earnings in the long run.
I started a position in Corillion Software at $3.10. This is a web banking software company with a product called "Voyager" that has JP Morgan, Bank One, Wachovia, Commerce Bancorp as customers. EV/Sales is 1.6 as they have a lot of cash. They are in the process of acquiring another web banking software company for mostly stock and 4.5m cash. Their earnings unfortunately are very skewed to license sales. Yahoo shows earnings estimates of .20 and .25 for 2005 and 2006 respectively.
I started a position in QC Holdings at $13.40. This is a paycheck lender. The pawnshops and paycheck lenders have been hurt with newly announced federal regulations on paycheck lending. The new regs have an immaterial effect on QC Holdings because for the most part they don't do business in the states where the regulations have effect. ROA is almost 21% and ROE is almost 26% and the company is trading at under 11x 2006 earnings of $1.28.
I passed on Clifton (CSBK). I'm guessing the MHC structure is not uncommon for thrifts and the market sees through it. There's room for ROE improvement here <g> and it should do okay, but the appeal is not very strong for me.
I sold BP and Chevron and bought more Conoco Philipps. The reserve replacement ratios were pretty scary on the majors and COP is considerably cheaper on a PE basis. I missed Suncor in the high US$20s (and the oil sands buys) and now I'm waiting for an opportunity. I still hold Burlington, Pioneer Natural, Devon, and XTO.
Added to Reebok in the low $40s - it's around 11x 2006 earnings and they've grown earnings 19% a year over the last five years. I don't get the valuation.
Added to Principal Financial in the high $30s - they've grown assets under management 16% a year over the last four in a difficult environment and are trading at 1.6x book with a current year PE of about 15.
Added to Fidelity Financial and First American. The current year PEs are around 10.
Added back Ebay at $34. I had sold to take tax losses and waited to see the Q1 report before adding back.
I would have sold off some of the furniture companies (Pier 1, Furniture Brands, Natuzzi), but they went down too much before I pulled the trigger. Now, I've got to think more about buying them.
I sold all my Equity Residential bought over the last 4 to 6 years. I'm selling as much of the REITs as I can stomach the associated capital gains. I've worked the REITs down below 11% of my portfolio, down from 35% at peak.
Companies mentioned:
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