Now here is what I'm working on now.
I've got a bit of money lined up for a purchase in my wife's retirement account. The stocks I'm looking at right now are: Coherent (COHR), McDonald's (MCD), Intel (INTC) and Eastman Kodak(EK). I'm also interested in getting back into Unitrode(UTR).
I already have positions in 3Com(COMS), American Express(AXP), Cisco(CSCO), Newbridge(NN), Nortel (NT), and Ancor Communications (ANCR). All except ANCR (which is a pure speculative play and is less than 8% of my portfolio) were bought in second half 1996 or first half 1997 for the long term based on the FCF valuation that I have been ranting on and on about.
Here are my thoughts on each of my prospects:
1. COHR - very cheap after the 4th quarter earnings disappointment, which I think is silly, but what do I know? I want to increase my position in it (it's my smallest holding right now but I love the company) to be more on par with my other holdings. It's the world's largest independant laser company, diversified across the medical, semiconductor manufacturing and telecommunication (ie fiber optics) markets.
2. MCD - Strikes me as very cheap because of all the flack it's been getting over it's North American performance. I'll refer you to my detailed argument on the MCD thread if you're interested:
exchange2000.com
There's also a good conversation going on the "McDonald's - why Buffett is Buying" thread where I posted the same thing.
3. INTC - just an unbelievable company. 90% and growing market share. Financials just blow the mind. It's gotten cheaper, but I'm not sure if it's a bargain enough for me yet.
4. EK - Several blunders this year have slammed the stock. I think that it's very cheap right now, but I'm not as confident as I'd like to be about their growth prospects. Tons of free cash flow though. There's an EK thread that I posted to
back in the summer.
5. UTR - fine little semiconductor company. I owned it for a while, but sold it last spring for a minor profit when Cisco got really cheap. Subsequently it exploded upwards on an earnings surprise, stock split and momentum orgy buying panic. Now it's come back almost full circle on a selling momentum orgy. If it hits the low 20's, I'll have a hard time resisting it. In fact, I'm researching some other semi companies right now, because the future looks phenomenal. And there's so much volatility (see 1996) that it's easy to get on board cheap every once in a while.
Anyone else want to comment on these stocks? Or suggest any others that look cheap based on free cash flow? I'm also particularly interested in Canadian companies.
Andrew |
