Shane,
I don't know if you use a mechanical screen to find
Buffett stocks, but it seems so, since you comment
that you don't know the business of some of them.
I would not do it, because in Buffett's view business
is everything. If business is "bad", there is no point
checking the numbers. To paraphrase Lord Kaynes:
"good numbers won't change bad business" :-P
Couple comments on your stocks:
>1. JOB - General Employment- temp svc firm,
Generally, I don't even look at services companies.
It's too difficult to figure out if they have
franchise value, brand name or unique advantage.
So I just assume they are commodities unless proven otherwise.
That's even more true for small cap services.
If you want more info, ask Mike - he knows something about
sector from looking at OLS. :-)
>2. PRST - Imaging technologies.
ROE is far below Buffet's required. In addition,
with a religious stock like PRST, I'd dig very deep
before doing anything.
>3. INVX - supplier to disc drive industry.
No earnings consistency. Cyclical, presumed
commodity. A friend of mine looked at it, but I did not.
>4. CDWC - direct computer/software retailer.
Commodity. No barriers of entry that I see.
>5. CATP - Cambridge Technology Partners
Services again. They may be hot, but I did not dig.
>6. FAST - Fastenal - not familiar with their business.
This one is very interesting. It's industrial company,
and I remember looking at it before. The numbers are great - the
projected return is ~20% - third highest in my current
calculations. This is a qualified result though - I used
the low PE of 35! If I use low PE 15, the return drops to
~11%. The company is probably business cycle cyclical,
as all industrial companies are. I don't know much about
its business, so I can't guarantee that they have a sustainable
competitive advantage. I'll try to do more DD on this one.
>7. COHU - Semiconductor sector - unfamiliar with business.
COHU is a nice rather small semiequip. It
actually also fell in 15% return area on Mike's spreadsheet.
Drawback - the whole sector is cyclical. They are also
not a leader, though they are niche leader, so they are
not strictly Buffett company.
>8. XETA - Semiconductor sector - unfamiliar with business.
Me neither, but from the first glance does not
look promising. They are in hotel/lodging local phone
service industry (PBX). With market cap 40M there's probably
gorillas in the business too (think of Lucent, NT and Co).
>9. ORCL - Oracle, as you mentioned.
>10. APCC - American Power Conversion
No additional comment.
Good luck
Jurgis |
