85 percent of the time we rallied off those numbers...
July 16 we were -19 rallied almost 100 points the next day then down..
August 05 were -18 and went down over 300 points..
Interesting story in yesterdays Miami Herald...
<Posted on Sun, Dec. 29, 2002
Top 10 stocks -- of 2003
BY JAMES K. GLASSMAN
Washington Post Service
WASHINGTON - In January 1995, I started offering readers a list of 10 stocks to consider for the year ahead, making my selections from the choices of market pros whose opinions I value. Over the five years of this exercise, my lists returned an annual average of 24 percent, compared with 28 percent for the benchmark Standard & Poor's 500-Stock Index. My sabbatical spared me the ignominy of almost certain losses from 2000 to 2001, but I'm back for another try for 2003, a bit early.
A warning: It's never easy to beat the market as a whole. Although my picks did pretty well, you would have been better off with an index fund from 1995 to 1999.
APPLE COMPUTER (AAPL)
''Although I have no plans to switch my windows allegiance to the Macintosh, I have always marveled at Apple's ability to persevere with the odds so often stacked against its survival.'' So writes John Buckingham in the most recent issue of the Prudent Speculator (877-817-4394), the stock-picking newsletter that's ranked number-one over the past 20 years by the scorekeepers at the Hulbert Financial Digest. Apple has been crushed lately, dropping 40 percent from its April high, and it posted a loss in the most recent quarter. Still, Buckingham thinks the ''future is bright,'' and Apple has an attractive lineup of products, including the tune-toting iPod, and a fine balance sheet.
JETBLUE AIRWAYS (JBLU)
Since its inception in December 1995, the Raymond James & Associates list of 10 best picks for the year ahead has returned an annual average of 47 percent, compared with just 9 percent for the S&P, an index it thoroughly whipped in each of the seven years. That's a fantastic record, and each year I pay close attention to the choices. The new list, just out last week, includes my favorite Initial Public Offering (IPO) of 2001: JetBlue Airways, which has just about everything going for it: strong balance sheet, low costs, new fleet of planes, excellent routes, highly productive nonunion workforce, good cash flow, access to capital markets to fund its growth, demoralized competitors teetering on bankruptcy, and customers (like me) who love the product. In a commodity business, JetBlue stands out for its use of technology and its great service (for example, live TV at each seat and a wonderful website for booking flights).
MONY GROUP (MNY)
James Roumell, a Chevy Chase, Md., money manager with a sensational record and a deep-value style, won the Wall Street Journal's ''dart-board'' stock-picking title twice before the contest was discontinued. His pick for our 2003 list has been a public company for only four years. Its the former Mutual of New York, a venerable life insurance company that also owns a small mutual-fund business (Enterprise), a brokerage firm (Advest) and a municipal-bond house (Lebenthal). Roumell admits that MONY Group's management ''cannot be described as stellar operators,'' but shares appear cheap. The stock trades at about half its book value (net worth on the balance sheet).
NISSAN MOTOR CO. LTD. (NSANY)
The Value Line Investment Survey (800-833-0046) has a stellar long-term record of picking winners among its ``1''-rated stocks -- the top 100 among the thousands the firm analyzes. Nissan is currently the only 1-rated auto company -- and one of the few large manufacturers of any sort with that ranking. New management has rejuvenated the firm, Japan's third-largest automaker, whose U.S. brands include Altima, Maxima, Pathfinder, Infiniti and the spiffy new 350Z.
PROCTER & GAMBLE (PG)
The researchers at Standard & Poor's bestow their current top rating (five stars) on only 89 stocks. Among those the inner circle is the Top 10, which includes Cincinnati-based P&G, maker of Tide, Dawn, Joy, Crisco, Jif, Folgers, Old Spice, Clairol and on and on. The stock collapsed three years ago from $118 to $52 on concerns about weak sales and stumbling management. The company brought in a new CEO, and its ''beautiful line'' of earnings never faltered.
ST. JOE CO. (JOE)
James Grant, editor of the estimable Grant's Interest Rate Observer (212-809-7994) and a pessimist on stocks for the past decade or so, turned in a recent issue to Paul J. Isaac, chief investment officer of Cadogan Management, with an intriguing question: ''A friend of a friend has sold his business. He would like to put the proceeds to work for the benefit of his descendants, not all of whom have come into the world. How would you invest it?'' Isaac suggested buying companies with lots of exurban land in dynamic areas of the South, Southwest and West. Thus, St. Joe, which owns nearly a million acres -- both developed and not -- mainly in northwest Florida. The mid-cap stock has been a steady performer, up nearly 10 percent this year. The P/E is 21, but earnings at this stage aren't really the point. The point is owning assets that are undervalued today but will get very attractive as time passes.
STANDARD COMMERCIAL CORP. (STW)
''Where do you find these things?'' That's the question I continually ask Jay Weinstein, of Oak Forest Investment Management in Bethesda, Md. Weinstein has had great success discovering tiny companies like Standard Commercial, whose bland name belies its controversial business. It's one of just three global leaf-tobacco merchants -- buying, processing, selling and shipping tobacco grown in 30 countries. Customers, of course, are the big cigarette companies. Management, says Weinstein, has spent the last three years cleaning up the balance sheet, and the stock looks cheap.
STRYKER (SYK)
One of my favorite mutual funds, Jensen (JENSX), has consistently whipped the S&P, with lower risk, by running an exclusive club. To get in, a company first needs to deliver a return on equity of at least 15 percent in each of the past 10 years (only about 100 of 10,000 firms qualify). Next, the stock has to trade at a discount of 40 percent to its intrinsic (or discounted cash-flow) value, according to the fund's managers. That leaves, at last count, just 26 stocks. One of them is Stryker, which makes orthopedic products like knee, hip and spinal implants, plus operating instruments, stretchers and maternity beds for hospitals.
TOO (TOO)
Elliott Schlang and Gregory Halter run LJR Great Lakes Review, a Cleveland-based research service for institutional investors like mutual funds and pension plans. Their specialty is finding boring companies in the Midwest that are both dynamic and cheap. The problem, Schlang said, ''is that this year we're down only 7.3 percent -- compared with a loss of 20 percent for the S&P. The bad news is that there are only six stocks we're recommending as buys.'' One of them is Too Inc., a fast-growing retailer that was spun off from The Limited Co. in 1999. Too sells clothes, jewelry and shoes, mainly to girls aged 7 to 14. Too's earnings have increased at an annual average of 52 percent over the past five years, it has lots of cash and no debt, and its margins are sensational -- 26 percent on equity and 7 percent on sales. With about 500 stores now and at least 1,000 as a goal, Too has been successful at appealing to the changing tastes of what Schlang calls ''the highly erratic young woman.'' The risk is that the management won't keep up its merchandising streak forever. Still, the price appears exceptionally modest. Schlang estimates earnings at $1.82 for fiscal 2003, for a P/E of just 14, and shares of the company (with a market cap of $900 million) are down by nearly one-fourth since April.
UNITED ONLINE (UNTD)
In these parsimonious times, this Internet service provider (ISP) offers consumers low-priced and (in some cases) free access to the Web under the brand names NetZero, Juno and BlueLight. Revenues jumped in the last quarter to $58 million, up from $14 the year before, and the company is now making a profit. United's market is highly competitive, but the biggest player, America Online, has clearly lost its edge, and even United's most expensive service undercuts AOL's price by more than half. The stock is the choice of Jim Collins, editor of OTC Insight (800-955-9566), a newsletter that focuses on smaller growth stocks and that's ranked number-one over the past 15 years by Hulbert. United, with a market cap of less than $700 million, has a hefty $150 million in cash and short-term investments on the balance sheet and just $2 million in debt. Unlike most of the stocks on this list, United's price has risen sharply, more than tripling in the past 12 months. Still, Earnings are projected to reach nearly $1 a share in 2003, which, at current prices, indicates a P/E of 17. Pretty reasonable.> |
