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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (18270)	12/26/2003 11:40:05 PM
From: Brendan W	Respond to of 78525

James, I have no potential stocks that could reasonably double (I would be shocked if that happens). My sensible large allocation would be Diageo. Good yield, a2 rated senior debt, PE of 14 on 6/2005 earnings, capable of double-digit earnings growth, decent moat. I only have 5% in it and it would have to drop 30 percent on no meaningful news for me to allocate substantially more. finance.yahoo.com

To: James Clarke who wrote (18270)	12/27/2003 12:03:40 AM
From: Tomato	Respond to of 78525

KDUS. Not a double, but should hopefully be at least a 30% gainer. $2 in cash and securities, no debt, no employees, administrative costs usually offset by royalty/license income, and currently trading at $1.45. I believe that's what someone might call a "margin of safety." The CEO, who's been there since February of this year, has as her goal to find an acquisition by her 1 year anniversary. For the full story peruse the thread on SI: Subject 19197 Often not very liquid, with large spreads. Carl Icahn controls the company. Disclaimer- I own a lot.

To: James Clarke who wrote (18270)	12/27/2003 2:06:44 AM
From: Mark Marcellus	Read Replies (1) \| Respond to of 78525

James - Interesting question. I agree with you on the difficulty in finding stocks in this market. I also agree on ANF - Hollister especially worries me. I'm starting to think that there are problems there that management is unwilling or unable to face up to. Re your question, here are a couple of stocks that I think will be long term (3-5 years) winners but don't expect to double in the next year: DGX (Quest Diagnostics): The leading provider of lab services and diagnostic testing, and the leader in the industry. They are an exceptionally well run company and they have a nice razor and blade type of business. I've dealt with them in the past (both at work and as a patient) and was very favorably impressed. Strong cash flow, decent balance sheet, options are an issue. They've been hurt a little by the bad economy over the last couple of years, and if employment improves their results should benefit. FDS (Factset Research): Provides integrated financial information services to investment banks, brokerages, etc. Based on the numbers, I think this is one of the most exciting companies out there but unfortunately, unlike Quest Diagnostics, I have had no direct dealings with them. I would be interested in hearing from anyone who has. Gross margin runs in the mid 60's, ROIC is in the mid 20's, the balance sheet is pristine, options are a problem. They are not quite as good as vintage Oracle or Microsoft - growth rates in the 20's or 30's, depending on what you're looking at - but the profitability, cash flow and balance sheet are in the same league. The closest I can come to a "swing for the fences" is LNCR (Lincare Holdings) a provider of home respiratory therapy. This company has been putting up Coca Cola-like numbers, but they are going to be hit hard by the new Medicare pricing rules, and the stock is down over 25% as a result. I'm not so concerned about that, LNCR provides a service that saves money overall and I'm reasonably confident that things will work themselves out by 2005 when the rules take effect. My problem with LNCR is that, quite frankly, I don't completely trust management. Don't have the time to go into great detail, but a condensed version is; they have (IMO) practiced selective disclosure in the past, and they are structured as a holding company with hundreds of independent units whose results are rolled up into theirs. They are quite probably a completely legitimate operation, but I don't have the confidence to buy a lot. If they are legit, I believe they are a tremendous bargain right now. As for what stock I'd put 25% of my portfolio in, for me that would require not only safety, but a "back up the truck" depressed price. I don't see the latter anywhere, but if I had to do it I'd consider MCD, JNJ, or BRK, all of which I consider to be very safe and reasonably priced.

To: James Clarke who wrote (18270)	12/27/2003 3:58:23 AM
From: Dale Baker	Respond to of 78525

Swing for the fences in HLSH and bet the farm on BRKB, both for obvious reasons to thread readers here, I think. BRKB is my largest current position but only mid-single digits in a very diversified portfolio. I am fully invested, but mostly in stocks that had big runups already this year, that I don't want to sell yet for tax or valuation reasons.

To: James Clarke who wrote (18270)	12/27/2003 9:22:38 AM
From: Madharry	Respond to of 78525

I will never put 25% if my portfolio into one company unless i am running it. At the moment my largest position is in a british company cambridge antibody technology. the stock is cheap relative to its peers , has lots of cash and good technology, it is down mostly because of a legal battle with abbott on licensing royalties- i believe that CATG will win. I also have a good size position in ABGX a competitor, where the CFO has recently exercized his option but not sold any shares. I also have a few in the money call options on BMY. I also for the moment have a good size position in INAP, a company that ran up a great deal on Friday, and could run right back down again on Monday-it is not a value stock. Happy Holidays.

To: James Clarke who wrote (18270)	12/27/2003 9:56:38 AM
From: Wallace Rivers	Respond to of 78525

I am running into the same quandary, really not much out there to buy IMHO. I posted I recently closed out positions in CSCO, X (way too early!), and CCE. Still like JNJ, and have a position in it. I am looking at WMT, CL, NWL, VZ as potential buys. LUV (I see your UAIR pick, and will look at it) is always on my radar screen on dips. My position in UIC has done well, but I am also considering trimming it. Paul asked about SGH, I am monitoring heating degree days in the northeast and mid-Atlantic. A normal winter would mean status quo IMO, warmer than normal would merit caution.

To: James Clarke who wrote (18270)	12/27/2003 10:45:09 AM
From: Grommit	Respond to of 78525

Which stock is likely to be a major winner over the next 12 months? I don't see any major winners. I hope that I have a number of potential 20% to 30% gainers. Picks in my top tier prospects are ANF, KBH, KWD, BEC, WM, HELE, RCRC. The next level are BEL, YELL, TOY, and two which I may purchase next week - JCI, TTC. Nothing great here, times are very much tougher. .................................................... What is the stock you'd put 25% of your portfolio into if you had to pick one? My largest holding right now is ACAS, as it has been for the past year or two. Last year, at $23, it had great potential, and I posted about it here a few times. When it was at $18 a little earlier, it was the fattest pitch I ever saw. (I managed to reduce my average basis to $20.50.) At $23, the dividend yield was 12%. Add the 26% cap gain over the past year, and it's still under the NASDAQ gain for the year. Jeez. It ain't fair, I say! finance.yahoo.com The short attack has come and gone, with the shares short dropping every qtr now. The issue, if any, is still the valuation of its portfolio investments. ACAS hired a respected outside valuation firm to audit 25% of the valuations per quarter, and the insider buying continues (even at today's prices). The dividend growth is unbelievable: american-capital.com american-capital.com finance.yahoo.com I think it's a safe "hold" at today's price, meaning that I think the stock price will not likely drop. The dividend yield at next year's $2.93 dividend (forecast by Wachovia Securities) at today's $29, is 10%. If the yield drops to a more likely 9%, the price would rise to around $32.50. That's a 10% dividend yield, and a 10% cap gain, for a 20% return. No home-run anymore, but a restful place to park my money, until I find something better. As I reduce my holdings of it... Disclosure - I bought way, way, way too much and have been selling some recently, trying to reduce my holdings to only "too much". Sorry about the cheerleading. grommit PS And look at REIT performance as compared to the NYSE. This graph ignores the REIT dividends of 8% or so. finance.yahoo.com For years people have been saying that interest rates would rise, and to get out of REITS and Bonds. I think now is probably the time to move out, but there's no place to reinvest safely. :o( Help. I hate holding cash.

To: James Clarke who wrote (18270)	12/27/2003 11:40:31 AM
From: TimbaBear	Read Replies (2) \| Respond to of 78525

James Clarke I haven't tallied the results for the year yet, but barring a cataclysmic event, it will turn out to have been a phenomenal year. As far as selections for 2004: TRCI, CCL, MRO, APFC, RTWI, IOM (yes, a former high-flyer, blast from the past), PMSI, WSCI, have all made my cut and are in my portfolios. I don't really see much difference in the number of opportunities, although I agree the market is pricing in far more perfection than I'm comfortable with. As far as potential doubles for 2004: TRCI, APFC, IOM, PMSI, WSCI could qualify as far as I'm concerned. CCL and MRO could return 50%. But, then again, I could be hallucinating about all of them! TimbaBear

To: James Clarke who wrote (18270)	12/27/2003 12:49:13 PM
From: Steve168	Read Replies (1) \| Respond to of 78525

James and all, My largest holdings are ALVR and EONC, both over 25%. EONC has a better chance of doubling in 2004, it is a small software company that had 6 quarters sequential revenue growth, and 3 quarters of profit. Chairman/CEO David Lee bought a lot of shares couple months ago, he is a smart successful businessman. At just above $3 and profitable, It is almost like a non-expiring option, just time value alone is good enough to justify the buy. They are successful in US FAA, military and Korean market, opened an office in Beijing couple months ago and now working on some big deals with large telecom providers in China. If they successfully get one big Chinese carrier to sign up, a double is feasible. Now comes my daring point - even ALVR still has a small chance to double again, if the business continue to do well and no big players jump in to the competition. Many know that I recommended here in Feb 2003 and bought big at $1.86, it is $10.50 now and I am holding majority of the shares. This could be the "next big thing" stock. Never buy after my post, do you own homework and decide. Happy New Year to all!

To: James Clarke who wrote (18270)	12/27/2003 3:10:28 PM
From: Paul Senior	Respond to of 78525

Jim Clarke. Been reflecting on your post. On the surface, very simple question, "What's your best idea(s)?" Framing that question by % gain possibility (double) and time frame (year 2004) has got me really spinning and stymied though. Once again I report that I don't see much correlation between what I might consider my "good" stock ideas and my results as measured by % gain in those stocks. Often what I consider my best ideas at the time turn out to be not so good. The ones that actually turn out to be high percentage gainers seem to surprise me by coming out over time (And that's more than 12 months) from nowhere. This is not an unusual occurrence to Ben Graham followers of course. One non-tech, non-fad/non-momementum example would be cigar-butt CNGR discussed here May & Nov 2001: siliconinvestor.com Who'da thunk this at the time: finance.yahoo.com (Same company, CNGR=CPRT. Name and ticker changed. I am still in.) If I try to look at how my good or best ideas correlate to weighting (i.e. large holding) in my portfolio, it still doesn't work for me. Since I have many stock ideas, and I'm wrong many, many times, I don't say to myself, "This is/are my best idea/ideas, I'll overweight here". Rather, my larger weightings are built up over time as the stock of an improving business just compounds. Or else if I make a large purchase, I do it in stages over time - sometimes over more than one year. Sometimes I'll trim an outsize position- so in just looking at the portfolio now (instantaneous view), I can't quantitatively relate large holding to my best or good ideas. If I understand the Bill Miller speech, he would suggest that stocks already reflect what's going to happen in '04; we need to be considering now how stockholders in late '04 will be considering what will happen to their stocks in '05. It just seems to me that 12-month-to-a- double window is too short. On the one hand, I could see that that's a good criterion though - you want people's best ideas, and that considerably narrows the field of choices and makes people carefully and deeply consider their suggestions (as compared to asking what stocks might double in two or maybe in three years). But back on the other hand, as I said about SINA,et. al., it's very difficult to recognize really good opportunities a-priori. There are many suggestions put forward by good posters here for stocks that might double. (And some of the suggested stocks will double or more imo.) It just will be very hard though, imo, to convince somebody else here to buy in - no matter what stock is mentioned or how few are recommended. Of course, otof (on the other foot - I've run out of hands -gg-) all that's needed is ONE purchase of one stock that works, and the exercise will have been worthwhile. Paul Senior

To: James Clarke who wrote (18270)	12/27/2003 5:38:29 PM
From: Jurgis Bekepuris	Respond to of 78525

James, Well, you're still worth your weight in gold in ability to ignite the thread. :) Myself, I feel as ignored as Paul Senior in his picks. Hey Paul, you're not alone, I doubt anyone bought any of my picks either! :))))) So "double - for the fences" idea: NTZ. Yep, it's risky and has issues, but has potential too. "Safe - 25% portfolio" idea: PEP/KO - choose one, whichever, they both are pretty similar. Happy holidays and prosperous New Year to the thread! Jurgis - as Paul Senior, I object to your criteria, but they are fun to play with. :))) I hold both of my picks above.

To: James Clarke who wrote (18270)	12/27/2003 6:06:19 PM
From: jeffbas	Read Replies (1) \| Respond to of 78525

"Whats the stock in your portfolio most likely to be a major winner in the next 12 months (though it may have the kind of risk where you wouldn't make it a big position), and second what is the stock you'd put 25% of your portfolio into if you had to pick one?" Interesting questions, Jim. I note that neither requires the pick to be a "value" stock; the first one requires the stock to be already owned; the second has no time frame, or performance spec. The stock I own that I think most likely to double in the next year is IMGG. The stock I have 25% in is FARO. I recommended it here at $2+ nine months ago. I consider it the "gorilla" in its growing niche. However, I couldn't recommend buying it above $20, although there is a reasonable shot at near $40 next year, and $50-100 in 3 years. My outlook is colored by the CAPEX comment in the following link: biz.yahoo.com I am taking that comment at face value. If there is a major 2004 CAPEX tax break applying to all purchases from the smallest to the largest company, any company run with half a brain (and profitable, I presume) will be planning now to push a load of 2005 CAPEX into 2004 - and related stocks should have great years. Therefore, you should expect a "hole" in 2005 CAPEX no matter who gets elected. This could end up being like Y2K in 1999. stealing from future periods. If so, you want to get out of any CAPEX sensitive stocks in 2004, and probably the whole market as well - as 2005 might be rather unpleasant.

To: James Clarke who wrote (18270)	12/29/2003 1:08:37 PM
From: Sergio H	Read Replies (1) \| Respond to of 78525

James, a stock that has been discussed on this thread, SCR.A has the credentials to be a big winner in 2004. The stock sells at low valuations, particularly p/b and p/s. In brief; the debt burden is heavy but steps to improve the balance sheet have had some success. Shipping rates are at all time highs. SCRA has a large position in OEH which some also be consider a value play. My swing for the fences play has been PAL. The company's main product is Palladium, which used mainly for catalyctic converters. Other uses include jewelry and fuel cell applications. It is almost interchangeable with Platinum. Platinum is currently trading at historic highs while Palladium prices are at the other end of the spectrum. Thanks to Paul Senior and other contributors to this thread for making it a worthwhile place to visit.

To: James Clarke who wrote (18270)	12/29/2003 3:44:01 PM
From: Spekulatius	Read Replies (3) \| Respond to of 78525

My favorites for 2004: MEDI, the biotech stock with the flu vaccine Flumist. Flumist still may take off and become a 500M$ product. If so, MEDI would be considerable undervalued. PE currently about 25. Low risk: MCK - the drug distributor trades at 12x forward earnings. I still see MCK to achieve a LT growth rate in the low teens percentagewise per year.

To: James Clarke who wrote (18270)	12/30/2003 10:54:24 PM
From: Area51	Read Replies (1) \| Respond to of 78525

I'll play: Safe pick that I would consider investing 25% of my portfolio in still with good capital gains potential: TMR. I actually have 20% invested here and would like it to run up so I can cut it back some. [If I was entering here I would limit it to a normal position (<5% for me) as there is more risk at $6 then there was at $3 and $4 where I accumulated most of my shares.] Good natural gas play, low production costs, rapidly improving balance sheet. I believe the natural gas story (that average NG prices above $3.50 per mcf are with us for the next several years), and have faith that TMR can significantly increase production in 2004. High risk\ high reward pick: CORV - bought Broadwing at a good price and is shooting for cash flow neutral by mid 2004. Minimal debt. CORV original business of telecom equipment is hibernating (but telecom equipment market may recover in 2005/2006) HIgh risk honorable mention pick: SATC (Fuel cell\ UPS related pick, that got some refinancing after third quarter and appears to be also turning the corner to cash flow neutral. Thanks to everyone for the interesting ideas, and have a prosperous New Year.

To: James Clarke who wrote (18270)	12/31/2003 10:10:39 AM
From: valueminded	Respond to of 78525

Jim: I have enjoyed your presence and thoughts over the years. In terms of what I like I still like ABM although it is somewhat more pricey then October when I mentioned it. (although I guess what isn't) For a somewhat risky play I like Elan. I have been in it for a year off and on, but still like it. They are a turnaround play with a decent pipeline and some potential catalytic events in 2004. Otherwise, I like China (usually closed end funds) such as GCH or TDF and I have had a small investment in Glamis Gold. The US dollar continues to be way overvalued in relation to commodities and other currencies imo. But catalysts such as decoupling of Chinese currency to dollar or pricing of oil in another currency or basket of currencies are difficult to predict. In terms of risks, I think if the Fed & Treasury have any sayso, inflation is a foregone conclusion. The only other alternatives would be a crash in the stock or real estate markets - neither of which gets anyone elected so I think all parties work like heck to make the alternative come true.