tag:blogger.com,1999:blog-73521852525635464702024-03-06T02:11:36.925-06:00Mostly Money MusingsA Stroll Through The World Of FinanceGreghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.comBlogger46125tag:blogger.com,1999:blog-7352185252563546470.post-39634720054154842472010-01-17T13:45:00.007-06:002010-01-17T15:26:01.629-06:00China Integrated Energy, Inc. (CBEH) - Smallcap Chinese Oil Play<span style="font-family: courier new;">I think it's fair to say that Chinese oil consumption is only going to continue it's upward trend in the coming few years. China has already surpassed the United States in car sales as more people relocate from rural farming communities into the cities. Many industries are expanding, bringing in more workers willing to commute longer distances. All of which points to increasing oil consumption in China. The question is, what is the best way to play this ongoing trend? Many Chinese energy plays remain undervalued at this time despite recent gains, giving many options to play the trend. While not to everyone's taste, I personally like to focus on smallcap stocks that I believe are undervalued.<br /><br />One company that has caught my eye in recent months is China Integrated Energy, Inc. (CBEH), formerly known as China Bio-Energy Holding Group. The company is engaged in three business segments, the development, production, and distribution of bio-diesel, the wholesale distribution and processing of heavy oil and finished oil products, and the sale of gasoline and diesel at retail gas stations. Actually, the bio-diesel segment really doesn't excite me especially. The main reason I like this company as an investment is the growing network of retail gas stations. <br /><br />The company recently announced the purchase of 2 additional gas stations in Shaanxi province, bringing the total to twelve at this time. CBEH also plans to acquire a further 5-7 gas stations in the coming 12 months. The company has the ability to provide stable supply to all of the gas stations in its network. Being a vertically integrated energy company allows the company to achieve higher profit margins, and the simplicity of the company business model is something I find attractive as an investment. As of September 2009, the company reported average gross margins of 13.3% for its retail gas stations, a figure which I would anticipate growing significantly in 2010 with increased sales.<br /><br />So how do the fundamentals stack up? The company has a market cap of $276M, with very little debt and a current ratio of almost 9. CBEH boasts a return on equity of almost 25% and a price to sales ratio of just 1.08. The company has demonstrated a trend of increasing sales and revenues over several years and has established a strong cash position in order to undertake further acquisitions. The shares currently trade at $8.49 and I would anticipate a 12-month target of $11-13.<br /></span><span style="font-family: courier new;"><br /></span><span style="font-family: courier new;">Disclosure: At the time of writing the author held shares in China Integrated Energy, Inc. (CBEH).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-78709520446051375762010-01-09T13:54:00.001-06:002010-01-09T14:51:34.866-06:00Chemspec International (CPC) - A Chinese Stock With All The Right Chemistry<span style="font-family:courier new;">In recent times there has been a lot of focus in looking at overseas markets for superior gains and as a hedge against the falling dollar. One country which has received a huge amount of attention and investment dollars is obviously China, however, it appears to me that finding value in China is getting increasingly more difficult. There has been somewhat of a herd mentality with many people rushing out to buy stock in Chinese companies, with little or no regard to whether or not it represents a good investment. Some people who would normally spend hours when researching a domestic company as a potential investment seem to throw caution to the wind when it comes to overseas investments. To some extent "a rising tide floats all boats", but there are excellent opportunities in China and there are, how do I put it, "less than stellar" opportunities in China. When the inevitable correction comes we will see which companies are the real deal and which are just playing with smoke and mirrors.</span><span style="font-family:courier new;"><br /><br />One company that I believe is the real deal and represents true value for the investor is Chemspec International, Ltd. (CPC).</span><span style="font-family:courier new;"><br /><br />Chemspec is a contract manufacturer of highly engineered specialty chemicals and the largest manufacturer of fluorinated specialty chemicals in China. The company is headquartered in Shanghai, with four additional facilities in surrounding provinces. The company’s chemicals are used as building blocks for more advanced chemicals or to enhance the performance of the end products of its clients. It sells primarily companies in the electronics, pharmaceutical and agrochemical sectors. Chemspec was founded in 1996 and underwent IPO in June of 2009, with a price of $9.</span><br /><span style="font-family:courier new;"><br />The area of contract manufacturing has grown immensely in recent years, both domestically and overseas, with many companies choosing to outsource what would have normally remained in-house. Chemspec's blue-chip end-users include major global TFT Liquid Crystal suppliers, one of the world's top global agrochemical companies and four of the world's top ten pharmaceutical companies by sales.</span><span style="font-family:courier new;"><br /><br />Chemspec trades at a P/E of 7.1 and a price/book of 1.51 with a current ratio of 2.99. The company has demonstrated excellent profitability in the past, however has been affected a little by the economic downturn, resulting in reduced earnings. The management appear to be making all the right moves to navigate through these difficult times, focusing on R&D and expanding facilities. The stock currently trades at $7.31, up significantly from the 52 week low, but still well below the IPO price. I would anticipate a 12-month target price of $9-10.</span><span style="font-family:courier new;"><br /><br />Disclosure: At the time of writing the author held shares in Chemspec International, Ltd. (CPC).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-64108794403039346942009-06-11T21:37:00.003-05:002009-06-11T22:47:39.385-05:00Yanzhou Coal (YZC) - A Chinese Value Stock?<span style="font-family: courier new;">I have been watching with interest from the sidelines as alternative energy stocks have skyrocketed in recent months, partly wishing that I was riding the wave and partly quite content in the knowledge that there will be plenty of opportunity to make money in alternative energy in the future. </span><span style="font-family: courier new; font-size: 100%;">My biggest concern at this point is that not all alternative energy stocks are created equally, a good number of them will fail, and ultimately which ones succeed may come down to politics. I don't yet feel confident enough to separate the wheat from the chaff, particularly as many alternative energy companies are not yet profitable, so I will continue to watch with interest and research companies that I feel stand out from the crowd.<br /><br />So if I'm not yet investing in alternative energy, what am I focusing on? While I fully expect renewable and green technologies to play an increasing role in energy production in the future, I am still a firm believer that coal, oil and natural gas will remain the major sources of energy in the intermediate term. I also expect nuclear power to feature strongly, but that is a topic for another day. <br /><br />You see, the problem with alternative energy, while highly desirable, is that it is expensive. In comparison, coal is cheap - very cheap. Yes, it is dirty, yes, the environmentalists don't like it, and yes, there is pressure to reduce its use in the US, but I don't feel that any of those issues are going to matter until alternative energy can begin to compete on price. <br /><br />The other huge issue is that </span><strong style="font-weight: normal; font-family: courier new;">China is the world's largest coal producer and consumer, and they are not going to stop burning coal any time soon. In fact, China plans to build stockpiles of the fuel in the eastern province of Shandong to ensure supplies and help stabilize prices.</strong><span style="font-family: courier new;"> At this point China is self-sufficient in coal, but there may come a time soon when it is a net importer of coal.<br /><br />If you are looking for a coal play that bets directly on China, then Yanzhou Coal (YZC) fits the bill. Yanzhou is one of China’s largest coal suppliers producing high-grade, low-sulfur coal, which burns cleaner and therefore fetches a premium price.</span><span style="font-family: courier new;"> Yanzhou Coal (YZC) is principally engaged in underground coal mining, preparation and processing, sales, and railway transportation of coal. The company is organized into three operating divisions: coal mining, coal railway transportation and methanol and electricity power. The company operates six coal mines: Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine, Dongtan coal mine, Jining II coal mine (Jining II) and Jining III coal mine (Jining III), as well as a regional rail network that links these mines with the national rail network.<br /><br />So Yanzhou Coal (YZC) is in a great position to benefit from China's growing demand for coal, and also from any additional infrastucture investment, but what are the fundamentals like? Despite the recent upward movement in the share price, I believe that Yanzhou Coal remains a value stock with plenty of potential upside.<br /><br /></span><span style="font-family: courier new; font-size: 100%;">The company has low debt, has shown excellent growth in recent years, and pays a 4.2% dividend. Yanzhou Coal (YZC) </span><span style="font-family: courier new; font-size: 100%;">currently </span><span style="font-family: courier new;">trades at a P/E of 7.4 and a price/book of 1.8 with a current ratio of 2.83. The company boasts a return on equity of 26.9% and a gross margin of 50%. </span><span style="font-family: courier new;">The company currently trades at $14.85 and I would be looking for a 12-month price target of $25-27.<br /><br />Disclosure: </span><span style="font-family: courier new; font-size: 100%;">At the time of writing the author held shares in Yanzhou Coal (YZC).<br /></span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com2tag:blogger.com,1999:blog-7352185252563546470.post-3179706740704518482009-06-10T22:43:00.000-05:002009-06-10T22:43:15.966-05:00CryoLife Inc. (CRY) - A Value Stock... But Not One For The Faint-Hearted<span style="font-family:courier new;">CryoLife, Inc. (CRY) is engaged in preserving and distributing human tissues for cardiac and vascular transplant applications and develops and commercializes medical devices. The human tissue distributed by the Company includes the CryoValve SG pulmonary human heart valve (CryoValve SG), processed using CryoLife's SynerGraft technology. The Company's medical devices include BioGlue Surgical Adhesive (BioGlue) and Hemostase, which the Company distributes for Medafor, Inc., as well as other medical devices. CryoLife distributes BioGlue, which is used in place of stitches, throughout the United States and in more than 70 other countries.<br /><br />CryoLife is an interesting company that has been on my radar for a while now. The company has carved itself a nice niche in an almost recession proof sector and has been aggressively marketing its products. The market for BioGlue and tissue preservation services is only going to continue to grow as the population gets larger and older, and eventually the true value of the company will be recognized. My main concern is the wild rollercoaster ride that the stock price has been on over the years. That said, I do believe that the lawsuits are now behind them and that the company will continue to grow.<br /><br />The company has been profitable since early 2007 and has been steadily increasing earnings and sales since then. CryoLife trades at a P/E of 5.0 and a price/book of 1.55 with a current ratio of 4.28. The company boasts a return on equity of 38.1% and a gross margin of 64.5% which is pretty impressive in the current economic climate. </span><span style="font-family:courier new;">There was significant insider selling last fall when the company was trading at over $12 a share, although CEO Steven Anderson still holds almost 7% of the company, which I take to be a positive sign.<br /></span><br /><span style="font-family:courier new;">CryoLife currently trades at $5.82 and I would be looking for a 12-month price target of $11-12.<br /><br />Disclosure: </span><span style=";font-family:courier new;font-size:100%;" >At the time of writing the author did not hold shares in CryoLife Inc., (CRY).<br /></span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-57545835420879092352009-06-08T19:38:00.006-05:002009-06-09T07:13:55.802-05:00SmartPros (SPRO) - Time To Go Back To Value School?<span style="font-family:courier new;">SmartPros (SPRO) provides learning and training solutions for professional markets, including accounting/finance, legal, engineering, securities and insurance, as well as information technology professionals. The company also provides corporate governance, ethics and compliance training for the general corporate market. It offers off-the-shelf courses and produce custom-designed programs with delivery methods suited to the specific needs of its clients. Its customers include professional firms and companies of all sizes. The company's e-marketing and e-commerce business sells ads on its website and develops newsletters and marketing programs for clients.<br /><br /></span><span style="font-family:courier new;">Depending on which numbers you choose to believe, unemployment currently sits somewhere between 9% and 14%. In these uncertain times I believe that companies such as SmartPros should do well as unemployment figures soar. Those of us lucky enough to be employed will most likely be looking for ways in which to become more valuable to our employers in order to retain our positions, and those of us who have suffered the loss of their job will inevitably be looking for ways in which to stand out from the crowd in the competition for the limited openings available. This is where SmartPros comes into its own. The company offers courses in the very skills that many people will be looking to add to their resumes.<br /><br /></span><span style="font-family:courier new;">The company reported excellent figures for 2008 and I expect a similar trend to be observed in 2009. </span><span class="style3" style="font-family:courier new;">As of December 31, 2008, the company had approximately $6.63 million in cash and cash equivalents, $5.6 million in deferred revenue, stockholders' equity of $12.1 million, and no debt.</span><span style="font-family:courier new;"> </span><span style="font-family:courier new;"></span><span style="font-family:courier new;">SmartPros trades at a P/E of 8.1 and a price/book of 1.17 with a current ratio of 1.36 and a gross margin of 57.9%. Also, t</span><span style="font-family:courier new;">he acquisition of Loscalzo last year appears to have been a smart one, leading to a number of cost cutting measures and an increase in ROIC.</span><br /><br /><span class="style3" style="font-family:courier new;"></span><span style="font-family:courier new;"></span><span style="font-family:courier new;">In the company annual report Chairman and CEO, Allen Greene </span><span class="style3" style="font-family:courier new;">stated “We are proud to have finished the year strong and are looking to carry that momentum into 2009.” “We continue to show revenue growth year-over-year and our operating profits were at an all-time high. Further, we believe that operating profit and EBITDA numbers provide the best comparative narration because it removes the influence of interest rates and the tax benefit treatment.” </span><span style="font-family:courier new;">Greene holds almost 5.6% of the company stock and is one of several insider holders. Also of note, real estate investor Zohar Ben-Dov announced a 10.5% stake in the company in March this year.</span><br /><br /><span style="font-family:courier new;">The company boasts a large course library and a large customer base, however, it is a competitive industry with a relatively low barrier to entry, meaning that the company has to continually strive to protect its niche. This being said, I believe that SmartPros represents good value at its current price of $3 a share and would be looking at a 12-month target price of around $5.</span><br /><br /><span style="font-family:courier new;">Disclosure: At the time of writing the author did not hold shares in SmartPros Ltd (SPRO).<br /></span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-8641465819393657772009-06-06T14:34:00.008-05:002009-06-06T16:49:45.436-05:003 Microcap Value Stocks Worth Considering<span style="font-family: courier new;">If you are anything like me, you've probably spent many hours screening through list after list of stock tickers trying to unearth some as yet undiscovered companies that, just maybe, might turn out to be the next Google (GOOG), Microsoft (MSFT) or Walmart (WMT). This inevitably results in a collection of speculative smallcap and microcap stocks that you have never heard of before - after all, you're unlikely to find potential multibaggers among the highly researched megacap companies of the Dow Jones - companies that have already grown massively. <br /><br />There are a number of things that must be considered when looking to invest in these smaller companies, not least of which is that there is often a lot less information available upon which to base your decisions, not to mention volatility and liquidity issues. So where is a good place to start? I personally like to begin my search by looking for value stocks with little or no debt that operate in niche markets. I also like to look for companies with good cash flow, high insider ownership, and a history of growth. It is a common misconception that most smaller companies will inevitably end up beginning run out of business by a larger one. In fact, many large companies are so slow moving that the smaller company eventually catches or even surpasses them! For instance, there was a time when the majority of people believed that Microsoft (MSFT) was invincible, until little Apple (AAPL) turned the tables and became a multi billion dollar enterprise.</span><br /><br /><span style="font-family: courier new;">So here are a three companies that I believe are worth considering further, along with a basic overview of each.</span><span style="font-family: courier new;"><br /><br />Image Sensing Systems, Inc. (ISNS)</span><br /><span style="font-family: courier new;">Market Cap: $35.6M</span><br /><span style="font-family: courier new;">The company develops and markets video image processing products for use in traffic applications, such as intersection control, highway, bridge and tunnel traffic management and traffic data collection. Its family of products, marketed as Autoscope and RTMS, provides end users with the tools needed to optimize traffic flow, enhance driver safety, regulate air quality and address security/surveillance concerns. Image Sensing Systems trades at a P/E of 8.6 and a price/book of 1.25 with a current ratio of 8.96. The company has been steadily increasing earnings and sales, and boasts a return on equity of 15.8%. The company has global exposure and wide potential with sales across North America as well as in Europe, Asia, and the Middle East. The stock currently trades at $8.92 and I would be looking for a 12-month price target of around $14-15.</span><br /><br /><span style="font-family: courier new;">RF Industries, Ltd. (RFIL)</span><br /><span style="font-family: courier new;">Market Cap: $12.1M</span><br /><span style="font-family: courier new;">The company is a provider of interconnect products and systems for radio frequency (RF) communications products and wireless digital transmission systems. Through six divisions the company supplies customers across a wide range of industries including aerospace, medicine, multi-media, and communications, as well as the military. RF Industries trades at a P/E of 9.4 and a price/book of 0.78 with a current ratio of 16.4. The company has demonstrated excellent profitability in the past, however has been affected by the economic downturn, resulting in reduced sales. As a result the company recently suspended its dividend payment in order to focus on product development and acquisitions. The company has a return on equity of 10.1% and the management appear to be making all the right moves to navigate through these difficult times. </span><span style="font-family: courier new;">The stock currently trades at $3.95 and I would be looking for a 12-month price target of around $6-7.</span><br /><br /><span style="font-family: courier new;">Continucare Corporation (CNU)<br />Market Cap: $142.5M<br />Continucare is a provider of primary care physician services in Florida. The company through its network of 18 medical centers provides primary care medical services on an outpatient basis. It also provides practice management services to independent physician affiliates (IPAs) at 25 medical offices. The company trades at a P/E of 11.3 and a price/book of 1.34 with a current ratio of 4.8. The company has demonstrated good EPS and sales growth in recent years and has a return on equity of 12.8% with very high insider ownership. The stock currently trades at $2.40 and I would be looking for a 12-month price target of around $3.50.</span><br /><br /><span style="font-family: courier new;">Disclosure - At the time of writing the author did not hold shares in any of the companies mentioned in this article.</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com1tag:blogger.com,1999:blog-7352185252563546470.post-53532940164850543292009-06-04T19:55:00.004-05:002009-06-04T21:21:35.171-05:00Friedman Industries, Inc. (FRD)<span style="font-family: courier new;">Friedman Industries, Inc. (FRD) is a microcap value stock engaged in steel and pipe processing and distribution. The company divides its products into two main groups: coil and tubular products. Friedman Industries, Inc (FRD) sells coil products primarily to steel distributors and customers fabricating steel products, such as storage tanks, steel buildings, farm machinery and equipment, construction equipment or transportation equipment,</span><span><span style="font-family: courier new;"> located primarily in the midwestern, southwestern and southeastern sections of the United States. The company's principal customers for tubular products are steel and pipe distributors, piling contractors and U.S. Steel Tubular Products, Inc. (USS).</span></span><span style="font-family: courier new;"><br /><br />The company comes with a great set of fundamentals, trading at a P/E of 2.5 and a price/book of 0.7 with a current ratio of 3.9 and very little debt. The company has been steadily growing earnings and sales over the past few years, and has paid a dividend for the past 10 years (currently 3.5% yield).<br /><br />Despite the current economic slow down, I am confident that a company of the strength of Friedman Industries will be among the survivors, particularly as the manufacturing and construction industries begin to pick up in the coming quarters. </span><span style="font-family: courier new;">Friedman Industries boasts a return on equity of close to 30% and a 5-year historical EPS growth rate of 31.7%. </span><span style="font-family: courier new;"> These are the kind of numbers that small cap value investors love to see. </span><span style="font-family: courier new;">The stock price has already made a significant move upwards from its 52 week low of $3.82 in March, and has in fact just broken through its 200 day moving average, but I believe that plenty of upside still remains to be seen. I would be looking for a 12-month price target of around $12-13 as the economic outlook begins to improve.</span><span style="font-family: courier new;"><br /></span><span><br /></span><span style="font-family: courier new; font-size: 100%;">Disclosure: At the time of writing the author held shares in Friedman Industries, Inc. (FRD).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-7718451274500247412009-06-01T22:33:00.004-05:002009-06-04T21:30:59.085-05:00Air T, Inc. (AIRT) - Microcap Value<span style="font-family:courier new;">Air T, Inc. (AIRT) is a microcap value stock which operates in two industry segments: providing overnight air cargo services to the air express delivery industry through its wholly owned subsidiaries, Mountain Air Cargo, Inc. (MAC) and CSA Air, Inc. (CSA), and aviation ground support and other specialized equipment products and services to passenger and cargo airlines, airports and the military, through its wholly owned subsidiary, Global Ground Support, LLC (GGS) and Global Aviation Services, LLC (GAS). </span><br /><br /><span style="font-family:courier new;">The company has the kind of fundamentals that Warren Buffett would love - if only he were able to trade a company this small. Air T, Inc. (AIRT) trades at a P/E of 4.4 and a price/book of 1.03 with a current ratio of 3.1 and very little debt. The company has been steadily growing earnings and sales over the past few years and pays a dividend of 3.7% which is pretty impressive for a company of its size. While there are a number of other microcap dividend payers, I have struggled to find one that I believe is quite as attractive as Air T, Inc. (AIRT). The company recently announced an annual dividend payment of $0.33 - an increase on last year's $0.30 figure despite the tough economic climate.<br /><br />I find that significant insider ownership is often one of the most important factors to consider when looking to invest in small and microcap companies. Company Chairman, Walter Clark, owns around 6% of the company's stock giving me confidence that the company holds the interests of its shareholders as a high priority. </span><br /><br /><span style="font-family:courier new;">The company recently announced an order for 29 plane deicers, worth $11.5 million from the US Air Force as part of an ongoing multiyear contract with the US Air Force. The company also has strong ties with FedEx, operating a fleet of 95 planes as part of the FedEx distribution network.</span><br /><br /><span style="font-family:courier new;">While Air T, Inc. (AIRT) may not yet be a household name (it may never be), the most profitable investments are often the ones where you get in on the ground floor. I find it hard to believe that companies such as Wal-Mart (WMT) or Google (GOOG) will double or triple in size any time soon - they've had impressive runs already. However, a microcap value stock of the caliber of Air T, Inc. (AIRT) could quite easily double or triple over the next year or two.</span><br /><br /><span style=";font-family:courier new;font-size:100%;" >Disclosure: At the time of writing the author held shares in Air T (AIRT).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-39290105409207761082009-05-31T09:03:00.002-05:002009-05-31T09:28:49.475-05:002009 - Ideas For The Year Performance Update<span style="font-family:courier new;">At the beginning of the year I made a </span><a style="font-family: courier new;" href="http://mostlymoneymusings.blogspot.com/2009/01/2009-ideas-for-year.html">list of picks and pans</a><span style="font-family:courier new;"> for the year which I planned to review at the end of each month. </span><span style="font-family:courier new;">The purpose of this exercise was to provide ideas for your own research, some potential opportunities for 2009, as well as some companies I feel are best avoided. We're five months into the year now and there has been a lot of movement across the board.<br /><br />Interestingly, had I owned real life positions in a number of these stocks, I would've most likely gotten out while the going was good. For instance, shares in Anadys (ANDS) skyrocketed over 300% on positive clinical data before losing most of thei</span><span style="font-family:courier new;">r gains a few months later following a poor earnings statement. A gain that large in the biotech arena would've been too much for me to resist and I would've been out of there right away! However, for the purpose of this exercise there will be no changing of picks, no matter what happens to the underlying companies.<br /><br /></span><span style="font-family:courier new;">So here are the performances for 2009 to date.</span><br /><br /><span style="font-family:courier new;">My Long Picks for 2009, with 05/31/09 closing prices<br /><br /></span><span style="font-family:courier new;">Himax Technologies (HIMX) - $3.63 (+125.47%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/yanzhou-coal-mining-co-yzc.html">Yanzhou Coal (YZC)</a> - $12.63 (+67.95%)</span><br /><span style="font-family:courier new;">Anadys Pharmaceuticals (ANDS) - $2.22 (+41.40%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/04/quicksilver-gas-services-kgs.html">Quicksilver Gas Services LP (KGS)</a> - $13.00 (+37.13%)</span><br /><span style="font-family:courier new;">Urban Outfitters (URBN) - $20.42 (+36.32%)</span><br /><span style="font-family:courier new;">Natural Resources Partners LP (NRP) - $23.66 (+35.59%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/dorchester-minerals-lp-dmlp.html">Dorchester Minerals LP (DMLP)</a> - $20.49 (+29.11%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/ecology-environment-eei.html">Ecology & Environment (EEI)</a> - $14.22 (+18.70%)</span><br /><span style="font-family:courier new;"></span><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/raven-industries-ravn.html">Raven Industries (RAVN)</a> - $27.46 (+13.94%)</span><br /><span style="font-family:courier new;"> <a href="http://mostlymoneymusings.blogspot.com/2009/01/versar-inc-vsr.html">Versar, Inc. (VSR)</a> - $4.52 (+9.71%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/chase-corporation-ccf.html">Chase Corporation (CCF)</a> - $11.70 (+3.63%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/highveld-steel-and-vanadium-hsvly.html">Highveld Steel and Vanadium (HSVLY)</a> - $7.85 (+</span><span style="font-family:courier new;">2.21</span><span style="font-family:courier new;">%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/hugoton-royalty-trust-hgt.html">Hugoton Royalty Trust (HGT)</a> - $13.88 (-13.52%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/united-foam-plastics-technologies-ufpt.html">UFP Technologies (UFPT)</a> - $4.16 (-21.36%)</span><br /><br /><span style="font-family:courier new;">Shares in Himax Technologies (HIMX) continued to rise from $2.73 to $3.63 this month despite reporting a huge slump in earnings revenue. The company is expecting a recovery in Q2 prompting the move in the share price. The top performer of the month was Versar, Inc. (VSR) moving from $2.60 to $4.52, following the announcement that the company would receive stimulus money as part of an alternative energy study. Dorchester Minerals (DMLP) and Hugoton Royalty Trust (HGT) both put in significant moves this month. I continue to be bullish on <span style="font-family:courier new;">commodities which I still believe will be one of the few sectors that will finish the year on a high note. Raven Industries (RAVN) announced a dividend increase this month, something of a rare commodity in these times, leading to a moderate movement in the share price.<br /><br />Not so stellar was the performance of United Foam Technologies (UFPT), falling from $5.05 to $4.16 and currently sitting bottom of the pile in my long picks for the year. The move is largely due to a drop in sales and revenue, however, I still believe the company has a strong balance sheet and will emerge from the current crisis as a strong player in the industry.<br /></span></span><span style="font-family:courier new;"><br /></span><span style="font-family:courier new;">My Short Picks for 2009, with 05/31/09 closing prices</span><br /><br /><span style="font-family:courier new;">Office Depot (ODP) - $4.66 (+56.38%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/03/ann-taylor-stores-ann.html">Ann Taylor Stores (ANN)</a> - $7.32 (+45.24%)</span><br /><span style="font-family:courier new;">Red Robin Gourmet Burgers (RRGB) - $17.30 (+2.79%)<br /></span><span style="font-family:courier new;">Build-A-Bear Workshop (BBW) - $4.48 (-7.82%)</span><br /><span style="font-family:courier new;">La-Z-Boy (LZB) - $1.87 (-13.82%)</span><br /><span style="font-family:courier new;">Bank of America (BAC) - $11.27 (-19.96%)</span><br /><span style="font-family:courier new;">LaCrosse Footwear (BOOT) - $9.40 (-24.68%)</span><br /><span style="font-family:courier new;">Citigroup (C) - $3.72 (-44.56%)</span><br /><span style="font-family:courier new;">Mercantile Bancorp (MBR) - $5.65 (-46.45%)</span><br /><span style="font-family:courier new;">Converted Organics (COIN) - $1.48 (-58.19%)</span><br /><span style="font-family:courier new;"> </span><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/circuit-city-cctyq.html">Circuit City (CCTYQ)</a> - $0.021 (-84.62%) - Bankrupt</span><br /><span style="font-family:courier new;">Smurfit Stone Container Corporation (SSCC) - $0.00 (-100%) - Bankrupt</span><br /><br /><span style="font-family:courier new;">As a group my short picks continued to rally this month, despite poor fundamentals. I think this is a trend that we will shortly see reversed as the bear market rally gives way to the next leg down. The biggest mover of the month was Office Depot (ODP) moving from $2.70 to $4.66 following a number of analyst upgrades, while La-Z-Boy (LZB) retraced most of last month's impressive gains. Office Depot (ODP) has made an impressive recovery from close to $1 a share back in March so I'm beginning to suspect that its days as a good short pick may be behind us.</span><br /><br /><span style="font-family:courier new;">Well, I will review the list again at the end of June to see how my picks and pans are performing. Until then, happy investing!<br /><br /></span><span style=";font-family:courier new;font-size:100%;" >Disclosure: At the time of writing the author held shares in </span><span style="font-family:courier new;">Highveld Steel and Vanadium (HSVLY), Himax Technologies (HIMX), Hugoton Royalty Trust (HGT), Yanzhou Coal (YZC), </span><span style=";font-family:courier new;font-size:100%;" >UFP Technologies (UFPT), and Versar, Inc. (VSR).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-71000203985422216202009-05-14T05:52:00.003-05:002009-05-14T06:54:13.118-05:00It's The End Of The World As We Know It...<span style="font-family:courier new;">...And I feel fine?</span><br /><br /><span style="font-family:courier new;">Actually, I don't know about you, but I have an ever-growing sinking feeling that this house of cards we've built up around us is about to come tumbling down! As I sit here drinking my early morning coffee and musing over the latest round of disappointing headlines, I'm beginning to see that despite all the vain attempts by the Federal Reserve to plug their finger in the levee, there are just too many holes and cracks to even think about stopping the floodwaters now.</span><br /><br /><span style="font-family:courier new;">I find all this talk of the "green shoots" of recovery a little insulting, it's kind of like the emperor's new clothes - everybody is too afraid to tell the mighty emperor that he is in fact naked, and those magnificent garments are just a figment of his overactive imagination! I have no idea how we managed to have such a great rally during March and April, I figure that many people decided that "it couldn't really get much worse" and just jumped in regardless! The bank stress tests were little more than a sick joke and a waste of tax payers money, even the so called "worst case scenario" that they incorporated is a better state of the economy than what is actually happening in reality right now!! I'm sure that makes sense to someone somewhere, but it seems like a another cover-up to me. I've just about had enough of all the smoke and mirrors, let's just bring the facts out into the light and deal with them.</span><br /><br /><span style="font-family:courier new;">So, moving on. Retail figures anyone? Er...yeah, they're less than pretty. With consumer spending continuing to drop, we should be expecting another round of corporate losses, missed earnings, and falling stock prices. Add into that the continuing increase in unemployment figures, which are not going to improve anytime soon in the light of continued corporate bankruptcies and cost cutting exercises and you will soon realize that we're in for even lower consumer spending and a fresh wave of home foreclosures and credit card defaults. In fact, while the stock market was putting in a huge rally during March and April, the number of home foreclosures surged to a record high according to RealtyTrac. If it was the bursting of the housing bubble that got us into this mess, then I find it hard to imagine getting out of the mess without a significant improvement in the real estate sector and I don't see this happening for a few years yet. Yes, I did really say YEARS. I don't subscribe to the permanent mantra of "we should expect to see recovery in ...</span><span style="font-style: italic;font-family:courier new;" >insert time 2 quarters away</span><span style="font-family:courier new;">..." That's just not realistic. The huge wave of mortgage losses and loan defaults that we will continue to see is going to finally expose many banks as being little more than bankrupt shell corporations. The government cannot save them all, and really shouldn't try.</span><br /><br /><span style="font-family:courier new;">Actually, given the huge shortfall in the funds needed to pay Social Security and Medicare to the millions of baby boomers retiring this year, I wonder in the Federal Reserve should really be trying to save any company, period. I think the latest estimate for the shortfall is somewhere north of $50 trillion which dwarfs many other economic issues right now. We already know that the Chinese and Japanese have taken on just about as much US debt as they are likely to, so the Federal Reserve can't just keep on running the printing presses without decimating the US dollar which is only going to harm the country further. We've already started to see the beginnings of the unraveling of the dollar, and I'm sure there is much worse to come.</span><br /><br /><span style="font-family:courier new;">So where do we go from here? Down.</span><br /><br /><span style="font-family:courier new;">Disclosure - At the time of writing the author held shares in </span><span style=";font-family:courier new;font-size:100%;" >ProShares Ultrashort 20+ Year Treasury ETF (</span><span style="font-family:courier new;">TBT) and Direxion Financial Bear 3X ETF (FAZ).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-66801744045071687962009-05-13T20:31:00.006-05:002009-05-14T06:59:50.739-05:00Selling Out On China?<span style="font-family:courier new;">On Tuesday morning, Bank of America (BAC) announced the sale of 13.5 billion shares of China Construction Bank, representing a 5.8% stake in the company. Bank of America (BAC) raised around $7.3 billion through this sale, which was required in order to meet capital requirements following on from last week's stress tests.<br /><br />So what's the big deal you might ask? Well, where do I start? There are a number of interesting observations that you could make.<br /><br />* The shares were sold at around a 14% discount to China Construction Bank's previous closing price of HK$4.91.<br />* Back in January, Bank of America (BAC) had already sold around $2.8 billion of China Construction Bank shares.<br />* There is no shortage of buyers for the shares, with a private fund headed by Fang Fenglei, picking up the lion's share.<br />* Rather than plummeting, the stock price actually rose slightly following the huge sale.<br /><br />In fact, this year overseas financial companies have sold over $15 billion of Chinese financial stocks as they are forced to try to repair their shattered balance sheets. I see this in a lot of ways as counter-productive. They are being forced to sell valuable assets that will inevitably see tremendous growth in coming years and yet will have to hold onto a lot of the toxic assets that got them into the mess in the first place. Bank of America (BAC) was obviously very desperate to sell their shares, as they had to offload them far below market price, and I'm sure if they weren't locked into holding the remainder of their stake (around 11% of CCB) until 2011, that they would've attempted to offload much of that too.<br /><br />It would appear that there is good liquidity among Chinese financial stocks, with this huge glut of shares being absorbed relatively quietly by a small group of investors. Where US financial institutions are resorting to desperate measures to try to raise capital, Asian bargain hunters are snapping up golden opportunities at great prices. It appears to be yet another example of the Chinese propping up the failing US economy. The Chinese are already the largest holders of US government debt, and now have the opportunity to use their vast cash reserves to buy up Chinese assets held by overseas institutions, as well as continuing to fuel their insatiable appetite for commodities.<br /><br />I am confident that China will continue its amazing growth story, despite the recent global economic downturn. The reduced US demand for Chinese goods will only cause temporary harm to the Chinese economy as manufacturers will be forced to focus more on intrinsic growth within China rather than being dependent on foreign economies. This will fuel the next stage in the growth of China, resulting in a stronger, more independent, economic superpower which no longer needs to rely on the economies of the West. It is a little ironic that overseas institutions are being forced to sell out of such great Chinese opportunities as they are forced to take their cash off the table now.<br /><br /></span><span style=";font-family:courier new;font-size:100%;" >Disclosure: At the time of writing the author did not hold shares in Bank of America (BAC).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-69524103390329852112009-05-01T20:49:00.004-05:002009-05-31T09:02:30.402-05:002009 - Ideas For The Year Performance Update<span style="font-family:courier new;">At the beginning of the year I made a </span><a style="font-family: courier new;" href="http://mostlymoneymusings.blogspot.com/2009/01/2009-ideas-for-year.html">list of picks and pans</a><span style="font-family:courier new;"> for the year which I planned to review at the end of each month. Well, it's that time again and there's definitely been a lot of movement this past month!</span><br /><br /><span style="font-family:courier new;">So here are the performances for 2009 to date.</span><br /><br /><span style="font-family:courier new;">My Long Picks for 2009, with 04/30/09 closing prices<br /><br /></span><span style="font-family:courier new;">Himax Technologies (HIMX) - $2.73 (+69.57%)</span><br /><span style="font-family:courier new;">Anadys Pharmaceuticals (ANDS) - $2.50 (+59.24%)</span><br /><span style="font-family:courier new;">Quicksilver Gas Services LP (KGS) - $13.46 (+59.24%)</span><br /><span style="font-family:courier new;">Natural Resources Partners LP (NRP) - $24.09 (+38.05%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/yanzhou-coal-mining-co-yzc.html">Yanzhou Coal (YZC)</a> - $9.91 (+31.78%)</span><br /><span style="font-family:courier new;">Urban Outfitters (URBN) - $19.14 (+27.77%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/ecology-environment-eei.html">Ecology & Environment (EEI)</a> - $13.43 (+12.10%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/dorchester-minerals-lp-dmlp.html">Dorchester Minerals LP (DMLP)</a> - $17.63 (+11.09%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/raven-industries-ravn.html">Raven Industries (RAVN)</a> - $24.64 (+2.24%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/highveld-steel-and-vanadium-hsvly.html">Highveld Steel and Vanadium (HSVLY)</a> - $7.45 (-</span><span style="font-family:courier new;">2.99</span><span style="font-family:courier new;">%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/united-foam-plastics-technologies-ufpt.html">UFP Technologies (UFPT)</a> - $5.05 (-4.54%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/chase-corporation-ccf.html">Chase Corporation (CCF)</a> - $9.70 (-14.08%)</span><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/hugoton-royalty-trust-hgt.html">Hugoton Royalty Trust (HGT)</a> - $11.10 (-30.84%)</span><br /><span style="font-family:courier new;"> <a href="http://mostlymoneymusings.blogspot.com/2009/01/versar-inc-vsr.html">Versar, Inc. (VSR)</a> - $2.60 (-36.89%)</span><br /><br /><span style="font-family:courier new;">The top performer of the month was Yanzhou Coal (YZC) moving from $7.17 to $9.91. I continue to be bullish on <span style="font-family:courier new;">commodities which I believe will be one of the few sectors that will finish the year on a high note. Urban Outfitters (URBN) also put in an impressive month, moving from </span></span><span style="font-family:courier new;">$16.37 to $19.14, although I am still interested to see what this months Q1 figures look like.<br /><br />Shares of Anadys Pharmaceuticals (ANDS) fell off a cliff after reporting larger than expected expenses in their recent earnings, demonstrating once again the volatility of the biotech sector. I still believe that Anadys has great potential, however, had I been sitting on a real life +300% gain from a biotech stock I would've sold right away! Anyway, let's not dwell on this, moving on.</span><br /><br /><span style="font-family:courier new;">My Short Picks for 2009, with 04/30/09 closing prices</span><br /><br /><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/03/ann-taylor-stores-ann.html">Ann Taylor Stores (ANN)</a> - $7.39 (+46.63%)</span><br /><span style="font-family:courier new;">Red Robin Gourmet Burgers (RRGB) - $22.71 (+34.94%)<br /></span><span style="font-family:courier new;">La-Z-Boy (LZB) - $2.85 (+31.34%)</span><br /><span style="font-family:courier new;">Build-A-Bear Workshop (BBW) - $5.13 (+5.56%)</span><br /><span style="font-family:courier new;">Office Depot (ODP) - $2.70 (-9.40%)</span><br /><span style="font-family:courier new;">LaCrosse Footwear (BOOT) - $7.79 (-37.58%)</span><br /><span style="font-family:courier new;">Bank of America (BAC) - $8.70 (-38.21%)</span><br /><span style="font-family:courier new;">Mercantile Bancorp (MBR) - $6.41 (-39.24%)</span><br /><span style="font-family:courier new;">Citigroup (C) - $2.97 (-55.74%)<br /></span><span style="font-family:courier new;">Converted Organics (COIN) - $1.52 (-57.06%)</span><br /><span style="font-family:courier new;"> </span><span style="font-family:courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/circuit-city-cctyq.html">Circuit City (CCTYQ)</a> - $0.021 (-83.85%) - Bankrupt</span><br /><span style="font-family:courier new;">Smurfit Stone Container Corporation (SSCC) - $0.00 (-100%) - Bankrupt</span><br /><br /><span style="font-family:courier new;">As a group my short picks continued to rally this month, despite poor fundamentals. I think it's a classic case of "a rising tide floats all boats". La-Z-Boy (LZB) put in a particularly impressive month moving from $1.25 to $2.85, but I really have no idea why! In my opinion the company has poor valuation and fundamentals and I don't expect them to survive the year. Build-A-Bear Workshop (BBW) missed analyst earnings estimates with a pretty unimpressive set of figures which has since been reflected in the share price reversing most of last months gains.</span><br /><br /><span style="font-family:courier new;">Well, I will review the list again at the end of May to see how my picks and pans are performing. Until then, happy investing!<br /><br /></span><span style=";font-family:courier new;font-size:100%;" >Disclosure: At the time of writing the author held shares in </span><span style="font-family:courier new;">Highveld Steel and Vanadium (HSVLY), Himax Technologies (HIMX), Hugoton Royalty Trust (HGT), Yanzhou Coal (YZC), </span><span style=";font-family:courier new;font-size:100%;" >UFP Technologies (UFPT), and Versar, Inc. (VSR).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com1tag:blogger.com,1999:blog-7352185252563546470.post-29743720254688299992009-04-28T11:36:00.002-05:002009-05-01T21:43:24.162-05:0080% Discount at Restaurant.com<span style="font-family: courier new;">Well, for a few days only the guys over at Restaurant.com are giving their best deal ever, this time for an additional 80% off, meaning you can get a $25 value for just $2. The code at checkout is: LUCKY which is valid until 04/30. Happy Eating!!</span><br /><br /><span style="font-family: courier new;">Disclosure: At the time of writing the author was bullish on food! </span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-32490892208201422932009-04-15T22:28:00.006-05:002009-04-15T22:47:59.368-05:00A Bull In China - Jim Rogers<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigy78yZwcVedy0dZrX0wXKxKty9gul31QMR6Y45YjK22Ypx4CGFKMTojyuUof6AotFeUjqCjkSmlEhhE5PGVPAefF5NzYuhXahT8xlWt7kG3RUTFdKeNmre2PVAXB_0xyadZLQY0-uQw/s1600-h/A_Bull_In_China.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 240px; height: 350px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigy78yZwcVedy0dZrX0wXKxKty9gul31QMR6Y45YjK22Ypx4CGFKMTojyuUof6AotFeUjqCjkSmlEhhE5PGVPAefF5NzYuhXahT8xlWt7kG3RUTFdKeNmre2PVAXB_0xyadZLQY0-uQw/s200/A_Bull_In_China.jpg" alt="" id="BLOGGER_PHOTO_ID_5325129512334652514" border="0" /></a><span style="font-family:courier new;">A Bull In China by Jim Rogers is an excellent book for anyone interested in investing in the huge potential of China. The author explains why China is growing and why it will continue to grow. He starts out with an overview of the different classes of Chinese shares and some of the history of the Chinese economy, and then breaks down all the major sectors of the economy.<br /><br />The author discusses everything from real estate to agriculture to the Chinese space program, and accompanies each chapter with dozens of companies with brief descriptions of each. Now, a number of these example companies are not open to investment by the average overseas investor, however, many of the companies are traded on US exchanges. </span><span style="font-family:courier new;"><br /><br />The author stresses that investing in China is a long term process with ups and many downs along the way. He does not specifically recommend any company in the book, he only mentions them to give the reader a broad understanding. I highly recommend this book as it gives the reader a real appreciation of the huge growth potential available through investing in China. I personally have compiled a list of interesting companies that I plan to research as I would like to increase my own exposure to this great country.<br /><br /> </span><iframe src="http://rcm.amazon.com/e/cm?t=mostmonemusi-20&o=1&p=8&l=as1&asins=0812977483&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="width: 120px; height: 240px; font-family: courier new;" marginwidth="0" marginheight="0" scrolling="no" frameborder="0"></iframe>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-50331402204131527112009-04-14T07:22:00.003-05:002009-04-14T07:26:40.960-05:0070% Discount at Restaurant.comWell, the guys over at Restaurant.com continue to provide a steady stream of discount dining certificates, this time for an additional 70% off, meaning you can get a $25 value for just $3. The code at checkout is: FEAST which is valid until 04/20. Happy Eating!!<br /><br />Disclosure: At the time of writing the author still loves to eat!Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-67733432686394372352009-04-04T08:03:00.002-05:002009-04-04T08:36:52.814-05:00Quicksilver Gas Services - KGS<span style="font-family: courier new;">Quicksilver Gas Services (KGS) is in the business of gathering and transporting natural gas and liquid natural gas through its pipeline assets and processing facilities in Texas</span>. <span style="font-family: courier new;">These services are provided under fee-based contracts, whereby the Company receives fixed fees for performing the gathering and processing services. Quicksilver Gas Services (KGS) does not take title to the natural gas or associated natural gas liquids that it gathers and processes and thus avoids direct commodity price exposure. This is what sets Quicksilver Gas Services (KGS) apart from similar pipeline companies.</span><br /><br /><span style="font-family: courier new;">Quicksilver Gas Services (KGS) </span><span style="font-family: courier new; font-size: 100%;">currently trades at a trailing P/E of 13.81, and pays a dividend of 11%. The company has demonstrated good levels of earnings and revenue growth, depsite the economic slowdown, and I anticipate a 12-month price target of $18-20 as the economic outlook improves in the second half of the year.<span style="font-family: courier new;"> My major concern about the company is the increasing level of debt that the company is taking on.</span></span><br /><br /><span style="font-family: courier new;font-family:courier new;font-size:100%;" >Disclosure: At the time of writing the author did not hold shares in Quicksilver Gas Services (KGS).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-44235777588479674692009-04-01T06:02:00.002-05:002009-04-04T09:06:30.892-05:002009 - Ideas For The Year Performance Update<span style="font-family: courier new;">At the beginning of the year I made a </span><a style="font-family: courier new;" href="http://mostlymoneymusings.blogspot.com/2009/01/2009-ideas-for-year.html">list of picks and pans</a><span style="font-family: courier new;"> for the year which I planned to review at the end of each month. The purpose of this exercise is to provide ideas for your own research, some potential opportunities for 2009, as well as some companies I feel are best avoided. At this point I am just going for a brief overview, I may get into some more in depth analysis later in the year. I will focus on specific companies in this instance, although later in the year I may look in more depth at specific sectors, or the economy as a whole.</span><br /><br /><span style="font-family: courier new;">So here are the performances for 2009 to date.</span><br /><br /><span style="font-family: courier new;">My Long Picks for 2009, with 03/31/09 closing prices<br /><br /></span><span style="font-family: courier new;">Anadys Pharmaceuticals (ANDS) - $6.79 (+332.48%)</span><br /><span style="font-family: courier new;">Himax Technologies (HIMX) - $2.80 (+73.91%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;">Quicksilver Gas Services LP (KGS) - $13.25 (+39.77%)</span><br /><span style="font-family: courier new;">Natural Resources Partners LP (NRP) - $22.33 (+27.97%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/ecology-environment-eei.html">Ecology & Environment (EEI)</a> - $13.15 (+9.77%)</span><br /><span style="font-family: courier new;">Urban Outfitters (URBN) - $16.37 (+9.28%)</span><br /><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/dorchester-minerals-lp-dmlp.html">Dorchester Minerals LP (DMLP)</a> - $16.33 (+2.90%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;"></span><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/highveld-steel-and-vanadium-hsvly.html">Highveld Steel and Vanadium (HSVLY)</a> - $7.85 (+</span><span style="font-family: courier new;">2.21</span><span style="font-family: courier new;">%)</span><br /><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/yanzhou-coal-mining-co-yzc.html">Yanzhou Coal (YZC)</a> - $7.17 (-4.65%)</span><br /><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/raven-industries-ravn.html">Raven Industries (RAVN)</a> - $20.78 (-13.78%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/united-foam-plastics-technologies-ufpt.html">UFP Technologies (UFPT)</a> - $4.4899 (-15.12%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/chase-corporation-ccf.html">Chase Corporation (CCF)</a> - $9.30 (-17.63%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/hugoton-royalty-trust-hgt.html">Hugoton Royalty Trust (HGT)</a> - $9.56 (-40.44%)</span><br /><span style="font-family: courier new;"> <a href="http://mostlymoneymusings.blogspot.com/2009/01/versar-inc-vsr.html">Versar, Inc. (VSR)</a> - $2.29 (-44.42%)</span><br /><span style="font-family: courier new;"></span><br /><span style="font-family: courier new;">The top performer of the month was Himax Technologies (HIMX) moving from $1.65 to $2.80. Also of note was Yanzhou Coal (YZC), moving from $5.68 to $7.17. <span style="font-family: courier new;">I imagine that oil and commodities will continue to improve in the coming months which should lift struggling pick Hugoton Royalty Trust (HGT). I am considering increasing my stake in HGT, as I feel it is one of the most undervalued royalty trusts.</span></span><br /><br /><span style="font-family: courier new;">My Short Picks for 2009, with 03/31/09 closing prices</span><br /><br /><span style="font-family: courier new;">Build-A-Bear Workshop (BBW) - $6.07 (+24.90%)<br /></span><span style="font-family: courier new;"></span><span style="font-family: courier new;">Red Robin Gourmet Burgers (RRGB) - $17.63 (+4.75%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/03/ann-taylor-stores-ann.html">Ann Taylor Stores (ANN)</a> - $5.20 (+3.17%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;">Mercantile Bancorp (MBR) - $7.2999 (-30.81%)</span><br /><span style="font-family: courier new;">LaCrosse Footwear (BOOT) - $8.03 (-35.66%)</span><br /><span style="font-family: courier new;">La-Z-Boy (LZB) - $1.25 (-42.40%)</span><br /><span style="font-family: courier new;">Bank of America (BAC) - $6.82 (-51.56%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;">Office Depot (ODP) - $1.31 (-56.04%)</span><br /><span style="font-family: courier new;"></span><span style="font-family: courier new;">Citigroup (C) - $2.53 (-62.30%)<br /></span><span style="font-family: courier new;"></span><span style="font-family: courier new;">Converted Organics (COIN) - $0.84 (-76.27%)</span><br /><span style="font-family: courier new;"> </span><span style="font-family: courier new;"><a href="http://mostlymoneymusings.blogspot.com/2009/01/circuit-city-cctyq.html">Circuit City (CCTYQ)</a> - $0.0075 (-94.23%) - Bankrupt</span><br /><span style="font-family: courier new;">Smurfit Stone Container Corporation (SSCC) - $0.00 (-100%) - Bankrupt</span><br /><br /><span style="font-family: courier new;">As a group my short picks rallied a little in recent weeks, particularly in the financial sector. The big surprise for me is Build-A-Bear Workshop (BBW) which is up almost 25% for the year. Converted Organics (COIN) continued its fall into penny stock territory.</span><br /><br /><span style="font-family: courier new;">Well, I will review the list again at the end of April to see how my picks and pans are performing. Until then, happy investing!<br /><br /></span><span style="font-family: courier new; font-size: 100%;">Disclosure: At the time of writing the author held shares in </span><span style="font-family: courier new;">Highveld Steel and Vanadium (HSVLY), Himax Technologies (HIMX), Hugoton Royalty Trust (HGT), Yanzhou Coal (YZC), </span><span style="font-family: courier new; font-size: 100%;">UFP Technologies (UFPT), and Versar, Inc. (VSR).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com1tag:blogger.com,1999:blog-7352185252563546470.post-9112824321971347322009-03-28T08:07:00.000-05:002009-03-28T15:13:19.917-05:00Are We Headed For A Credit Card Meltdown?<span style="font-family: courier new;">Everybody likes to point their fingers at the government, or blame the banks for the economic mess that we currently find ourselves in, but maybe we as consumers have helped facilitate things more than most of us like to admit. Everybody likes to accuse the banks of being greedy, but ultimately they are in the business to make money for themselves and their shareholders, not to be charitable to the general public. We are all grown adults, and those of us that have made poor financial choices should take responsibility for them, learn from them, and move on. <br /><br />The current financial crisis stems in part from people over extending themselves in the real estate market, obtaining mortgages that they couldn't really afford to pay, for assets that were declining in value. Not to mention the individuals using their property as an ATM to fund their indulgent lifestyles. The rapidly depreciating real estate market led to many individuals being in way over their heads, leading to foreclosures, short sales and the like. Many of us want to blame the banks, but they didn't force anyone to buy a house they couldn't really afford, they didn't force anyone to borrow beyond what they could feasibly pay back based on their incomes, they didn't force anyone to take equity out of the homes to spend on luxuries they didn't need, they simply helped facilitate what the consumer demanded. <br /><br />Now don't get me wrong, I am not supporting some of the banks actions - they were irresponsible and reckless at times. I believe that if we knew more of what goes on behind the scenes and off the balance sheets at many banks, then the markets would fall much more than we have already witnessed, but I do think we need to take part of the responsibility. <br /><br />Now we are left with a situation where those of us that were responsible with our finances, and made "smart" choices, are the people having to bail out the irresponsible and greedy! The scariest part of the situation is where we are headed from here. <br /><br />The government and the media seem to be painting an overly optimistic picture of the current economic environment, saying that the worst is over and that the Federal Reserve has everything under control. I don't think we could be further from the truth, as two further bubbles are readying themselves to pop. I have already touched on the treasury bubble in a previous post, so I will not discuss it here, but the other bubble that is looming large is the credit card bubble.<br /><br />Credit card companies have been seen to be raising interest rates, cutting credit lines, and closing inactive accounts. This serves to reduce consumer spending and confidence, and is a self-feeding cycle as it leads to reduced FICO scores, leading to reduced access to credit which in turn causes a further reduction in spending, hurting the economy further in the process. <br /><br />The worrying thing is that with the level of unemployment still rising, we are seeing more and more people using credit just to survive and make essential purchases. People have already cut back significantly on large purchases such as houses, cars and vacations, they have also cut back on luxuries, electronics and the like. People are now relying on credit for essential, day to day purchases such as food, clothing and energy. Now, I don't know about you but I find this scary! Credit card companies have been reporting increasing numbers of delinquencies, and I fear the worst is still to come.<br /><br />The Federal Reserve already has it's hands full with the banks, auto makers, insurance companies and the like, it cannot start bailing out individuals too! With rising unemployment, and reduced access to credit, the economy is close to a tipping point where the whole house of cards could come down at any minute.<br /><br />Disclosure - At the time of writing the author held shares in </span><span style="font-family: courier new; font-size: 100%;">ProShares Ultrashort 20+ Year Treasury ETF (</span><span style="font-family: courier new;">TBT) and Direxion Financial Bear 3X ETF (FAZ).</span><span class="std"><span dir="ltr"></span></span><span style="font-family: courier new;"><br /></span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com1tag:blogger.com,1999:blog-7352185252563546470.post-34177638330878822872009-03-22T14:43:00.013-05:002009-03-28T08:56:20.224-05:00Musings About Treasuries - Can We Make Sense Of Them Anymore?<span style="font-family:courier new;">A term which you are going to hear a lot in the coming weeks is "quantitative easing" which, put very simply, refers to the practice of central banks creating money. On March 6th, The Bank of England announced £150bn of quantitative easing, increasing the risk of inflation in the UK and now the US is following suit. The FOMC announced this week that it would purchase $300 billion worth of longer term US treasuries over the next six months. Unsurprisingly, this announcement caused the US dollar (USD) to fall, particularly against the euro (EUR), and the price of gold to jump.</span><br /><br /><span style="font-family:courier new;">The Chinese government has the world's largest holding of US treasuries and has recently openly expressed their discontent over the devaluing nature of the US government's activities toward their investment. If they were to fear that the value of their holdings was going to decline, they would most likely be obliged to sell them off and salvage whatever value they can before the market for US treasuries crashes. Which leads me to an interesting supposition, that the Federal Reserve is not going to be buying freshly created treasuries, which would have a strong inflationary effect, but in actual fact is going to buying existing treasuries from China! This in turn carries with it the implication that the Chinese will not be purchasing any more new treasuries from the US in the near future, increasing speculation that the Federal Reserve is set on devaluing the US dollar (USD), thus inflating asset values. </span><br /><br /><span style="font-family:courier new;">Of course, there are deeper implications to this as this effectively gives China the chance to increase its share of the global market and continue with its incredible economic growth. The credibility and influence of the US government over China is weakening, and attempts to coerce China into allowing the yuan (CNY) to appreciate will likely fall on deaf ears. There is even the scary possibility that China may decide to devalue the yuan (CNY) as the US dollar (USD) begins to slide. This will effectively bolster the Chinese economy and increase global market share. Of course, in practice it cannot be that simple, as the US government can always retaliate by increasing import taxes on Chinese goods and before you know it, the global depression is worse than it was to start with!</span><br /><br /><span style="font-family:courier new;">I believe that the discussion of the Chinese yuan's (CNY) valuation is going to be high on everyone's agendas in the coming weeks, particularly following the FOMC's move to devalue the US dollar (USD). Added to which we are likely to see some real fireworks in the treasury market. The outrage following the AIG bonus scandal will soon pale into insignificance in the light of more important events with much more dire consequences. I don't for one second buy into the heavily touted deflation banter and think that we're in for steady paced inflation in the upcoming months.<br /><br />I expect continuing increases in the price of oil, gold and other commodities, and I ultimately fear a collapse in the treasury market. The collapse when it comes leaves me with the fear in the back of my mind that there is a strong probability that the US will have to default on its debts, as they cannot keep on printing money indefinitely. I do anticipate that the eurozone will crash first, which may somehow enable the US to crawl from the wreckage intact, but either way I don't believe the ride is close to being over.<br /><br /></span><span style="font-family: courier new; font-size: 100%;">Disclosure: At the time of writing the author held shares in ProShares Ultrashort 20+ Year Treasury ETF (TBT).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-78351442293762525122009-03-22T07:32:00.007-05:002009-03-22T08:35:14.843-05:00How To Win Friends & Influence People - Dale Carnegie<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZRPSeHIyptxB3gfs-Eio9BpkI4nBz90HGRYpSiR4EIoLu2DeVQGA1qn37wZQU7s0Zilxfc9hxbGhm96Zed_tUKzTqph7ptgUM2DKBSxMkv8wrdFe8gLLMEoJLYMXxDPpBKqOHufvkCg/s1600-h/How_To_Win_Friends_And_Influence_People.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 240px; height: 350px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZRPSeHIyptxB3gfs-Eio9BpkI4nBz90HGRYpSiR4EIoLu2DeVQGA1qn37wZQU7s0Zilxfc9hxbGhm96Zed_tUKzTqph7ptgUM2DKBSxMkv8wrdFe8gLLMEoJLYMXxDPpBKqOHufvkCg/s200/How_To_Win_Friends_And_Influence_People.jpg" alt="" id="BLOGGER_PHOTO_ID_5316004477052232738" border="0" /></a><span style="font-family:courier new;">Originally published back in 1937, How To Win Friends & Influence People by Dale Carnegie is a book which, despite its age, retains its usefulness today. The study of human nature is an essential element in finding success in life. There will always be someone smarter than you, stronger than you, faster than you, better at this skill or that one, but that should not halt your success. If you can learn to express ideas in a way that fosters enthusiasm, or know how to assume leadership in a sincere way, then you will go far.<br /><br />Dale Carnegie was a firm believer in soft skills which could use a revival in this day and age, such as making people feel appreciated, being a good listener, smiling, and remembering people names. I hope these things don't sound too trivial to you, because remembering to do these little things right could be the difference between winning or losing a promotion, a big sale or a contract. This is a very insightful book that provides techniques you can use to get to know the people you interact with on a daily basis. For some people, being open, friendly and honest doesn't necessarily come naturally, but there is more to it than that, it's about identifying what makes a person tick and then using that knowledge to communicate more effectively with them.</span><br /><br /><span style="font-family:courier new;">The book has gone on to become an international bestseller, and a book that in my opinion should be an essential read for just about everyone. Whatever your position in life, there is something in there for you - unless you are a total recluse and never have to interact with another person for the rest of your life, you will no doubt learn something from this book! I highly recommend it.</span><br /><br /><iframe src="http://rcm.amazon.com/e/cm?t=mostmonemusi-20&o=1&p=8&l=as1&asins=0671027034&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="width: 120px; height: 240px; font-family: courier new;" marginwidth="0" marginheight="0" scrolling="no" frameborder="0"></iframe>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-8496600384581312142009-03-15T09:22:00.006-05:002009-03-15T10:00:52.205-05:00Reasons To Short Stocks<span style="font-family:courier new;">I was recently asked by a Mostly Money Musings reader about reasons that I would look for in order to consider shorting a stock. Rather than just post a comment reply, I thought this raised an interesting thought for a regular posting.<br /><br />Put simply, when an investor goes long on an investment, it means they have bought a stock believing that its price will rise in the future. Conversely, when an investor goes short, they are anticipating a decrease in the share price.<br /><br />Shorting is the process of borrowing a security, then selling it with the belief that it will fall in value so you can buy it back at a lower price before returning it to its rightful owner. The security will be loaned to you by your brokerage, either from their own inventory or from another client. It will be sold and the proceeds credited to your account, and after a time you will be required to buy the shares back and return them. A lot of the time, you can hold a short for as long as you want. However, you can be forced to cover if the lender wants the stock back for any reason.<br /><br />The key difference between going long and going short is the potential loss in each case. If you go long, your potential for loss is limited solely to the money invested in the stock should its value fall to zero. If you go short, your potential for loss is unlimited, since the price of a security can (in theory at least) rise forever. In practice, this does not happen, however a shorted stock can easily rise enough to wipe somebody out! I'm sure that many short sellers lost their shirts during the technology stock bubble.<br /><br />So, why short any stocks at all? The most common reason to short is to profit from an overvalued stock or market, although some will use shorting as a means of hedging - to protect their long positions.<br /><br />What should you look for when considering a short sale? I believe that the most important factor to look at is deteriorating fundamentals. Ultimately, it is strong fundamentals that cause a stock price to rise, as they are the foundation of a company or market, conversely deteriorating fundamentals damage the foundations of the company or market.<br /><br />In particular, you may wish to consider factors such as rising debts, rising inventories, falling sales and revenues, over-valuation. You may also wish to look for outdated technologies, companies that fail to keep up with the times. You may wish to consider the effects of changes in management or keep a watch on the amount of insider ownership.<br /><br />In addition to looking at deteriorating fundamentals, it also pays to look at technical factors too, as they offer a clue that all the buyers have bought and there is no-one left to hold up the security. In this case, a price drop would be expected, and a short sale could be possible.<br /><br /></span><span style=";font-family:courier new;font-size:100%;" >Disclosure: At the time of writing the author did not hold any short positions.</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-6771219103873727152009-03-11T20:29:00.005-05:002009-03-28T09:03:40.557-05:00China Fire & Security Group - CFSG<span style="font-family:courier new;">China Fire & Security Group (CFSG) supplies industrial fire safety products and systems to companies in the iron and steel, power and petrochemical industries in China. The company today announced fourth quarter results which beat analyst estimations, showing increased revenue and earnings. The company is in a strong financial position with no debt and a healthy cash flow. </span><span style="font-family:courier new;"><br /><br />In the past, China has not been known for its strong track record in the arena of health and safety, but as the country continues to show tremendous growth, it makes sense that they will endeavor to protect their investments. Companies like China Fire & Security Group (CFSG) should flourish as a result. Interestingly, the company has a high insider ownership </span><span style="font-family:courier new;">and yet has almost a 10% short interest.</span><br /><span style="font-family:courier new;"><br />China Fire & Security Group (CFSG) has been on my watchlist for several months as it is in a strong position to benefit from any government infrastructure spending and stimulus efforts in China.<br /><br /></span><span style="font-family: courier new; font-size: 100%;">Disclosure: At the time of writing the author did not hold shares in China Fire & Security Group (CFSG).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0tag:blogger.com,1999:blog-7352185252563546470.post-11294519580105090392009-03-11T18:59:00.001-05:002009-03-28T08:57:32.613-05:0080% Discount at Restaurant.com<span style="font-family:courier new;">For those of you that like to eat, but missed your chance to get the certificates last month, you now have another chance. Restaurant.com is offering $25 gift certificates for just $2. Just use the discount code:<span style="font-weight: bold;">MENU</span> when you go to check out. The offer runs until March 15th and the certificates are valid for a year once purchased.<br /><br /></span><span style="font-family: courier new; font-size: 100%;">Disclosure: At the time of writing the author still loves food!</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com2tag:blogger.com,1999:blog-7352185252563546470.post-44050752242543473872009-03-07T08:09:00.004-06:002009-03-28T09:02:51.700-05:00Ann Taylor Stores - ANN<span style="font-family:courier new;">Ann Taylor Stores (ANN), one of my short picks for 2009, reported a set of pretty appalling results yesterday, including a staggering loss of $6.66 per share. This hardly came as a surprise to me, as I feel the company caters mostly to the section of the population most affected by the current economic climate. It is significantly more expensive than a number of discount retailers, but it is also far from high-end fashion. I don't see things improving for the company for some time yet as people seem to have significantly less disposable income available at present. Investors greeted the news by sending the stock price down 38%!<br /><br />Prior to these results, Ann Taylor Stores (ANN) was the only one of my short picks to have posted a stock price gain for the year, now all of the picks are in negative territory.<br /><br /></span><span style="font-family: courier new; font-size: 100%;">Disclosure: At the time of writing the author did not hold shares in Ann Taylor Stores (ANN).</span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com2tag:blogger.com,1999:blog-7352185252563546470.post-2069883979447539572009-03-02T21:57:00.007-06:002009-03-28T09:02:05.604-05:00AIG - A Money Pit<span style="font-family:courier new;">Ok, so I don't know about you but my head is spinning! Not only has American International Group (AIG) posted the worst quarterly results in the history of the stock market, but it has been rewarded with more government bailout money! The insurance group managed to lose an historic $61 billion in just three months, and has just been granted access to a further $30 billion from the US government.<br /><br />It is a mystery to me that American International Group (AIG) can still be a publicly listed company, it is a mystery to me than any single individual would go anywhere near their shares, and it is a mystery to me how they didn't see this coming!<br /><br /></span><span style="font-family:courier new;">Only the government can provide insurance where private companies cannot - after all, they are the only ones with enough resources available. Essentially, American International Group (AIG) got into the business of insuring a significant amount of the world's financial system against the consequences of a global financial meltdown. The US government had to step in and bail them out because AIG was totally incapable of delivering on that insurance. Ultimately, American International Group's (AIG) business of selling credit default swaps was a huge scam, as there was no way they could ever pay out on them.<br /><br />The total bailout for AIG so far is in the region of $170 billion, which blows my mind. The worst part of the whole thing is that, I very much doubt that that will be enough. With American International Group (AIG) so intertwined in the global economy, they pretty much have the US government held at gunpoint whenever they need more money because of the disasterous repercussions following potentially bankruptcy of the company. Simply put, the government cannot afford <span style="font-style: italic;">not</span> to bail them out, which is a really scary thought! If AIG were to fail, then the entire global economy would end up in a lot of pain, and very very few individuals would not feel it in some way or another.</span><br /><br /><span style="font-family: courier new; font-size: 100%;">Disclosure: At the time of writing the author would not touch shares in American International Group (AIG) with someone else's barge pole.</span><br /><span style="font-family:courier new;"></span>Greghttp://www.blogger.com/profile/04763548114682360479noreply@blogger.com0