After seven months of tracking my 2008 picks -- Wham! -- I went from beating the indices and Berkshire Hathaway (NYSE: BRK.B) to being humbled by the market. However difficult it is to display your failings, once again I will share all. This is the low point since I posted the original story Chasing Value: Final list -- 8 stocks for 2008.

Only Reliance Steel & Aluminum (NYSE: RS) remained in positive territory, down from five stocks that were up in the last report. Sometimes, the reasons for the downslide were more obvious than they were in the cases for my picks. The cutting in half of Valero Energy Corporation (NYSE: VLO) has been reported often, as the largest independent oil refiner in North America has had its profit margins squeezed.

Loews Corporation (NYSE: L) has been hurt by its insurance interests and helped by its holdings -- a 51% stake in Diamond Offshore Drilling, Inc. (NYSE: DO) that has been doing well as the world remains desperate for more oil and natural gas.

The gap between the Dow Jones Industrial Average, Standard & Poor's 500 Index and the technology heavy NASDAQ Composite Index is narrower than in the past.

Continue reading Chasing Value: 8 stocks for 2008 -- June/July, that sinking feeling

Chasing Value: 8 stocks for 2008 -- June/July, that sinking feeling originally appeared on BloggingStocks on Thu, 14 Aug 2008 12:30:00 EST. Please see our terms for use of feeds.

• Appliances
• Aviation
• Consumer Electronics
• Electrical Distribution
• Energy
• Finance - Business
• Finance - Consumer
• Health-care
• Lighting
• Media & Entertainment
• Oil & Gas
• Rail
• Security
• Water

Continue reading Serious Money: GE should focus on water and power

Serious Money: GE should focus on water and power originally appeared on BloggingStocks on Thu, 12 Jun 2008 15:40:00 EST. Please see our terms for use of feeds.

After five months of tracking my 2008 picks, it is rewarding to finally have a breakthrough -- topping the three major stock indices and Berkshire Hathaway (NYSE: BRK.B) too. It has been painful to have to report each month that I was being bested. However, since I have not seen anything contradicting my original rationale for my eight picks I stood my ground.

This past month saw great improvement. For the first time since I posted the original story Chasing Value: Final list -- 8 stocks for 2008, five of the eight stocks are up:

Moving into positive territory by pennies was Loews Corporation (NYSE: LTR). Among its holdings is a 51% stake in Diamond Offshore Drilling, Inc. (NYSE: DO) that has been doing well as the world remains desperate for more oil and natural gas.

Bunge Limited (NYSE: BG) was the other stock to cross the line into the black, while Valero Energy Corp. (NYSE: VLO), although improving, remains my worst performer. It is still down almost 28% after five months.

The gap between the Dow Jones Industrial Average, Standard & Poor's 500 Index and the technology heavy NASDAQ Composite Index narrowed substantially so that the three are tracking each other very closely. Stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) continue to gain significantly and their outlooks have not been shaken amid overall pessimistic economic forecasts.

Continue reading Chasing Value: 8 stocks for 2008 -- May beats all

Chasing Value: 8 stocks for 2008 -- May beats all originally appeared on BloggingStocks on Mon, 02 Jun 2008 13:01:00 EST. Please see our terms for use of feeds.

Today was a very gloomy day in the stock market with Oil reaching new highs and everything else losing -- almost. Among the few winners, and I mean very few, Apple Inc. (NASDAQ: AAPL), oil, and specialty steel were up. I went through my watch list and found this very short list of winners:

Anadarko Petroleum (NYSE: APC) $78.49, up +$0.95 or 1.23%

Apple Inc (NASDAQ: AAPL) $185.90, up +$2.30 or 1.25%

Halliburton (NYSE: HAL) $49.92, +$0.85 up +$1.73%

Precision Drilling TR (NYSE: PDS) $27.90, up $1.13, or 4.22%

Reliance Steel and Aluminum (NYSE: RS) $67.37, +0.$52, or 0.78%

Valero Energy (NYSE: VLO) $50.12, up +$0.43 or 0.87%

Continue reading Apple, Oil, & Steel were rays of light on gloomy market day

Apple, Oil, & Steel were rays of light on gloomy market day originally appeared on BloggingStocks on Tue, 20 May 2008 20:15:00 EST. Please see our terms for use of feeds.

Continue reading With Reliance Steel, customizing is the key

With Reliance Steel, customizing is the key originally appeared on BloggingStocks on Mon, 19 May 2008 18:15:00 EST. Please see our terms for use of feeds.

This month saw great improvement after last month's disaster. Having to conclude my findings on a specific month end day, or any day, depending on the news, sometimes distorts results. For example news on March 31 sent the market down and on April first my picks shot up an unusual amount; hopefully the trend will continue.

My riskiest stock pick Newcastle Investment Corp (NYSE: NCT) was down the most in March but recovered about 35% of the loss in April leaving Valero Energy Corp. (NYSE: VLO) the dubious honor of being my worst performer, down over 30% in the first four months of the year.

April showed improvement as many companies reported positive earnings reports or beat expectations.

The Dow Jones Industrial Average gained some ground in April as did the Standard & Poor's 500 Index, and the technology heavy NASDAQ Composite Index was up with stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) improving significantly on very strong reports. Google is up over 25%.

Most of my picks improved. Higher food prices no doubt helped Bunge Limited (NYSE: BG) which recaptured losses moving up 23% from its recent bottom. My two winners Raytheon Co. (NYSE: RTN), the high tech defense contractor, and Reliance Steel & Aluminum (NYSE: RS) were joined by a third, Anglo American plc (ADR) (NASDAQ: AAUK) which had a 10% swing entering positive territory.

Continue reading Chasing Value: 8 stocks for 2008 -- April Bunge's back

Chasing Value: 8 stocks for 2008 -- April Bunge's back originally appeared on BloggingStocks on Thu, 01 May 2008 15:58:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Abbott Laboratories Inc. (NYSE: ABT) first-quarter profit soared on overseas demand for Humira.
• Advanced Micro Devices Inc. (NYSE: AMD) posted a bigger-than-expected loss, its sixth straight.
• Coca-Cola Co. (NYSE: KO) posted better-than-expected first-quarter results on strength overseas.
• CSX Corp. (NYSE: CSX) first-quarter profit soared on strong demand for grain, ethanol, and coal.
• eBay Inc. (NASDAQ: EBAY) beat first-quarter expectations but the outlook was uninspiring.
• Google Inc. (NASDAQ: GOOG) first-quarter profit soared 42%, beating Wall Street estimates.
• Intel Corp. (NASDAQ: INTC) first-quarter earnings slipped but exceeded expectations.
• Intuitive Surgical Inc. (NASDAQ: ISRG) beat first-quarter estimates and offered a disappointing outlook.
• J.B. Hunt Transport Services Inc. (NASDAQ: JBHT) missed first-quarter estimates on rising fuel prices.
• Nokia Corp. (NYSE: NOK) first-quarter profit missed expectations and it warned of a coming decline.
• Pfizer Inc. (NYSE: PFE) first-quarter profits fell and missed analysts' expectations.
• Reliance Steel & Aluminum Co. (NYSE: RS) lowered its second-quarter outlook.
• Royal Philips Electronics posted a bigger-than-expected fall in profit on weak North America TV sales.
• Wolverine World Wide Inc. (NYSE: WWW) beat earnings estimates but shareholders were not impressed.
• Xerox Corp. (NYSE: XRX) posted a first-quarter loss that matched analysts' estimates.

Continue reading Earnings highlights: Google, Intel, Coca-Cola, Pfizer, eBay, AMD and others

Earnings highlights: Google, Intel, Coca-Cola, Pfizer, eBay, AMD and others originally appeared on BloggingStocks on Sun, 20 Apr 2008 10:10:00 EST. Please see our terms for use of feeds.

Reliance Steel (RS) drops on lower Q2 guidance originally appeared on BloggingStocks on Thu, 17 Apr 2008 13:46:00 EST. Please see our terms for use of feeds.

After three months it is time to face the facts: two of the three indices beat my picks handily. I have not made a good showing so far and unlike most investment idea sources, I feel obliged to air my dirty laundry for all to see.

My riskiest stock pick Newcastle Investment Corp (NYSE:NCT) is down almost 37% this year, and the energy stocks did almost as poorly even though fuel prices are near all-time highs. The downers were not offset by this months' repeat winners.

March was a seesaw battle, but in the end there was not much to show for it. However, unlike the last day of January (down 370 points in the Dow) and February's last trading day (down 315 points), March had a final day of plus 46.49, which is not very meaningful.

The Dow Jones Industrial Average gave some ground in March as did the Standard & Poor's 500 Index while the technology heavy NASDAQ Composite Index was marginally up with stocks like Apple Inc (NASDAQ:AAPL) improving notably.

Most of my picks sagged a little more, while two remain in positive territory. Raytheon Co. (NYSE: RTN), the high tech defense contractor is up and Reliance Steel & Aluminum (NYSE: RS) is way up.

Continue reading Chasing Value: March review -- 8 stocks for 2008 -- not so refined

Chasing Value: March review -- 8 stocks for 2008 -- not so refined originally appeared on BloggingStocks on Mon, 07 Apr 2008 15:18:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: The X factor

Cramer on BloggingStocks: The X factor originally appeared on BloggingStocks on Thu, 27 Mar 2008 08:35:00 EST. Please see our terms for use of feeds.

The currency of our realm, the US Dollar, has been losing value for many years, but lately the results of this sad state of affairs have become increasingly more evident. Concerns are mounting on a global basis not just in the United States. The euro, once pegged at a buck, is now trading at $1.55, while gold has passed $1,000 and oil has continued its charge, breaking through the $110 per barrel mark.

While a good deal of this problem is home grown, the pain is being felt all around the world. We have read many stories about how the American economy is a smaller part of the global economy and becoming somewhat detached. This is nonsense. What has happened is that the global economy has become infinitely more integrated and like any integrated structure (the architect speaking), what occurs in one place is felt everywhere.

The Federal Reserve Board, led by Chairman Ben Bernanke, has been watching the economy in an extremely measured fashion, bordering on casual. To those who see beyond Bernanke's calm demeanor, one should imagine a stock trader of old, holding the ticker tape up to his eyes and monitoring every change, every blip in the market as the ticker tape machine clicks away, spewing out the latest market activity.

Continue reading Serious Money: The falling dollar creates global pain -- Part 1

Serious Money: The falling dollar creates global pain -- Part 1 originally appeared on BloggingStocks on Thu, 13 Mar 2008 15:05:00 EST. Please see our terms for use of feeds.

Earlier in the week I posted about finding the market bottom using that age-old handheld calculator, a white paper napkin. So, unfortunately it looks like I may be right again. Not exactly something I was hoping for, but if it has to be, it has to be. I wonder if my old napkin can outperform Wall Street super computers?

Is this an auction to the bottom? Are investors bidding things down instead of up? Looks like it from all the negative sentiment. Consumer sentiment is down, and short sellers are all excited, increasing their negative positions to new highs every day.

And here is the all-telling sign of capitulation: the ever-lying overly optimistic government is starting to admit how bad things are and throwing hundreds of billions of dollars at the problem. When does the turnaround come?

Continue reading Dow below 12,000 -- do I hear 11,000? Yes I do!

Dow below 12,000 -- do I hear 11,000? Yes I do! originally appeared on BloggingStocks on Fri, 07 Mar 2008 15:02:00 EST. Please see our terms for use of feeds.

It is alarming to me that the same people who screw up the economy (or stand by watching) are the ones that are now promoting the remedies. They have proven without a shadow of a doubt that this is not their strong suit. The proposed economic stimulus package has bi-partisan support and calls for an estimated $156 billion of tax rebates ranging from $500 to $1,000 (+ $300 for each child) that might show up in May.

If we are going to add on to our already humungous joke of national debt, than I want to invest this capital in something that will bring a higher return on invested capital (ROIC) than the paltry one time mad money. That expenditure should be for national infrastructure projects like roadways, bridges, tunnels, and waterways.

We have all heard about the poor condition of our national infrastructure and the hundreds of billions of dollars of repair work and replacement that is desperately needed.

This alternative would bring visible results that every single person in the country would benefit from and improved linkages always stimulate economic growth. Road improvements even reduce fuel consumption by shortening routes and reducing friction both strategically and physically.

Continue reading Fund roads & bridges NOT mad money stimulus

Fund roads & bridges NOT mad money stimulus originally appeared on BloggingStocks on Tue, 04 Mar 2008 17:43:00 EST. Please see our terms for use of feeds.

Continue reading Top 10 stocks since last recession, tax audit red flags to avoid & bankruptcies make gift cards worthless - Today in Money 3/4

Top 10 stocks since last recession, tax audit red flags to avoid & bankruptcies make gift cards worthless - Today in Money 3/4 originally appeared on BloggingStocks on Tue, 04 Mar 2008 08:38:00 EST. Please see our terms for use of feeds.

Two months into the year and investors' true 'metal' was tested, and mine more than most. February showed signs of improvement over January, but the last week ended hopes of any rally. The last day of January saw a 370 point drop in the Dow and February's last trading day closed with similar results, down 315 points.

The soft stock market did display many points worth noting. The Dow Jones Industrial Average was about break even for the month, indicating investors were showing some signs of support for large cap stocks, prompted in part by news of increased profits at Wal-Mart (NYSE: WMT) and share buy-backs at IBM Corp (NYSE: IBM).

I cannot say the same for the other major indices, NASDAQ Composite Index and Standard & Poor's 500 Index, which dropped significantly last month.

Some of my picks also sagged a little more, although not as much, while two turned into positive territory. In January, only Raytheon Co. (NYSE: RTN), the high tech, defense contractor, was up. In February, the weak dollar and inflation concerns boosted Anglo American plc (ADR) and Reliance Steel & Aluminum (NYSE: RS) -- two commodity plays.

Continue reading Chasing Value: February review -- 8 stocks for 2008 -- testing my 'metal'

Chasing Value: February review -- 8 stocks for 2008 -- testing my 'metal' originally appeared on BloggingStocks on Mon, 03 Mar 2008 14:55:00 EST. Please see our terms for use of feeds.

January was a wild ride and February holds the promise of more of the same after yesterday's 370 point drop in the Dow. All the major indices were down in January and so were seven of my eight picks. Only Raytheon Co. (NYSE: RTN), the high tech defense contractor, was up. My two high flyers from last year, Huaneng Power International, Inc. (ADR) (NYSE: HNP) and Valero Energy Corp. (NYSE: VLO), were the biggest losers.

I have not changed my opinion of these stocks from that of the original story Chasing Value: Final list -- 8 stocks for 2008 and I am following them closely for buying opportunities. We have already added more Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power to our holdings.

Among the indices, the DJIA lost the least and the NASDAQ lost the most. The average return for my eight picks was -7.82%. This underperformed the average of the indices that was -7.58% -- but my new stalking horse Berkshire Hathaway (NYSE: BRK.B) bested both, so Buffett is still the man.

Now including dividends for my picks which average 3.91% divided by 12 for the one month allows for an additional .326%, reducing the loss to -7.494%. Using 1.8% for the average dividend of the indices divided by 12 adds 0.15%, reducing the loss to -7.43%. The dividends tighted things up. BRK.B does not pay a dividend.

The following are my eight picks with the starting share price as of December 28, 2007:

Continue reading Chasing Value: January review -- 8 stocks for 2008

Chasing Value: January review -- 8 stocks for 2008 originally appeared on BloggingStocks on Wed, 06 Feb 2008 12:44:00 EST. Please see our terms for use of feeds.

The price-to-cash flow ratio has been repeatedly promoted in various publications as one of the more important metrics to consider when evaluating a stock to buy. Apparently over long periods of time it is more telling than the often quoted price-to-earnings ratio. I have read that cash flow is a key metric that "my pal Warren" looks at for Berkshire Hathaway (NYSE: BRK.B) investments.

Here are the figures for the Chasing Value: Final list -- 8 stocks for 2008 in order from highest to lowest P/CF. The 12/28/08 starting stock price, yesterday's closing price and the current P/CF for the most recent fiscal year (MRFY) are listed. Only two stocks are up, while six are down.

Continue reading Chasing Value: BG, HNP, LTR, VLO, NCT price-to-cash flow

Chasing Value: BG, HNP, LTR, VLO, NCT price-to-cash flow originally appeared on BloggingStocks on Tue, 15 Jan 2008 15:55:00 EST. Please see our terms for use of feeds.

I recently posted Chasing Value: Final list -- 8 stocks for 2008 and mentioned that all of them pay a dividend. If this year is going to be as gloomy as some would have you believe, then stocks that pay dividends, as a group, will outshine those that do not.

The following are my eight picks, with the closing stock price as of my start date December 28, 2007 and the dividend yield. Last year, there were more stocks among my picks that paid a dividend higher than the S&P 500 Index average of 1.8% . This year there are only two.

• Anglo American plc (ADR) (NASDAQ: AAUK) $30.79. 1.9%
• Bunge Limited (NYSE: BG) BG was $119.03. 0.56%
• Huaneng Power International, Inc. (ADR) (NYSE: HNP) HNP was $41.75. 3.5%
• Loews Corp. (NYSE: LTR) at $49.35. 0.50%
• Newcastle Investment Corp. (NYSE: NCT) was $13.08. 22%
• Raytheon Co. (NYSE: RTN) RTN was $61.51. 1.65%
• Reliance Steel & Aluminum (NYSE: RS) $54.32 per share. 0.58%
• Valero Energy Corp. (NYSE: VLO) VLO was $70.55. 0.66%

Continue reading Chasing Value: Final 8 -- love dividends

Chasing Value: Final 8 -- love dividends originally appeared on BloggingStocks on Mon, 07 Jan 2008 14:40:00 EST. Please see our terms for use of feeds.

A few days behind schedule, but here is my list of eight stocks. Included in the list there are two holdovers from the 2007 list of seven stocks. I do not see any value in creating an entirely new list when I have done well over the years riding the winners. This is particularly true if the reasons you bought the stock in the first place remain valid.

These eight picks for the year will be tracked monthly with updated results. The initial share prices are from December 28, 2007. They are focused on defense, energy, food, gold, metals, mining, oil, power, and every one pays a dividends. The following are my "Quick Takes" in alphabetical order with links to the complete stories.

Anglo American plc (ADR) (NASDAQ: AAUK) is a world-class player in precious metals, diamonds, and commodities, which are all growing in demand. When the world economy is booming, all of its mining products are sought after, and when the market runs scared, gold goes up. It pays a dividend yield of 1.9% and is trading almost 25% off its 52-week high. For full story: Chasing Value: Anglo American diamonds and gold are your best friend. The closing price on December 28, 2007, for AAUK was $30.79.

Continue reading Chasing Value: Final list -- 8 stocks for 2008

Chasing Value: Final list -- 8 stocks for 2008 originally appeared on BloggingStocks on Sat, 05 Jan 2008 15:10:00 EST. Please see our terms for use of feeds.

Reliance Steel & Aluminum (NYSE: RS) made my 2008 short list. It processes and distributes more than 100,000 products made of carbon, alloy, stainless, and specialty steel, as well as aluminum, brass, copper, and titanium. It serves more than 125,000 customers. On December 28, 2007 RS closed at $54.32 per share.

Commodities have been hot the last few years and there has been a lot of activity as the steel market in particular has seen a lot of mergers. The downturn in construction in the latter half of 2007 has affected the stock prices of most companies producing building materials, and most of the steel mills would be included in that category.

Reliance seems to have escaped that pitfall by making value-added products for a very broad range of industries and customers. This specialization is why I picked it over one of my other contenders Nucor Corporation (NYSE: NUE), which is one of the world leaders in the idea of mini-mills. Nucor is a wonderful company that has been very successful; however, in a sputtering economy you have to be able to distinguish yourself from the crowd.

Continue reading Chasing Value: Reliance Steel & Aluminum adding value globally

Chasing Value: Reliance Steel & Aluminum adding value globally originally appeared on BloggingStocks on Sat, 05 Jan 2008 09:10:00 EST. Please see our terms for use of feeds.