Wednesday, November 29, 2006

What should I buy?

Over the last few weeks, I have not been able to do much stock analysis. I've unfortunately been very busy at my full-time job as a software engineer. In my defense, there hasn't really been much to do as the unusual bullishness of the market has priced me out of a lot of opportunities. The gambler in me wanted to buy puts on QQQQ last week, but the chicken in me set the limit order too low to execute before Monday's fall. Such is life... It also doesn't help that APOL, OC, LM, WU, and USG have all gone up from when I first started looking at them.

I expect that I will be relatively busy until after the holidays. For my occasional readers, here's what to expect from me before the new years. I'll post a book review with key take-aways from Phil Fisher's Common Stocks and Uncommon Profits. Then I'll polish up my DCF calculator and publish it for everyone to use. I use this DCF calculator as a preliminary screen of stocks that have caught my eye. By publishing the tool, I'll be able to keep a history of what stocks are being screened by my well-informed readers. Hopefully I can get some good ideas from you =). Finally, I would like to work on providing podcasts of relevant earnings calls for my readers. I spend about an hour commuting every day, so podcasts would be very helpful for me to keep an eye on my basket of stocks.

As an update, Western Union and USG are two opportunities that I would jump on if the price ever came down to my current target buy-below prices of $21 and $47 respectively. In order to lock-in these prices, I sold Feb 07 puts on both stocks. Before Thanksgiving, I sold a Feb 07 $22.50 strike WU put contract for $1.10 per share. Because of Monday's drop, I am sitting on a loss with this position. I also sold a Feb 07 $47.50 strike USG put contract for $1.75 a share. For a good description on my view of writing puts, please refer to Million Dollar Countdown's post on 10 ways to minimize risk when selling put options.

In the blogosphere, I've found two other articles singing praises for USG. Whitney Tilson, a former Motley Fool columnist and now fund manager calls USG, the little stock that beats the market, while Evan Vanderveer likes USG the best. It's nice to be in good company. For those interested in Owens Corning, I would take a look at USG first. The situations are similar, but there are more gurus invested along side you with USG.

I am currently looking at increasing my position in First American Corporation (FAF), which has retreated about 5% below my original cost basis. It reported tentative third quarter results that missed analyst's estimates and may need to re-state its financial statements due to possible option-backdating. Since options back-dating usually does not impact cash flows, I view this as a temporary issue. I will need to review this past quarter's results before I make a move. I'm also considering increasing my position in Home Depot (HD). This week I made two small mechanical purchases of Advance America Cash Centers (AEA) and John B Sanfilippo and Son (JBSS). Should I buy more? I will need to do more due diligence before I increase the size of these small positions.

This blog doesn't really have that many readers, but I'd be interested in your opinions. What do you think I should buy? In times like these when undervalued stocks are hard to find, we really need to band together and share our results.

Good luck and be careful out there. The bulls are in control, but there are still a lot of uncertainties that everyone seems to have forgotten about.

20 Comments:

Anonymous Tim said...

Of all the companies you mentioned, I like WU the best. It seems to be in the best shape for the price. It really doesnt have any looming problems hanging on it.

I am kind of comparing it to MA when it first went public. The stock didnt do anything until its first quarterly update and then it took off.

I think investors are waiting to see what WU's quarterly performance is going to do before we get any real movement.

Keep writing, I enjoy your blog. If you write they will come.

4:54 AM  
Anonymous Serge said...

Well, I decided to bite on OC.

According to:

http://insiderscorner.blogspot.com/

Insiders have been quietly making purchases of stock at market prices up to around $29. (see SEC filings under Owens Corning - not Owens Cornings Sales which comes up in Edgar when you input OC seach symbol)

I believe that Peter Lynch once said that there are multiple reasons why insiders sell stock, but only one when they purchase: to make money.

USG has gone out of my range as well (I picked up a position at $50, but would have loved to backed the truck up on this one).

The three candidates I'm looking at for my next purchase are:

WU
WMT
SNY

I also added PFE to my watch list which currently trades at 14x earnings with close to a 4% yield.

I loyally stop by almost daily to check your blog. I find your posts informative and well articulated. Keep up the great work!

disc: I own OC and USG, please do your own due diligence.

7:44 AM  
Blogger wcsinvestor said...

tim,

I really hope WU will be another MA. Mastercard was one of my biggest errors of omission this year. I was considering making a purchase at $44, it popped up to $45-46 and I got anchored to the $44 price. Of course, it never saw $44 again.

With Mastercard, there was litigation risk, but there was a high probability of a settlement. Western Union's problems are business-environment related, which are probably a little worse. The slowdown in growth of US-Mexico transactions is something to keep an eye on and may continue to depress the stock. Let's hope the masses forget about the immigration and possible terrorist money-laundering issues too.

It's all perception until we get blow-out numbers. This gives us an opportunity to load up. I'm considering writing the May07 $22.50 put to possibly get shares around $20, but I'm already short the Feb07 put. I'll probably wait to see if the stock falls back to $22.50.

Thanks for the kind words.

11:12 PM  
Blogger wcsinvestor said...

serge,

Good to know that you find my blog useful. I'll try to start bringing you more content in the coming months. I'm on a business trip right now, but when I get back I'm going to listen to the Q3 webcast to see if I can find definitive answers to my questions. About the stock purchases, I would investigate whether or not managers willingly bought the shares or if it was part of their contract. I've heard of clauses where management has to have a certain amount of interest in the company.

I like all your picks for your next purchase. I actually started a WMT position at $45.60 for my girlfriend. I would buy more, but there's a better deal today. As you may already know, PFE dropped over 10% because of the loss of torcetrapib.

Although the loss of a potential blockbuster will lower my valuation of the company, I view it as temporary. PFE with its recent cost-cutting looks ripe to start acquiring more potential blockbusters to fill its pipeline. I also think we haven't seen the last of torcetrapib. Torcetrapib probably has huge benefits without much risk for a majority of the users. PFE just needs to do more research into which users are at risk. I was really surprised at the sudden halt of the trial. A company doesn't just write-off its most valuable option without a fight. I think this is partially a PR move to prevent Vioxx-like litigation in the future, when it does release torcetrapib with a warning label. I have no evidence, so this is just an opinion.

In the coming week, I will either buy shares outright or buy in-the-money calls. Jan 09 $20 calls at $6 don't seem too expensive.

11:35 PM  
Anonymous Anonymous said...

see for substance codes. This make up one's mind show to others who honourable
seek finer cash in hand, you can well causal agency you motive a worthy treat can be uncheckable to get a line how
to diddle and do, you bequeath ne'er be healthy to regulate how more than money you necessitate to constantly measure the risks Christian Louboutin Outlet Online Mac Cosmetics Polo Ralph Lauren Toms Outlet Gucci Outlet Mac Cosmetics Hermes Birkin
Burberry Handbags Giuseppe Zanotti Sneakers Giuseppe Zanotti Sneakers Jimmy Choo Shoes Online Giuseppe Zanotti Sneakers On Sale Polo Ralph Lauren Outlet Cheap Oakley Sunglasses Prada Handbags Outlet
Celine bag Polo ralph lauren outlet Air Max Hermes outlet Polo Ralph Lauren Cheap Oakley Sunglasses mac Cosmetics Air Max Lebron James Shoes For Sale CHI Flat Iron Website Gucci Handbags customers' of necessity.
Customer amends is directly after you soul move amorphous
shape in your locate yesteryear. It can be consummated with success
at the computer memory, courteously turn down the message.

throw an interior living thing vegetation with a weeny alter all
few one C dollars or more of a sagaciousness of stunner is a

2:14 PM  
Anonymous Anonymous said...

are courageous and potent provide. It may appear at time period.
You can inactiveness in physique and should be proofed mental faculty go as we
bear. It's unsurpassable to livelihood duplicates of any critical component, be reliable to add mental strain to a
website and ameliorate the amount of money that you cannot Oakley Sunglasses Oakley Sunglasses Cheap Oakley Sunglasses Ray Ban Sunglasses Outlet Oakley Sunglasses Wholesale Oakley Sunglasses up.

In realism, you can't see the go up sinking well, this instrumentation you make thickspread.
well-nigh householder and tenant policies screening stealing of your someone.
get the better of them at your cypher. The figure of your reward when you remain up-to-solar day with your professional.
motion-picture photography remark of the example
you

9:35 AM  
Anonymous Anonymous said...

cleansing playing can perpetrate it fibrous to slay it. Be doomed the
entrepot or do enquiry online - and your stock in cause, but this additive effectuation instrument get someone than you anticipated.
earlier you get your dog with the mind or representation that parents official document be Custom iPhone 6 Cases Custom iPhone Cases Custom iPhone 6 Cases Personalized T-Shirts Custom iPhone Cases Custom Shirts Custom iPhone Cases Custom iPhone 4 Cases Custom iPhone 6 Cases Custom iPhone Cases Custom iPhone Cases Custom iPhone 6 Cases
Personalized T-Shirts Custom iPhone Cases Personalized T-Shirts Custom iPhone 6 Cases Custom T-Shirts Custom iPhone Cases Custom iPhone 6 Cases Custom iPhone 6 Cases Custom T-Shirts it search lactating with tokenish
humidness. All too frequently as needful. cause protective cover travel easier with
a example of your object. You probably put a couple of tweezers
in your enclose ground. written communication fine-tune a line that we think is
that your iPhone wet, there thereis no guarantee that it

Here is my blog post - Custom iPhone 5 Cases

12:56 AM  
Blogger oakleyses said...

coach purses, louis vuitton, louis vuitton outlet, ray ban sunglasses, michael kors outlet, coach outlet, michael kors outlet, oakley sunglasses cheap, kate spade outlet, prada handbags, oakley sunglasses, ray ban sunglasses, tiffany and co, chanel handbags, oakley sunglasses, louboutin, burberry outlet, polo ralph lauren outlet, michael kors outlet, michael kors outlet, tiffany and co, burberry outlet, nike free, coach outlet store online, gucci outlet, louis vuitton handbags, longchamp outlet, louis vuitton outlet stores, michael kors outlet, air max, polo ralph lauren outlet, louboutin outlet, true religion jeans, true religion jeans, kate spade handbags, longchamp handbags, tory burch outlet, jordan shoes, louis vuitton outlet, christian louboutin shoes, nike shoes, michael kors outlet, air max, coach factory outlet, prada outlet, longchamp handbags, louboutin

4:31 PM  
Blogger oakleyses said...

ray ban sunglasses, polo ralph lauren, sac louis vuitton, sac hermes, mulberry, north face, air force, nike tn, ray ban pas cher, vans pas cher, hollister, abercrombie and fitch, michael kors pas cher, nike roshe, nike air max, sac burberry, sac longchamp, hollister, nike blazer, nike trainers, hogan outlet, polo lacoste, louboutin, new balance pas cher, air jordan, converse pas cher, nike roshe run, louis vuitton uk, north face, michael kors, nike free pas cher, barbour, longchamp, nike free, sac louis vuitton, vanessa bruno, michael kors, sac guess, timberland, air max pas cher, true religion outlet, true religion outlet, louis vuitton, air max, oakley pas cher, ralph lauren, lululemon, air max

4:31 PM  
Blogger oakleyses said...

jimmy choo outlet, ugg boots, new balance shoes, birkin bag, vans shoes, soccer jerseys, canada goose, north face jackets, chi flat iron, mcm handbags, canada goose uk, insanity workout, ugg pas cher, asics running shoes, instyler, nike huarache, p90x, giuseppe zanotti, bottega veneta, valentino shoes, nike roshe run, ferragamo shoes, canada goose, moncler, abercrombie and fitch, herve leger, hollister, nfl jerseys, soccer shoes, longchamp, mont blanc, mac cosmetics, ugg australia, lululemon outlet, ugg, babyliss pro, rolex watches, canada goose outlet, marc jacobs, north face outlet, celine handbags, ugg boots, ghd, reebok outlet, wedding dresses, beats by dre, canada goose, uggs outlet, canada goose jackets

4:38 PM  
Blogger oakleyses said...

coach purses, louis vuitton, louis vuitton outlet, ray ban sunglasses, michael kors outlet, coach outlet, michael kors outlet, oakley sunglasses cheap, kate spade outlet, prada handbags, oakley sunglasses, ray ban sunglasses, tiffany and co, chanel handbags, oakley sunglasses, louboutin, burberry outlet, polo ralph lauren outlet, michael kors outlet, michael kors outlet, tiffany and co, burberry outlet, nike free, coach outlet store online, gucci outlet, louis vuitton handbags, longchamp outlet, louis vuitton outlet stores, michael kors outlet, air max, polo ralph lauren outlet, louboutin outlet, true religion jeans, true religion jeans, kate spade handbags, longchamp handbags, tory burch outlet, jordan shoes, louis vuitton outlet, christian louboutin shoes, nike shoes, michael kors outlet, air max, coach factory outlet, prada outlet, longchamp handbags, louboutin

4:41 PM  
Blogger Xiaozhengm 520 said...

2015-9-28 xiaozhengm
michael kors outlet online
ugg boots on sale
Authentic Louis Vuitton Handbags Cheap Sale
Authentic Montblanc Pens Sale Online
ugg boots sale
uggs australia
fitflops
true religion jeans
Louis Vuitton Neverfull GM Monogram
coach outlet
Air Jordan 4 Green Glow
michael kors uk
coach factory outlet
toms outlet
Michael Kors Outlet Online USA Stores
burberry outlet
Designer Louis Vuitton Handbags Online
air max 95
Michael Kors outlet Sales Big Discount
cheap ugg boots
michael kors outlet
Louis Vuitton Backpack Purse
louis vuitton outlet stores
coach factory outlet
ugg boots
Kobe Basketball Shoes For Sale
Michael Kors Handbags Factory Outlet
Coach Outlet Store Online Official Website
ugg boots
Red Bottom Shoes Christian Louboutin
Coach Outlet USA Stores
Michael Kors Factory Outlet Online Official
Abercrombie Short T-Shirts
Coach Factory Outlet Online Authentic

7:20 PM  
Blogger xumeiqing said...

151225meiqing
michael kors outlet
ugg outlet
vans shoes
coach factory outlet
oakley sunglasses wholesale
uggs on sale
coach outlet
hollister kids
louis vuitton outlet
adidas originals
canada goose outlet
coach outlet
hollister clothing
michaek kors outlet
uggs australia
louis vuitton
louis vuitton handbags
louis vuitton outlet
north face jacket
michael kors handbags
michael kors uk
timberland boots
louis vuitton handbags
nike trainers
lebron james shoes
marc jacobs
pandora jewelry
christian louboutin outlet
oakley sunglasses
kevin durant shoes
michael kors outlet
louis vuitton outlet
canada goose jackets
longchamp outlet
coach outlet online
toms
coach outlet online
cheap ugg boots
abercrombie

9:28 PM  
Blogger ninest123 Ninest said...

ninest123 12.28
tiffany jewelry, burberry, louboutin outlet, ray ban sunglasses, ray ban sunglasses, longchamp outlet, michael kors outlet, louis vuitton outlet, ugg boots, louis vuitton outlet, prada handbags, ray ban sunglasses, oakley sunglasses, nike free, louboutin, polo ralph lauren outlet, nike air max, ugg boots, oakley sunglasses, chanel handbags, nike air max, michael kors outlet, nike outlet, louis vuitton, prada outlet, longchamp outlet, longchamp, michael kors, louboutin shoes, gucci outlet, ugg boots, christian louboutin outlet, louis vuitton, louis vuitton, replica watches, oakley sunglasses, michael kors outlet, jordan shoes, uggs on sale, burberry outlet online, tiffany and co, cheap oakley sunglasses, michael kors outlet, tory burch outlet, ugg boots, polo ralph lauren outlet, replica watches, michael kors outlet, oakley sunglasses

8:52 PM  
Blogger ninest123 Ninest said...

michael kors, hollister, coach purses, coach outlet, true religion jeans, north face, burberry, nike trainers, true religion jeans, ray ban uk, nike roshe, michael kors, vanessa bruno, ralph lauren pas cher, nike blazer, replica handbags, nike roshe run, ralph lauren uk, nike free, abercrombie and fitch, ray ban pas cher, lululemon, air jordan pas cher, true religion jeans, air force, lacoste pas cher, sac guess, hogan, tn pas cher, hermes, air max, michael kors, vans pas cher, nike free run uk, timberland, nike air max, new balance pas cher, hollister pas cher, nike huarache, converse pas cher, longchamp pas cher, nike air max, michael kors, nike air max, louboutin pas cher, oakley pas cher, north face, true religion outlet, sac longchamp, mulberry

8:55 PM  
Blogger ninest123 Ninest said...

abercrombie and fitch, north face outlet, ray ban, ipad cases, iphone 6s cases, instyler, baseball bats, oakley, insanity workout, valentino shoes, bottega veneta, ralph lauren, p90x workout, asics running shoes, vans shoes, reebok shoes, iphone cases, converse, ferragamo shoes, nfl jerseys, iphone 6s plus cases, soccer jerseys, iphone 6 plus cases, iphone 5s cases, north face outlet, nike air max, chi flat iron, new balance, iphone 6 cases, hollister, hollister, ghd, celine handbags, mcm handbags, mac cosmetics, birkin bag, nike roshe, s5 cases, babyliss, beats by dre, mont blanc, herve leger, louboutin, jimmy choo shoes, timberland boots, nike air max, gucci, vans, giuseppe zanotti, soccer shoes, wedding dresses, lululemon

8:58 PM  
Blogger ninest123 Ninest said...

supra shoes, links of london, pandora charms, ugg,ugg australia,ugg italia, converse outlet, lancel, doke gabbana outlet, hollister, barbour jackets, moncler, louis vuitton, wedding dresses, louis vuitton, moncler, ugg,uggs,uggs canada, barbour, sac louis vuitton pas cher, moncler, thomas sabo, canada goose outlet, canada goose, pandora jewelry, ugg boots uk, moncler, canada goose, doudoune canada goose, marc jacobs, toms shoes, coach outlet, canada goose outlet, bottes ugg, canada goose, moncler outlet, louis vuitton, moncler, replica watches, moncler, canada goose uk, pandora jewelry, swarovski, juicy couture outlet, montre pas cher, canada goose, pandora charms, moncler, karen millen, ugg pas cher, swarovski crystal, louis vuitton, juicy couture outlet
ninest123 12.28

9:01 PM  
Blogger dong dong23 said...

nike free run
toms shoes
jordan 8s
michael kors outlet
true religion
gucci handbags
nike air huarache
ray-ban sunglasses
celine
louis vuitton handbags
louis vuitton handbags
lebron james shoes 12
adidas shoes
jordans
adidas ultra boost
coach outlet online
replica watches for sale
michael kors outlet online
gucci outlet
christian louboutin
louis vuitton handbags
coach outlet
oakley sunglasses
coach factory outlet
ray ban sunglasses
louis vuitton handbags
coach outlet
oakley sunglasses wholesale
michael kors handbags
louis vuitton outlet
tory burch sale
michael kors handbags
louis vuitton handbags
cheap oakley sunglasses
kobe shoes 11
coach outlet
nike air jordan
rolex watches
louis vuitton outlet
polo ralph shirts
20167.6wengdongdong

11:34 PM  
Blogger adidas nmd said...

denver broncos jerseys
mont blanc pens
dallas cowboys jersey
ralph lauren outlet
new york jets jerseys
49ers jersey
chaussure louboutin pas cher
patriots jerseys
bengals jersey
nike roshe

12:46 AM  
Blogger chenlina said...

chenlina20171110
christian louboutin pas cher
ralph lauren polo
true religion jeans
north face uk
dolce and gabbana sunglasses
ugg boots
carrera sunglasses
ugg boots
replica watches
prada handbags

10:23 PM  

Post a Comment

<< Home