8/2/08-Since the last entry, there have been no assets held for at least a year in either of our long-term tracked portfolios (as I was on an extended holiday at this time last year), so sales are not now in order among the Classic Value (CV) or Leapin' Lizards (LL) portfolios.
My top-ten equities for mention today are: AM; AXS; EBF; HCC; HMN; IR; MGA; NTRI; PLFE; and TRV.
The focus this time is on a new Classic Value (CV) selection, Ingersoll-Rand Company, Ltd. (IR) (recent price $36.92). IR's trailing price to earnings ratio is just 2.69. The forward P/E is estimated at 8.55. The PEG ratio is 0.76. The asset's market-capitalization size is large-cap: $10.07 billion. Ingersoll-Rand Company, Ltd. has a 2.00% dividend, with a dividend payout ratio of 0.05. The price to sales ratio is 1.10. IR's price to book value is 1.18. There is positive free cash flow. Return on equity is 11.50%. Debt to equity is 0.18. The current ratio is 2.87. The shareholders' equity to total assets ratio is 0.59. This stock has a low P/E, below average P/Bk, and low debt in its favor. It meets Benjamin Graham's bargain stock safety and value criteria.
Ingersoll-Rand Company, Ltd. will be added to our CV tracking portfolio, as well as our own nest egg, at its market price early on Monday, 8/4/08.
8/11/08-Since the last entry, there have been no assets held for at least a year in either of our long-term tracked portfolios (as I was still on an extended holiday at this time last year), so no sales are in order among the Classic Value (CV) or Leapin' Lizards (LL) portfolios.
Since the last entry, our Wild Wizards (WW) pick, MOS, purchased on 5/2/08, has been held at least 4 weeks, and it no longer meets our WW buy or hold criteria. So it will be sold at the early market price tomorrow (Tuesday morning). It will then be removed from the WW open positions portfolio, and its closed position info recorded, based on the 5/2/08 to early 8/12/08 per share performance. Through the close of trading on 8/11/08, after subtracting a commission (while not counting any dividends), MOS has been down 22.55% since purchase.
My top-ten equities for mention today are: AFAM; AXYS; BMI; BRK/A (BRK/B); CF; CMI; MANT; POT; RBN; and VAR.
The focus currently is on a new Wild Wizards (WW) selection, Almost Family, Inc. (AFAM) (recent price $44.00). AFAM's trailing price to earnings ratio is 26.25. Its forward P/E is estimated at 19.73. The asset's market-capitalization size is micro-cap: $357.72 million. Almost Family, Inc. has no dividend. The shareholder equity to total assets ratio is 0.79. The price to sales ratio is 2.18. AFAM's price to book value is 4.02. Return on equity is 18.57%. Debt to equity is 0.09. The current ratio is 2.61. In the last 52 weeks, AFAM has risen 135.93%. This stock has advisory support, low debt, and healthy momentum in its favor.
Almost Family, Inc. will be added to our WW tracking portfolio, plus our own nest egg, at its market price early on Tuesday, 8/12/08.
8/16/08-Since the last entry, our Leapin' Lizards (LL) pick, CDI, purchased on 8/13/07, has been held over a year. It will be sold at the early market price Monday morning. It will then be removed from the LL open positions portfolio, and its closed position info recorded, based on the 8/13/07 to early 8/18/08 per share performance. Through the close of trading on 8/15/08, after subtracting a commission (while not counting any dividends), CDI had been down 8.53% in the past 12(+) months.
My top-ten equities for mention today are: ACE; AMPH; BRK/A (BRK/B); CFFC; CNA; ENH; HCC; MXGL; NSEC; and TRV.
The focus this time is on a new Classic Value (CV) selection, The Travelers Company (TRV) (recent price $44.46). TRV's trailing price to earnings ratio is just 6.79. Its forward estimate of P/E is 7.64. The asset's market-capitalization size is giant-cap: $26.27 billion. The Travelers Company has a 2.70% dividend, with a dividend payout ratio of 0.18. The price to sales ratio is 1.01. TRV's price to book value is below average at 1.03. There is positive free cash flow. Return on equity is 16.27%. Debt to equity is 0.24. The current ratio is 0.50. This stock has low price to earnings, low debt, an above average dividend, and relatively low P/Bk in its favor. It also has a good record of earnings growth over the past several years. The Travelers Company's shares currently meet Ben Graham bargain stock value and safety criteria.
The Travelers Company will be added to our CV tracking portfolio, as well as our own nest egg, at its market price early on Monday, 8/18/08.
8/25/08-I am throwing in the towel on the Wild Wizards (WW) portfolio assets. For awhile, they held up fairly well, but the WWs require at least as much research as the Classic Value (CV) assets, have greater volatility than the value oriented CV stocks, require at least as many trades as do the CV investments to properly maintain the portfolio, and are no longer providing a buffer against downturns in the market, as they were doing for awhile. Counting both open and closed positions, the WW assets are now down on average 10.97% on an annualized basis. If one looks only at their closed position results, the WWs are now down over 25% annualized vs. up about 12.5% for the CV securities, before dividends are added.
What is more, though I have had high hopes for them, at least as an experiment that could work, I intuitively have less faith in the WW buys, since I know they depend on momentum and popularity to continue performing well, factors that seem unreliable.
By contrast, the CV assets strategy simply depends on the market pricing some stocks unreasonably low for their actual value, thus providing a supply of bargains, like ripe fruit there for the picking. One then needs only to hold them long enough to "get them to the market" where in time the public recognizes their worth, and so they may sell at nice profits.
Finally, while I can explain to readers how I come up with my CV picks, and if they repeat the same steps they should get the same stock bargains I do, the method for deciding on the Wild Wizards assets is far more subjective, combining stocks that are noted to be in the headlines as excelling over their brethren, having advisory support from various investment services, plus positive cash flow, up-to-date balance sheets, and low debt to equity. That all sounds straightforward enough, sort of, but how do I convey exactly how I pick the ones that are currently popular and which have advisory support without violating Zacks, Motley Fool, Value Line, etc. copyrights?
In short, the Wild Wizards turn out to be a lot of trouble plus higher risk for a questionable, unreliable, and hard to replicate result. Accordingly, I am stopping all references to the Wild Wizards portfolios.
For now, I shall just concentrate on one or another type Classic Value asset, and shall see how that works out. I may not recommend the purchase or sale of a CV pick every week, but when in town expect to continue adding entries here at least every other week with good CV suggestions.
While the above considerations are true, there is also a more personal reason for my decision to simplify my efforts and entries here. In the last few days, my wife and I have learned that one of my young nephews, whom we have visited with his family frequently but who lives in another state, has bone cancer.
I do not yet know if I can be really useful, but I have offered to assist with his family's efforts and adjustments in the next few months. I have heard that if the disease is caught early enough there is a chance after treatment he may be alright. I shall do whatever I can to help assure that outcome.
Meanwhile, although it is not an official portfolio recommendation at this time, I presently most favor MTW as a Ben Graham type asset. It has a low P/E, low debt, and apparently good prospects.
To round out my top-ten equities today, I also like: ACE; AEO; HMN; MRH; MXGL; NTRI; QCOR; RGEN; and RNR.
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Neither I nor Investor's Journal will be responsible for losses by anyone who obtained ideas from this site.
This diary is intended for personal interest and general information only. You are advised to do your own research (as well as to consult highly compensated professionals) before spending money on anything.
I know of no reason anyone should take my financial musings seriously. At best I am a dedicated amateur providing a bit of investment-related insight and entertainment, at worst an amusing diversion.
My wife, Fran, and I may at times own shares of some of the assets mentioned here. But neither of us receive any benefit from reference to them, unless you count the mutual misery when we get it wrong, or the opportunity to gloat when we get it right.