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Martha Stewart Living Omnimedia Inc. Message Board

  • jonathan.loewer jonathan.loewer Nov 29, 2011 5:31 PM Flag

    10 Stocks I Love; 10 Stocks I Hate

    10 stocks I love:

    10) WWE: $160mil in cash with no debt, and the 5.4% dividend is safe. They beat earnings last quarter by 4 cents.

    9) PETS: I really like the concept here; people love their pets and are willing to lay down some money on medication for the health of their four-legged-family members. It is at it's 52-week low and is trading at 8 times trailing earnings (backing out the cash). It has $57mil in cash-on-hand, $17mil of which it has earned over the last 12 months.

    8) AEO: This retailer is sitting on $600mil in cash, that's $3.27 per share. They just hired a former Levi's Jeans Exec as their new CEO, and they pre-announced that they expect to beat earnings this quarter by 3-5 cents.

    7) NCT: Sandy told me about this one. I like what their management team is doing being aggressive, all while paying a big 14.5% dividend.

    6) CTRP: This is the "Chinese Expedia/Priceline". The P/E ratio was high, but after this drop in the stock price, this is now a growth stock with a value stock P/E ratio.

    5) TEX: They blew away expectations last quarter and although this is a rough environment for this cyclical play, I like the company's future prospects. Don't let that high P/E ratio fool you; that trailing P/E is misleading due to one very poor quarter last year.

    4) NAT: Dry Bulk Shipping is in a rough bear market. However, this one is what Jim Creamer calls "best-of-breed". As their underwater (no pun intended) competitors sink, they'll be able to buy up their assets for pennies on the dollar. I would not buy until after they finally cut that dividend. It's too high in this unprofitable environment.

    3) MSFT: It's not a growth play, but they just keep making money. That's not going to change.

    2) BRD: Gold has done really well. I like this unprofitable goldminer to finally turn a profit thanks to the high gold prices. This one is a little more risky though.

    1) AAPL: They are the company of the decade, maybe our generation and maybe even our lifetime.

    10 stocks I hate:

    10) RST: I love the concept (I am bilingual myself), however, management is doing a poor job for its shareholders.

    9) EGLE: Above I mentioned that NAT is "best-of-breed", well this one is "worst-of-breed". This company has $1.15bill--not million... billion--dollars in debt. Shareholders will either be seriously diluted or, more likely, lose via bankruptcy.

    8) BKS: The Nook is nice, but this company just cannot turn a profit anytime in the year other than Christmas.

    7) PSUN: This retailer may have to declare bankruptcy if they can't turn it around.

    6) CWTR: This company already hurt its shareholders via dilution.

    5) DRYS: This is another company that might disappear due to the difficult bulk-shipping environment. Well, NAT can buy their assets cheap, at least (see above).

    4) NCS: They should have gone out of business in early '09 during the crash. Rich Harvard hot-shots came in and bought a lot of prefered shares to keep them afloat. Thus, commonshareholders lost and the Harvard boys won. That being said, I still think BK is inevitable in the longer term.

    3) TSLA: This stock is up 33% over the last 3 months but this company is always unprofitable. The common stockholder will probably lose.

    2) MMYT: Trading at 171 times earnings, this stock is still too high.

    *I would have put MSO here, but since the stock has already fallen so much, and Blackstone is working on its behalf, I'm leaving it off.

    1) EK: With 1.6bill in debt, it is just a matter of time until they do the same thing as AMR just did.

    These are my opinions and ideas for you. Do your own due diligence. I am long AEO, WWE, PETS, BRD, and TEX.

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    • PETS is up 12% this morning... I'm almost up 75% now, and I haven't sold a share yet. Good luck to all!

      • 1 Reply to jonathan.loewer
      • lovelosingmoney believes you and I are the same person. He reminds me of Renfield in "Dracula." As Dan Quayle once said "A mind is a terrible thing to lose."

        NCT split into two companies each of which continues to move up. Good luck with PETS.

        BTW, closing arguments in the M/MSO case are scheduled for Aug 1, with a decision due in August. The stock is so low that there isn't a good put play available. I think a decision favorable to M may already be factored into MSO's price.

        Sentiment: Strong Sell

    • The stock market looks like it is turning down; it has been for the last two weeks, and the last two days have been among the worst of the year for the Dow 30. But there is a good side to that. It allows us to buy into some companies that have become much more attractive at better prices. I mentioned PETS a few days ago. It beat on both top and bottom line (revenues and earnings), but as the overall market has fallen, that 15% pop in the stock price has given way since then (just below $10.00 before earnings, then shot up to $11.45 on earnings release, now it's back down to $10.75). If the overall market continues lower for the next days and weeks, it will be an opportunity to buy a stock with the hindsight of an earnings beat, but at almost pre-earnings price levels.

      This market has allowed AAPL to become much cheaper. This is allowing investors who've missed the last wave up to get back in at a better price. When finding a valuation for Apple, don't forget to back out the $100 million in cash. Yes, the trailing P/E isn't 14, it's 10.5.

      A new one I like is SKUL. This down-market has made Skullcandy fall to almost all-time lows, but revenues continue to grow. Also, short interest is high, 38% of the float, so if they beat on the quarterly report, the short squeeze could be MASSIVE! Two 'Seeking Alpha' contrbutors wrote lengthy analyses on the company and stock. Another new one I like is CMG. Just like I mentioned above with PETS and AAPL, the negative market is making CMG fall even harder than it otherwise would have in a better market. Chipotle is a great company, and their product and business is a very special niche. I am tempted to put in a good-til-canceled buy order down a few percent from here and see if I can't get a bite.

      Of course, DYODD, and good luck. I am long PETS.

    • Eight months later, the entire list looks pretty good, even with eight months of hindsight. Eight months ago I was also looking at LL, and had previously been long it. I guess I should have gone with LL over WWE. And on the hate side, I should have gone with RSH instead of RST... LOL!

    • In reference to my Hate #9, "9) EGLE: Above I mentioned that NAT is "best-of-breed", well this one is "worst-of-breed". This company has $1.15bill--not million... billion--dollars in debt. Shareholders will either be seriously diluted or, more likely, lose via bankruptcy." This article on EGLE spells out why it's almost over for EGLE. In my quote last winter I said that bankruptcy or dilution is the only option. Well, this article shows that there is almost no chance for another round of dilution, but rather bankruptcy, which is going to happen pretty soon.

      This one can be shorted to the courthouse steps!

      • 3 Replies to jonathan.loewer
      • Hey everybody. I hope you all took my advice on my "hate" stock EGLE. It has really crashed over the last 2 years.

        Okay, now it's time to close your short positions on it. You're welcome!

      • The Dry-bulk shipping environment is not getting better, and a lot of the shippers without the debt issues of EGLE are even in trouble.

        For EGLE, they don't have any other options... Maybe they could do yet another secondary offering but they've already done that twice and reverse-splitted their stock so I can't imagine any more dilution. Even so, it won't fix their massive debt issues and it won't fix their unprofitability.

        Just like I said before "short it to the courthouse steps".

    • An update on my original list from 4 months ago: 10) WWE has done poorly technically, but it is still paying that dividend, and it is safe. 9) PETS seems to be pushing up against resistance technically, and earnings are improving. 8) My Favorite! :-D Look at the 6-month chart on that! Even though it is near its 52-week high, Smart-Money Investors are liking it more and more, not less and less. 7) I sold half of my NCT way too soon. It's looking good. 6) CTRP grew revenues 18% last quarter versus the previous year and the P/E ratio is 18. Smart Money is accumulating it down here. 5) TEX has been a two-bagger for me. I still own half because I expect earnings to grow. 4) NAT is still paying that 14% dividend. 3) MSFT is looking strong and sitting on a huge pile of cash. 2) BRD has disappointed. It is off the list and is replaced by CSTR, which should earn $5-$6 in earnings this year. Wall Street Firms and analysts keep upping their price targets on it. 1) AAPL just beat on earnings again. Their cash-on-hand is now $110 Billion. Analysts and Firms keep upping their price targets.

      For the Hated 10 on my list: 10) RST has trended up, but it's still unprofitable. 9) EGLE is still in financial trouble. 8) Brick & Mortar Booksellers are in the fight of their lives! Why invest in a company that is in "the fight of its life"? 7) A Seeking Alpha contributor just wrote a good article on why PSUN is on the fast track to bankruptcy. 6) CWTR is still stuck in dire straits. 5) An analyst with Motley Fool gave a good case as to why DRYS is most-likely to go bankrupt in its sector. 4) NCS is fine for the prefered share owners, but not the commons. 3) I moved TSLA to "Hold" after it plummeted. It's still a "Hold". 2) MMYT is near its 52-week low, but it is still trading at 165 times trailing earnings and it isn't growing nearly that fast. 1) "Nailed it!... Bankrupt!"

      • 3 Replies to jonathan.loewer
      • TEX just beat its earnings by $.25, and now the stock is up 28% this morning from $14.11 to almost $18.00.

        The earnings beat was so nice, that over the next couple of months this stock could head back up to its 52-week high of $26.00. There's still a lot more room to run here.

      • "2) MMYT is near its 52-week low, but it is still trading at 165 times trailing earnings and it isn't growing nearly that fast."

        MMYT has just had its stock crash 50% over the last 2 months. However, that just means that its P/E ratio has fallen from 165 to 75. So, at 75 times earnings, it is definitely not cheap, especially since MMYT isn't growing like a growth stock. However, since it is making new 52-week lows everyday, I am changing my sentiment from Strong Sell to Hold. But there is no reason to try to pick up some shares here. I'm just emphasizing that the great short opportunity is nearing its end.

      • Love #10, WWE, is finally turning the corner. WWE is the kind of stock that moves slowly and trends in a direction for months, or even years. WWE is now a Buy, as it should continue higher without stopping, until some new news that comes in and disappoints. I think it could trend all the way back up to where it used to be ($12-14.50) over the next few quarters, which represents a 100% return, even after today;s earnings beat.

    • I sold my PETS today after the 5% pop today (a 37% gain from my original post here). I took that money and bought LGF due to the monster success of the "Hunger Games" franchise. We'll see how that works out. :-) DYODD & good luck!

    • My AEO (Love #8) just hit another 52 week high! :D

      I have sold 100 of my 500 shares (that's called trading around a position) at $17.85. When the stock goes down, I'll pick them back up at a better price, if doesn't, I still have 400 shares of the stock. My cost basis on the 500 shares is $13.29 (commissions included).

      Also, my other "Loves" NCT, TEX, AAPL, MSFT, and PETS are doing well. It looks like I was wrong about BRD though.

    • Hate #8 (BKS), Barnes & Noble, just reported another disaster of a quarter... there was hardly anything positive to pull out of it.

      The stock has fallen 4.5% over the last two days, but that hasn't stopped the bulls on the BKS message board from pumping away, promising better days. Others are making outrageous claims that Apple or Amazon will buy the company. However, that's just not true. The losses will mount and no buyer will jump in at these prices.

      Until BKS falls back into the single digits I keep my strong sell rating on the stock. Here's why: I do not see them earning more than $1.00 for any year before 2014, and that does NOT include the R&D into the Nook or the 16 cents-per-share that automatically goes to the prefered shareholder for his special dividends on the prefereds. Therefore, $1.00 EPS before Nook R&D and prefered dividend - 50 cent Nook R&D - 16 cent prefered dividend = 34 cents EPS x P/E of 20 = $6.80 stock.

    • Love #1, AAPL, just hit $500.00.

      Love #3, MSFT, has passed $30.00 and is headed higher.

      Love #5 & #7, TEX and NCT, are doing nicely as well.

      Also, since my Hate #1, EK, has already filed for BK, I need to find a new #1. I am not sure yet, but some possible "victims" to be thrown into the #1 spot are (in no particular order): S, SHLD, BKS, or any of my current Hate #2-9 could be nominated for that top spot.

    • I see that while I was away EK, my Hate #1 filed for bankruptcy. I am not surprised; that's why I put it on the list. They were dying. Anybody who lost money on Borders, Blockbuster, American Airlines, or Eastman Kodak over the last year had it coming. I don't feel sorry for them for any losses suffered.

      Anyway, with regards to my list, all else is still the same. Hate #1 (EK) is done. Hate #3 (TSLA) already crashed (sorry bad pun) and made some nice money as a short, so I moved it to 'hold'. Even though TEX is up over 110% over the last 3 months, I still like its ability to grow earnings going forward. Therefore, the other 18 I still have classified the same.

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