Stock Picks for 2007:
Here are the Additional Stock Selections as of November, 2007
1. Blackboard –NASDAQ: BBBB - $40 (52 week range $27 - $50) –
Blackboard is a smaller technology company that makes software for
teachers and schools to create online classes and track them. BBBB
does not pay a dividend
2. Barclays – ADR NYSE: BCS - $40 (52 week range $38 - $62) – Barclays
is a big English bank with worldwide operations. The company has taken
some mortgage hits thru ill-timed acquisitions but does not seem to be
facing huge exposure like other banks. BCS pays almost 5% on dividends
3. Canon – ADR NYSE: CAJ - $49 (52 week range $48 - $60) – Canon is a
giant Japanese maker of digital cameras and office equipment. Canon
pays 1.72% on dividends
4. Ebay – NASDAQ: EBAY - $32 (52 week range $29 - $40) – Ebay is the
famous auction company whose stock price was hurt by the Skype
internet phone write down. Ebay seems reasonably valued and can have
some price growth. Ebay pays no dividend
5. Interactive Intelligence Inc – NASDAQ: ININ - $26 (52 week range $13 -
$28) ININ makes phone systems and VOIP systems for productivity and
call centers. ININ pays no dividend
6. NIDEC – ADR NYSE: NJ - $17 (52 week range $11 - $20) – NJ is a
Japanese company & is one of the world’s largest builder of direct current
motors and disk drive components. NJ pays a small dividend of 0.7%
7. Nomura Holdings – ADR NYSE: NMR - $16 (52 week range $15 - $23) –
Nomura is one of Japan’s largest brokers and is poised for gains if the
Japanese market starts to take off. NMR pays a small dividend of 0.8%
8. Telephonos De Mexico – ADR NYSE: TMX - $35 (52 week range $25 -
$43) – TMX is the big telephone company in Mexico and is partially owned
by Carlos Slim the world’s richest man. It pays a dividend of 2.26%
Here are the 2007 Stock Selections as of August, 2007:
1. Diageo – ADR NYSE: DEO - $83 (52 week range $69 - $87) – Diageo is
based in London and owns liquor brands from around the world. They are
a major player and consolidating, liquor also is likely to hold up well in a
downturn. They have a 2.4% dividend yield. What happened – back at
$87, up a bit, still recommended
2. Netscout – NASDAQ: NTCT - $9 (52 week range $6 - $10) – Netscout is
a smaller technology company that makes equipment for monitoring
networks. They are steadily profitable and have no debt and significant
cash on hand. Beyond being in a good space for technology they are a
possible take over candidate. NTCT does not pay a dividend. What
happened – shot to $15.5, sold at $13.5, back to $11, mildly
recommended
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Stock Picks for 2007:
3. Caterpillar – NYSE: CAT - $76 (52 week range $57 - $82) – Caterpillar is
a local favorite and maker of construction equipment that is used globally.
They seem to have resolved most of their union issues. CAT has a 1.8%
dividend yield. What happened – at $68, down a bit, still recommended
4. Honda – ADR NYSE: HMC - $34 (52 week range $29 - $41) – Honda is
the well known Japanese automaker. HMC has a 1.4% dividend yield.
What happened – flat at $34, still recommended
5. MDU Resources – NYSE: MDU - $26 (52 week range $22 - $32) – MDU
is a well run utility and construction / oil & gas company out of North
Dakota. They have been growing and are consistently profitable. MDU
has a 1.9% dividend yield. What happened – flat at $26, still
recommended
6. PrivateBancorp – NASDAQ: PVTB - $34 ($26 - $47) – a well
recommended smaller Chicago based bank catering to the rich. It recently
was caught up in controversy which drove down the stock price but is a
strong performer. The stock yields about 1% in dividends. What
happened – fell to $28, still recommended
7. Nokia – ADR NYSE: NOK - $31 ($19 - $32) – Nokia has been taking
market share from Motorola for years and in 2007 really started to take off.
Still down about ½ compared to the “bubble” valuations in early 2000-1.
What happened – at $38, did OK, still recommended
April 2007 added items…
1. Dr. Reddy’s Laboratories – NYSE: RDY - $15 (52 week range $12 -
$19) – This company makes pharmaceuticals (drugs) in India and is a
pioneer in their emerging drug industry. India’s drug industry is likely to
grow in the future due to their vast internal market and need for drugs as
well as local scientific talent, and the fact that India is moving towards
international rules on patents. What happened, at $15, still flat, mildly
recommended
2. ICICI Bank – NYSE: IBN - $37 (52 week range $21 - $47) – ICICI Bank is
an Indian bank serving primarily Indian customers. The Indian banking
industry is growing due to skyrocketing land and housing prices. What
happened… shot to near $70, sold at $60 (current price) – not
recommended
3. TATA Motors – NYSE: TTM - $16 (52 week range $14 - $22) – Tata
motors is an Indian auto manufacturer. TATA makes cars as well as 3
wheeled vehicles. India has been having high growth in their auto
demand and there are many restrictions on foreign automakers. What
happened… at $17, basically flat, recommended
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Stock Picks for 2007:
Here are the 2006 Stock Picks and their Performance…
1. Home Depot (HD) – price $33 (52 week range $32 - $44) – Home Depot
has been making progress on earnings and is trading at a significant
discount to the market. The CEO is kind of tone-deaf to the outside world
(Nardelli ) and if he left the stock could have a big jump. What happened,
now at $28, sold back during buyback at $34, not recommended
2. CEMEX (CX) – price $28 (52 week range $22 - $36) – CEMEX is a
worldwide producer of cement and related products from Mexico. They
are well run and benefit from increasing homeownership and construction
in places like Mexico where the middle class is getting larger. What
happened, up to $40, back to $26, recommended
3. Williams-Senona (WSM) – price $28 (52 week range $28 - $45) – high
end specialty retailer that also owns Pottery Barn. Good long term history
of growth, downgraded recently and their CEO stepped down and their old
CEO is coming back. Worst may be behind them. What happened,
peaked at $36, down to $26, not recommended
4. China Mobile ADR (CHL) – price $32 (52 week range $20 - $33) China
Mobile is the world’s largest cellular phone company ranked by # of
subscribers and is the #1 phone company in China. They have an ADR
so we can purchase them in the US and they are listed on the Hong Kong
Stock Exchange. What happened, shot to $105, sold at $90, now at $80,
not recommended
5. Comcast (CMCSA) – price $35 (52 week range $25 - $35) Comcast is the
largest cable company in the USA. They also own regional sports
networks and some cable properties. They are a big player in Internet
access and moving into bundled phone service. What happened… stock
split 3/2 and went up, now down to $20 post split, down, mildly
recommended
6. Toll Brothers (TOL) – price $26 (52 week range $22 - $51). Toll Brothers
is one of the largest home builders in the USA. They are a well run
company. They have lost over ½ their market value recently with thoughts
that the real estate boom is over. While this is probably true, the stock is
likely a “buy” at this price and just hold onto it until the real estate market
picks up a couple of years out. What happened… rallied to $35, now to
$28, not recommended
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Stock Picks for 2007:
For reference only, here the 2005 stock picks…
1. General Electric (GE) – price $34 (52 week range $32-$38) – GE is one
of the largest-cap stocks up there with Exxon and Microsoft. GE has a
new CEO Immelt who took over from Jack Welch a couple of years ago.
GE makes everything from jet engines to medical equipment and makes
even more on services. The company seems to be well managed under
Immelt and their stock seems pretty reasonably priced right now. What
happened… as high as $42, now $39, mildly recommended
2. Illinois Tool Works (ITW) – price $85 (52 week range $79-$96) – ITW is
another well managed companies. They make everything from screws to
industrial parts and purchase smaller companies and are good at
integrating them and extracting higher profits out of their business. They
have a long history of performance financially and their diversity of
businesses gives them the ability to shake off downturns in different areas
of their portfolio. What happened… stock split, at $120 (pre-adjusted),now
$110, not recommended
3. BHP (BHP) (formerly Broken Hill Proprietary Corporation) – price $31
(52 week range $18-$32) – BHP is a huge company out of Australia
specializing in mining and commodities with a long history. There has
been a big run up in commodities with China and India beginning to go in
a more capitalistic direction and as such dramatically increasing demand
for the whole world. BHP is like the ExxonMobil of mining. What
happened… shot to $87, sold at $80, not recommended
4. USANA Health Sciences (USNA) – price $52 (52 week range $27 - $53)
– USNA is a smaller company selling vitamins and other personal care
products. They have had good financial results for a smaller company
(usually it takes a while for smaller companies to become profitable) and
as a result their stock has been on a huge run. What happened… up to
60, down to $30, back to $44, not recommended
5. International Securities Exchange or ISE (ISE) – price $24 (52 week
range $19-$32) – ISE is a stock options trading exchange. They are well
managed and the first of the significant options exchanges to go public.
They are all-electronic while many of their competitors have both floor
exchanges and electronic exchanges. There is a lot of price competition
in the options industry compared to the futures industry, however. Given
the large number of competitors (5 main ones) it is likely that there will be
consolidation and given that ISE went public first they should be in a good
position to benefit from that consolidation. What happened… company
bought out and now at $67, not recommended
6. Chuck E Cheese (CEC) – price $35 (52 week range $33-$43). Chuck E
Cheese is a well run franchise operation for restaurants and entertainment
for kids. They generate good cash flow and their concept seems sound
and unlikely to become outdated in the near term. Their stock is also
down from the peaks which makes it more of a relative bargain. What
happened… went to $29, sold, not recommended
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