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A little over a week ago Sears Holdings CEO, Eddie Lampert revealed that Sears continues to have problems meeting earnings estimates. A month prior SHLD pre-announced this was going to happen and both announcements had a negative affect on the stock price.
I think Mr. Lampert has been pushing all this negative news in order to push the stock price of Sears down in order to get a better deal on buying back shares. Sears is having earnings problems and Lampert is taking advantages of them in order to make the company worth more by buying back millions of dollars in shares.
Sears (SHLD) is tarding in the low 150s after brushing 190 earlier this year. It seems a masterstrock of genius by Lampert so when Sears’ earnings do bounce back the company will be even more attractive to investors.
This is why I am long on Sears Holdings (SHLD) and I initiated a position last week in it.
Written by Nagel on July 27th, 2007 with no comments.
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I had owned a stock position in Toyota Motors (TM) for a few months because it is the best-in-breed automobile manufacturer. I was so confident in the investment that along the way I added to my initial position because of the long-term growth potential. I believe there is still long-term growth potential in TM, but because the stock had not moved much during the time I owned it I needed to exit that and move my money into something with a brighter short-term outlook.
This sale freed up cash in the international portion of my portfolio so I deemed it necessary to get that money back into a foreign investment. That money went into Barclay’s Ishares: Malayasia. This investment is much riskier, but its short-term outlook is much brighter and it is worth the risk.
Written by Nagel on July 21st, 2007 with no comments.
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I sold my Best Buy (BBY) stock on July 12 during the stock market surge. After fees I only netted about 4% from my stock purchase of BBY, however, I did not own it very long and I was concerned about retail in general.
That 4% taken over the year equals 20-30% return, not bad. I still like Best Buy the company, but I do see retail in general doing poorly short-to-mid-term which will drag BBY as well. Also, Wal-Mart is currently taking on Best Buy and Circuit City, and Circuit City is paying the price. I do not think BBY will fall apart like Circuit City, but Wal-Mart is a behemoth. Short-term, you do not want WMT to start being a direct competitor; long run who knows what will happen, but BBY will need to adapt or it will be suffer a mortal wound as Circuit City has.
Written by Nagel on July 15th, 2007 with no comments.
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My current stock portfolio consists of some mutual funds, but the most important part are the stocks I own.
Toyota Motor Corporation (TM)
It’s the best car company in the world and actually makes money and has a low PE.
Peabody Energy Corporation (BTU)
This coal company is best in breed.
Trinity Industry, Inc. (TRN)
It makes railcars–oh yeah, and it is the only company that does it when demand is skyrocketing.
Corning Incorporated (GLW)
A well-diversified company that creates the LCD screen and much more.
Terra Nitrogen Company, L.P. (TNH)
7% yield is very nice. It has been very volitile in the past few weeks, but is up almost 17% for me.
Goldman Sachs Group, Inc. (GS)
Best-in-breed. Goldman Sachs is the gold standard.
Cisco Systems, Inc. (CSCO)
A growth technology company that has a value PE. Come August it should jump dramatically
Transocean Inc. (RIG)
Best-in-breed, p-e-r-i-o-d. Huge contracts are already signed so nowhere to go but up, especially at bargain basement PEs.
Written by Nagel on June 11th, 2007 with no comments.
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The stock portfolio report for my assets has been positive recently, at the same time fluctuating. As I had previously stated, I have pared down my portfolio several weeks back because of risk jitters. Soon there after I flip-flopped and took more money from cash and placed it in individual stocks. My stock portfolio performance has been very good this year save one stock.
That one stock is the New York Stock Exchange (NYX). It has dipped significantly since my original purchase in January, and I have even double and tripled up on it. Last week I took about 30% out because I needed to pay for taxes for an IRA transfer to a Roth IRA. I have faith that NYX will be a long-term success and I will not reduce that position until it turns around and is positive unless some extraordinary circumstances prevent that. Short-term, the New York Stock Exchange (NYX) might have more problems though will not dip below 80, however, it could jump to 100.
When and if this stock rises significantly my overall stock portfolio performance will rise with it. I do not expect this until quarter-earnings are reported in a couple months.
Written by Nagel on June 9th, 2007 with no comments.
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Stock Portfolio Report
Recently, my wife was gifted Conoco Phillips (COP). I began tracking the stock in April before the transfer of the gifted stock. Since then it is up around 15%. The actual transfer came about in early May and since then COP has increased around 12%. This is the good news.
The bad news was the because the stock was gifted it was automatically put into an account with Mellon Investor Services. I do not have a problem with Mellon, but I have never dealt with them before. The letter my wife received stating the gifted stock transfer occurred was short and vague. My wife signed up for online access to her account and that has not offered any answers. We have sent an email proposing some specific questions and their support team did not directly answer those questions. Therefore, it has been a bumpy start to the financial relationship. Now my wife will need to call their 800# and get the answers we need so we better understand our new account with Mellon.
Written by Nagel on June 6th, 2007 with no comments.
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Online stock trading has become ever more popular in the past several years. It has evened the playing field dramatically, and now an average-joe investor has a better opportunity to success on Wall Street. Maybe everyone cannot compete against the large investors and mutual funds, who can move a stock price when they trade. However, buying stocks online and acquiring knowledge of stock news is much more egalitarian than decades ago.
I currently participate online stock trading, where I buy stocks and sell stocks. Stock news that I delve into assists me in deciding what stocks to buy. investing in stocks is not easy, but online stocks trading has made my trading life much easier and has made me much more money investing than I ever could have in the past.
I am not a day-trader by any means. However, the option of trading stocks online allows me the flexibility and freedom to execute stock trades as often as I like. Last week on Wall Street company earnings reports pushed stock prices up and I am hoping it will do the same next week as many more good companies report earnings.
Written by Nagel on May 4th, 2007 with no comments.
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When the percent yield of a stock is high, it would seem that this stock would be a great one to invest, however, that is not always the case. During turbulent markets it is important to look for good stocks that yield return is high. These quality stocks with yield returns that are high can be an anchor for your portfolio and be a great way for more diversification in your portfolio.
But sometimes these high yield return stocks are not quality stocks, and have artificially high yields in order to temp investors to buy their stocks. It is difficult to believe, but many of these stocks are actually bad investments and won’t even be able to cover the dividend when due or will lower it after an artificially high period used to lure investors.
As always, do your homework on these stocks as you would with any investment. If something seems to good to be true, it might just be.
Written by Nagel on April 29th, 2007 with no comments.
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Same Store Sales, or Comparables (comps), allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of new stores. Same store sales are important because, although new stores are good, a saturation point–where future sales growth is determined by same store sales growth - eventually occurs. They also measure sales growth at stores that have been open for over a year.
So for a store to be able to count monthly comps for December 2006, it must have been open for the full month of December 2005. If the store opened December 15th 2005, comps couldn’t be counted until January 2006, a year after the store’s first full month.
The two main factors that affect same store sales are prices and number of paying customers. Revenue=price x sales, and if prices go up and volume stays the same, sales will increase. And if volume increases but prices stay the same, sales will also rise. However, when a company has a bad month, it does not blame that fact to price or volume problems.
Falling comps often stem from weather extremes or holidays on an unfavorable day of the week for sales. Rising comps are great and mean that more people are coming to buy goods, or paying more for those goods than they did a year ago, or a combination of the two. So basically,sales are rising without the added costs associated with new stores.
Increase revenues at existing stores or increase the number of stores are the ways to increase revenue. Increased revenues at existing stores is less expensive and that makes rising same store sales excellent news for companies.
Decreasing comps=
- Brand is losing strength and people aren’t shopping at the company’s stores.
- The economy is moving downward and people aren’t shopping.
- Too many items at discount prices.
There are a few ways to deliniate between short-term and long-term problems with same store sales. Decreasing comps for an extended period is not good. Comparing that to competitors’ performance is important to examine because if they are doing poorly as well it might not be a company-specific problem. However, it could be an industry-specific problem
Listen to the quarterly earnings report call and see what the company says the problem is and what they are doing to fix it. This can guide you to stay with the company or dump it.
Good comps do not mean to jump in and begin investing and vice versa with bad comps. Look same stores sales as one data point in a myriad of data points that can lead you to your conclusion.
Written by Nagel on April 25th, 2007 with no comments.
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I purchased some Altria (MO) stock a couple months back. It had been underperforming, but it has a great dividend and I had high hopes for its future. I bought it around $88 and now was around $84. I was watching Jim Cramer’s Mad Money and he suggested that since Atria (MO) was soon going to let Kraft (KFT) go you should purchase Altria When Issued stock. I had never heard of When Issued stock before so I was intrigued. I did some homework and discovered that when you buy When Issued stock, e.g. Altria, when it lets Kraft (KFT) go you would only own the Altria stock and no Kraft stock. I loaded up on this MO_WI stock and just last week the split was finalized. I purchased the When Issued stock at around $64 and is now above $70. My Altria split up into Altria and Kraft. I have kept the Kraft stock for now, but soon will sell.
It was a learning and money-making experience.
Written by Nagel on April 10th, 2007 with no comments.
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