Written by Spekulatius
October 21st, 2009 at 1:49 am
STJ is a medical device company (pacemakers etc.) with a good LT track record. STJ trades at 13x Y2009 earnings at <12x forward earnings. Their last earnings report showed some weakness and the recent weak BSX report added to the turmoil. However, I have followed the company for a couple of years and in the past it has paid to buy at current valuations. They have consistently gained market share to Medtronics during the last couple of years.
Not without risk (what is?) but as a reversal to the mean play I see 20% upside. I also envision STJ as a good acquisition target for JNJ, ABT or the like due to it’s moderate size and good technology.
I bought some at 32.@$ and believe it can be had for this price again (Stock bounced back to 33$ after a swoon below 32$). Next add point would be 30$ (assuming no adverse news)
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Written by Spekulatius
September 13th, 2009 at 11:41 am
Barrons has a story this week “Boring Beauties With Powerhouse Yields” where they suggest a few utility stocks. the one I like most is D (Dominion) and integrated utility with regulated, unregulated , pipeline and some gas E&P assets.
D is trading at 10.0x earnings. Some NG price sensitivity once the hedges run out in 2010 (0.11$ earnings/1$ mcfe ). Diversified business mix with generating assets (coal, gas , nuclear) a good chunk of regulated business, transmission assets, pipelines and some E&P gas. Their FERC regulated pipelines are about 16% of the earnings stream and nicely located around the Marcellus shale. I think at 32.7$/share one can do a whole lot worse than buying in right now. Dividend yield is 5.3%.
Good presentation from the Corporate IR website (may take a while to load):
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTQ3ODJ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
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Written by Spekulatius
August 22nd, 2009 at 1:59 am
Being a cheapskater, i bought a few healthcare stocks with cheap metrics recently:
SUNH,SKH: nursing home operators, PE<8, EV/EBITDA 10%. Both are somewhat dinky company with a high debt load but very favorable valuation
MDTH: manages specialty healthcare facilities, trading at a 40% discount to tangible book, very manageable debt level.
http://finance.yahoo.com/q?s=SKH,SUNH,MDTH&d=s
With Obamacare now off the table (?) I see these smaller companies finally rebounding too, just like their larger and better known peers.
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Written by Spekulatius
July 27th, 2009 at 11:57 pm
This is a fundamental play with a good looking (IMO) chart. BAESY (BA.L in London) is a diversified defense company with a good growth record and cheap metrics: PE around 8, FCF Yield >10%, little net debt (<1x EBITDA) and a 5% dividend yield. Forward earnings estimates are at 44pence/share and the shares are trading at 320 pence. ADR symbol is BAESY.PK (average volume about 100k shares/day).
[tags]BA.L, BAESY, Defense stock [/tags]
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Written by Spekulatius
July 22nd, 2009 at 12:01 am
Might be a good idea to look at regional banks as value play. As a group they are trading only 20% above their March lows as indicated by the KRE Regional bank ETF. Assuming a recovery in the economy they ought to bounce back too. one advantage they have over their larger brethren is that they should not have much problems keeping the TARP, which is cheap capital after all (earning 5% interest for the forseeable future). Commercial Real Estate (CRE) is a problem but note that credit markets have recovered and REIT stocks as well, so it is reasonable to assume that regional banks will follow. Ticker symbols to through out there are KEY and RF or just the ETF KRE. both KEY and RF trade at <0.5x tangible book and even if we account for future losses in 2009 and 2010 they still should be trading above the min. tangible book value in 2010 according to the “Stress Test” burndown model.
[tags]KRE, Banks, Real estate, regional banks, Bank ETFs, ETFs, TARP, Commercial real estate, REIT, KEY, KeyCorp, RF, Regions Financial Corp[/tags]
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Written by Spekulatius
June 25th, 2009 at 9:48 am
BRKB has underperformed the market recently and appears to be a good trade. BRKB is in a channel from 2770$ to 3000$ Currently at 2790$ the trade would be to sell out at 3000$. I also believe that from a FA point of view BRKB looks OK. So a potential long BRKB /short SPY trade looks like it has good odds
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Written by Spekulatius
May 29th, 2009 at 12:10 am
A play for this Friday: Buy COV on SP500 removal. This for sure is going to put pressure on the stock due to index fund selling. COV is going to be removed from the SP500 due to the fact that they incorporate in Ireland. COV is solid medical business (mostly consumables) with a pretty good track record and an undemanding valuation (PE=11)
Other stocks that were removed because of incorporation (RIG comes to my mind) have subsequently done well.
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Written by Spekulatius
May 20th, 2009 at 2:21 am
Is there any truth to the old saying:”Sell in May and go away”. To find out I calculated the average monthly returns from 1990 to 2008 for the SP500 index. The Graphical representation is shown below. Based on that it seems that this old saying is just about right – sell in May and buy back in October.
FWIW this data recollection does not represent an in depth statistical analysis. Do your own DD. I for one thing will reduce my equity exposure in my 401k ( choice are mostly index and index like funds) this year this month with the intend to buying back in late Sept/Oct.
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