Seeking Alpha
Value, growth at reasonable price, long-term horizon, portfolio strategy
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You might have been like my friends and family in the past 6-months -- afraid to check the portfolio, afraid to accidentally see the latest Dow Jones beatdown, with an upset stomach from a depreciating portfolio of Large Caps that your broker said were a great buy two years ago. You might be in a state of denial. You might be sitting 100% cash with two years of fallout supplies packed into your basement. I challenge you to open your eyes and go hunt with me for bargains.

What sets Super Markets apart from Stock Markets is pretty straight forward. At the Super Market, a 50%-off sale draws people from across the country to line up at 4am and stampede the bargains. At the Stock Market, a 50%-off sale is like a bomb threat in an airport. There are those that make gobs of money in times when the stock market is 50%-off. The trick is not looking around for the 50%-off items, because those really aren’t the bargains anymore. There are stocks that are 95%-off in a 50%-off sale. I call this the clearance aisle. These goods are selling for less than their cost of production (book value). The trick here is differentiating ones that are high quality from those of lesser quality. I set my parameters as fairly straight forward. The companies I buy have to be profitable and growing.

Then, the trick is continuously learning how companies can and may scam their investors. I look for indications of accounting fraud, and try to eliminate those companies from my lists. Did you know that companies can boast huge numbers year-after-year and not be making money?

Now, I’m not saying that all 14 of these companies are going to be up 300% one year from today. What I am saying is that by being certain that I am uncertain, I can diversify my college tuition nest egg into 14 of the cheapest discounted cash flow companies out of the 5,000 I’ve sorted through. I can also do my best to minimize my risk by knowing how to identify accounting fraud and not paying more than book value for a stock. By doing this, I am certain that I will candidly beat the market over time. Don’t believe me? That’s fine. All I can do for you is give you the opportunity. The choice is yours to take it, or leave it.

Below I’ve compiled a table of all the plays I am considering or possibly in. Mind you that I have been betting my college tuition on my advice. Some of the numbers have been adjusted by me in order to reflect my feelings on the stock itself as well as potential dilutions.

Earnings
Price
P/E
P/B
Growth
Bust Target
Boom Target
Exchange Listed?
Bottom?
CNO
$ 0.85
$ 1.35
1.59
0.15
16%
$6.80
$13.60
1
1.0
GHII
$ 0.13
$ 0.08
0.62
0.16
27%
$1.04
$3.51
0
0.7
NWD
$ 0.20
$ 0.17
0.85
0.13
13%
$1.60
$2.60
1
0.3
CAEI
$ 0.50
$ 1.00
2.00
1.06
25%
$4.00
$12.50
1
0.5
CHCG-OLD
$ 0.51
$ 0.92
1.80
0.55
20%
$4.08
$10.20
0
0.8
CYXN
$ 0.19
$ 0.27
1.42
0.68
25%
$1.52
$4.75
0
0.9
GNPH
$ 2.16
$ 4.95
2.29
0.54
12%
$17.28
$25.92
0
0.5
OPAI
$ 0.20
$ 0.14
0.70
0.18
30%
$1.60
$6.00
0
0.5
LTUS
$ 0.24
$ 0.30
1.25
0.32
26%
$1.92
$6.24
0
0.6
CKGT
$ 0.14
$ 0.30
2.14
0.23
11%
$1.12
$1.54
0
0.6
AKRK
$ 0.09
$ 0.19
2.11
0.35
20%
$0.72
$1.80
0
0.6
$ 4.00
$ 7.20
1.80
0.3
15%
$32.00
$60.00
1
0.7
CNEH
$ 0.70
$ 1.49
2.13
0.61
20%
$5.60
$14.00
0.5
0.4
XING
$ 0.65
$ 1.32
2
0.17
10%
$7.60
$9.50
0
0.5

I also figure that I’ll outline my sentiment. I’m bullish financials that are down 85%+ in the last 3 years that are likely to survive this downturn. I’m neutral-bullish commodity prices. I’m neutral-bearish the US dollar; not because of this narrative fallacy of monetizing the US deficit, but because of the US-Treasury bubble bursting and the reversal of the “run to the dollar for safety” trend. I’m bullish emerging markets.

Disclaimer: Glen and his investors currently own CNO, GHII, NWD CAEI, CHCG, CYXN, GNPH.OB, OPAI LTUS, FAS, CNEH.OB. Glen and his investors intend to purchase the other stocks mentioned in this article.

Source: 14 Tuition Breaking Stocks