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Brian Schieble's  Instablog

Brian Schieble
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Retail investor of five years, fundamentally oriented, short and long investor as cases warrant. Probably characterize my own investing style as aggressive conservative investing with large emphasis on valuation and entry point.
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  • Datalink Offers Good Value Entry Into Cloud Sector

    After an unspectacular quarter with a decrease in unit sales revenue YoY DataLink (DTLK) offers a compelling valuation entry into the cloud computing sector, which is projected to grow at a large clip in the next 10 years. Service Sales grew at a significant clip and may continue to gain momentum, so when unit sales pop up again, by macro forces or by sheer sales force determination, the stage will be set for a significant increase in share price.

    At a market capitalization of 206 million as of May 12th DataLink has 71.6 million in cash and no long term debt and a projected 5-year EPS growth rate of 20%. 2014 numbers may underwhelm the street and may not reach the consensus 91 cents EPS that was initially projected. That being said, DataLink is clearly a value stock at this moment in time, offering a margin of safety in a lofty market with good prospects in the coming years.

    If DataLink can be earning $1.30 a year within 5 years and continues to build it's cash reserves I would estimate the fair value of this stock to be around $19-$21, which makes the recent pullback an opportunity as far as I'm concerned.

    DTLK Chart

    DTLK data by YCharts

    Tags: DTLK
    May 13 8:24 AM | Link | Comment!
  • Model Portfolio Snapshot, May 2014

    Seeing as the market is in something of a lull here it's a good time to set in stone what a portfolio could look like from my personal perspective and compare it with the overall market going forward. All of these stocks I consider to be safe and with limited downside over the long term, leading to substantive gains over the next 36 months. Only one stock, China Mobile, is a stock I'd consider disposing of after roughly a 25% gain.

    Divided into equal allocations the portfolio's current dividend yield is 2.5%

    Veolia (VE) - Last Closing Price of $17.95

    XPO Logistics (XPO) - Last Closing Price of $23.75

    Advanced Energy Industries (AEIS) - Last Closing Price of $17.41

    Fortress Investment Group (FIG) - Lasting Closing Price of $6.61

    Johnson Outdoors (JOUT) - Last Closing Price of $21.80

    Huaneng Power International (HNP) - Last Closing Price of $39.62

    China Mobile (CHL) - Last Closing Price of $48.16

    Disclosure: I am long XPO.

    May 11 10:40 PM | Link | Comment!
  • FIG - Sector Heavy Hitter With Value Price

    I always attempt to find companies that are in multiple sweet spots to minimize downside risk, margin of safety as it's called. It doesn't seem like an overly complicated concept, but it does seem like one lost on many players in the stock market.

    When I first found Fortress Investment Group (FIG) it was trading around $6.60 in June 2013 and it looked like a great investment, solid dividend, good growth prospects, good valuation relative to current and future projected earnings. And I thought the story was playing itself out, as it shot past $8 in the subsequent months, I thought the train had left the station.

    Well the train came back around once more, with a 33% higher dividend yield and more cash in the coffers. And with a market that looks like it will take a tumble here soon this name looks to be a very attractive investment at an attractive range of entry points in the near term, for the long term.

    Current FY EPS projections sit at 91 cents, roughly 390 million dollars, and with a market cap around 3.1 billion you're looking at a company trading under 10x. Subtract the cash this begins to look even more attractive. Add a ~4.5% dividend and a 52% projected 5-year EPS growth rate this begins to look overwhelmingly positive.

    I don't necessarily think Fortress can execute on the EPS growth number, nor would I need that to view it as an attractive investment. It could do 30% of that number and still be attractive, even without the dividend. But if it did? If it did it's laughably cheap right now. And that's why I own it.

    Buying Fortress is like buying a widely diversified portfolio of alternative investments at an attractive valuation, with growth, and a dividend that beats the 30-year US treasury and should do so in the medium term.

    Disclosure: I am long FIG.

    Apr 10 7:51 AM | Link | Comment!
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