Paul Price

The Mosaic Company: Growing an Option Opportunity

Mosaic decleared a special dividend of $1.30 /share.

Record date......... Nov. 12
Payment date ..... Dec. 3

How I'm Trading V.F. Corporation Given Negative Quarters Likely Ahead

VF Corp raised its dividend from $0.59 to $0.60 quarterly making the current yield 3.1%.

Record date....... Dec. 8
Payment date ... Dec. 18

Energize Your Returns with BP

BP (BP): Q3 earnings of $4.67B vs. consensus of $3.25B. Sees 2009 costs down by $4B vs. a previous $3B. Total production +6.9%.

Shares +5% premarket to $58.55

FLIR Systems: Heat Up Your Portfolio with Thermal Imaging

Businessweek Magazine spotlighted FLIR in their "Inside Wall Street" column (Nov. 2, 2009 issue).

They led with the headline "Laser-Like Growth at FLIR" and called it "the cheapest value" now among growth stocks - #1 in infrared technology for various purposes, including military use.

IBM: Take Advantage of Sell-Off After Good Earnings

Barrons' October 26th issue somes to the same conclusion and pretty much the same projected valuation for IBM that I did.

In a follow-up item they spoke about the latest earnings report and concluded that based on the earnings projections... "the stock could be worth more than $150."

Get Your Just Desserts by Selling Cheesecake Factory Puts

Cheesecake Factory profit beats Street
Thu Oct 22, 2009 4:54pm EDT

LOS ANGELES, Oct 22 (Reuters) - Cheesecake Factory Inc’s (CAKE) quarterly profit beat Wall Street’s view, as cost controls and lower food prices helped shelter earnings from falling sales at established restaurants, sending shares up 2.7 percent.

The restaurant company, known for its big portions and extensive menus, said on Thursday third-quarter net income was $16.3 million, or 27 cents per share, up from $11.8 million million, or 19 cents per share, a year earlier.

Excluding charges, the company had a profit of 29 cents per share in the most recent quarter, beating analysts’ average estimate by 5 cents, according to Thomson Reuters I/B/E/S.

Total revenue fell 1.1 percent to $400.6 million. Overall sales at restaurants open at least 18 months fell 2.8 percent, on a 2.4 percent drop at Cheesecake Factory restaurants and a 6 percent drop at the smaller Grand Lux chain.

Shares of Cheesecake Factory rose to $18.63 in extended trading after closing at $18.14 on the Nasdaq.

Get Your Just Desserts by Selling Cheesecake Factory Puts

Yes, sorry for the typo. It should read 2001 & 2012.

FLIR Systems: Heat Up Your Portfolio with Thermal Imaging

FLIR Systems Tops Expectations

By: Zacks Equity Research

October 21, 2009


FLIR Systems, Inc. (FLIR - Snapshot Report) reported third quarter 2009 net income of $60.0 million or 38 cents per diluted share, compared with net income of $54.8 million or 35 cents per diluted share in the third quarter a year ago. This is higher than the Zacks Consensus Estimate of 35 cents.

Revenue was $285.6 million, up 3% compared to third quarter 2008 revenue of $276.7 million. Revenue from the company’s Government Systems division increased 7% over the third quarter of 2008 to $163.0 million, with strength in stabilized gimbaled systems. Revenue from the Company’s Commercial Vision Systems division increased 15% over the third quarter of last year to $52.6 million, reflecting growth in the security, cores and components, and maritime markets.

Revenue from the company’s Thermography division decreased 12% from the third quarter of last year to $69.9 million, primarily due to lower demand for high-value products for the predictive maintenance market.

The company announced that it has acquired OmniTech Partners, Inc., a leader in the development and manufacturing of image intensified and fused image intensified / thermal imagers based in Freeport, PA, for $42 million in cash. OmniTech adds image intensified capability to FLIR’s product line, and creates the opportunity to leverage the capabilities of both companies to expand in the growing market for fused image intensified / thermal imagers.

Total cash and equivalents at the end of the quarter stood at $403 million, with long-term debt at $60.2 million and shareowner’s equity at $$1.1 billion.

FLIR Systems, Inc. is a leader in the design, manufacture and marketing of thermal imaging and stabilized camera systems for a wide variety of thermography and imaging applications. These include condition monitoring, manufacturing process control, airborne observation and broadcast, search and rescue, drug interdiction, surveillance and reconnaissance, navigation safety, border and maritime patrol, environmental monitoring and ground-based security.

NASDAQ OMX Group – Over the Counter appears Undervalued

Thank you. The typo has been fixed.

Almost Family: Well Positioned for Demographic Growth

AFAM was mentioned very favorably at today's Value Investors' Conference in NYC.

Almost Family: Well Positioned for Demographic Growth

Almost Family Inc. By: Tracey Ryniec - ZACKS
October 19, 2009

Almost Family, Inc. (AFAM - Snapshot Report) continues to quietly beat estimates and grow revenues. Third quarter estimates have risen in the last 30 days.

Almost Family provides home health nursing, rehabilitation and personal care services. It has surprised on estimates 7 quarters in a row and has beat on average of 15.42% in the last four.

On Aug 5, the company reported second quarter results which saw revenues rise 54% to $74.9 million from $48.7 million in the year ago period. The company surprised on the Zacks Consensus Estimate by 8.96% as earnings per share were 73 cents compared to the estimate of 67 cents. Almost Family reported 50 cents in the year ago period.

The Visiting Nursing segment saw 65% growth compared to the second quarter of 2008, with 29% of that coming from organic growth and the rest from acquisitions. The Personal Care segment increased 11%.

Will the company's earnings surprise streak continue in the third quarter? Almost Family is scheduled to report earnings on Nov 4. The Zacks Consensus Estimate is up 1 cent to 70 cents in the last 30 days. Analysts expect 2009 earnings growth of 30.81%.

Value Fundamentals

Almost Family is a Zacks #2 Rank (buy) stock. When I last reviewed the company in April 2009, it was trading at only 6.6x forward earnings. It is more expensive now, at 11.2x forward earnings, but still well within the value parameters.

The company has a low PEG ratio of 0.56. It also has a stellar 1-year return on equity (ROE) of 22.11%.

Obama lashes out at health insurers in his weekly radio address, calling their efforts 'deceptive and dishonest.' "For decades, whenever we have tried to reform the system, the insurance companies have done everything in their considerable power to stop us," he said.

HE LIES!!!!

Time to Play with Hasbro?

Profit Tracks High Rank Value Highlight - From ZACKS

HASBRO INC (HAS)
Oct 16, 2009

Hasbro Inc. (HAS) is one of four companies that make the grade for the High Rank Value profit track. This stock picking strategy looks for companies with a high Zacks Rank that carry low valuations. Learn about this company and others.

Hasbro Inc. (HAS) delivered a 13.04% surprise in year-over-year second quarter earnings, which jumped to 26 cents per share, compared to 25 cents last year. In addition, the company enjoys a dividend yield of 2.81% and will pay a dividend of 20 cents on Nov 16. The Zacks #2 Rank company qualifies for this profit track with a P/E ratio of 14.91 and a P/B ratio of 2.87. HAS is a worldwide leader in children's and family leisure time and entertainment products and services. The company will release third quarter earnings on Oct 19, 2009.

GEO Group: Time to 'Lock Up' Shares?

Arresting Developments By KOPIN TAN - Barrons

For-profit prison operators are gaining as demand for cells outstrips supply.

AMERICA HAS 5% OF THE PLANET’S POPULATION, but 25% of its prisoners. This should be good news for the private prisons that absorb the spillover from our congested federal and state penitentiaries, but, alas, the recession has ruffled the economics even of law and order. Cash-strapped states seeking to cut the cost of housing inmates are mulling drastic measures, ranging from quicker paroles to earlier releases. Not only have the headlines alarmed some citizens, they have frightened investors as well.

As a result, private-prison stocks are selling at unusual — and untenable — discounts. The three biggest companies are Corrections Corp. of America (ticker: CXW), which controls 39% of private-prison beds, Geo Group (GEO), which runs 25%, and Cornell (CRN), with 10%. While their stocks have rebounded this year, they still trade at 12 to 18 times what each is expected to earn in 2010 — compared with multiples pushing 30 before the budget crisis.

Darrin Klimek/Getty Images
Iron bars might not a prison make, but they’re certainly needed to control criminals. And just about the only cells being built are operated by private companies.
THE GRIM SHARE PRICES DWELL TOO much on states’ stop-gap attempts to curb incarceration costs, and overlook private prisons’ steady profitability, their stranglehold on a tough-to-penetrate industry and the widening chasm between supply and demand. In an extensive recent report, Barclays analyst Manav Patnaik pegs the annual demand for new prison beds at 35,000. That’s being met by a supply of just 20,000 from both the public and private sectors. Patnaik’s conclusion: “It’s an imbalance that works in favor of private-prison operators.”

Today, budget-constrained states can ill afford the time or capital to build new facilities, and many find it cheaper to outsource part of their incarceration system. That explains why half the new inmates during the past year were sent to private prisons, even though less than 9% of U.S. prison beds are privatized. Regions whose public employees are heavily unionized have tended to resist the shift, but reality and overcrowding usually force a compromise.

Even California, which runs the largest U.S. prison system and has no shortage of convicts or unions, has succumbed, tapping Corrections Corp. of America to handle its flood of felons. And this year, for the first time in recent memory, Florida earmarked no funds to build new prisons. It also passed laws allowing inmates to be transferred outside its borders. Some may go to private facilities in other jurisdictions.

Investors in the triad of Corrections Corp. of America (or CCA), Geo Group and Cornell have other perks: Private prisons earn recurring revenue, impervious to seasons or business cycles. They build decades-long ties with a fairly reliable customer — the government, be it state or federal. And if the customer is the feds, the companies are selling to a client that doesn’t even have to balance the budget, and can print money at will.

Barriers to entry into the business are forbidding, and customers don’t defect easily to newer rivals. What public official would want to say, after a prison break, that he had picked an unproven company to run the facility, instead of one of the more experienced outfits?

On top of that, prison facilities, replete with concrete and steel, tend to be durable, low-maintenance and immune to changing architectural whims.

A LONG STAY IN PRISON, according to an industry joke, cures very little except heterosexuality. Yet our prison population has more than tripled over the past quarter-century, jumping from roughly 700,000 in 1984 to 2.38 million this year, the fastest pace of any country on earth.

Proponents say that incarceration protects society from dangerous offenders, acts as a deterrent and allows re-education, thus fulfilling the criminal justice system’s three main goals of prevention, punishment and rehabilitation. As a result, our federal prisons are at 137% of capacity, and state jails have shot past 110%. (It should be noted that prison populations of some nations, such as China, are held somewhat in check by the government’s willingness to execute people for crimes that would rate only a prison term stateside.)

A study by the nonpartisan Pew Research Center points to an arresting development in the land of the free: For the first time, one in every 100 adults is behind bars, and state funds spent annually on corrections have swelled from $10.6 billion in 1987 to $44 billion. While the Department of Justice says violent crime has declined since 1993, drug arrests and reported crimes have increased.

This has galvanized proponents of sentencing reform, and change is on the way. States from Ohio to Oregon have enacted, or are considering, laws that would award sentence-shortening credits for prisoners who behave well or who participate in substance-abuse programs.

A SIGNIFICANT REDUCTION of the U.S. incarceration rate, the highest in the world, would rattle private prisons. But bulls say this is unlikely and that the stocks already factor in much of the threat.

According to the Vera Institute of Justice, an independent policy center, at least 26 states have cut funding for corrections in fiscal 2010. Yet this hasn’t thwarted the big private-prison operators, all three of which see profits growing next year. And investors may be underestimating the role that private outfits play in helping the prison system operate efficiently. Many changes — some states now let prisoners serve their time in facilities in other states — benefit private outfits. Their facilities span the country, and they can build wherever they see demand.

IRONICALLY, FREEING INMATES could create a larger need for prisons down the road. According to the Bureau of Justice, two of every three convicts released are rearrested within three years for a new crime.

To be sure, pricing will be pinched in the months ahead, but not too severely. “Private prisons have built up a lot of ancillary services over the years that can now be cut if their per-diems are cut, without too much damage to their bottom line,” says Eric Marshall, director of research at Dallas-based Hodges Capital Management. Besides, pricing will rise again as the budget crisis passes, and private prisons aren’t without bargaining power. “There are only so many nonviolent criminals that can be let out, and it isn’t like states can run out and quickly build another prison.”

Case in point: Colorado wants to reduce its prison population by 26%, or 6,000 inmates, during the next two years. This could hurt Corrections Corp. of America, which runs three prisons, or nearly 4,700, beds there. But Signal Hill analyst T.C. Robillard doubts the state “can classify a quarter of its inmates as low-risk or near the end of their sentences.” Even if that were possible, Barclays’ Patnaik pegs the impact at just 1,000 beds, because releases will be offset by the arrival of new inmates. Also, the state probably will let CCA decide the most cost-effective way to release prisoners, so the company will retain considerable sway.

WHICH PRISON STOCK is the best bet?

Marshall finds all three worth considering but owns Geo, partly because the Boca Raton, Fla., outfit has the most international exposure. The privatization of prisons is in its infancy abroad — penetration rates run from 17% in Australia to just 3% in South Africa — and Geo earns 13% of its revenue overseas. Another 12% comes from its higher-margin criminal mental-health facilities.

Last month, Geo snagged a contract to run an 832-bed prison in Sydney, its fifth facility Down Under. A plan to raise $250 million — by selling eight-year notes yielding roughly 8.25% — also bespeaks ambitions to expand its balance sheet and give rival Corrections Corp. a run for its money.

CCA and Cornell have no overseas exposure, partly because U.S. demand has been strong. Corrections Corp. runs 64 prisons in 19 states and owns nearly two-thirds of them, a boon because owned prisons generate margins averaging 25%, compared with 15% for managed facilities. CCA’s massive inventory makes it the go-to company for federal and state customers. One worry: Because it has so many beds, investors fret that a large number could go unused. Earlier this year, 11,000 were empty, but new government contracts had trimmed the total to 6,500 by summer.

The Bottom Line
Shares of Corrections Corp. of America, Geo Group and Cornell are selling at unrealistically low prices, considering the Big Three’s solid prospects and steady profitability.Corrections Corp. is the go-to stock for many investors as well. At 24, its shares trade at 17.9 times expected 2010 profits, compared with 13.5 times for Geo and 12.1 times for Cornell.

CORNELL DOESN’T GET THE SAME RESPECT, because 26% of its revenue comes from lower-margin juvenile-detention facilities. But it is also the most sensitive to economic swings — it doesn’t take much to move Cornell’s needle — and hence more suitable for traders with an appetite for risk.

Signal Hill’s Robillard rates all three Buy, but he gives the short-term edge to Cornell over Geo, and to Geo over CCA over the next six to 12 months. CCA’s recent run has already “priced in a lot of the growth re-acceleration,” he says, “while Cornell and Geo can still catch up.” In fact, analysts’ conservative price targets put Cornell at 26, 10% above its recent quotes.

Over the long run, however, Robillard argues that CCA’s bigger balance sheet gives it the most options. Crime increases in a recession, but as the economy revs up, so should spending on crime and punishment. Who said crime doesn’t pay?

Cornell Companies: Not Waiting for a 'Breakout'

Arresting Developments By KOPIN TAN - Barrons

For-profit prison operators are gaining as demand for cells outstrips supply.

AMERICA HAS 5% OF THE PLANET’S POPULATION, but 25% of its prisoners. This should be good news for the private prisons that absorb the spillover from our congested federal and state penitentiaries, but, alas, the recession has ruffled the economics even of law and order. Cash-strapped states seeking to cut the cost of housing inmates are mulling drastic measures, ranging from quicker paroles to earlier releases. Not only have the headlines alarmed some citizens, they have frightened investors as well.

As a result, private-prison stocks are selling at unusual — and untenable — discounts. The three biggest companies are Corrections Corp. of America (ticker: CXW), which controls 39% of private-prison beds, Geo Group (GEO), which runs 25%, and Cornell (CRN), with 10%. While their stocks have rebounded this year, they still trade at 12 to 18 times what each is expected to earn in 2010 — compared with multiples pushing 30 before the budget crisis.

Darrin Klimek/Getty Images
Iron bars might not a prison make, but they’re certainly needed to control criminals. And just about the only cells being built are operated by private companies.
THE GRIM SHARE PRICES DWELL TOO much on states’ stop-gap attempts to curb incarceration costs, and overlook private prisons’ steady profitability, their stranglehold on a tough-to-penetrate industry and the widening chasm between supply and demand. In an extensive recent report, Barclays analyst Manav Patnaik pegs the annual demand for new prison beds at 35,000. That’s being met by a supply of just 20,000 from both the public and private sectors. Patnaik’s conclusion: “It’s an imbalance that works in favor of private-prison operators.”

Today, budget-constrained states can ill afford the time or capital to build new facilities, and many find it cheaper to outsource part of their incarceration system. That explains why half the new inmates during the past year were sent to private prisons, even though less than 9% of U.S. prison beds are privatized. Regions whose public employees are heavily unionized have tended to resist the shift, but reality and overcrowding usually force a compromise.

Even California, which runs the largest U.S. prison system and has no shortage of convicts or unions, has succumbed, tapping Corrections Corp. of America to handle its flood of felons. And this year, for the first time in recent memory, Florida earmarked no funds to build new prisons. It also passed laws allowing inmates to be transferred outside its borders. Some may go to private facilities in other jurisdictions.

Investors in the triad of Corrections Corp. of America (or CCA), Geo Group and Cornell have other perks: Private prisons earn recurring revenue, impervious to seasons or business cycles. They build decades-long ties with a fairly reliable customer — the government, be it state or federal. And if the customer is the feds, the companies are selling to a client that doesn’t even have to balance the budget, and can print money at will.

Barriers to entry into the business are forbidding, and customers don’t defect easily to newer rivals. What public official would want to say, after a prison break, that he had picked an unproven company to run the facility, instead of one of the more experienced outfits?

On top of that, prison facilities, replete with concrete and steel, tend to be durable, low-maintenance and immune to changing architectural whims.

A LONG STAY IN PRISON, according to an industry joke, cures very little except heterosexuality. Yet our prison population has more than tripled over the past quarter-century, jumping from roughly 700,000 in 1984 to 2.38 million this year, the fastest pace of any country on earth.

Proponents say that incarceration protects society from dangerous offenders, acts as a deterrent and allows re-education, thus fulfilling the criminal justice system’s three main goals of prevention, punishment and rehabilitation. As a result, our federal prisons are at 137% of capacity, and state jails have shot past 110%. (It should be noted that prison populations of some nations, such as China, are held somewhat in check by the government’s willingness to execute people for crimes that would rate only a prison term stateside.)

A study by the nonpartisan Pew Research Center points to an arresting development in the land of the free: For the first time, one in every 100 adults is behind bars, and state funds spent annually on corrections have swelled from $10.6 billion in 1987 to $44 billion. While the Department of Justice says violent crime has declined since 1993, drug arrests and reported crimes have increased.

This has galvanized proponents of sentencing reform, and change is on the way. States from Ohio to Oregon have enacted, or are considering, laws that would award sentence-shortening credits for prisoners who behave well or who participate in substance-abuse programs.

A SIGNIFICANT REDUCTION of the U.S. incarceration rate, the highest in the world, would rattle private prisons. But bulls say this is unlikely and that the stocks already factor in much of the threat.

According to the Vera Institute of Justice, an independent policy center, at least 26 states have cut funding for corrections in fiscal 2010. Yet this hasn’t thwarted the big private-prison operators, all three of which see profits growing next year. And investors may be underestimating the role that private outfits play in helping the prison system operate efficiently. Many changes — some states now let prisoners serve their time in facilities in other states — benefit private outfits. Their facilities span the country, and they can build wherever they see demand.

IRONICALLY, FREEING INMATES could create a larger need for prisons down the road. According to the Bureau of Justice, two of every three convicts released are rearrested within three years for a new crime.

To be sure, pricing will be pinched in the months ahead, but not too severely. “Private prisons have built up a lot of ancillary services over the years that can now be cut if their per-diems are cut, without too much damage to their bottom line,” says Eric Marshall, director of research at Dallas-based Hodges Capital Management. Besides, pricing will rise again as the budget crisis passes, and private prisons aren’t without bargaining power. “There are only so many nonviolent criminals that can be let out, and it isn’t like states can run out and quickly build another prison.”

Case in point: Colorado wants to reduce its prison population by 26%, or 6,000 inmates, during the next two years. This could hurt Corrections Corp. of America, which runs three prisons, or nearly 4,700, beds there. But Signal Hill analyst T.C. Robillard doubts the state “can classify a quarter of its inmates as low-risk or near the end of their sentences.” Even if that were possible, Barclays’ Patnaik pegs the impact at just 1,000 beds, because releases will be offset by the arrival of new inmates. Also, the state probably will let CCA decide the most cost-effective way to release prisoners, so the company will retain considerable sway.

WHICH PRISON STOCK is the best bet?

Marshall finds all three worth considering but owns Geo, partly because the Boca Raton, Fla., outfit has the most international exposure. The privatization of prisons is in its infancy abroad — penetration rates run from 17% in Australia to just 3% in South Africa — and Geo earns 13% of its revenue overseas. Another 12% comes from its higher-margin criminal mental-health facilities.

Last month, Geo snagged a contract to run an 832-bed prison in Sydney, its fifth facility Down Under. A plan to raise $250 million — by selling eight-year notes yielding roughly 8.25% — also bespeaks ambitions to expand its balance sheet and give rival Corrections Corp. a run for its money.

CCA and Cornell have no overseas exposure, partly because U.S. demand has been strong. Corrections Corp. runs 64 prisons in 19 states and owns nearly two-thirds of them, a boon because owned prisons generate margins averaging 25%, compared with 15% for managed facilities. CCA’s massive inventory makes it the go-to company for federal and state customers. One worry: Because it has so many beds, investors fret that a large number could go unused. Earlier this year, 11,000 were empty, but new government contracts had trimmed the total to 6,500 by summer.

The Bottom Line
Shares of Corrections Corp. of America, Geo Group and Cornell are selling at unrealistically low prices, considering the Big Three’s solid prospects and steady profitability.Corrections Corp. is the go-to stock for many investors as well. At 24, its shares trade at 17.9 times expected 2010 profits, compared with 13.5 times for Geo and 12.1 times for Cornell.

CORNELL DOESN’T GET THE SAME RESPECT, because 26% of its revenue comes from lower-margin juvenile-detention facilities. But it is also the most sensitive to economic swings — it doesn’t take much to move Cornell’s needle — and hence more suitable for traders with an appetite for risk.

Signal Hill’s Robillard rates all three Buy, but he gives the short-term edge to Cornell over Geo, and to Geo over CCA over the next six to 12 months. CCA’s recent run has already “priced in a lot of the growth re-acceleration,” he says, “while Cornell and Geo can still catch up.” In fact, analysts’ conservative price targets put Cornell at 26, 10% above its recent quotes.

Over the long run, however, Robillard argues that CCA’s bigger balance sheet gives it the most options. Crime increases in a recession, but as the economy revs up, so should spending on crime and punishment. Who said crime doesn’t pay?