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Analyst Sean
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A successful fund analyst continuously striving to maximize Alpha. Many years of experience in asset management, along with a great deal of knowledge in equity research . I have a firm belief in financially strong companies in order to outperform the market. I typically formulate my portfolio... More
  • The New Year Can't Come Any Sooner 0 comments
    Dec 24, 2010 3:14 PM | about stocks: NFLX, OUTR, ULTA, ZAGG, AAPL

       Various companies have seen a drastic sell off as the year 2010 comes to an end and the year 2011 approaches. Fund managers of all types are getting out of positions where they have realized exceptional returns. This should be looked at more as an opportunity to buy rather than a time to short these stocks

    Some examples include:

    Ulta Salon (NASDAQ:ULTA) has seen a 91% year to date return but during the last month has seen a 10% pull back by investors. The growth in this company is still intact since management has made it clear that in 2011 they will open numerous stores nation wide. With an ROE of just under 20% and a future PE of just 24 as compared to its current PE of 34, my valuations suggest this company as a 2011 continued growth stock.

    Netflix Inc (NASDAQ:NFLX) is another company that has seen significant growth during the 2010 calendar year. Netflix has realized a 235% return year to date but has seen a sell off of nearly 10% over the last month. This DVD movie rental company should be able to sustain its growth due to the emergence of their online streaming packages. The cutting of costs should be able to make up for the loss of customers that will look for other alternatives. Also the consistent revenues that Netflix generates should tell you how good this company is, in turn leading to another great campaign for management in 2011.

    Zagg Inc (NASDAQ:ZAGG)
    Any company associated with Apple products has a good chance of becoming successful. Zagg makes all types of products for Iphones, Ipads, and many of the hot technology products on the market. Zagg has realized a 94% return year to date but as of the last two weeks they have seen a 12% decrease in its share price. The company is innovative in their production line and has reached out to mobile companies like Verizon to sell their products in stores. Look for the slight drop in share price to turn around and for shareholders to see significant growth in 2011.

    Coinstar (CSTR)
    has seen its share price increase by 108% year to date but as the year has come to an end the stock has dropped 13% over the last month. The company is known for its innovative products such as the coin counting machines located in grocery stores along with its booming DVD movie rental segment known as Redbox. The stock is currently trading at 44 times earnings and the forward PE is forecasted at around 20 times earnings. They have exceeded quarterly estimates each time for the last three or four years and will look to continue this streak. They have healthy financial statements and with their plans for 2011, look out for a Netflix type surge.

    Conclusion: Investors need to be aware that a trend is a trend and a good company is a good company. All of the companies listed above have three things in common, they are Efficient, Convenient, and Innovative, something all companies should strive for. All four of the companies have realized significant growth over the last year and fund managers are taking the profits to boost year end portfolio returns. Do not look at the recent losses as anything more than short term pull outs because the future looks bright for every single company on this list. 

    For detailed information regarding each stock, I have research reports available at request.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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