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Scott Wachsler
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I manage Wax Ink.net, a baseline equity research company comprised of individual investors not licensed or registered with any government agency. I have been all cap value investor and independent equity researcher for the past 30 years, and believe that patience is the key to successful... More
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  • Performance - Week Ending 12/20/13 0 comments
    Dec 22, 2013 8:42 AM | about stocks: MXWL, LDOS, SAIC, CLF, BA, DPS, AP, MYE, HFC, CBST, AIR

    My friend is retiring, the president has gone to Hawaii to rest and catch some rays, Obamacare is still not working, and a case before the Oklahoma Supreme Court is examining a persons' right to choose.

    What do all of these thing have to do with investing? Probably nothing, but perhaps everything.

    My friend is retiring because he kept his head down and read end up for 30+ years and has now decided to enjoy the years he has left doing whatever he wants to do.

    The president is catching a few Christmas rays because lying to the American people has apparently made him tired.

    Obamacare does not work because it is a monopoly with no financial incentive to make it work. In the end, the government decided to pretend to be apart of the private sector when it came to health insurance, and the result is that the president had to go and rest.

    The case in Oklahoma is about a person's right to choose. The issue is that the state says yes the citizen has the right to choose and that such right is a basic right. The legal challenge is that the citizen has no right choose.

    The argument is that the Obamacare law stripped the right to choose away from all United States citizens and that while not argued before the blow daddy black robed supremes, that happy little group collectively sang hallelujah and screamed amen and go forth, regarding the new law, making a challenge difficult at best.

    In the end, Americans have a singular inept individual as a president. Ditto for our vice-president.

    But what is even more painful are the choices lining up to replace him. My god how has one nation fallen so far?

    Hi. My name is Wax, and I am an individual, working class, investor just trying to do the best I can in a world that was never intended for investors like me.

    Throughout the course of the week, in addition to my regular job, I create baseline equity research valuations, principally for United States based companies in accordance with an All Cap Value investing philosophy.

    The other thing I do is let the world watch as I manage the The Wax Ink Portfolio.

    Perhaps watching me make the mistakes I make will help other working class investors avoid the investing pitfalls that constantly seem to find me.

    Enjoy your weekend

    Wax

    Markets
    The Wax Ink Portfolio was up 3.6% for the week. By comparison, the Dow was up 3.0%, the Nasdaq was up 2.6%, the S&P 500 was up 2.4%, the Russell 2000 was up 3.6%, and the Volatility Index, commonly known as the VIX, was down 12.7%.

    Year to date, the Wax Ink portfolio is up 45.8%, the Dow is up 23.8%, the Nasdaq is up 35.9%, the S&P 500 is up 27.5%, the Russell 2000 is up 35.0%, and the VIX is down 9.5%.

    Breakdown
    The Wax Ink Portfolio breakdown is roughly 66% equities, 34% cash, and 0% bonds.

    Research
    A great deal of time is spent every week looking for potential investments. Part of that research is listed below. Investment considerations are based on a long-term, buy and hold,
    value investing philosophy, that considers investment risk before considering investment reward.

    The Boeing Company (NYSE: BA) - Negative Investment Interest (Sell) based on a recent price of $133.83 and a fair value estimate of $42-$53.

    Other investment considerations were: the price to sales change is 4.7, meaning that for every dollar change in sales, the price increased $4.70 and negative y-o-y earnings growth.

    Dr. Pepper Snapple Group, Inc. (NYSE: DPS) - Negative Investment Interest (Sell) based on a recent price of $47.75 and a fair value estimate of $27-$34.

    Other investment considerations were: debt increased 3.5 times faster than sales, 64% of assets comprised of goodwill and intangibles, y-o-y earnings growth less than 1%.

    Ampco-Pittsbugh Corporation (NYSE: AP) - Negative Investment Interest (Sell) based on a recent price of $18.81 and a fair value estimate of $36-$39.

    Other investment considerations were: y-o-y earrnings decline of 37%, y-o-y free cash flow decline of 29%, and a 15% y-o-y decline in sales.

    Recent Changes
    As I noted in a prior performance report, I have made the following portfolio changes.

    I sold my positions in Maxwell Technologies (Nasdaq: MXWL), Leidos Holdings (NYSE: LDOS), Science Applications International (NYSE: SAIC), and Cliffs Natural Resources (NYSE: CLF).

    In addition, the sale of Tellab (Nasdaq: TLAB) funded, with the company being sold to Marlin Equity Partners for $2.45 per share.

    Collectively, with this basket of stocks it was a loss of almost 19%.

    Holdings
    This week's moving on up stocks were rubber and plastic container maker Myers Industries (NYSE: MYE), up 8%, oil refiner Holly Frontier (NYSE: HFC), up 7%, and drug maker Cubist Pharmaceuticals (Nasdaq: CBST) was up 7%.

    This week's floaters in the bunch bowl was airplane repair company AAR Corporation (NYSE: AIR), down 1%. Yes Elizabeth, that is it, the only floater for the week.

    Not Performing
    With the recent changes to the portfolio, the new portfolio choke and puke stocks are garage door and telephone headset makerGriffon Corporation (NYSE: GFF), down 27% since being added to the portfolio, and municipal/industrial construction company Layne Christensen (Nasdaq: LAYN), down 23% since being added to the portfolio.

    Copyright © 2013 Wax Ink

    Wax Ink is a baseline equity research company not licensed or registered with any government agency

    Disclosure: I am long MYE, HFC, CBST, AIR.

    Themes: Portfolio Management Stocks: MXWL, LDOS, SAIC, CLF, BA, DPS, AP, MYE, HFC, CBST, AIR
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