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Daniel Nathel
9 Comments
Gushan Environmental Energy: The Case for Chinese Biofuel
The fundamental being that they have good management and they are enticing them to stay and conquer the market.
The technical... I know that Market Technicians are capable of producing gains aside from the underlying businesses they are investing in, but I am not one and the word has too many meanings for me. For the sake of simplicity I would replace it with popular or increased demand for ownership in this situation... unless you are referring to something else like one of the volume/financial stat functions that most quote sites offer. If that is the case, I am curious to know what measurement you think was the underlying influence on the gain.
Thanks for your comment though. Shortly after I wrote this article I went long GU, and I nervously watched the price drop more than 10%. "Cat's eye's" comment was quite alarming and made me reluctant to continue writing because it didn't seem like I had a reader. Instead I concentrated on my own analysis more.
I am still in GU now, indefinitely, but I am looking to be compensated more for the risk I assumed when I picked it up. The price has been pretty unstable at the current level and if it had more time to follow it I would probably approach the situation differently and try to take advantage of the huge movements.
Casual Dining Sector Offers Up Compelling Plays Like Ruby Tuesday
Casual Dining Sector Offers Up Compelling Plays Like Ruby Tuesday
I miss spoke if I said the EPS was rising. What i was alluding is what Marguerite Duffy, Ruby Tuesday CFO,said during the conference early this month. She mentioned that their restaurant margins beat their expectations to over 18%. She continued to say that they increased their checks, decreased their COGS and cost of payroll.
That does not translate directly into earnings because of the many casualties on their balance sheet and I should have only used the word profits to describe their operations.
Thank you for the correction.
Also, I don't avoid the balance sheet but, I am no where near as fluent at reading it as I would like to be. Sometimes I am not sure if that is just me or if they are just out right deceptive, but that is definitely something I will work on and pay closer attention to in the future.
I have heard a lot about issues of corporate debt recently, one of the most prominent is its unavailability. Another issue I will pay closer attention to in the future.
Thanks for the advice.
Casual Dining Sector Offers Up Compelling Plays Like Ruby Tuesday
Casual Dining Sector Offers Up Compelling Plays Like Ruby Tuesday
Your point is valid, well taken and those 10 make me even more of a skeptic.
But never having the experience of working in a professional investment house like yourself, any advice I can get is better than none, including yours. And though Cramers advice alone doesn't go far, he brings up stats in one company that I never thought to look at which help me to analyze other companies.
On top of that looking back at the comparison I made between the two of them, Cramer's advice is actually a derivative of advise that Graham showed favor to for the defensive investor in "The Intelligent Investor." (sorry, I had to use them in the same sentence for that one) I can't recall the lady who did the study or the exact name of it but I think it was somewhere along the lines of Dollar-Cost averaging, in which you disregard the current market level and inject the same amount month to month, buying less when prices are high and more when prices are low. Graham did not oppose such a strategy and actually highlighted its success.
Casual Dining Sector Offers Up Compelling Plays Like Ruby Tuesday
Cramer brings out great stats and fundamentals in the few seconds he talks about a company, but a few seconds can't compare to the days, months and years people along with Jim spend analyzing stocks.
I defend him because even though personality is a reason many people watch his show, there is more to it. He brings out factors that you wouldn't think to look for if you haven't had the experience and he offers it day to day. You can learn a lot or at least have a foundation to begin learning off of from watching.
On the contrary I am a skeptic when he, or any one for that matter gives me investment advice, so don't mistake me for a Cramerican and because it can't hurt I won't use his name with Grahams again unless I have to. Sorry Jim.
Best and Worst Performers YTD
After hours price as of 02.28.08 - $8.54; Conference call scheduled for 03.03.08 at 4:45 pm.
TurboChef Technologies (OVEN) is a tough call, but it deserves a little more than the cold shoulder before they announce their quarterly earnings on Monday. If the ticker and the company name are not enough of a hint, TurboChef specializes in speed cooking technology. Their narrow market focus and the increasing demand for food cooked fast offers an opportunity for strong economic growth. Unfortunately, from 2004 to 2006 there income statement would prove otherwise, with revenue consistently declining from over $70 mil in'04 to under $48 mil in '06. Don't be mistaken though, they have been on the up and up, and in the 9 months beginning last January they already reported over $52 mil in revenue.
OVEN lost about 50% of its market value just in '08, mainly because news broke that Starbuck's, one of their top 3 customers, reported that they would phase out their hot sandwich offerings in the fall (they were stinking up their coffee shops) and they just couldn't recover from the down trading market. Volume has been on the rise recently and the price started following this week making an upward move of about 10%.
Their are a ton of risks associated with OVEN including a history of negative earnings, there is not really a direct competitor to compare them against, 60% institutional ownership, almost 38% is held by insiders, 18% of the float was short at the end of January and the list goes on. But, there is some upside potential in the short run, if not long, for at least a ride on the rebound if they report good news Monday.
I say long run because they make good, expensive, speed cooking products that should spread globally over time; as they have in the US. They also offer an extremely upper end speed cooking oven for residential kitchens (that I am sure has had a tough time selling along side of the new home starts) that will probably not be so uncommon in the future. To top it off, the consensus of analysts covering OVEN expect earnings to be a positive 3 cents for the last quarter of '07 and to stay out of the red rising to .19 cents for the fourth quarter of '08.
If you are interested in purchasing shares of OVEN check out some of the other players in the cooking equipment market including Middleby Corp. (MIDD) and companies that you feel operate with similar demand, but don't expect OVEN to move in sync with them (because of their R and D focus). Most of those guys did good recently and I think the upside potential should out way the downside risks, which look like they have already been factored in, for Mondays conference call.
Disclosure: I may, or may not, invest in or trade shares of OVEN, but I currently have no position in the company.
Pfizer, J&J Would Be Front Runners in a Sepracor Buyout
To start the drug that they "supposedly" over payed for was part of a move to hedge out into different therapeutic areas of the pharmaceutical industry, which I think is a great move. SEPR is no 11 figure Glaxosmithkline (GSK) or Merck & Co. Inc (MRK), but its also not a monotone bio-pharma like Bio-Marin Pharmaceutical Inc. (BMRN) trading at 77 times earnings. Sepracor has approved drugs for allergies, asthma and insomnia, they are in phase 3 with an epilepsy med and have a bunch more in the pipeline.
The numbers look decent too. The market cap right now is just over $2.5, bil, but it does half of that in revenue. It trades like the big barons (PFE, LLY, SNY, MRK, GSK) in terms of P:E but still offers huge growth prospects; being that it is valued at a percent or two of those companies and the introduction of one of SEPR's drugs could tsunami their balance sheet.
Analysts don't expect Serpacor to earn as much money as management does, but when they announced that the stock plummeted. They also supplemented their contradiction with a downgrade and I think that is why it is already a value. Institutions have their entire fist in this company, but there is still over 2 million shares trading daily. If management can follow through at the end of the week I would expect the news to travel.
The reported mess that could exist at Serpacor is a huge short term risk. I read an expectation as low as $20 for a share. If it gets down that low before Friday it would seem to be a good buy because bad news would just provide evidence for that price and would probably not send it any lower. But, if the mess is not as bad as everyone expects, this stock has good upside potential.
If you like my comment check out my new blog at DanielNathel.blogspot....
Disclosure: I may buy this stock in the near future.
Eight Brazilian Telecom Stocks Worth Calling
From 2005 to 2007 Brazil's wireless subscriber base grew by just under 50% approaching 120 million (~2/3 of the pop.), and Oi, the Tele Norte Leste Participacoes S.A. (TNE) wireless brand, was there to capture that growth, and looks like it will continue to do so. TNE has had a strong hold over the land lines industry for a long time, but that business, which represents a little less than half of their revenue, has not been going any where as it looms as a thing of the past. They also provide internet, digital tv, etc... wireless only represented about 16% of their business in the middle of '07. They recently acquired a bunch more licenses to expand their wireless business in Brazil and I think that will help increase their value.
TNE does $10.29 bil in revenue, has a market cap of 9.91 bil, but has $2 bil more debt than cash (which is common to the industry, in a smaller proportion). Their cash flow is pretty high though, and they have been good about paying off their debt. Institutional owner ship is less than 50% and about 2 million shares trade per day. Other players in the industry including Tele Norte Celular Participacoes (TCN), Telecomunicacoes de Sao Paula (TSP) and Vivo Participacoes (VIV) are all trading at higher earning multiples, and so is the Mexican giant America Movil (AMX). In the 8 times trailing and future earnings range TNE looks like a good buy with a lot of growth potential. If the conference call goes well this Friday I would expect TNE to continue on its upward trend.
If you like my comment, check out my new blog at DanielNathel.Blogspot....
Disclosure: I may or may not purchase any or all the companies included in this article.