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  • Low P/E Stock Of The Day No. 27: L.B. Foster Company [View article]
    I think one of the main issues weighing on FSTR is their dispute with UNP and the potential for litigation that could drag on for years. As I understand UNP's position FSTR's liability could be far higher than the amount they've already incurred or for which they've already taken reserves (perhaps as much as an additional $125M).

    From their most recent 10Q: "As of June 30, 2015, the Company maintained a total product warranty reserve of approximately $9,050 for its estimate of all potential product warranty claims. Of this total, $7,756 reflects the current estimate of the Company’s exposure for potential product warranty claims related to concrete tie production. While the Company believes this is a reasonable estimate of its potential contingencies related to identified concrete tie warranty matters, the Company may incur future charges associated with new customer claims or further development of information for existing customer claims. Thus, there can be no assurance that future potential costs pertaining to warranty claims will not have a material impact on the Company’s results of operations and financial condition. See Note 13 of the Notes to Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q for additional information."

    It also seems likely that this dispute will lead to losing UNP as a customer for all products, not just concrete ties.

    While I agree with Retired CFA's comments concerning the significance of UNP'S ongoing business, I think it is the potential of further liability that is more significant. It seems odd that the author does not address this issue in an article on FSTR.

    Long FSTR.

    Sep 2, 2015. 01:18 PM | 1 Like Like |Link to Comment
  • Transocean A Hold Despite Dividend Suspension And $2 Billion New Impairment Charge [View article]
    Excellent answer. Personally I've made a lot of money investing very PATIENTLY in cyclical stocks. Like most investors I've not been very successful at "timing the market".
    Aug 27, 2015. 02:44 PM | 2 Likes Like |Link to Comment
  • Freeport-McMoRan And The Cash Costs Of Copper [View article]
    Logical Miner, I fully agree and wouldn't have made this comment if only I could give you more than one "like". These high quality cyclicals are a gift to patient investors.
    Aug 5, 2015. 06:16 PM | 1 Like Like |Link to Comment
  • Is Nike's Past Stock Performance Repeatable? [View article]
    I've owned NKE since 7-1999 (split adjusted $14/sh) and bought an additional large position in 6-2001 (split adjusted $10 ⅜ /sh). My only mistakes since then have been selling portions of those positions on three occasions when the stock looked over-valued. But even with those mistakes it's been a fantastic investment. The lesson, IMO, is to be very weary of people advising that a stocks price is "getting ahead of itself" while it is still demonstrating great growth, has excellent management, and is executing its plan superbly.
    Jul 22, 2015. 04:44 PM | 2 Likes Like |Link to Comment
  • Boring Means Profitable In Chase Corporation's Case [View article]
    I agree that this stock is very illiquid. According to Fidelity the 90 day average trading volume is less than 9,000 shares. But I also agree it's a great little company that some have described as a mini-MMM. The Chase family owns over 20% of the shares but they seem to run it in a shareholder-friendly and conservative way. It's been a great investment for me since I opened a position in 2007 (poor timing) but even with that, and with just a few trades I have an IRR of 19.7%. It just takes a lot of patience and discipline when making trades.
    Jul 10, 2015. 07:45 PM | 1 Like Like |Link to Comment
  • Acadia Pharmaceuticals Buyout Will Happen, Just Not Yet [View article]
    After listening to the conference call I added to my position (after hours trading). Their explanations sounded very reasonable and reassuring to me. Seems like more of a "hiccup" than a trip-up. We'll see.
    Mar 11, 2015. 06:34 PM | 1 Like Like |Link to Comment
  • Copper: The New Texas Tea [View article]
    TDune, Part of my thesis is that oil prices will not stay below $70 for more than a few months and I've positioned several of my investments based on that. And, I believe that with oil back over $70 those electric cars will will gain a lot of "traction". But really it's just a speculation for both of us.
    Jan 21, 2015. 07:58 PM | Likes Like |Link to Comment
  • Copper: The New Texas Tea [View article]
    The construction slow down in China may be causing much of the reduced demand for copper but I see a counter trend that I've not been able to quantify. The technical advantages of using electric motors to power vehicles is being proven by Tesla and others. I believe there will be a continuing, and rapidly accelerating, trend to replace internal combustion engines (ICE) with electric motors. Electric vehicles use far more copper/vehicle than ICE vehicles. The world's electric power infrastructure will need to expand and be modernized to a large extent to keep all these vehicles charged. I'm long FCX as a long-term play.
    Jan 21, 2015. 04:29 PM | 1 Like Like |Link to Comment
  • Retirement Strategy: Total Return Or Income? The Debate Rages On [View article]
    "At least that is MY chosen path. What's yours?"
    Mine is small and mid-cap growth stocks w/o regard to dividends. If you start this approach in your early working years and stick with it your portfolio will, in all likelihood, grow large enough to support you at retirement with the nominal dividends it does throw off along with a few occasional rebalancing sales of parts of positions that are temporarily well above their "mean". If you look at charts of representative funds it seems pretty obvious:

    Works for me.
    Dec 13, 2014. 01:19 PM | Likes Like |Link to Comment
  • After Recent Price Drop, Fluor Looks Mighty Attractive [View article]
    BruceLee1984, The reason CBI is more attractive to me is because of its current valuation, growth, and profit margins vs. FLR. For example:
    CBI vs. FLR
    PE 8.11 vs 14.13
    P/CF 5.73 vs 9.75
    P/B 1.88 vs 2.51
    EPS growth TTM vs prior TTM 64.4% vs 35.8%
    Revenue change TTM +13.3% vs -20.35%
    Free CF TTM $378M vs $154M
    CF growth rate last 5 years +61.8% vs -0.2%
    Gross margin TTM 12.15% vs 6.73%
    Operating margin TTM 7.44% vs 5.02%

    So, I have already done some research and decided CBI is a better fit in my portfolio than FLR. But I do think they are both good companies. CBI carries more debt, mostly due to a recent acquisition, but I expect them to pay this down with their excellent CF over the next few quarters.
    Dec 11, 2014. 09:55 PM | 1 Like Like |Link to Comment
  • After Recent Price Drop, Fluor Looks Mighty Attractive [View article]
    IMO CBI looks more attractive than FLR. Their balance sheet is not as strong but I think it's "strong enough" and nearly all other valuation metrics would indicate it is very oversold. (long CBI, no position in FLR).
    Dec 2, 2014. 12:27 PM | 2 Likes Like |Link to Comment
  • Why The Market Topped Out [View article]
    "Job openings recently came in at their highest levels since 2001. Unfortunately, the jobs that are in demand (commercial truck drivers, machinists, software programmers, etc…) cannot be filled by those that remain unemployed."

    Based on my own observations I just can't agree with this. We've traveled all over the midwest this summer and nearly every town has "now hiring" and "help wanted" signs prominently displayed by a large percentage of the businesses. This includes all sorts of factories, trucking companies, retail establishments, and restaurants of all sorts. Nearly every Walmart seems almost desperate for people with large recruiting information displays for all sorts of positions.

    Based on the charts showing labor participation rate and percentage of folks on food stamps, vs. the wide range of jobs that I see available, it seems like our country has more of a work-ethic problem than an unemployment problem.
    Oct 12, 2014. 09:59 AM | 4 Likes Like |Link to Comment
  • Apple's iWatch Profit Potential [View article]
    My grandpa always carried a pocket watch - I've always preferred a wrist watch.
    Aug 21, 2014. 04:54 PM | 2 Likes Like |Link to Comment
  • Introducing The 'Conservative Total Return' Portfolio [View article]
    Thanks for your very well written article. My own approach and selection criteria is very similar but with a bias toward mid and small cap companies. Also, I pretty much ignore dividends. When I buy a "good" and growing small or mid-cap I do so with the expectation that it will keep growing and keep finding high margin uses for their excess cash so why should I want them to send me a check every quarter just so I can cash it, pay tax on it, and send it back to them. If they can't/don't redeploy the cash usefully then I move on. This approach has been working for me for many years and, as you've found with your approach, it has done far better than the benchmark averages. IMO the extreme popularity of the "dividend growth" approach is a passing fad that we won't hear much about during the next high interest rate cycle of the economy. Now that statement should really attract a lot of "incoming fire" and get your clicks up! These DGI people are fanatics.
    Aug 21, 2014. 04:22 PM | Likes Like |Link to Comment
  • Apple's iWatch Profit Potential [View article]
    Your hindsight is 20-20, your foresight not so good. Apple is in the business of solving the problems you foresee and introducing products you never knew you "needed". IMO this new wearable device will be another blockbuster. Tim Cook has pulled together an awesome team of technical and marketing people. Most of those people could find a job anywhere - they wouldn't have taken a job to work on this new product if they didn't have conviction that it will successful; even revolutionary.
    Aug 21, 2014. 04:05 PM | 3 Likes Like |Link to Comment