Korby

Presidential Starts: 1900-2009

This is an interesting article, but I also think there's a significant lag between policy and performance.

Most of the blame for the DJIA's performance for the first two months of this year fall squarely on the housing bubble and credit crisis of earlier this decade.

Now, that's not to say that President Obama's first 100 days haven't been part of the cause for the drop. I think it's just too difficult to assign all of the market's peril or prosperity to neat four to eight year time periods.

Three Stocks with a Margin of Safety

I like to have a little more faith in people, than just assume that all the articles written here are for self-serving purposes. Plus, I haven't yet heard of the Seeking Alpha pop, so even if someone does write an article to make money on their own positions I don't see see it being very effective here.

All of that being said, anyone who follows someone else without doing there own due diligence deserves what they get. There's nothing that is a good replacement for independent and reasonable judgment.


On Mar 02 07:20 PM Marcap wrote:

> Unfortunately that is the case with many such articles. Rather than
> being informative, most of them are very biased, designed solely
> to promote the author's position in a particular stock, for obvious
> reasons. And as you suggest, this accomplishes little except do a
> "severe injustice" to the reader.
>

Under Armour: Getting Closer to the Bottom?

Looking at Under Armour's fundamentals, I'm worry very little about how much more it could go down, because all signs point to the stock being worth more than it is currently.

I can understand why investors are wary of the stock. We've been told that this recession will be particularly bad on retail stocks and especially higher-end retail stocks like UA. UA's value metrics (P/E, P/S) also aren't as low as some other stocks that value stock pickers have started to vulture.

However, I believe that a look at the SEC filings show that UA has been oversold, even for a retail stock.

The price of UA is less than half of what it was in March 2008, but from March 2008 to December 2008 UA's sales were actually 14% higher. UA's current ratio is lower during that same time period (3.83 to 2.97), but the company's cash position is higher and it hasn't been afflicted with the same inventory build-up (only 9% growth from March 2008 to December 2008) that other retailers have. Good inventory management and steady sales bode well for a retailer to come out of the recession stronger.

UA has also had positive cash flow for all four quarters of the past year, with most of the cash coming from healthy areas like operating activities. The company has kept borrowing steady but low.

The company looks stronger to me than it did a year ago, and now is trading at more than a 50% discount from its 2008 highs. That's worth a buy in my book.

Numbers Show Consumers Not Cutting Cable in Favor of Online Video

I commented on this subject in another article, but felt like this article provided a forum for one additional comment. Until the author said the following statement, he was making the fatal mistake by ignoring that technology progresses and the old ways of doing things will look foolish when new technology provides a better way:

"While everyone is excited with these new offerings, let's set expectations correctly and look to the future without forgetting what is taking place today."

Content provider websites will continue to add shows online, the quality of the video will improve, and sending this video to your television to be viewed on a larger screen will get even easier. The only odd man out that I can see is the cable providers unless they drastically add to their business models.

Web Video Isn't Killing Cable...Yet

Sometimes, it helps to step back and think logically about things before looking at numbers.

I watch four types of programs religiously: Syracuse basketball, The Office, Prison Break, and NFL football.

I can watch the first three for free: SU on ESPN360, The Office on Hulu and Prison Break on Fox.com.

Looking at these facts, I am a fool for continuing to pay $80/month to a cable company when the content owners provide the same product over the internet for free.

It's not just focused watchers like me who will make the switch. Channel surfers can access nearly everything on cable on demand on the content providers websites. Just roam around sites like mtv.com and watch an episode of the Real World or foodnetwork.com and watch Giada make orzo stuffed peppers.

The people who say it will never happen, are probably the same people that thought the PC would only be good for housewives to store their recipes.

Earnings Preview: Target

As a value investor, the current environment makes many companies look like attractive investments at first look. The problem is finding the capital to invest in all the companies that look good right now.

Target will get a look from me, but probably not a buy, here's why:

1. It value metrics, Price/Sales and Price/Earnings, as well as its margins are better even than the everyman's defensive pick, Wal-Mart. That's what attracted me to TGT at first, but there's plenty of stocks out there with the same valuations.

2. Target's current ratio stands at a healthy 1.5. However, two-thirds of the company's current assets are made up of inventories. These inventories are most likely worth less than the 9B on the books. This problem is double-edged. If Target slashes prices to reduce inventory, its margins shrink. Otherwise, it will incur large inventory holding costs. There's no reason to think this won't be a problem Target will face since inventories have grown 33% since last year.

3. During the last recession, American consumers spent their way into a bull market. That's unlikely to happen this time around, since that's what got us into the current mess. That's not good news for retailers.

I like TGT's valuation metrics, I just think there's better places to put my money right now.

Jim Cramer's TheStreet.com: Things Were Bad Last Quarter, and They’re Getting Worse

As a content provider, I could do without TheStreet.com. It's just another face in the investment information/advice crowd and on the outside banks of a deep moat surrounding the premier destination, Yahoo! Finance. I could do without ever visiting the website, and many other investors make the same choice.

Regardless, TSCM has built quite a war chest out of a high margin business built simply on ad revenues and content subscriptions like the author says. At a price/book ratio of around .5, for a company made of cash assets and not much else, I'm tempted to invest 50 cents on each dollar the company is worth and let the market take its course. With nearly a 4% dividend yield, I could do worse, like letting my money sit in T-bills.

What concerns me is that the advertising dollars aren't going to recover for some time due to the state of the economy. TSCM has acquired more online properties, but their advertising revenue has actually gone down.

Given all the variables and the fact that this company has NO DEBT, I think it is well suited to ride out the storm and could provide a nice return.

Whole Foods: Pick of the Day

There is some value in Whole Foods in this current market, but I'm not as bullish as the author. Marcap is right in that we can't put on blinders to the fact that the economy could get even worse, forcing consumers to cut back even more. These events would most likely force Whole Food's revenues down even more. It is important to realize that in a time when consumer confidence is extremely low, Whole Foods was able to increase revenue while maintaining virtually the same operating margins as better times.

Maintaining business as usual at a cheaper price (EV/Sales=.33) makes WFMI an attractive investment. However, with a current ratio hovering below 1, I am going to pause before I put all my eggs in Whole Food's basket.