hernanday's Instablog J. McLennon is a graduate from the top business school in the nation and has worked in venture capital and the financial industry for 7 years and has worked in analyzing financial products and securities for leading financial service organizations generating returns that beat the market consistently. Mr. McLennon has held the position of Relationship Manager at a leading commercial lending and leasing products firm that specialized in lending to high-tech firms. Furthermore, Mr. McLennon has worked in Venture Capital as a Distressed Assets & Special Event Equities Investment Specialist where he analyzed companies experiencing special events and generated returns for the firm and its clients. His duties included: -Writing credit proposal. -Financial forecasting. -Industry Research. -Credit Structuring. -Business development. -Client Management. hernanday http://seekingalpha.com/user/6749261/instablog Update On Consumer Portfolio Services, Inc http://seekingalpha.com/instablog/6749261-hernanday/1618721-update-on-consumer-portfolio-services-inc?source=feed 1618721 Back on January 8, 2013, I wrote about Consumer Portfolio Services, Inc. (CPSS) and its market defying rise in 2012, seeing a 450% return. Since I wrote that article in January 8, 2013, the stock has continued to rise and delivered a 57.3% return since the day I wrote the article until March 5, 2013. There are quiet a few factors driving that growth in the stock price, but the main reason was that management at CPSS has been able to: reduce selling/general/ and administrative expenses, reduce the cost of revenue, and most of all increase revenue and the net profit margin. There are other factors however affecting the increase in stock price, but if management is able to keep numbers like in the past quarter throughout the year, another stellar year is not out of the question.

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

]]> Wed, 06 Mar 2013 03:17:49 -0500 Back on January 8, 2013, I wrote about Consumer Portfolio Services, Inc. (CPSS) and its market defying rise in 2012, seeing a 450% return. Since I wrote that article in January 8, 2013, the stock has continued to rise and delivered a 57.3% return since the day I wrote the article until March 5, 2013. There are quiet a few factors driving that growth in the stock price, but the main reason was that management at CPSS has been able to: reduce selling/general/ and administrative expenses, reduce the cost of revenue, and most of all increase revenue and the net profit margin. There are other factors however affecting the increase in stock price, but if management is able to keep numbers like in the past quarter throughout the year, another stellar year is not out of the question.

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

]]> cpss cpss subprime lender best stocks of 2013 How To Invest. http://seekingalpha.com/instablog/6749261-hernanday/1618921-how-to-invest?source=feed 1618921 My fellow readers, you are aware of my stock picks, most do well, some do great and some do not do so well. So I want to give you a tip on how to invest. If a stock is in your portfolio for over 1 month and has not generated a return, or generates 7% or more in losses, drop that stock from your portfolio. This will limit your down side from losses. On the upside, hold onto stocks that are rising and I have given recommends on stocks that risen 57% like CPSS, ones that have risen nearly 30% like infinity pharmaceuticals, interoil corporation 33%, Green mountain coffee roasters 17%, Jefferies Group 17%, Strum Ruger and Company 26%, Citigroup Inc 10%, JP Morgan 13%, Goldman Sachs 20% plus a small dividend. Most of the stocks I've picked have been winners, but if you find one losing 7% or more and drop it from your portfolio, you should have seen at least 15-20% return in the first quarter of this year if you followed my stock picks.

Going back to my article best stocks of 2013

I had 3 top picks

SWHC: 21.09%

DDD: -3.09%

ASR: 17.3%

Average Return = 11.76%

Lets compare that to the market

Nasdaq: 6.78%

NYSE: 8.77%

S&P 500: 7.97%

Average Return = 7.84%

My top picks outperform the market significantly, and I expect for the chasm to increase. ASR has a dividend coming in May, SWHC still has room to grow and DDD will see growth. In fact DDD was delivering a 30% return by January 25, 2013. However the stock price fell significantly in February and then there was a stock split. The earnings came in slightly below analyst estimates at about $101 million instead of $103 million. Although the stock price fell because DDD didn't meet the expectations of analyst its performance and fundamentals are still strong, it is a fast growing company in one of the fastest growing industries in America. It may have been temporarily overvalued, but it wasn't by much. I recommend holding this stock until its next earnings release.

]]> Wed, 06 Mar 2013 03:10:08 -0500 My fellow readers, you are aware of my stock picks, most do well, some do great and some do not do so well. So I want to give you a tip on how to invest. If a stock is in your portfolio for over 1 month and has not generated a return, or generates 7% or more in losses, drop that stock from your portfolio. This will limit your down side from losses. On the upside, hold onto stocks that are rising and I have given recommends on stocks that risen 57% like CPSS, ones that have risen nearly 30% like infinity pharmaceuticals, interoil corporation 33%, Green mountain coffee roasters 17%, Jefferies Group 17%, Strum Ruger and Company 26%, Citigroup Inc 10%, JP Morgan 13%, Goldman Sachs 20% plus a small dividend. Most of the stocks I've picked have been winners, but if you find one losing 7% or more and drop it from your portfolio, you should have seen at least 15-20% return in the first quarter of this year if you followed my stock picks.

Going back to my article best stocks of 2013

I had 3 top picks

SWHC: 21.09%

DDD: -3.09%

ASR: 17.3%

Average Return = 11.76%

Lets compare that to the market

Nasdaq: 6.78%

NYSE: 8.77%

S&P 500: 7.97%

Average Return = 7.84%

My top picks outperform the market significantly, and I expect for the chasm to increase. ASR has a dividend coming in May, SWHC still has room to grow and DDD will see growth. In fact DDD was delivering a 30% return by January 25, 2013. However the stock price fell significantly in February and then there was a stock split. The earnings came in slightly below analyst estimates at about $101 million instead of $103 million. Although the stock price fell because DDD didn't meet the expectations of analyst its performance and fundamentals are still strong, it is a fast growing company in one of the fastest growing industries in America. It may have been temporarily overvalued, but it wasn't by much. I recommend holding this stock until its next earnings release.

]]> Here Are My Picks For The Best Stocks For 2013 And Why: http://seekingalpha.com/instablog/6749261-hernanday/1529231-here-are-my-picks-for-the-best-stocks-for-2013-and-why?source=feed 1529231 Original Publication Date January 07, 2013, in DI Venture Capital Magazine

Here are my picks for the best stocks for 2013 and why:

These first 3 stocks are all likely to post more than 70% returns for 2013.

Smith and Wesson Holding Corporation ("Smith and Wesson Holding Corporation (SWHC)")

3D SYSTEMS ("3D SYSTEMS (DDD)")

Grupo Aeroportuario del Sureste ("Grupo Aeroportuario del Sureste (ASR)")

All of these stocks have posted over 90% gains in the last year and are in for another strong year.

ASR who manages airports and manages, operates and develops airports in Mexico's tourist region should expect to see an increase in business as Mexico sees an increase in tourism from the US as the economy turns around and China who Mexico is expanding its tourism market to. With a net-profit margin of over 30% in the last year expect to see strong results in the first quarter and throughout the year.

DDD who is seeing a mass expansion in its market and sales force will also experience continued stock growth. In the last calendar year it has posted more than 300% returns and shows no signs of slowing down as analyst predict continued strong growth. Based on forecasted earnings in excess of $350 million this stock should at least double again in price. This stock may be the Apple of the early 2000s as 3D printing is on the cusp of a new technological revolution with practical applications for manufacturing, military and even consumer applications. As 3D continues to buy up its competitors and consolidate the 3D printing market, expect to see the stock price to continue to rise as 3D printing saves, time, cost, space and materials for industrial manufacturers.

SWHC, with semi automatic guns being sold out in several states at major retail stores, FBI background checks for gun purchases breaking records by 39% (FBI background checks are required to purchase guns and thus are a strong indicator of gun sales in the next 30-60 days). The main drags on stock price are the threat of Obama and the democrats' proposals to enact new gun control measures. This will likely increase gun sales again, dropping stock price in the short term but increasing them in the long run as they increase earnings. One gun store owner described "Barack Obama as the greatest gun sales man in history" during an interview as he stood in a store with a 6 month backlog on 90% of semi-automatic guns. The truth is that any gun control measures are highly unlikely to pass the Republican controlled Congress, which also has a significant number of southern and western pro-gun democrats or democrats who come from pro-gun states. And the selling out of guns is not just limited to semi-automatics guns, with even pistol cases being near emptied out.

"Americans want to buy guns. Gun retailers want to sell them.

Problem is, demand has outstripped supply of the most popular firearms.

That means gun sellers in metro Detroit and across the country haven't seen a revenue boost as lucrative as they could if weapons manufacturers were meeting market demand. "

www.crainsdetroit.com/article/20130106/N...-eye

As such expect to see strong gun sales continue for the next few months as a gun shortage and threat of a looming gun ban will ensure gun sales remain strong for the months to come as manufacturers attempt to catch up and meet demand. Throw in the increasingly rising popularity of Preppers (aka Survivalist) and gun ownership and the gun industry seems to appear to be stronger than ever.

In addition to strong on the ground reasons, all of these companies demonstrate strong financials, good returns, and are in markets that appear to remain strong for the foreseeable future.

These next 4 stocks are likely to see lower gains of 30%-60% over the year.

Alpha Natural Resources ("Alpha Natural Resources (ANR)") While coal is being phased out in the long run in America, its usage is rising faster than ever in places like China, India and the rest of the developing world. Although its price has fallen overall in the last 5 years, expect this stock to continue its thundering return. In the last 3 months this stock has gone up a whopping 60% and 12% in the last 5 days, now who would not like returns like that. Ever see a stock whose price has doubled and wish you got in, well this may just be one of them.

Research in Motion ("Research in Motion (RIMM)") The buzz is in the air, Apple's stock is falling as a result of the disappoint by techies about the iPhone 5 and RIMM is likely to rise in the future with the release of its new phone the BB10. RIMM seems after lots of labour to finally be turning this ship around. Hold this stock for a few years and you may see a very solid return.

Goldman Sachs ("Goldman Sachs (GS)") If there was ever a bank that always made money, this one would be it. Where the NYSE increased 14% in the last year Goldman crushed those numbers with an incredible 43% return in the last year while paying out 4 dividends. As one of the most successful banks in the world, expect to see Goldman Sachs take advantage of the economic recovery beating the market again.

Infinity Pharmaceuticals ("Infinity Pharmaceuticals (INFI)") I've always found Pharma stocks to be the most speculative and hardest stocks to really hammer out. I can go into a gun store or a retail store, I can call up manufacturers in Asia to know if they are going to increase production. I can get a feeling on the streets of who is going to expand on Wall Street, or call up who is banking with who for their next big deal. But there is no real hard information that an outsider can look at into a company like Infinity Pharmaceuticals and determine why they are going to rise in the future, but rise they do. And despite losing 30 million dollars each year for the last 3 years and having a negative earnings per share this stock has risen over 350% in the last year and 500% over the last 3 years. It is often said the best predictor of future performance is past performance, and if that is true, you may want to strongly consider adding Infinity to your portfolio invest, even perhaps as a minor addition (Perhaps from 5-10% overall unless you really enjoy risk).

And while these returns on these stock picks may seem farfetched, keep in mind it was my profession to identify these types of stock and I specialized in identifying distressed assets and providing recommendations on how to profit of them for top firms in the nation. In this financial recovery, these stocks could all easily post the returns I have predicted if not more. And while this financial information is the result of thorough independent analysis by the author, be aware that this is very valuable information that usually cost hundreds of thousands of dollars.

Other stocks which may see break outs are:

JPMorgan Chase & Co. ("JPMorgan Chase & Co.(JPM)")

Goldman Sachs ("Goldman Sachs (GS)")

Arena Pharmaceuticals ("Arena Pharmaceuticals (ARNA)")

Hovnarian Enterprises ("Hovnarian Enterprises ( HOV )")

Sturm, Ruger & Company ("Sturm, Ruger & Company (RGR)")

Citigroup Inc. ("Citigroup Inc. (C)")

Jefferies Group, Inc. ("Jefferies Group, Inc. (JEF)")

Stratasys, Ltd. ("Stratasys, Ltd. (SSYS)")

Grupo Aeroportuario del Pacifico ("Grupo Aeroportuario del Pacifico (ADR) (PAC)")

MGM Resorts International ("MGM Resorts International (MGM)")

Security National Financial Corp ("Security National Financial Corp (SNFCA)")

Green Mountain Coffee Roasters Inc ("Green Mountain Coffee Roasters Inc (GMCR)")

InterOil Corporation (USA) ("InterOil Corporation (USA) (IOC)")

Ruckus Wireless Inc ("Ruckus Wireless Inc (RKUS)")

Spartech Corporation ("Spartech Corporation (SEH)")

Stay tuned for my article where I may highlight stocks likely to fall in 2013.

Tip: They are in the computer industry

]]> Thu, 07 Feb 2013 14:27:44 -0500 Original Publication Date January 07, 2013, in DI Venture Capital Magazine

Here are my picks for the best stocks for 2013 and why:

These first 3 stocks are all likely to post more than 70% returns for 2013.

Smith and Wesson Holding Corporation ("Smith and Wesson Holding Corporation (SWHC)")

3D SYSTEMS ("3D SYSTEMS (DDD)")

Grupo Aeroportuario del Sureste ("Grupo Aeroportuario del Sureste (ASR)")

All of these stocks have posted over 90% gains in the last year and are in for another strong year.

ASR who manages airports and manages, operates and develops airports in Mexico's tourist region should expect to see an increase in business as Mexico sees an increase in tourism from the US as the economy turns around and China who Mexico is expanding its tourism market to. With a net-profit margin of over 30% in the last year expect to see strong results in the first quarter and throughout the year.

DDD who is seeing a mass expansion in its market and sales force will also experience continued stock growth. In the last calendar year it has posted more than 300% returns and shows no signs of slowing down as analyst predict continued strong growth. Based on forecasted earnings in excess of $350 million this stock should at least double again in price. This stock may be the Apple of the early 2000s as 3D printing is on the cusp of a new technological revolution with practical applications for manufacturing, military and even consumer applications. As 3D continues to buy up its competitors and consolidate the 3D printing market, expect to see the stock price to continue to rise as 3D printing saves, time, cost, space and materials for industrial manufacturers.

SWHC, with semi automatic guns being sold out in several states at major retail stores, FBI background checks for gun purchases breaking records by 39% (FBI background checks are required to purchase guns and thus are a strong indicator of gun sales in the next 30-60 days). The main drags on stock price are the threat of Obama and the democrats' proposals to enact new gun control measures. This will likely increase gun sales again, dropping stock price in the short term but increasing them in the long run as they increase earnings. One gun store owner described "Barack Obama as the greatest gun sales man in history" during an interview as he stood in a store with a 6 month backlog on 90% of semi-automatic guns. The truth is that any gun control measures are highly unlikely to pass the Republican controlled Congress, which also has a significant number of southern and western pro-gun democrats or democrats who come from pro-gun states. And the selling out of guns is not just limited to semi-automatics guns, with even pistol cases being near emptied out.

"Americans want to buy guns. Gun retailers want to sell them.

Problem is, demand has outstripped supply of the most popular firearms.

That means gun sellers in metro Detroit and across the country haven't seen a revenue boost as lucrative as they could if weapons manufacturers were meeting market demand. "

www.crainsdetroit.com/article/20130106/N...-eye

As such expect to see strong gun sales continue for the next few months as a gun shortage and threat of a looming gun ban will ensure gun sales remain strong for the months to come as manufacturers attempt to catch up and meet demand. Throw in the increasingly rising popularity of Preppers (aka Survivalist) and gun ownership and the gun industry seems to appear to be stronger than ever.

In addition to strong on the ground reasons, all of these companies demonstrate strong financials, good returns, and are in markets that appear to remain strong for the foreseeable future.

These next 4 stocks are likely to see lower gains of 30%-60% over the year.

Alpha Natural Resources ("Alpha Natural Resources (ANR)") While coal is being phased out in the long run in America, its usage is rising faster than ever in places like China, India and the rest of the developing world. Although its price has fallen overall in the last 5 years, expect this stock to continue its thundering return. In the last 3 months this stock has gone up a whopping 60% and 12% in the last 5 days, now who would not like returns like that. Ever see a stock whose price has doubled and wish you got in, well this may just be one of them.

Research in Motion ("Research in Motion (RIMM)") The buzz is in the air, Apple's stock is falling as a result of the disappoint by techies about the iPhone 5 and RIMM is likely to rise in the future with the release of its new phone the BB10. RIMM seems after lots of labour to finally be turning this ship around. Hold this stock for a few years and you may see a very solid return.

Goldman Sachs ("Goldman Sachs (GS)") If there was ever a bank that always made money, this one would be it. Where the NYSE increased 14% in the last year Goldman crushed those numbers with an incredible 43% return in the last year while paying out 4 dividends. As one of the most successful banks in the world, expect to see Goldman Sachs take advantage of the economic recovery beating the market again.

Infinity Pharmaceuticals ("Infinity Pharmaceuticals (INFI)") I've always found Pharma stocks to be the most speculative and hardest stocks to really hammer out. I can go into a gun store or a retail store, I can call up manufacturers in Asia to know if they are going to increase production. I can get a feeling on the streets of who is going to expand on Wall Street, or call up who is banking with who for their next big deal. But there is no real hard information that an outsider can look at into a company like Infinity Pharmaceuticals and determine why they are going to rise in the future, but rise they do. And despite losing 30 million dollars each year for the last 3 years and having a negative earnings per share this stock has risen over 350% in the last year and 500% over the last 3 years. It is often said the best predictor of future performance is past performance, and if that is true, you may want to strongly consider adding Infinity to your portfolio invest, even perhaps as a minor addition (Perhaps from 5-10% overall unless you really enjoy risk).

And while these returns on these stock picks may seem farfetched, keep in mind it was my profession to identify these types of stock and I specialized in identifying distressed assets and providing recommendations on how to profit of them for top firms in the nation. In this financial recovery, these stocks could all easily post the returns I have predicted if not more. And while this financial information is the result of thorough independent analysis by the author, be aware that this is very valuable information that usually cost hundreds of thousands of dollars.

Other stocks which may see break outs are:

JPMorgan Chase & Co. ("JPMorgan Chase & Co.(JPM)")

Goldman Sachs ("Goldman Sachs (GS)")

Arena Pharmaceuticals ("Arena Pharmaceuticals (ARNA)")

Hovnarian Enterprises ("Hovnarian Enterprises ( HOV )")

Sturm, Ruger & Company ("Sturm, Ruger & Company (RGR)")

Citigroup Inc. ("Citigroup Inc. (C)")

Jefferies Group, Inc. ("Jefferies Group, Inc. (JEF)")

Stratasys, Ltd. ("Stratasys, Ltd. (SSYS)")

Grupo Aeroportuario del Pacifico ("Grupo Aeroportuario del Pacifico (ADR) (PAC)")

MGM Resorts International ("MGM Resorts International (MGM)")

Security National Financial Corp ("Security National Financial Corp (SNFCA)")

Green Mountain Coffee Roasters Inc ("Green Mountain Coffee Roasters Inc (GMCR)")

InterOil Corporation (USA) ("InterOil Corporation (USA) (IOC)")

Ruckus Wireless Inc ("Ruckus Wireless Inc (RKUS)")

Spartech Corporation ("Spartech Corporation (SEH)")

Stay tuned for my article where I may highlight stocks likely to fall in 2013.

Tip: They are in the computer industry

]]> swhc ddd asr anr gs infi jpm arna c rgr jef ssys mgm rkus gmcr snfca ioc seh hov Best Stocks of 2013 Waterstone Financial Inc. Analysis http://seekingalpha.com/instablog/6749261-hernanday/1529211-waterstone-financial-inc-analysis?source=feed 1529211 Waterstone Financial, Inc. ("Waterstone Financial, Inc. (WSBF)") whose improving loan has led it to a highly profitable 3rd quarter after 3 years of running losses in its net income seems poised for a turn around in 2013 and once the 4th quarter results are released which analyst are expecting to be very good, Waterstone Financial will be a stock to watch for 2013. WSBF has increased mortgage loans, and the mortgage loans by all accounts seem to be of a higher quality than in the past.

""The record number of mortgage originations by Waterstone Mortgage Corp. has increased net income, and the steadfast improvement in WaterStone Bank's loan portfolio has resulted in significantly lower and more normalized loss provisions," said Doug Gordon, president and chief executive."

www.jsonline.com/business/boost-in-mortg....html

Consequently, Waterstone has seen a net income of $17 million over the last 3 quarters with $8.6 million or nearly half of that coming in the most recent quarter. With results like these, a 338% increase in share price has resulted. This is possibly one of the most undervalued small cap financial stocks in the market today.

Financial analysis of similar sized competitors show they are trading at P/E ratio of about 37:1. Since Waterstone had a losing quarter 4 quarters ago the P/E ratio is appearing artificially low in the price range. That is, when the market properly adjust, and Waterstone is noticed, and if it continues posting the same level of earnings in the 4th quarter, expect the price to hit $14.06 per share.

Waterstone has clearly improved its base financial performance and on the ground sales team as evident by the regulators removing orders that forced Waterstone to strengthen its financial positioning and loan portfolio. Further Waterstone had a net earning of $1 million from mortgage lending in the most recent quarters so we know that they are indeed in a strong financial position.

]]> Thu, 07 Feb 2013 14:27:42 -0500 Waterstone Financial, Inc. ("Waterstone Financial, Inc. (WSBF)") whose improving loan has led it to a highly profitable 3rd quarter after 3 years of running losses in its net income seems poised for a turn around in 2013 and once the 4th quarter results are released which analyst are expecting to be very good, Waterstone Financial will be a stock to watch for 2013. WSBF has increased mortgage loans, and the mortgage loans by all accounts seem to be of a higher quality than in the past.

""The record number of mortgage originations by Waterstone Mortgage Corp. has increased net income, and the steadfast improvement in WaterStone Bank's loan portfolio has resulted in significantly lower and more normalized loss provisions," said Doug Gordon, president and chief executive."

www.jsonline.com/business/boost-in-mortg....html

Consequently, Waterstone has seen a net income of $17 million over the last 3 quarters with $8.6 million or nearly half of that coming in the most recent quarter. With results like these, a 338% increase in share price has resulted. This is possibly one of the most undervalued small cap financial stocks in the market today.

Financial analysis of similar sized competitors show they are trading at P/E ratio of about 37:1. Since Waterstone had a losing quarter 4 quarters ago the P/E ratio is appearing artificially low in the price range. That is, when the market properly adjust, and Waterstone is noticed, and if it continues posting the same level of earnings in the 4th quarter, expect the price to hit $14.06 per share.

Waterstone has clearly improved its base financial performance and on the ground sales team as evident by the regulators removing orders that forced Waterstone to strengthen its financial positioning and loan portfolio. Further Waterstone had a net earning of $1 million from mortgage lending in the most recent quarters so we know that they are indeed in a strong financial position.

]]> wsbf MORTGAGE LENDER sub prime lender Sub Prime Auto Lender Defies Market With 450% Return http://seekingalpha.com/instablog/6749261-hernanday/1432011-sub-prime-auto-lender-defies-market-with-450-return?source=feed 1432011 Despite the collapse of the sub-prime lending market just a few years ago Consumer Portfolio Services, Inc. (CPSS) has risen over 450% in the last calendar year. With strong financials and growth in the sub-prime auto lending market on its home turf in California, this stock shows no signs of slowing down for the foreseeable future. In recent press releases, the company indicates they are in the process of selling $45 million in receivables out of a total of $160 million of Senior Subordinate Asset-Backed Securitization. Approximately 85% of Consumer Portfolio Services, Inc. (CPSS) loans are rated as A2 by Moody's and A- or better by S&P Rating Agency.

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

]]> Tue, 08 Jan 2013 17:20:35 -0500 Despite the collapse of the sub-prime lending market just a few years ago Consumer Portfolio Services, Inc. (CPSS) has risen over 450% in the last calendar year. With strong financials and growth in the sub-prime auto lending market on its home turf in California, this stock shows no signs of slowing down for the foreseeable future. In recent press releases, the company indicates they are in the process of selling $45 million in receivables out of a total of $160 million of Senior Subordinate Asset-Backed Securitization. Approximately 85% of Consumer Portfolio Services, Inc. (CPSS) loans are rated as A2 by Moody's and A- or better by S&P Rating Agency.

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

]]> cpss NASDAQ:CPSS