July 31, 2007:What do we do now? Best Longs as per Market Edge

In markets such as the present one, it is useful to me to see what other eyes come up with for stock selections. Market Edge uses several criteria for their "Best Long" list. All of the stocks have come off a significant bottom.The positive characteristics of the company are still in place and the stock has experienced a further minor pullback recently. Other criteria are used, but for the sake of brevity, here is the list. Due diligence is up to you.



Alvarion (ALVR)
Cytori Therapeutics (CYTX)
Genomic Health (GHDX)
ISIS Pharma (ISIS)
Compania de Minas Buenaventura ADR (BVN)
Brazil Telecom ADR (BTM)
Cummins (CMI)
A.O. Smith (AOS)
Astec Industries (ASTE)
PetMed Express (PETS)
Franklin Elctric (FELE)
USA Truck (USAK)
Greenbrier Companies (GSX)
Eagle Bulk Shipping (EGLE)
Goodman Global (GGL)
Garmin (GRMN)
KLQ Corporation (LKQX)
Central European Distribution (CEDC)
Ambassadors Group (EPAX)
FS Networks (FFIV)
Smith and Wesson Holdings (SWHC)
SanDisk Corporation (SNDK)
SunPower Corp (SPWR)
Synovis Life Tech (SYNO)
Integrated Silicon Solutions (ISSI)

July 30, 2007: Soups on...some dough for your portfolio

Pictures: A.C. Nielsen and Jobe Cerney/Pillsbury Doughboy (Morton High School graduates)

Some comments from the respected team at Credit Suisse First Boston as they parse a recent Nielsen Survey on processed food. Disclosure: A.C. Neilsen and I graduated from the same high school. Decades apart.

Kraft is having some problems. Total sales declined 0.3% over the past three months ended July 14th. Kraft lost dollar share in 17 of its top 20 categories. Cheese continues to be a big problem. Kraft lost 130 bps of market share in cheese while pricing was raised 3%. Private label cheese took 70 bps of share while taking pricing up 7%. Conclusion: Kraft is not being recognized as a premium brand despite a heavy advertising campaign and appears adrift.

Heinz maintains strong retail sales and favorable currency exchange. CSFB feels the pullback on these shares is unjustified. Heinz dollar sales rose 5.2% in the past three months. Dollar sales and volumes of frozen dinners are up almost 17.5% gaining almost 1 share point. Higher prices in frozen potatoes is being supported by increased promotion which drove sales up 5.4%. Ketchup sales rose 2.4% and pasta sauce sales were up 3.4%.

General Mills is pretty flat all around. They are bringing out a lot of new products and retiring some old packaging which has lead to discounts as they strive to empty grocer shelves before the new launches. General Mills bears watching as they restructure their gut products.

Wrigley sales were up 3.9% over the past three months. Chewing gum sales were up 4.9% even though Cadbury continues to take market share. Hard candy flopped 2.8%. Strong international markets for Wrigley products are a lifesaver.

ConAgra is not doing very well. Dollar sales declined 2.1% over the past three months. Promotions fell flat. Of its top ten categories, six declined. Healthy Choice continues to get traction - especially in the frozen food area where sales collapsed 13.6%. Maybe Healthy Choice is doing poorly because the food TASTES LOUSY.
A bright spot was old standby Chef Boyardee products with sales growing strongly.

Campbell dollar sales grew 3.7%over the past three months. Pepperidge Farm products shine with dollar sales up 9.1% and cracker sales growing 7.7%. Soup sales were good. Perhaps soup is now more than a seasonal food.

Kellogg dollar sales were up 2.4% driven by a 3.4% increase in pricing that has held up. Crackers and snack bars continue to see strong growth at 2.5% and 18% respectively. Cereal is holding its own.

General Mills lost dough with Pillsbury sales declining 4.5%, Disclosure: The voice of the Pillsbury Doughboy and I graduated from the same high school, at about the same time. Progresso sup is doing well, especially the new non-meat light varieties. Snack bar sales were up 39.9%. Dried fruit snacks are about even with Kellogg after loosing market share last year.

To sum up. If you are looking for some defensive stocks, don't buy the food group en masse, be selective.

CSFB recommends:

Heinz (HNZ)
Kellogg (K)
Nestle (NSRGY) - not discussed but listed, and I like this company a lot.

I also like Campbell (CPB)

July 28, 2007: Taking stock, and three good ways to save money

As we head into the weekend, there is no need to panic.


Remember:

1. Investing is an art, not a science.
2. There is some luck involved with successful investing.
3. Diversification means investing in more than stocks and bonds.
4. Don't be too smart by half.
5. Take a break and appreciate what you have, in spite of some temporary loss.
6. Long term, a diversified portfolio works out very well.
7. Don't let the mainstream media dictate your emotions.

Enjoy your weekend, and if you must tinker with a few investments, only do so for compelling long term reasons.

Now, on to saving money while you are likely loosing it!

CONSUMER SEARCH.com has listed the best sites for travel, travel discounts and international travel.

The winners are:

Best travel search engine: www.Kayak.com.
Kayak is a free service that allows users to compare fares gathered from airline Web sites and online travel agencies. You can also use Kayak to find discounts on rental cars and hotels.

Best discount travel site: www.Hotwire.com.
Hotwire is still the best choice for bargain flights. The site's fares are consistently the lowest, according to Consumer Search. The trade-off is that you don't discover the airline you're flying or the exact time of departure until after you make your purchase, which means you are flying blind.

Best international travel site: www.Mobissimo.com
For bargains on foreign travel, this is far and away the best bet because it has the largest international supplier network. The site also includes a blog that tracks bargains on airfares and hotels.

An alternative to the above, check www.Airfarewatchdog.com, a service that is dedicated to keeping tabs on the cheapest tickets offered directly by airlines.

July 24, 2007: An American Hedge Fund by Timothy Sykes/my commentary

AN AMERICAN HEDGE FUND is written with the same full-throttle energy that Tim Sykes has put into his meteoric career in the world of investment. In a pounding, compelling style, Sykes corners the market in a relentless urge to succeed, finally setting up his own hedge fund after a remarkable, rollicking ride. Tim slams us through his high school and college adventures culminating with his documented multi-million dollar profit engine that is still on track, with no obstruction on the horizon.

This is not your father's financial publication. It is a warp speed adventure that I enjoyed reading, and re-reading. AN AMERICAN HEDGE FUND is Jim Cramer on steroids that will make many older legends of years past run to the bathroom for their Depends.

No doubt, we will be hearing a lot more from Tim Sykes in the years ahead so long as our free market allows creative individual spirits free and open access to information and does not stifle the courage to invest how and when one chooses. Hedge Funds need less, not more government interference to produce brilliant investors like Tim Sykes.

THIS BOOK IS SCHEDULED FOR OCTOBER,2007 PUBLICATION.

I was honored to be a contributor and reader for his draft copy. This will be a well-discussed publication in the financial world representing a new age in aggressive financial journalism.

July 23, 2007: Three properties and a funeral

Postings will be spotty through Wednesday.


A brother-in-law passed away too early in life from a rapid and especially volatile form of Alzheimer's. He graduated from the US Naval Academy and will be laid to rest in Annapolis, where his family had a home overlooking Chesapeake Bay for generations. He later received his Master's and Doctorate from the University of Maryland, where he was Prof. of English and a doctoral advisor for many years. He leaves a young daughter aged twelve and his wife, also holding a Doctorate in English (Gothic Literature). Investing made their eyes glaze over as much as mine hearing about the latest in Gothic literature and the theater, but we all enjoyed each other's company.I will be in Annapolis with some family all day today.

Tuesday and Wednesday is a trip to Southport, NC to close on property and look for more. I am more impressed with each trip how North Carolina promotes their state attributes and expresses a steady approach to business and industry.

Two weeks ago during my journey west, the stock market went berserk. I hope it moves up in a like direction during my brief absence from this blog on Tuesday.

July 21, 2007: Aero Defense notes

picture: just another Airbus crash



There is a lot of action in the aero defense and commercial aviation industries.

AH announced a $525m 1170-vehicle MRAP order. Vehicles will be delivered by February 2008. Also, AH-BAE deal received HSR approval.

EDO received a $201m CREW award for 3,000 systems.

IAP worlwide has protested the Army LOGCAP IV awards.

GD has protested the Army Warfighter FOCUS award given to RTN.

ERJ is reported to be considering making larger jets to compete with Boeing and Airbus.

Airbus workers in Germany protested against planned factory sales. Rumor has it they would be forced to actually work and turn a profit for new owners. Still, fourteen companies are interested in the Airbus factory-from-hell acquisition scheme.

BA is in talks with VSMPO to extend Titanium supplies through 2015. This could provide a buying opportunity for VSMPO shares.

Cessna will proceed to develop a light sport aircraft.


In addition to previously recommended aero stocks, here are others which may be of interest. This is NOT a buy recommendation, just a working list for study:

CACI International (CAI)
Ceradyne (CRDN)
DRS Technologies (DRS)
EDO Corporation (EDO)
GKN (GKN.L)
KBR Inc. (KBR)
L-1 Identity Solutions (ID)
SAIC (SAI)
Sra International (SRX)
Thales (TCFP.PA)
ZODIAC (ZODC.PA)

July 20, 2007: Life Insurance quickie in sub-prime time

Sub-prime. I'm tired of hearing about it. I would love to put the term to better use, i.e., a bad steak.

A few readers e-mailed me regarding expressed thoughts on the sub-prime situation. Life Insurance companies are highly invested in bonds and other income producing securities. It turns out that only a few have sub-prime exposure. And these few only have exposure as a very small part of their investment portfolio.

The following major insurers have mentionable sub-prime debt:
MET,CNO,GNW and HIG.

Looking at the numbers, here are insurance companies I would consider for purchase if you decide to become a more defensive investor:

Conseco (CNO)
Genworth Financial (GEN)
Hartford Financial Services (HIG)
Lincoln National (LNC)
Met Life (MET) - don't worry about their small sub-prime exposure

Sub-prime mania is a sucker's emotion,imo.

July 19, 2007: A new ETF worth looking at: Claymore/Clear Global Exchanges, Brokers and Asset Managers Fund EXB

With some fanfare, Claymore has been strutting out niche ETF Funds at a steady rate to capture the remarkable cash inflow into the ETF and ETF-type industry. Although expenses seem to be inching higher, investors see these investment vehicles as transparent, tradable (sometimes not a good thing) and a good value. The internet-based marketing schemes for several upstart companies specializing in ETFs has been successful in many respects.

I maintain several ETFs in my portfolios, primarily international in scope and driven by the portfolio I see, not the fund description. I review ETFs bi-weekly for portfolio shifts. I do not day trade, as regular readers know.

EXB is an interesting global approach based on the correct assumption that the wealth of the world has expanded and will continue to expand - especially amongst the top 20% of the world's population. The portfolio's top holdings include CME Group, Franklin Resources, Deutsche Boerse, Inc., NYSE Euronext, Goldman Sachs, Merrill Lynch, Hong Kong Exchange and Clearing, Morgan Stanley, Ameriprise Financial, T Rowe Price, Legg Mason, NYMEX Holdings, Lehmann Brothers Holdings, Nomura Holdings, Amvescap, Intercontinental Exchange, Austrailian Exchange, Charles Schwab and Macquarie Bank.

While 66% of the holdings are US based, the international flavor of the total portfolio is present and an excellent bundle of quality. With the overblown mayhem over sub-prime tanking some of the aforementioned stocks, now would be a good time to consider buying this ETF.

I have pruned a few stocks from my portfolio and raised cash. EXB is a fund where I may well invest a part of the proceeds as a core holding position in my Permanent Portfolio.

We all see many ETFs come to market. Some are superb. Many are thinly traded dogs not worth your study.

I believe EXB stands an excellent chance of being a winner.

www.claymore.com for details on this fund.

July 18, 2007: Hedge Fund book and philanthropy, why not?

Tim Sykes was kind enough to send me a preview copy of his forthcoming book to review.

Mr.Sykes is a diligent and highly motivated young investor (to me, at least - anybody under age thirty is fresh out of diapers) who has built a rock solid credentials. His book in draft form deals with the art of day to day theory, practice and emotions making successful bets on securities and then crafting a hedge fund. I am about 2/3 of the way through his effort, and I am enjoying it very much for a variety of reasons. That's all I'll say about it for now, but when it is released,I recommend you buy it and enjoy the read.I believe that Mr. Sykes will be heard from with a progressively louder and influential voice in our investment world.
He has ENERGY.

Philanthropy: 1. good will toward all people; esp: effort to promote human welfare 2. a charitable act or gift; also; an organization that distributes or is supported by donated funds. -- The Merriam-Webster Dictionary

Many of the large philanthrophic organizations have turned into far left shills for pin-head socialists who in the final analysis only seek to create power for themselves and their ilk. I find this perverse.

At present, there are over 65,000 foundations controlling over $40 billion in assets. I suspect that many of the idle rich contribute to foundations not even knowing how, what or why their money is spent. My wife and I exclude all foundations, including the United Way, from our philanthrophic giving. However, it does not prevent my wife and I doing what can be described as philanthropic work on several planes.

We give monies to Catholic Charities, Right to Life, the Salvation Army and several other charities that support people without overhead or a far left agenda.

My wife volunteers one day per week in the Emergency Room at our local hospital.
She is the Music Director at our church (with a master's degree in pipe organ) and coaches soccer. She also gives blood regularly for the Red Cross. None of these philanthrophic activities involves giving money.

I volunteer assisting inner city residents who are victims of predatory lending, volunteer as a credit counselor and assist in counseling welfare recipients in a work to financial independence and self-respect program. Again, none of these philanthrophoic activities involves giving money.

This is not to brag, and not to head slap you to tithe 15%. It is to encourage everyone to do something to help causes held dear to you.

As many of us will eventually HAVE to take some profits from what has been a wonderful bull market, I hope that you consider selective philantrophic efforts that fit your hope for humanity with some monies. And take some time out of your one and only life here in planet earth to better the lives of others.

July 17, 2007: Aero Defense,DEEPWATER and a trip

I spent the better part of last week at one Air Force base and then then assisted my son and his family move to a new classified position in Colorado Springs driving a 2003 Ranger 4 wheeler across 1359 miles of heat loaded with essential stacks of stuff.

The USAF is in transition. Many junior officers are being asked to take leave as downsizing takes hold. The 21st century air force will likely consist of many drones, computer-driven laser weapons, lightning fast super missiles, and squadrons of unmanned bomber and fighter units coordinated in virtual harmony without human contacts. And there will be some manned planes as well. The new deployment of the latest drone to Afghanistan and Iraq (directed from a command center in Nevada) should be in the headlines this week. Fascinating and vital to see the our Air Force continue to be our most lethal military arm.

Force Protection (FRPT) is being criticized by some in Congress for being awarded a lucrative explosive-resistant vehicle contract when they had failed to meet quotas in the past. I believe that more of this type of micro-managing fishing expeditions
by Democrats is silly and an insult to Pentagon planners, who have forgotten much more than special-interest driven baby Dems will ever know. I have criticized myself for not buying FRPT when it was two bucks a share not too long ago. This company is solid and deserves more respect than it is getting. I would not buy the stock now (I may regret stating this) unless there is some substantial fact of a consolidation in this niche industry. My favorite remains Oshkosh (OSK).

RTN received a $304m contract for upgrades to the TPY-2 radar.

DOD has a new position: Africa Commander. Congratulations to General William Ward.
Africa is quietly becoming a haven for terrorist organizations (over and above the twenty or so terrorist governments representing peace and stability from Africa at the U.N.).

GD received a $1.2b WIN-T cost plus development contract (see Air Force notes above).

Air Berlin ordered twenty-five 787s worth $4b from Boeing. No Stukas.

LAN announced it expects to purchase twenty six 787s and lease six 767s for its fleet.

ERJ broke ground for its new bizjet facility at Williams Gateway Airport.

Airbus may shutter eight Power 8 facilities later this month.

USAF Stock picks:

Goodrich (GR)
Boeing (BA)
Raytheon (RTN)
Northrup (NOC)
Lockheed Martin (LMT)
General Dynamics (GD)
Alliant Techsystems (ATK)
Esterline Technologies (ESL)
DRS Technologies (DRS)
EDO Corporation (EDO)
Dyncorp (DYN)
L-3 Communications (LLL)

The US Coast Guard has completely revamped their problem-plagued DEEPWATER program. A new set of outstanding USCG officers are already making dramatic changes to the program, which is going to replace 1960s Coast Guard boats and give this wonderful service the speed and muscle it needs to perform its wide variety of functions. Semper Peratus, gentlemen. This new group will get the job done. Finally.

July 6, 2007: Short stocks? Ideas to mull

I ran a stock screen today and thought I would focus on a narrow band of "shorts" for consideration. I am NOT an advocate of shorting stocks. I much prefer to buy stocks based upon value considerations or a great new idea (the Peter Lynch Story Stock- kind of).

The following stocks have experienced a very recent downgrade which may have not been caught by traders this week. These stocks have formed a significant top formation with distribution characteristics or, stocks that have experienced a significant downward move with momentum still in place for more downward retracement.

Here goes:

ABMD (ABIOMED, Inc.)
ACI (Arch Coal, Inc.)
AGL (Angelica Corporation)
ALNY (Ainylam Pharmaceuticals, Inc.)
ALTU (Altus Corp.)
ANGN (Angelon Corp.)
CLUB (Town Sports International Holdings)
CVO (Cenveo, Inc.)
DRQ (Dri-Quip,Inc.)
ENZ (Enzo Biochem)
EZPW (EZCORP. Inc.)
FRG (Fronteer Development Group, Inc.
GIGM (GigaMedia Limited)
GKK (Gramercy Capital Corp.)
GPX (Graphic Packaging Corp)
GRS (Gammon Gold, Inc.)
IGLD (Internet Gold Golden Lines)
ILE (Isolagen, Inc.)
MAXY (Maxygen, Inc.)
MIR (Mirant Corporation)
MTH (Meritage Homes Corporation)
NMTI (NMT Medical)
NRF (Northstar Realty Finance)
NTY (NBTY, Inc.)
OMRI (Omrix Biopharmaceuticals, Inc.)
OPLK (Oplink Communications, Inc.)
ORCT (Orckit Communications, Ltd.)
OSCI (Oscient Pharmaceuticals Corp.
PHHM (Palm Harbor Homes, Inc.)
ROSE (Rosetta Resources, Inc.)
RVI (Retail Ventures, Inc.)
SMP (Standard Motor Products, Inc.)
STLD (Steel Dynamics, Inc.)
STLY (Stanley Furniture Company)
SWC (Stillwater Mining Company)
SWIM (INVESTools, Inc.)
TWPG (Thomas Weisel Partners Group, Inc.)
VIAC (Viacell, Inc.)
VSE (VeraSun Energy Corporation)
WRES (Warren Resources Inc,)
XING (Qiao Xing Universal Telephone, Inc.)

I enjoyed looking up some red meat for our short friends. Bon appetite.