Thursday, June 30, 2005

Fed Raises Rates 1/4 Point

The Federal Reserve raised the Fed Funds rate from 3.00% to 3.25% today. They said that they will continue to move rates up at a "measured" pace. I think they will finish tightening at 4.00%. The markets sold off a bit after the announcement.

Other Stock Blogs To Visit

Please visit these other great investing blogs.

Guerilla Trader
Knight Trader
Random Roger
Trader Mike

Two Favorites Trading Higher

Cerner (CERN) and Lennar (LEN) each are up over a $1.40 as of 12:22 EST. Cerner is a great short squeeze play. I own them both. I would buy them both on a pullback.

Stocks Upgraded on 6/30/05

Stocks Upgraded on 6/30/05

Ametek AME
Asyst ASYT
CEC Entertainment CEC
Cephalon CEPH
Cheesecake Factory CAKE
Duke Energy DUK
Elec For Imaging EFII
Home Depot HD
Lowe's LOW
Marchex MCHX
Merix MERX
Omnicell OMCL
Scottish Annuity SCT
Symantec SYMC
Wisconsin Energy WEC

Stocks Downgraded on 6/30/05

Stocks Downgraded on 6/30/05

Barrier Therapeutics BTRX JP Morgan (Overweight-Neutral)
Citadel Broadcasting CDL Smith Barney Citigroup (Hold-Sell)
HSBC Holdings HBC Morgan Stanley (Equal-weight-Underweight)
Lexington LXP Ferris Baker Watts (Buy-Neutral)
Merix MERX Stanford Research (Buy-Hold)
Nextel Partners NXTP Fulcrum (Neutral-Sell)
Pinnacle Airlines PNCL Morgan Stanley (Overweight-Equal-weight)
RSA Security RSAS JP Morgan (Overweight-Neutral)
SBA Comm SBAC Raymond James (Outperform-Mkt Perform)
ScanSource SCSC Bear Stearns (Peer Perform-Underperform)
UniFirst Corporation UNF Barrington Research (Outperform-Mkt Perform ($44)

Bank of America to Buy MBNA

Bank of America (BAC) announced today that it will buy credit card giant MBNA (KRB) for $35 Billion in cash and stock. MBNA is up over 25% from yesterday's close. This deal has been in the works for a while. Capitol One (COF) and Metris (MXT) are trading higher off the news. I think Metris has a better chance of being taken over because of the 840 million dollar market cap compared to 20 billion for Capital One.

Wednesday, June 29, 2005

Checking My Stock Picks

I made several stock picks on 4/27/05 for the 2005-2006 year. It has only been two months and the results have been quite good. Clearly energy and healthcare are working. Here is how my picks have fared as of the close on 6/29/05. I still like all of these stocks.

Chesapeake Energy (CHK) UP 13.7% - Great natural gas company
United Health Care (UNH) UP 12.8% - Stock Split 2:1 in May
Halliburton (HAL) UP 11.04% - Continues to win big contracts
Pfizer (PFE) UP 4.0% + 19 Cent Div - Worth at least $31
Altria (MO) UP 1.5% - Strong fundamentals & 4.5% dividend yield
Coca Cola (KO) UP 0.4% - I'll take Buffett over Pepsi
Citigroup (C) UP 0.4% + 44 Cent Div - Good yield

Proctor & Gamble (PG) UNCHANGED - Better than losing money

Tyco International (TYC) DOWN 5.7% - Had a bad qtr: things should pick up
Goldman Sachs (GS) DOWN 5.7% - Pulled back: now over $100.
Qualcom (QCOM) DOWN 4.9% - Buy some more
General Electric (GE) DOWN 3.3% - Buy some more

NOTE: I added St. Jude Medical (STJ) & Lennar (LEN) in June. Both are up since I posted but it is not right to compare them to picks made two months ago. They will be reviewed on 8/30/05 with the rest of my picks.

Updated Portfolio 6/30/05

Here is an updated list of my top holdings as of 6/30/05. Always subject to change.

1. St. Jude Medical (STJ)
2. Tyco International (TYC)
3. Google (GOOG)
4. Lennar Corporation (LEN)
5. Altria (MO)
6. Citigroup (C)
7. Cerner (CERN)
8. Chesapeake Energy (CHK)
9. Coca-Cola (KO)
10. Sears Holdings (SHLD)
11. Halliburton (HAL)


Free Credit Report

It is recommended that you check your credit history at least once per year. For more information on how to obtain a free credit report check out Credit Alert.

Stocks Downgraded on 6/29/05

Stocks Downgraded on 6/29/05

Arbinet-thexchange (ARBX) Lehman Brothers (Equal-weight To Underweight)
ASML Holding (ASML) CSFB (Outperform To Neutral)
Blue Coat (BCSI) Avondale Partners (Mkt Outperform To Mkt Perform)
Bluegreen (BXG) Ferris Baker Watts (Buy To Neutral)
Columbia Banc (CBMD) Friedman Billings (Outperform To Mkt Perform)
CardioDynamics (CDIC) Brean Murray (Buy To Hold)
Majesco Entertainment (COOL) JMP Securities (Mkt Outperform To Mkt Perform)
Enterprises Finl (EFSC) Legg Mason (Buy To Hold)
ITLA Capital (ITLA) Friedman Billings (Outperform To Mkt Perform)
MB Financial, Inc. (MBFI) Sandler O'Neill (Buy To Hold)
Net2Phone (NTOP) Janco Partners (Accumulate To Mkt Perform)
Performance Food (PFGC) Sun Trust Rbsn Humphrey (Buy To Neutral)
Sunset Financial (SFO) JP Morgan (Neutral To Underweight)
Semitool (SMTL) DA Davidson (Buy To Neutral)

Stocks Upgraded on 6/29/05

Stocks Upgraded on 6/29/05

Automatic Data (ADP) Moors & Cabot (Hold To Buy)
BP (BP) Banc of America Sec (Neutral To Buy)
Ceradyne (CRDN) Needham & Co (Buy to Strong Buy)
Chevron (CVX) Banc of America Sec (Neutral To Buy)
Digital River (DRIV) Stanford Research (Hold To Buy)
FedEx (FDX) Legg Mason (Hold To Buy)
Gables Resdtl (GBP) Banc of America Sec (Sell To Neutral)
Infineon (IFX) CSFB (Underperform to Neutral)
Landstar System (LSTR) Legg Mason (Hold To Buy)
Motorola (MOT) Morgan Stanley (Equal-weight To Overweight)
Mainsource Fincl (MSFG) FTN Midwest (Neutral To Buy)
Ryder System (R) Legg Mason (Hold to Buy)
STMicroelectronics (STM) CSFB (Neutral To Outperform)
Suncor Energy (SU) CIBC Wrld Mkts (Sector Perform To Sector Outperform)
Wisconsin Energy (WEC) AG Edwards (Hold To Buy)
Wells Fargo (WFC) Robert W. Baird (Neutral To Outperform)

GDP Better Than Expected

GDP was up 3.8% in the first quarter, which beat the estimate of 3.7%. Growth was lead by spending in housing and business investment spending. Inflation came in at 2.00%, which was below the consensus 2.2% rate. But inflation was up 0.3% from the forth quarter of 2004. Things don't look as bad as some may think. I will continue my bullish view on US and international stocks for the rest of 2005 and 2006.

Monday, June 27, 2005

Check Out: Credit Alert

Check out my other blog Credit Alert. Information on getting a free credit report, credit card rewards, and loan consolidation.

High Oil and Fed Holding Stocks Down

Oil traded up to $60.95 for the August futures contract today. A barrel of light sweet crude finished the day trading up $0.70 to $60.54. If you don't own any energy stocks you are getting hammered. Few stocks are breaking out; one of the exceptions seems to be Google (NASDAQ: GOOG). Which continues to surge higher.

This is going to be a crazy week. With more economic data coming out on Thursday, the FOMC meeting on interest rates on Friday, as well as Mutual Funds closing their books on Friday for the end of the quarter. Look for heavy volume in the hot stocks that mutual funds missed earlier and are now buying, such as Google, the energy stocks, homebuilders, and some select healthcare stocks.

Friday, June 24, 2005

Another Rough Day For Stocks

The market was down again today. The key is not to panic when your investments go down. As Jim Cramer says "no one ever made a dime panicking." I know it's rough when you see lots of red, but over any twenty year period, no asset class has outperformed high quality dividend paying stocks. Another note, If you read Intelligent Investor by Benjamin Grahm, the premier value investor, he constantly says throughout the book that the more stocks go down, the more attractive they become. I highly recommend purchasing this book.

Stocks stop going down at zero. Go over your portfolio and make sure you own high quality companies that will continue to be profitable. Buying low and selling high is one of the hardest things to do but you have to be able to not panic, remain focused on high quality companies, and consider adding to your high quality positions as they go down and sell into strength.

New Addition: St. Jude Medical (STJ)

I wrote an article on 6/16/05 about stocks that I was eyeing. I made a purchase last week in St. Jude Medical. They make medical devices such as defibrillators and pace makers. Standard and Poors rates Saint Jude Medical as a "strong buy (5/5 Stars)" with a $55 price target. Guidant, it's number one competitor, is having some problems and recalling some of their medical devices. Look for more business to go to St. Jude Medical (STJ) and Medtronic (MDT) (See this article on Market Watch). I would wait for a little pullback in either Saint Jude or Medtronic and then I would buy. With the Fed tightening, select medical stocks are a safe bet for the rest of 2005 and 2006.

Stocks Downgraded 6/24/05

Stocks Downgraded on 6/24/05

Altiris (ATRS) CSFB (Outperform to Neutral)
America Srvc Gr (ASGR) Avondale Partners (Mkt Outperform to Mkt Perform)
Beckman Coulter (BEC) Morgan Stanley (Overweight to Equal-weight) ($71)
Biomet (BMET) First Albany (Buy to Neutral)
Callaway Golf (ELY) Ryan, Beck & Co (Outperform to Mkt Perform) ($14)
Comm Net Lease (NNN) BB&T Capital Mkts (Buy to Hold)
Corinthian Colleges (COCO) Jefferies & Co (Buy to Hold) ($14)
Energy East (EAS) Jefferies & Co (Hold to Underperform) ($25)
Gold Kist (GKIS) JP Morgan (Overweight to Neutral)
Hooker Furniture (HOFT) Sun Trust Rbsn Humphrey (Buy to Neutral)
In Focus (INFS) McAdams,Wright,Ragen (Buy to Hold) ($5)
Intl Game Tech (IGT) Susquehanna Financial (Net Positive to Net Neutral)
Kyphon (KYPH) Bear Stearns (Outperform to Peer Perform)
Mattel (MAT) Piper Jaffray (Outperform to Market Perform)
Maverick Tube (MVK) Raymond James (Strong Buy to Mkt Perform)
Nordstrom (JWN) Morgan Stanley (Overweight to Equal-weight)
Sierra Wireless (SWIR) JP Morgan (Neutral to Underweight)
Solectron SLR (CSFB) Neutral Underperform
Steel Dynamics (STLD) Morgan Stanley (Overweight to Equal-weight)
U.S. Steel (X) Morgan Stanley (Overweight to Equal-weight)
Washington Group (WGII) Oppenheimer (Buy to Neutral)

Stocks Upgraded 6/24/05

Stocks Upgraded on 6/24/2005

CACI Intl (CAI) Robert W. Baird (Neutral to Outperform)
Crosstex Energy (XTXI) Raymond James (Outperform to Strong Buy) ($62)
Hancock Fabrics (HKF) BB&T Capital Mkts (Hold to Buy) ($9)
Omnicom (OMC) Smith Barney Citigroup (Hold to Buy)
Pactiv Corp (PTV) KeyBanc Capital Mkts / McDonald (Underweight to Hold)
Perry Ellis (PERY) Wachovia (Mkt Perform to Outperform)
Rite Aid (RAD) JP Morgan (Neutral to Overweight)
Thermo Electron (TMO) Robert W. Baird (Neutral to Outperform)
UnionBanCal (UB) Keefe Bruyette Mkt (Perform to Outperform)

Thursday, June 23, 2005

Stock Pick Corner: Halliburton (HAL)

Halliburton hit a 52-week high today at $48.73. It is one of my stock picks for 2005, and I own shares in Halliburton. Regardless of your political beliefs Halliburton is the leader in enegery service companies. It still remains undervalued with all the other oil service stocks. It also has a contruction business that gets revenue from the US Military. They will soon sell off the KBR (Kellog Brown & Root Contruction Business) unit that is valued at an additional $3-4 per share. Halliburton is the best oil service company and if you listen to their latest conferance call, they are like the homebuilding stocks in a sense because of the baglog of orders from the major oil companies. Halliburton is still over 10 points off its all time in 1998 and the stock has been down since going to war in Iraq.

I am RAISING my price target for Halliburton to $57.00. Schlumberger (SLB), Halliburton's number one competitor is trading at 27 times 2005 earnings while Hal is trading at 21 times. Take 25 (conservative multiple) times $2.31 (2005 Earnings Estimate) = $57.75. Halliburton BEAT estimates by 63% ($0.72 vs. estimate of $0.44) last qtr and the stock did nothing. So, there is plenty of room for this stock to run.

Stocks Upgraded Today

AmBev (ABV) Bear Stearns Peer Perform Outperform ($36)
Ameritrade (AMTD) IRG Research Sell Neutral
Banco Latinoamer (BLX) Smith Barney Citigroup Hold Buy
Forest Labs (FRX) Prudential Neutral Overweight
Innovo (INNO) Fulcrum Neutral Buy ($6)
Sonic (SONC) Sun Trust Rbsn Humphrey Neutral Buy ($39)
Tanger Factory (SKT) Legg Mason Hold Buy ($31)
Unova (UNA) Bear Stearns Peer Perform Outperform ($27)

Wednesday, June 22, 2005

Ameritrade to buy TD Waterhouse

Ameritrade announced plans to merge with rival online brokerage TD Waterhouse. Ameritade's stock ended up more than 20% today. More consolidation will continue in the online brokerages as trading online has become extremely affordable. Keep an eye on other online brokerages like Schwab (SCH) and E-Trade (ET).

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Lennar Reports Record Earnings

Lennar blew everyone away by beating estimates by $0.14. Lennar earned $1.42 in Q3 up 16% year over year. They raised their earnings estimates for 2005 to $7.80 pershare. I get a $78 stock price by January 2006 ($7.80 X 10 (Homebuilders Average Earnings Multiple) = $78). Lennar is still undervalued and will likely earn $9.00 a share in 2006 ($90 by Jan 2007). I still think a conservative price target for this year is between $70-75. At least 20% upside left. Still a lot can happen between now and 2007. Also note that Lennar is a land bank, as they are selling lots of land and cleaning their balance sheet. Listen to the conference call for more details.
I am currently long Lennar.

Monday, June 20, 2005

Lennar Reports Earnings Tomorrow

Homebuilder Lennar will report earnings during its conference call tomorrow at 11am ET. Look for nice pop in the homebuilders after a good report.

Check out this investing blog

Saturday, June 18, 2005

Mutual Funds

If you are just starting out I reccomend an index fund that tracks the S&P 500 largest companies. Most mutual funds underperform index funds after fees. Check the fees of your index fund and make sure they are low. Index funds should not have an expense ratio of more than 0.50%. Some are as low as 0.10%.

New to Investing

You can start investing in the stock market with as little as $50. If you are new I recommend buying a mutual fund. Don't put all your money in at once. If you have $1000 to invest. Put the minimum amount into the mutual fund and add $50 each month electronically. Talk to Fidelilty or an investment advisor about dollar cost averaging into a mutual fund. That way you don't put all your money into the market at a short term "top" or "peak." If you are investing for retirement open an IRA.

Friday, June 17, 2005

My Portfolio

Below are my ten largest holdings ranked by position as of 6/17/05. Positions may change

1. Tyco International (TYC)
2. Citigroup (C)
3. Altria (MO)
4. Lennar (LEN)
5. Cerner (CERN)
6. Chesapeake Energy (CHK)
7. Coca Cola (KO)
8. Sears Holdings (SHLD)
9. Halliburton (HAL)
10. Maxim Integrated Products (MXIM)


Today's Most Active Stocks

6/17/05 Most Active Stocks

MSFT Microsoft Corporation 92,039 25.04 unch 0.00%
QQQQ Nasdaq-100 Index Tracking Stock 89,171 37.87 -0.03 -0.08%
INTC Intel Corporation 60,083 27.12 unch 0.00%
SUNW Sun Microsystems, Inc. 55,570 3.87 +0.01 +0.36%
SPY SPDRS 53,756 121.36 -0.04 -0.03%
MLNM Millennium Pharmaceuticals, Inc. 53,103 9.41 +1.14 +13.78%
LU Lucent Technologies Inc. 45,882 2.98 +0.06 +2.05%
SIRI Sirius Satellite Radio 45,568 6.02 +0.03 +0.50%

Former Tyco Execs Guilty of Stealing

The former Tyco CEO and CFO both were found guilty of stealing today. Tyco has an all new management team. They are a great team with CEO Ed Breen, one of the highest rated CEO's in all of Wall Street. The stock has already moved up in anticipation from its low near $27 to $31 today. Tyco should be near $36-40 by 2006.

Thursday, June 16, 2005

Short Squeeze Picks

I may own some of the stocks below. Invest at your own risk.

Cerner (NASDAQ: CERN) (42.7% Short)
Great company that makes software (electronic medical records) for hospitals. Very profitable. Earns premiums annualy from customers plus the intial cost of the contract. Just won a big contract in Europe. Over 40% of the float is short. Earnings growth of 22-30%. Stock goes over $80 in 2006.

Dynamic Material (NASDAQ: BOOM) (21.3% Short)
Company has two divisions, explosive metal working and aerospace. Very interesting company with no analyst coverage. Stock has had a monster run from $2.77 to over $40. Trades at 54 times trailing earnings.

Parlux Fragrances (NASDAQ: PARL) (54.3% Short)
Perfume company with real earnings. Just reported a blowout qtr. I think the stock goes higher. Wish I owned it. Going to be making Paris Hilton perfume/bags. High margin business with high growth prospects.

Forword Industries (NASDAQ: FORD) (24.2% Short)
Another very profitable company that makes bags and accessories. Founded in 1954. Stock has also had a huge move from $2 to $23. Still a very interesting play.

Turbochef (AMEX: TCF) (42.5% Short)
Symbol changes to OVEN on Nasdaq effective 6/20/05. Makes the toaster ovens at Subway. A high growth business with the current toasted sub trend. The company is looking to win some big contracts and soon put out a model so you can toast subs in your own home.

Stocks I'm Looking to Buy

I don't own any of the below stocks but I am looking at investing in them. Do your own research. I am not liable for any losses incurred. Good luck!

1. The Nasdaq Company (NASDAQ: NDAQ)
The "Nas" is where the majority of the exciting growth companies are listed and this is a play on the IPO market, which has certainly not peaked. Much more growth ahead for listing fees as more companies leave the Amex to go to the Nasdaq. This stock is NOT an ETF but the actual Nasdaq company. Stock needs to come down before I buy. Really like the long term prospects.

2. St. Jude Medical (NYSE: STJ)
Makes high margin medical devices. Extremely profitable and a good takeover candidate like Guidant. Best part of this stock is that it hasn't done anything since December, lots of upside. Healthcare is the safest place to be when the Fed is tightening. St. Jude is taking away market share from Medtronic and Guidant. S&P has a $55 price target on the stock which currently trades around $40. Earnings are growing at 15+%.

3. Amgen (NASDAQ: AMGN)
A bio-tech company that is profitable and has many cancer drugs in the pipeline. Genentech (NYSE :DNA) has outperformed them of late, but everyone seems to love DNA, so lets play contrarian and buy AMGN under $59. Earnings growth has slowed compared to previous years but still growing between 15-20% at 20x 2005 earnings

4. Whole Foods (NASDAQ: WFMI)
Organic grocery store that has lots of room for expansion. You can even go on their website and recommend a location for a store. I wish there was a Whole Foods near me. Stock trades at a high multiple. I would buy under $110.

5. Aqua America (NYSE: WTR)
Boring stock that goes up every fricken day. A water utility company that is not cyclical at all and is growing between 5-15%. Listen to the conference calls on their website. I would recommend buying this company for the long haul and reinvesting the dividend by going to Equiserve (see the table on the right side of the page). Waiting for a pullback under $28.

Pick of the Month: Lennar (NYSE: LEN)

My latest purchase came a few days ago as I bought some shares of Lennar. A homebuilder that is making hoards of money and is still undervalued with many orders in the backlog. I would still buy the stock right here if I had more money. Look for a huge pop in the stock after the earnings report. Lennar should earn at least $7.00 per share in 2005, and $8 in 2006 and if it trades at 10X earnings that $70 in 2005 and $80 in 2006. Check out some of Lennar's price targets. Still plenty of upside to Lennar. It closed today at $62.19 but ran up in the after hours because of KB Home's blowout qtr. I would still be buying Lennar up to $70 for a short term investment. Longer term I am not concerned about an entry point.

Chesapeake Energy Up 11%

Chesapeake Energy, a company I recommended investing in is one of the largest natural gas companies in the US & continues to have huge insider buying. One of the few energy companies where the CEO and other execs are BUYING stock. It is up 11% since I recommended it on 5/9/05. I continue to see it as a strong buy. Congrats to those who have followed my advice.