Rob's Lobs

[mimo_100]

Ladies and germs, I proclaim that ALDA is a great buy today. Mark my words on this. If the next few weeks and months prove this to be a bad call, feel free to come here and regale me with your noisiest raspberries.

But if time shows that this was indeed a great call, I'll be sure to remind you where you heard it first!

Anyone want to try to convince me that I'm wrong on this one?

I ran the numbers again (see my previous post #247 on 7/13) as of the close on 7/26. The intermediate term direction is still down, but improving. Still no buy signal.

[Rob]

ALDA—The Good, The Bad, & The Ugly

I ran the numbers again (see my previous post #247 on 7/13) as of the close on 7/26. The intermediate term direction is still down, but improving. Still no buy signal.

As you no doubt have seen, ALDA took one heckuva horrendous beating in yesterday's after-hours, post earnings trading.

As you can see from this graphic below, the fact that their Q2 revenue and earnings increased over Q1 in '05 was somwhat of an anomaly, as Q2 has always been lower than Q1, with that one exception—although the earnings of Q1 and Q2 in 2002 were about even. If these patterns continue to hold true, then Q3 revenue will also reflect a drop from Q2, though the EPS may show a slight improvement. Interestingly, Q4 and Q1 is where they typically make their big moves up in sales, whereas on the earnings front, Q4 tends to look sort of weak, and Q1 is where they pick up the most.

[peanuts]

Dear Mr. Rob, Sir

I really like your revenue and EPS graphs. I haven't seen them anywhere else and it is a great visual tool. I'd like to ask a favor of you- could you please make up those graphs for my favorite stock, USLM? They just reported 2nd Q earnings tonight and from the outset, they look fantastic. I would really appreciate it if you could make those graphs, and if I can ever return the favor, please let me know.

[Rob]

I haven't seen them anywhere else and it is a great visual tool.

They are, at least for now, a Rob exclusive.

I'd like to ask a favor of you- could you please make up those graphs for my favorite stock, USLM?

Here you go. Looks like an overall healthy trend with some quarterly, cyclical fluctuation.

[peanuts]

Here you go. Looks like an overall healthy trend with some quarterly, cyclical fluctuation.

You are the MAN, Rob! Thanks a bunch. It sure looks good to me

[Rob]

Momentum Screen Update

Here's an update on the stocks that have shown up on my momentum screen in recent weeks. I've been busier than usual with other projects and didn't run the scan last weekend, so the latest scan was run 2 weeks ago. Honestly I don't know if any of you are following these updates, but there are a couple of interesting stories surfacing here. So FWIW ...

[IIC]

Here's my thought on MoMo stocks...I'd consider my IIC 100 a modified MoMo scan as well as the IBD 100. Some other scans I run would be purer MoMo scans I believe.

When the market is in an uptrend the MoMo's tend to beat the indices overall...When the market is in a downtrend they tend to do worse than the indices. Seems to be true no matter what time frame you use.

Therefore, IMO...If you are only going to trade long...Then it is safest to be in the best you can find when we are trending up and in cash when we are trending down.

I don't necessarily follow that philosophy because I also believe that no matter what the market is doing (unless it's tanking) there is always something moving up...But I'd probably be better off if i did follow it...Doug(IIC)

[Rob]

I'm Not The Only One Who Likes GOOG & EBAY

Some excerpts from Back From The Brink, by J.R. Brandstrader, Barron's, July 24, 2006 [Talking With Tom Galvin, Chief Investment Officer and President, U.S. Trust Growth Equity Group]:

. . . After graduating from Georgetown, he [Galvin] ran a $200 million portfolio (invested in a variety of assets) for high-net-worth individuals and foundations at Chase Manhattan. While still in his 20s, he moved to brokerage C.J. Lawrence, where he honed his skills under James Moltz and Ed Hyman -- who taught him to translate macroeconomic trends into stock picks.

At his next career stop, as chief equity strategist for Donaldson, Lufkin & Jenrette, he correctly predicted that the Federal Reserve would loosen credit in the wake of the 1998 Asian crisis. He was named to Institutional Investor magazine's All-America Research Team three years running. Later, the business media pummeled him, however, for staying bullish too long after the 2000 tech crash. He was cut loose by Credit Suisse after it acquired DLJ in 2000.

Galvin got his groove back in February 2003, when he began the resuscitation of the Excelsior Large Cap Growth Fund (ticker: UMLGX), which had been performing poorly and hemorrhaging money. (Charles Schwab, which bought high-net-worth specialist U.S. Trust in 2000, acknowledged in late 2003 a small amount of market timing in Excelsior funds that occurred before Galvin's arrival. U.S. Trust was subpoenaed, but never charged with any impropriety.) Galvin gutted the portfolio, replacing underperformers with stocks that he viewed as undervalued but generally with earnings growth in excess of 12%, a better than 15% return on equity and very little debt.

. . . Today, fund assets total about $600 million, versus $74 million when he arrived. (Galvin's also president and CIO of the $2 billion U.S. Trust Growth Equity Group, of which the large-cap fund is a part.)

. . . "I think Google [today] is Microsoft in the 1990s," he says.

Three factors that he considers in picking or holding stocks are: How seasonal are the earnings? How rapidly are fixed costs rising? (A quick gain might indicate that margins have peaked.) And how much earnings growth is coming from stock repurchases? "Cash is better used to grow the company's footprint nationally or internationally rather than financially manipulate the earnings per share by shrinking the float," Galvin maintains.

. . . One of his current bets is on Zimmer Holdings (ZMH), which makes replacement hips, knees, shoulders and elbows. Zimmer should profit from the aging of the baby boomers. So should Allergan (AGN), the maker of Botox. "They just got approval from the FDA for a substance called Juvederm, which is a longer-lasting injectable gel that reduces wrinkles below the eye," he says.

He also likes Starbucks (SBUX), which, he compares to "McDonald's in 1985 with roughly 10,000 stores. Today, McDonald's has about 35,000. Caffeine is a legalized addiction; people don't seem impacted by the price."

EBay (EBAY) is another favorite. "Certainly, more people are doing commerce on eBay. It is now the 10th-largest retailer in the world," he notes.

How committed is Galvin to his investment approach? Not only has he put a big chunk of his own money into the fund; he's also plunked down his mother's. That, of course, ratchets up the pressure to do well. "Look, I want to be able to show up at family gatherings," he says. . . . [emphasis mine—Rob]

[Rob]

I Think Something's Up With ImClone (IMCL)

IMCL trading halted at 9:34 this morning! Hmmmmm .... could the sale be finally consummated? We'll see.

Edit: Nope, wasn't the sale. It's an unfavorable court decision. Well, that's why I bought those puts.

[peanuts]

IMCL trading halted at 9:34 this morning! Hmmmmm .... could the sale be finally consummated? We'll see.

Edit: Nope, wasn't the sale. It's an unfavorable court decision. Well, that's why I bought those puts.

Maybe one that should halt trading is SCT... down 74% on earnings warning and resignation of pres and CEO, Willkomm. This could get interesting

[Rob]

Keep An Eye On Nam Tai (NTE)

With their earnings report today, Nam Tai's (NTE) EPS for the last 4 quarters is $1.43.

At $17.00, about what it's selling at right now, the P/E is 11.89, which is fairly inexpensive for this company. I'd say it's a pretty good buy right now, though it may get a bit cheaper still. Will it hit 15? Thoughts?

[skiracer]

I think today could have been a bit of an overreaction to the next qtrs. guidance. They issued guidance of .03 below the .33 analysists expected for next qtr. I wouldn't be buying it for the long term but tomorrow I think it gets a nice bounce to at least the previous 52 week low of $18.90. I think there is a nice day or two day trade here at this price. I would be watching it at the open tomorrow to see what it does in the first half hour of trade.

[Rob]

Viropharma (VPHM)

Viropharma (VPHM) had a nice quarterly earnings report this morning. Here are what their rev. & EPS histories look like with this morning's numbers included:

[Rob]

EBAY Is Cheap

Buy it now, or kick yourself later. That's just my opinion, but my opinion is grounded in ...

Okay, so I could have saved a couple bucks by waiting before I bought. It's almost impossible to nail the bottom exactly, but this stock is o-v-e-r-s-o-l-d! Everyone always says the time to buy is when everyone else is selling. Well? What are you waiting for? (Everyone except Spike—I know what he's waiting for, and it ain't gonna happen.)

[New-born baby]

Potw

I should just keep EBAY short for POTW and do better than I am doing now.
Seriously, EBAY shows no sign of a bounce here. The price just keeps declining everyday. It just isn't a buy here. And those people who say you should buy when everyone else is selling are . . . crazy. Haven't they ever heard of "trend following" and "the trend is your friend?" Well, the trend here is definitely South. If you buy when everyone else is selling, you'll soon be a bagholder.