FA help...

[mrmarket]

Hans

What can I say about HANS that hasn't already been said. It's tough for me to love this stock anymore as it seems to be following the same path that Snapple went on (hot independent, huge advertising and branding, new product that sizzles)....eventually to be absorbed by an old staid giant distributor to basically fade to black.

I'm sure the curtain hasn't closed on HANS yet but at a PE of 59, can you really afford to be wrong here? You have to love the growth story, but the first time they miss earnings, they'll get taken out back and shot and they will NEVER recover.

Not worth the risk anymore to me.

[mrmarket]

Bjs

I really can't comment on BJS because its in the oil industry. However one can safely say that as long as oil prices stay where they are, or go higher, this stock will perform very well.

[mrmarket]

Fcl

FCL is an industry story, the coal industry. It's still pretty cheap, trading at a PE of around 20. What makes it further attractive is the fact that its PEG ratio is only 0.7 meaning that as its earnings continue to grow, the stock price has not quite kept up with it so there is room for the stock price to accelerate, once the market catches on.

There is no reason to believe that coal prices will take a tumble anytime soon, so FCL looks to be in great shape from an earnings growth prospective. With cash flow increasing, they'll have more money to spend on production which should generate even more revenue.

With an ROE of 33% and YOY revenue growth at 30%, this stock is a nice safe play. Check mark.

[Runner]

10-4 MM, ok looking into NBR’s PE I notice that right now it is showing a 10-year low at 14.6. Now according to PE readings this stock should be cheap at 34.54. It also makes me wonder if long term investors will often sell the stock if it should get closer to its 10 or 5 year high. This might indicate a stock that is now run its race? Short term I’m not bullish in the energy sector but NBR looks attractive.

Here is my understanding thus far of the FA approach on NBR:

NBR-drilling Company

This company has increased sales over the last three years from 1,880>2,394>3,459 and is currently at a PE of 14.6 this also is a 10 year low.
Sales have also increased over the last three QTR’s from 893>1,017>1,163

Return on Equity is currently at 20.4 and the 5 year average is 12.2
This stock is projected to continue strong earnings going into 2007 with this year projected EPS 3.34 and next year 4.50.

Based on me limited exposure to FA here is what I see
Low P.E ratio compared to the 10 year average. Expected strong growth going forward and so I rate NBR highly as a possible buy when TA conditions improve.

[Runner]

WOW, thanks for taking the time to check these out for me MM.

[mrmarket]

Cwtr

CWTR has been in the MM top 5 before, so you know I have to like it. Unfortunately for me, I never bought this stock and its PE is now over 50. When I'm paying that much for a stock, I really have to like its product and understand just what it is that makes it that much better than its competition.

In the case of CWTR..it's a specialty retailer of women's stuff. Sure it is growing its revenues and earnings but I can't quite grasp why other companies won't be able to jump into this fun. It's forward PE is still as high as 30, which means even if it makes its numbers next year, its stock will still be expensive.

With only a 6% profit margin, they need to push a lot more volume of this stuff. I just can't see the growth that will sustain it right now. CWTR was a MM top 5 pick back in June 2004. I guess I should have bought it then. I can't really love it now.

[mrmarket]

Nsr

I really can't figure out what this company actually does to make money. They seem to be successful at it, but since I'm too stupid to understand their business, I won't buy their stock, especially at a PE of 41.

[mrmarket]

I hope that gave you a little taste of the kinds of things I look at.

[billyjoe]

Runner,
Please tell us if you decide to buy any on your list.

billyjoe

[mrmarket]

10-4 MM, ok looking into NBR’s PE I notice that right now it is showing a 10-year low at 14.6. Now according to PE readings this stock should be cheap at 34.54. It also makes me wonder if long term investors will often sell the stock if it should get closer to its 10 or 5 year high. This might indicate a stock that is now run its race? Short term I’m not bullish in the energy sector but NBR looks attractive.

Here is my understanding thus far of the FA approach on NBR:

NBR-drilling Company

This company has increased sales over the last three years from 1,880>2,394>3,459 and is currently at a PE of 14.6 this also is a 10 year low.
Sales have also increased over the last three QTR’s from 893>1,017>1,163

Return on Equity is currently at 20.4 and the 5 year average is 12.2
This stock is projected to continue strong earnings going into 2007 with this year projected EPS 3.34 and next year 4.50.

Based on me limited exposure to FA here is what I see
Low P.E ratio compared to the 10 year average. Expected strong growth going forward and so I rate NBR highly as a possible buy when TA conditions improve.

Runner,

NBR is an energy play, so I really try to hold back commenting on it. However when I compare the drilling companies, I like to see how much money they make in different oil price environments. For example, how much money did they make when oil was $40, $50, $60 and now $70/bbl. You can compare these earnings with those of the other contract well service firms and determine which companies the oil guys go to when the going just started to get good. This gives you an indication of which company will be left standing if oil prices start to fade again.

If you love the oil business right now, this is a good stock to own. If you are skeptical about the oil business, then maybe this is too risky for you. You are right though, the low PE makes it easier to swallow.

There's no reason why good FA can't be used with TA.

[Runner]

I hope that gave you a little taste of the kinds of things I look at.

I will need to gather more knowledge of the FA side of things and may even buy a book to try to learn. I’ll also need to find out how to sift thru the chaff. I’ve thus far learned low PE is good and high does not mean bad but the stock may have run its race. I’ve learned a company that has increased sales over a 3-year period might be able to continue to increase these sales. I’m thinking this and could be wrong. If the pe has a 10 year history and is now at the lowest point in those 10 years this stock is attractive to investors as long as sales and earnings are strong.

[mrmarket]

I will need to gather more knowledge of the FA side of things and may even buy a book to try to learn. I’ll also need to find out how to sift thru the chaff. I’ve thus far learned low PE is good and high does not mean bad but the stock may have run its race. I’ve learned a company that has increased sales over a 3-year period might be able to continue to increase these sales. I’m thinking this and could be wrong. If the pe has a 10 year history and is now at the lowest point in those 10 years this stock is attractive to investors as long as sales and earnings are strong.

Nothing is a certainty...for example the homebuilders, even with record earnings and revenue growth, had stubbornly low PE ratios. Then the market finally decided that speculation in real estate had run its course and the homebuilders got hammered.

Having said that, these companies continue to make money, and I see management doing the following:

paying dividends, buying back stock, consolidations...all are good for stock prices.

[Rob]

High P/E OK IF ...

I'll only buy a high PE stock if its earnings AND revenue growth are accelerating.

I wholeheartedly agree with that, $$$ Mr. Market $$$. Here's an example that illustrates the power of revenue growth:

[Runner]

Here is a brief look of the entire group that NBR is in

[IIC]

I will need to gather more knowledge of the FA side of things and may even buy a book to try to learn. I’ll also need to find out how to sift thru the chaff. I’ve thus far learned low PE is good and high does not mean bad but the stock may have run its race. I’ve learned a company that has increased sales over a 3-year period might be able to continue to increase these sales. I’m thinking this and could be wrong. If the pe has a 10 year history and is now at the lowest point in those 10 years this stock is attractive to investors as long as sales and earnings are strong.

Decreasing sales is not always bad...Depends why...A company that eliminates low margin products to spend more time selling high margin products can actually have increased eps as revenue declines. Or possibly, they have taken the lean and mean approach...eliminated lower producing sales staff...sales might decline overall...but eps could increase due to elimination of dead weight overhead...Just some food for thought...Doug(IIC)