Stocks for the Long Term

[riverbabe]

I have been swing trading NEON for a year or more with success. But some news came out in the last few days that makes it a very long-term play. This article describes it pretty well. http://seekingalpha.com/article/1672...readmore&app=1
Patent stock players know that patent infringement litigation can go on for years, so this is not for the impatient! In fact VRNG is still battling GOOG after a jury verdict in VRNG's favor almost a year ago, and the motions are still flying back and forth. Watch for the spin-off on NEON. Do DD and prepare to wait (and wait and wait). (This is the "long term" thread. Right?)

NEON up 9.16% today AM. Here's another article. Looking good! http://seekingalpha.com/article/1674...readmore&app=1

[riverbabe]

I have been swing trading NEON for a year or more with success. But some news came out in the last few days that makes it a very long-term play. This article describes it pretty well. http://seekingalpha.com/article/1672...readmore&app=1
Patent stock players know that patent infringement litigation can go on for years, so this is not for the impatient! In fact VRNG is still battling GOOG after a jury verdict in VRNG's favor almost a year ago, and the motions are still flying back and forth. Watch for the spin-off on NEON. Do DD and prepare to wait (and wait and wait). (This is the "long term" thread. Right?)

[antioch6]

I want to bring up another stock Vale S.A. (VALE). This is a Brazilian company with operations all over the world. From FinViz.com:

Vale S.A. engages in the research, production, and marketing of iron ore and pellets, nickel, fertilizers, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally. Its Bulk Material segment engages in the extraction of iron ore and pellet production, as well as operation of transport systems in Brazil, including railroads, ports, and terminals related to mining operations. This segment is also involved in the production of manganese and ferroalloys; and mining of coal. The company's Base Metals segment produces non-ferrous minerals, including nickel and copper; and aluminum products. Vale S.A.'s Fertilizers segment provides potash, phosphates, and nitrogen. The company's Logistic Services segment offers cargo transportation services, such as rail transport, port, and shipping services for third parties. In addition, Vale S.A. generates energy through hydroelectric plants and centers in Brazil, Canada, and Indonesia; and has a natural gas exploration portfolio of 18 blocks in 4 petroleum basins in Brazil. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is based in Rio de Janeiro, Brazil.

This is a large and diverse company built to last. Brazilian stocks are out of favor and so are companies related to mining. Vale should survive this slump in demand for it's products and go back to earning around $3.00 a share in normal times. This would give it a current 4.8 P/E ratio. Brazil has also recently removed a 6% tax on foreign investors. Vale is still pumping out cash according to a simple cash flow analysis. Compared to generating 7-8 Billion in cash during normal times, it's only generating 800 million - 1.4 Billion now and selling for just under 75 Billion. This is a cyclical company and we are in a downturn, so we should take the cashflows from good times into consideration. When Vale starts generating 7-8 Billion again, that gives it a yield of about 10% at the current price of 75 Billion. On top of that, it has a 5% dividend. The dividend is relatively stable and according to it's history shouldn't be cut more than 25%, leaving it at the worst 3.75%. They do have some debt. I expect the stock to get cheaper, but it's something to consider buying. Similar to the Solar Power companies,Vale is also depending on China for much of it's demand.

[antioch6]

At first glance in the Solar area, the trend in solar panel usage looks alright. The sector is going through some sort of consolidation. Main problem as I see it is most companies can't produce the stuff economically yet. Not really practical to use a simple P/E analysis since these companies are losing money. The big name First Solar (FSLR) has been trying to cut costs and sell assets. Alot of the business depends on government subsidies until there is another scare in higher oil prices. Until then, the way to play this Sector is find the companies that will survive bankruptcy and buy them when there is fear of bankruptcy. Can't justify buying FSLR with my valuation metrics since they lose money and the future is cloudy and uncertain. China will help subsidize this area but they are going through their own problems economically right now so the timing isn't quite here yet. I'm going to look for some Solars that have the best economically viable production. Have to study up some more on the industry and get some clues from other people too.

So far I'm interested in FSLR YGE SPWR and CSIQ. These companies should survive for some specific reasons and at the moment I consider them the leaders in the industry. Need to run some spreadsheets on them and look into what sets each one apart from the pack.

Japan and China are driving a temporary surge in demand for these companies. SPWR and CSIQ are doing well in Japan. CSIQ has the cheapest costs of the four. YGE has the most debt. In terms of efficiency, FSLR and CSIQ have the most efficient energy in their technology. In terms of size, FSLR largest, SPWR second, YGE next, CSIQ smallest. SPWR and FSLR have come the furthest the fastest in returning to profitability. The simplest strategy here should be spreading some buys around these four during the next round of bankruptcies.

[antioch6]

It's time to analyze some companies in areas of interest. Taking into account future trends and themes, I want to look deeply into some companies in the following areas: Solar Power, Oil and Oil related sectors, Food and Agriculture, Mobile Technology and Communications, Cyber and Web security, Medical Instruments and Robotics, Transportation and Travel Leisure, Water and Environmental Cleanup, and Gold/Silver.

This is a long list and there are probably more areas to cover. The goal here is to find great businesses in these areas, and buy them at a good value during the next market downturn. It will take some time but slow and steady should give us something worthwhile. Let's try to find at least 3 strong companies from each.

The first area we'll look is Solar Power.

[antioch6]

I'm not sure what to think of Facebook. During the IPO I subscribed to the bear case that they were completely overvalued because they didn't make enough money yo justify their market cap. Now I'm skeptical to the bear case, and wonder if they can monetize their HUGE traffic. Also, I can picture a future where everyone across the world using the internet also uses Facebook. People in America will talk to their friends in Europe and Asia or Australia and post pictures and videos and stuff. I just wish I could see clearly where the money would come from besides advertising. It's on my list for a long term investment, but I want to wait for more evidence before buying. Also, the stock is a little hot right now and the market is overvalued. I'm confident I will get a chance to buy it lower sometime in the next 2 years.

[billyjoe]

Antioch, I'm buying FB at this level for a long term investment. I've lost before getting in too early but now FB shows signs of being another long term runner.

--------------billy

[antioch6]

Sold SGG and JO to raise some cash for other trades. I like FUD and RJA better anyways, so I'll add to them over time instead. Sold:

SGG 57.311
JO 23.80

[antioch6]

Finally. I feel the wait is over and tomorrow I'll buy my targets. I'm deciding to exclude PVG and instead include SIL (an ETF of silver mining stocks) to make my position about an even 30% of my account. I think the timing here is perfect for the next few weeks.

CEF 11.0%
SLW 5.5%
RGLD 2.75%
SSRI 2.75%
IAG 2.75%
SIL 2.0%
GDX 1.3%
GDXJ 1.3%

I'll post the prices I got after I buy. Let's make this money.

[antioch6]

Billy that dividend really is great on INTX. Seems nice and steady. The reasons why I was expecting some capital gains is because of the long term support on the chart, and from a possible investor appetite for security software companies when all the cyber threats/terror nonsense.

Silver didn't quite mini crash like I thought it would. I was feeling a bit gloomy and confused when I saw it pop after the fed minutes, but it ended down nicely for the day. I'm targeting $24-$25 for SLW and $20.00 for silver futures to help me decide when to start buying. After the recent selloff and if SLW/silver get to my targets, I feel confident in my analysis and will put between 25-30% of my portfolio in these stocks. This long term idea is starting to turn into an "Outsmart the Market" trade since I don't believe silver and gold have ultimately bottomed.

[billyjoe]

antioch, Just reread your first post and realized that we are mostly in agreement on INTX in fact I bought quite a bit this week and hope to ad to the position. My reason for buying is mostly for the dividend any appreciation would just be frosting on the cake. If you go to the dividendchannel.com you'll see they have rated INTX as one of the top dividend paying stocks for at least 2 years running. I've got a portfolio of div. payers I keep and continue reinvesting into more stock in a retirement account. It is at the point where I can almost live off the generated $$ and it continues to grow at a remarkable rate. Some of the holdings : AI, INTX, PM, NJR, HQL ,NYCB, CODI, KKR, FTR......

-------------------------billy

[antioch6]

Today feels like the day I'll get my pullback in gold and silver. I'm buying SLW CEF RGLD IAG GDX GDXJ SSRI PVG on weakness today. My ideal entry is 22.00 on silver.
SLW 5.2%
CEF 2.6%
RGLD 2.6%
IAG 2.6%
GDX 1.3%
GDXJ 1.3%
SSRI 1.3%
PVG 1.3%

[antioch6]

Bought 0.6% positions in FUD, RJA, SGG, JO.
FUD at 25.014
RJA at 8.428
SGG at 57.79
JO at 25.274
Will add similar to RAD.

[antioch6]

Bought 0.7% position in RAD at 3.578. Going to add triple the size over the next months.

[antioch6]

V and MA look like solid companies. I like to buy most long term ideas when they're out of favor though. Right now these two would fit more into my other model.

I'm adding another idea to my long term buys.This was recently in a Mr. Market data dump but it still has huge potential upside. The company is Rite Aid and it's stock is RAD. My brother is an expert and you could say an insider when it comes to pharmacies. He worked at CVS for 6 years, left and opened his own pharmacy for the last 6 years, and recently bought an assisted living facility. He's been afraid to invest in stocks for fear of losing his money, and instead invests and buys directly into businesses he understands. When I explained to him that buying stocks can be looked at the same way, we went over analyzing the companies where he has an expertise. He was shocked to find that stocks aren't just a "put your money and earn 7-8% a year" game.
When we went over RAD and he saw it went from $0.20 to $2.00 and then from $1 to $3, he realized the possibilities. He got super excited after looking at the company financials and news because he said next year there are many changes coming in the industry. The two major changes are Obamacare starting January 1st as well as the major shift from Brand name drugs to Generic drugs. He said the industry will do very well over the next 1-3 years. RAD has the most room for growth and should start seeing higher profit margins and revenue in the coming quarters. He thinks now is the time for change and the time to invest in these companies. RAD should see at least $6 and maybe $9 or even $12 in the not too distant future. This is a turn around company and the market is starting to realize it, but it still has a ways to go. With my brothers blessing, I'm getting ready to buy a good chunk of RAD stock during this next market correction.