"Tryouts" for the March Madness Data Dump

[mrmarket]

One of the best things about the NCAA tournament is that, at the beginning of March, any one of up to 200 teams has a chance to be the national champion.

In the spirit of this open compeition, I will take any stock you list on this thread (one per member) and add it to my database when I run my model. The actual "champion" may or may not come from these "at large" candidates as I will also be running my normal "screens" to get my "picks" (don't you just love these basketball puns?).

After I run my model, I'll post here how they fared....sound like fun? I have already received a few via email but I think it would be more fun to see them in this forum. Ok..let's have them.

[mrmarket]

and PLEASE only list stocks with positive earnings! They have NO chance of winning if the company hasn't made money over the last 12 months.

[mrmarket]

So far, the ones emailed to me were:

AUO
SAY
ESMC

Remember, if the stock is not trading within 10% of its 52 week high, it will probably have a low R^2 result and will most likely not be selected.

[ParkTwain]

At Large pick -- ZQK

Recent breakout after 10 month base. PEG under 1.0. See my post on "Park Twain's Parlor."

[Dave]

I am going to have to go with NCEN here, my old favorite. I wanted to toss in MVL cause they are just a cool company, but they will most likely not be within their 52wk high that was set a day ago. They will drop on lowered earnings guidance for the year, even though revenue guidance was up and the reduced earnings is based on a higher tax rate.

NCNE is still a cash machine with excellent momentum and a low P/E. They may not cough up the 3-year numbers that you like, but if CFC was a pick once, NCEN could do it as well!

P.S. Go Syracuse!

-Dave

[ytown12]

ARO

My pick would be ARO...

ytown12

[mimo_100]

GORX

These tryouts are fun. HUGE idea MrMarket.

How about GORX.

[mrmarket]

IMGG was "volunteered" by a lurker email.

[Iggy]

IMGG

I was the one that recommended that as a "take a look".

No...I wasn't just trying to pump it.

I'll go back to lurking now.

[mrmarket]

Re: IMGG

I was the one that recommended that as a "take a look".

No...I wasn't just trying to pump it.

I'll go back to lurking now.

Legitimate pick...why should the chance to cut down the nets be limited to only the major conferences...

Iggy..feel free to post more often, from what I read in your email, you have a lot to offer us!

[Mi6op]

FCFS

FCFS Been watcing since $24 around thanksgiving. Too bad I was a little gun shy back then. This company is a cash cow.

As a matter of fact I saw it turn up in the last dump or two. (Back when it was $31ish!).

[scifos]

Oh so many to choose from. I will have to pick Meritage (MTH). Homebuilders is the growth sector of this decade. Even rising intrest rates won't stop this stock, or any other large homebuilder. Some believe the industry could withstand an increase in mortgage rates of 2 to 3 percentage points before their business was significantly damaged. That's nice, but frankly, I don't foresee rates rising substantially in the next two years anyway.

Just yesterday Standard and Poor's increased their debt rating from b+ to bb- and added them to the S&P smallcap 600. This increase in debt rating makes them available to investment dollars from state pension funds and mutual funds. As homebuilders are changing their image from highly cyclical and speculative investments to the blue chips of tomorrow. This is happening right now. Get in on the ground floor.

The homebuilding industry is undergoing rapid consolidation, and this favors big homebuilders like MTH. In addition, low debt levels and increasingly more affordable access to capital puts MTH in a position to take advantage of any weakness in the industry and acquire smaller rivals cheaply. Even a downturn in the market will only accelerate their growth and support their margins!

There is also demographics. Demand for homes is increasing. During the 1990s, the US population increased 32 million, compared with 28 million in the post-World War II baby boom. That rate is expected to continue for 20 more years! MTH builds homes in the Southwest. I like that because as boomers retire they/we are moving to the sunbelt states.

Revenue growth 50%, Earnings Growth 38% all with a miniscule PE of 11.3! MTH was ranked 11th in Fortune magazine's September 2003 "Fastest Growing Companies in America" list, its third appearance on this list. Their revenue and earnings numbers are spectacular. Meritage posted fourth-quarter earnings per share of $2.26 on revenue of $473 million, up 31% compared with earnings per share a year earlier. For the full year of 2003, homebuilding revenue was also up 31%. This makes it one of the fastest growers in the homebuilder group and explains why it is setting all time highs.

[vish]

NFI is my pick

I would have to go with NFI (Novastar Financial). It's a company that invests in mortgage assets along with loan servicing. Their financial results are amazing AND they pay a NINE PERCENT ANNUAL DIVIDEND! Just look at the impressive year over year revenue and earnings growth (see below). Even with the large run up in the stock over the past year (from 16 to 54), it still only has a PE of just over 12. The only negative I see in this one is a bit of high debt load which is pretty standard for companies in this sector. Plus, another benefit is that insiders own 33 percent of the company--which means that they are very much interested in adding value to their shares.


Revenues (in millions)
2003 2002 2001
1st Qtr 76.1 35.2 25.6
2nd Qtr 90.8 36.6 23.1
3rd Qtr 87.8 40.7 42.9
4th Qtr NA 57.0 24.2
Total 254.7 169.5 115.8

Earnings Per Share - Quarterly Results
FY (12/03) FY (12/02) FY (12/01)
1st Qtr $1.04 $0.40 $0.24
2nd Qtr $1.03 $0.49 $0.20
3rd Qtr $1.06 $0.57 $0.88
4th Qtr NA $0.80 $0.27
Total $3.13 $2.26 $1.59

[billyjoe]

AH
billyjoe

[Dave]

Vish,

I also like NFI. I traded that for a nice 17% gain a while back. Gotta love REIT's! Good pick.

-Dave